tv Defense University CSPAN April 7, 2013 4:05pm-4:50pm EDT
services and cancelled or curtailed in number of major modernization program that were performing poorly, or poorly suited to real world demand. the realignment continued undersecretary panetta who worked closely with president and the joint chiefs of staff to craft new defense strategic guidelines and a defense budget which reduced the department planned spending by $487 billion over 10 years. even while reshaping the force to become smaller and leaner, this budget made in foreign investments in the new strategy, including rebalancing our defense posture to asia- pacific, and prioritizing critical capabilities, such as cyber, special operations, and unmanned systems. so the department of defense had been preparing for this inevitable downturn in defense
budgets and has taken significant steps -- steps to reduce spending and adapt to a new strategic environment. nevertheless, the combination of fiscal pressures and a grid lock political process has led to far more abrupt and deeper reductions that were planned or expected. now dod is grappling with the serious and immediate challenges of sequester, which is forcing us to take as much as a $41 billion cut in this current fiscal year. if it continues, we are projected to reduce spending by another $500 billion over the next decade. the sequestered cut, because it falls heavily on operations and modernization accounts, is already having a destructive and potentially damaging impact on the readiness of the force. the department has already made many cuts, including cuts to official travel and facility maintenance. we have imposed hiring freezes and halted many important but
not essential activities. however, we will have to do more. across-the-board reductions aside we are looking at will demand that we furloughs civilian personnel which could affect morale and may impact productivity. cuts will fall heavily on maintenance and training which further erodes the readiness of the force, and will be costly to regain in the future. as the service chiefs have said, we are consuming our readiness. meanwhile, our investment accounts in the defense industrial base are not spare damage. as we also take indiscriminate cuts across these areas of the budget. these are the challenges that face us right now and i am determined to help the department get ahead of them.
general dempsey has said we need to read through this crisis. i have told our senior leadership, the joint chiefs, the service secretaries and undersecretary of defense, we are all in this together, and we will come out of it together. the task ahead for the department is to prepare for the future, but not in a way that the collects, or is oblivious to the realities of the present. we are therefore undertaking a process to develop choices, options, and priorities to deal with further reductions in the defense budget that could result from a comprehensive deficit-reduction deal, or the persistence of sequestered. all anchored by the president defends strategic guidance. my goal in directing the strategic choices in management review, which is now being led by deputy secretary carter, who is working with general dempsey, is to ensure that we are realistic the confronting both our strategic and fiscal
challenges. it is not to assume or tacitly except deep cuts, such as those imposed by sequester, will endure, or that these cuts can be accommodated without a significant reduction in military capabilities. at the same time, we cannot simply wish or hope our way to carrying out irresponsible national security strategy for its implementation. the department must understand the challenges and uncertainties plan for the recognize the, opportunities inherent in budget constraints in more efficient restructuring. this exercise is also about matching missions with resources, looking at ends, ways, and means. this effort, by necessity, will consider big choices which could lead to fundamental change and a further prioritization of the
use of our resources to retain that involve not just tweaking or chipping away at existing structures and practices, but where necessary, fashioning entirely new ones that are better suited to 21st century realities and challenges. all this with the goal of insuring that we can better execute the strategic guidance as set out by the president. in order for this effort to proceed with the to be steely- eyed and clear headed in our analysis and explore the full range of options for implementing our national security strategy. we need to challenge all past assumptions and we need to put everything on the table. for example, is already clear to me that any serious effort to reform or reshape our defense enterprise must confront the principal drivers of growth in the department's budget, namely acquisitions, personnel costs, and overhead. in many respects, the biggest long-term fiscal challenge
facing the department is not be flat or declining top line budget. it is the growing unbalance in where that money is being spent internally. if left unchecked, spiraling costs sustain existing structures and institutions provide benefits to personnel and develop replacement for aging weapons platforms while eventually crushing of spending on procurement, operations, and readiness. the budget category that enable the military to be, and stay prepared. if these trends are not reversed, former chief of naval operations warned that pod could transform from an agency protecting the nation to an agency administering and if it programs capable of buying overpriced equipment. thanks to the efforts of my predecessors and other dod leaders, we have made an effort in this crowding out in this budget and future budgets. much more hard work, difficult
decisions and strategic prioritizing remains to be done. the political and institutional obstacles to necessary reforms need to being gauged and overcome gary i'm -- overcome. i'm concerned that pruning over the last four years that the strategy still require systems that are vastly more expensive and technologically risky than what we are promised are budgeted for. we need to continually move forward with designing an acquisition system that responds more efficiently, effectively and quickly to the need of troops and commanders in the field. and a that rewards-cost
efficiency so our programs take longer, cost more and deliver less than initially planned and promised. with full recognition for the great stresses that our troops and our families have and placed under, and been under for nearly 12 years of war and the contributions that civilian employees make to the departments mission, fiscal realities demand another hard look at personnel. how many people we have both military and civilian? how many do we need? what do these people do? and how do we compensate them for their work, their service and their loyalty with pay, benefits, and health care? these are tough questions from a such as what is the right mix of civilian and military
personnel across the department and its various components? within the force, what is the right balance between officers and enlisted? without necessarily accepting the off stated claim that there are more than 300,000 service members performing civilian and commercial functions, what is the appropriate distribution of troops performing combat, support and administrative duties? there will like lace -- there will likewise need to be a scrutiny of the command structure, most of which leads back to the early years of the cold war. the last major defense reorganization was during the major defense bill the been focused on improving dryness and establishing clear operational change of command. cost and efficiency were not major considerations then. goldwater nichols strengthened the joint staff and the
combatant commands. it went about doing this by layering joint organizations and processes a top service organizations and the top hospices. the elevation of the former did not automatically lead to the diminishing of the latter. today, the operational forces measured in battalions, ship's, and aircraft wings have shrunk radically since the cold war. yet our support structure sitting atop these smaller fighting forces have stayed intact. with minor exceptions, and in some cases, they are actually increasing in size and drank. -- size and rank. it is still not clear that every option has been considered to pare back the war office back office. the fourth estate consists of the office of the secretary, the joint staff, the combatant commands, defense agencies and feel that the beauties, the
missile defense agency -- the field activities, the missile defense agency. with respect to the fourth estate, former secretary of defense gates compared the process of looking for savings as going on an easter egg hunt. secretary panetta was more polite. he called the pentagon "a big damn bureaucracy." it does not sound like leon panetta at all. [laughter] are, leon, we're quoting you. the military is not and should never the run like operation. but that does not mean we don't
have a good deal to learn from what the private sector has achieved over the past 20-30 years in which reducing layers of upper and middle management not only reduced costs and micromanagement, but also led to more agile and effective organizations. and more empowered junior leaders. in light of all these trends, we have to examine whether dod a structured and incentivize to ask for more and do more. that entails taking a hard look at requirements. how they are generated and where they are generated from. it could turn out that making dramatic changes in each of these areas could prove unwise, untenable, or politically impossible. yet we have no choice but to take a close look at how we can
do all of this better. in order to address acquisition, personnel and overhead costs in smart ways, they have not been done before. we need time, flexibility, and support and partnership of congress during we also need long-term budget certainty. one of the biggest problem's the sequester has brought is that is requiring immediate, deep and steep cuts. this means that the department will by necessity have to look at large cuts in operations and modernizations to find savings to be quickly realized. the kinds of reforms the department needs in other areas would take some time to implement and take longer for significant savings to accrue.
flexibilityme and to implement savings, we could limit the impact of spending reductions on for structure and modernization while still making a significant contribution to deficit reduction. i contrast, the cuts required by sequester afford neither time nor flexibility. these dramatic cuts would certainly require reductions in would have long been considered core military capabilities and changes in the traditional role in missions among the uniformed services. we will have to take a critical look at our military capabilities and ensure that our core structure and modernization plans are directly and truly aligned with the present strategy. that includes taking a new look
at how we define and measure readiness and risk. and factor both into military requirements. it also includes balancing the competing demands of capacity and capability. how much of any given platform we need and how much capability it needs to have to fulfill in real-world missions. the size and shape needs to be constantly reassessed come a mix of conventional and unconventional capabilities, general purpose and social operations units, and the appropriate balance between forward stations, rotation we deployed, and home-based ports. we also need to reassess how much we can depend on our allies and our partners. what can we anticipate from them in the way of capabilities capacity?
and factor these calculations into both our short and long- term planning. a thorough examination of the way our military is organized and operates will also highlight our inherent strengths. including leadership development, mobility, logistics, special operations, cyberspace and resurgent film and. another course -- and research and development. another core strength is the ability to adapting. in the lean years between world war i and world war ii, during the great depression, a group of farsighted officers with virtually no funding or prospect of promotion -- you will remember in your history how long general eisenhower was a lieutenant colonel. a good example of what we are talking about. they conceived important new platforms and operating concepts for armored warfare, amphibious assault, aircraft carriers,
submarines, and long-range bombers. as the military grappled with challenges to morale and readiness after vietnam, it also made a transition to an all voluntary force and made should she just investments in stealth and platforms like the f-16 and the abrams tank. 1990suring the procurement holiday, we invested in satellite guidance, in networking systems and remotely piloted aircraft that had been game changers during the last decade of war. seniorl of the leadership of this department today is to learn from the miscalculations and mistakes of the past drawdowns and make the right decisions that will sustain our military strength, advance our strategic interest, and protect our nation well into the future. let me now conclude with some comments on america and its
role in the world. during this time of budget turmoil and after a financial crisis, in a decade when our country has grown weary of war and skeptical of foreign entanglements, questions arise about the merits of america's role in the world, america's global leadership. america does not have the luxury of retrenchment. we have too many global interests at stake, including our security, prosperity, and our future. if we refuse to lead, something, someone will fill the vacuum. the next great power may not use its power as responsibly or judiciously as america has used its power over the decades since world war ii. we have made mistakes and
miscalculations with our great power. but as history has advanced, america has helped making her world for all people with its power. a world where america does not lead is not a world that i wish my children to inherit. more than a century ago on this campus, while laying the corner store and -- cornerstone on the building that now bears his name, roosevelt declared that the united states had "the mere trend of events been forced into the position of world power." he went on to say that america "cannot bear these responsibilities are right unless it's a is coded for and justice with the assured self-confidence of the just man armed." what distinguishes america is not our power. the world has known great power. it is america's purpose and our
commitment to making a better life for all people. we are a wise, thoughtful and steady nation. worthy of our power, generous ourpirit and humble in purpose. that is the america we will defend together, with the purpose and self-confidence of the just man armed. thank you. [applause] thank you. >> if you have questions that are not too tough, i will take a few. [laughter] and even if a general asks a question, i will answer it. [laughter]
yes, there's one back here. >> hello, thank you for coming. jessica lynch from national war college. that you are here today. i definitely think that you will have the steely eyed vision to lead us through this difficult time. but i do have a difficult question. i do appreciate that you said that civilians are important. but why are we still furloughing? in case your divisors haven't told you, it is affecting morale. advisorse your haven't told you, it is affecting morale. >> thank you first for what you do. and your contributions to our security. your question regarding furloughs, i wish i didn't have
to answer that question. i wish we had other options. but the reality is that we are dealing with 41 -- dealing with a $41 billion shortfall that was not planned for. as also noted in my remarks, many of the accounts where we must focus our readiness and our first mission, securing this country, those are a counselor we don't have enough resources. havetions, missions, we had to cut training. are of you in this room aware of the wings we have had to stand down, other consequences. as we try to be fair and analyze where we take those cuts and we take them because we have no choice, and trying to minimize the hurt and the pain cuts are causing across our entire range of
and, first ofes all, people, we have had to look at everything. we have had to look at all of the accounts. we have had to look at where money goes. we initially thought that we might have to make some difficult decisions on furlough as long as 22 days. because of congress's actions a couple of weeks ago, passing a continuing resolution, we have been able to move some monies around with a little more flexibly. we still don't have a lot of
flexibility. no matter how you look at it, we did not get any more money. so now we're looking at the possibility of furloughs up to 14 days. if we can do that better and less, we will, recognizing that morale will be affected. but the tough decisions i will have to be made and we will have to make them are done on the basis of what we think is the most fair way to do this. but our readiness and our capabilities have to always come first because it is the first mission and responsibility of this institution, the protection and security of this country. so as i began my answer, which i know is not a good answer, i wish i did not have to answer that question. if we can do better, we will do better.
and believe me, every person that the pentagon is working very hard to try to continue to minimize this issue for our civilian people. bethe same time, i want to honest with you and not this lead you about the reason -- and not mislead you about the reality that we find ourselves in. yes. >> thank you, sir. i appreciate your remarks. i appreciate the news this morning that you yourself will be taking a pay cut as we go through this furlough. i very much appreciate the gesture. however, as we look into the future, you mention in your remarks that you are looking at
strategic cuts that involve military benefits -- healthcare, retirement, how can station. -- and compensation. are those cuts imminent where they are coming as a result of looking into cuts in the future? >> it is their ability to sustain the commitments we have made to the men and women who joined the military as well as our civilians. we make promises. this country makes commitments to people here in we will honor those. but i don't think there is anyone here today that has not heard of or aware of the fact that, if you play this out 10- 20 years, we won't be able to sustain the current personnel costs and retirement benefits. there will be no money in the budget for anything else. as admiral ruffin said, we will
become essentially a transfer agency. how do we do this now to get some lead time on this so we can adjust to the realities that we know are coming? social security is the same thing. may care is the same thing. you can't sustain those programs, those commitments. we know that. but that is not the question. the question is how do you then respond to it? we have time to get ahead of it if we start planning for it now. that is part of the review. it's not new. there is no one in this institution that has not been aware of the fact that we would have to start adjusting in some way. but what i believe is that your immediate question, as far as immediate cuts to health care and so on, no, i don't see those kinds of things coming
this year. we will go forward in budget presentations and ask the congress to explore ways where it is possible to increase fees on different programs. i think that is fair. and i think that we have to look at everything. as i said, i'm sorry. i wish it was otherwise. but that is a fact of life. and the longer we do for these things, the worse it will be for all of us. so let's be smart. let's try to get ahead of it. that is the whole point of why i directed our leaders to come up with a strategic review. we have resources. we will continue to have resources. but we have to be wise in how we apply those resources.
mostpeople are your important product. without people, systems don't matter. it does not matter how sophisticated your weapons are. your people are everything in any institution. and you take care of your people. i am committed to do that. i think every leader here is committed or we wouldn't be here. your families, the commitments we have made, we are doing everything we have -- we're doing your thing we can to ensure that. and we will continue to do that. >> good afternoon, sir. as much as i would like to complain about a pay cut, i have a different question. you mentioned the pivot to asia. i am interested in what you think we could do to build a better relationship with china to help work on containing the belligerence we see coming out of north korea.
>> i had a long conversation last night with the new chinese minister of defense. general chang. it was very positive. we talked about some pretty tough issues, starting with north korea, touchy issues like taiwan. as i think all of you know, general dempsey's going to china this month and secretary kerry will be in china this month. as you also know, secretary of treasury lou was in china in the last few weeks. so we are continuing to reach out and strengthen our relationship with china. china is a great power. it will continue to be a great power. we have many common interests. general chang and i talked about those common interests. he have differences. we will always have differences. we have differences with allies. it's not differences that
matter. it is how you deal with differences. you build a platform of a relationship based on your common interests, not on your differences. and north korea is a very good example of a common interest. certainly, the chinese don't want a public hated and combustible situation to explode into a worse situation. it is not in their interest that to happen. it is not in our interest or in our allies interests. like always, relationships are built face to face. they are built around common interests. institutional interests as well as personal interests. and using this institution as an example, 66 nations represented here in this room, this is the way you build each other.g with
this is the way you start to accept each other as a sovereign people, respect each other's dignity as human beings. then you work out from there. i think we can continue to build a strong relationship with china, with our differences. and there are significant differences. but there are too many common interests for both our countries. and with why steady leadership, and i think the chinese have shown their leadership to the study, wise, careful, and the more we can exchange at every level, programs, especially military-to-military per grams,
i don't know of a single -- military-to-military programs, i don't know of a single impact greater than building military- to-military relationships. the best example is egypt. i'm not sure things would have turned out the same in egypt over the last two years without that. you can't solve all the problems nor should you be expected to, but you can do an awful lot. and as i said in my remarks and no one in this room has heard this for the first time because you all live it and in your capacities as leaders, military leaders today, as valleys have been, but especially today, they are far more than military leaders. your diplomats. your psychologists in your mentors. your educators. your referees. -- you are educators here and
you are referees. you are school board chairman. you have many possibilities. that is real. that is life. that is what makes the difference in people, in understanding people. so i am a bit of far field, but i am a former senator. [laughter] i will hear about this i'm sure at a hearing next week. [laughter] but i think it's relevant to your question. thank you. yes. >> good afternoon, sir. civilian. of navy, like you for being here today. what do you believe are some opportunities that we have to partner with the department of state, the department of homeland security, and in order
to secure and protect our homeland given the state of our budget? >> i think the interagency relationship is always a key part of any agency institution carrying out its responsibilities. your particular question mentions department of state and homeland security. gatesimes, secretary sounded like the secretary of state. rebalancinge priorities and the resources at state where some of these programs should reside and used to reside? in my opinion, he was right. state has a very important role to play in our foreign policy,
obviously, but also in the homelandcy relationships that security, which, as you all knew, is a new agency. but they all connect. there is not an interest, not a connection point that doesn't affect all the other connection points that serve our interests, whether it's homeland interests, economic interest, diplomatic interests, and military interests, energy interest, cyber interest, whatever. they are all connected in. omen security, the way it is structured -- and i was there upthe senate when we rolled
agencies and the one -- has authorities in a rather significant for homeland security. we are still working through how we all work together. and that's ok. but i think another part of your question is how do you maximize and add value to each other for the bigger purpose and objective in this country? you are exactly right. you have just identified in my opinion may be the most important dimension of where we will all have to go as government leaders in this country over the next few years and beyond. we have not been getting a return on investment. the taxpayer has not been getting their return on investment in how we connect our agencies and departments and how we work together.
we are getting better. everyday we are getting better better, far better today than five years ago. but we are kind of new at this. so you can continually overload the circuits like i think we have in the last 10 years in the department of defense and say, well, you will do it all and we will give you the money good but you have the resources on the 20's and the management and the people, so on and so on, so you go do it because you can do it faster. and in all most every case get it done better. that distribution of labor and resources has to now be rebalance. because there is a bigger return that can come from all of that. so i think that your question is a very important one. it is central to everything that
we will all be doing and continue to do, especially you young leaders who will be moving into very important positions in your careers. you are here at a special time. you really are. every generation has an opportunity to reshape the world. but some generations really have big opportunities. your generation has a big opportunity to reshape things. and it will be you. this audience. yes. >> secretary, thank you. i am a student at the national war college. i would like to turn back to the front page. if i scanned correctly the headlines this morning, you make comments related to north korea and nuclear capability. as i understood it, you are saying a specific level, where some level of nuclear capability will not be acceptable. could you elaborate on that
? >> well, i was misquoted again. [laughter] thanks for the question. [laughter] george little is here and he likes that kind of question. he is the assistant of public affairs. so keep your answers short, he says. [laughter] [applause] and and i like hell. [laughter] -- and deny like hell. [laughter] thank you for your question. i'm not sure i said quite that starkly. here is the point. north korea has been a problem for not just the region for years. the responsible powers in the region, starting with national security -- permanent national security council and japan have been part of talks with north korea for number of years.
we have been trying to work with the north koreans to them it's not in their interest and certainly in the korean peninsula's interest -- the south koreans have been part of this as well -- to pursue nuclear weapons. they have nuclear capacity now. they have missile delivery capacity now. and so, has they have ratcheted up her bellicose dangerous rhetoric, and some of the actions they have taken over the last few weeks present a real and clear danger and threat to the interests certainly of southlies, starting with korea. and japan. thealso the threats that north koreans have leveled directly at the united states regarding our base in guam,
threatened hawaii, threatened to the west coast of the united states. as secretary of defense, and beginning with the president of the united states, and all of our leaders, we take those threats seriously. threatsto take those seriously. i think we have measured, responsible, serious responses to those threats. as you know, we are undergoing joint exercises with the south koreans now. we are doing everything we can working with the chinese and others to defuse that situation on the peninsula. but, as i said in a news conference last week when asked
about this, it only takes being wrong once. and i don't want to be the secretary of defense who was wrong once. take will continue to these threats seriously. ratchethe north will this very dangerous rhetoric down. isre is a pathway that responsible for the north to get on a path to peace, working their neighbors. there are many benefits to their people that could come. but they have to be a responsible member of the world community. and you don't achieve that responsibility and peace and prosperity by making nuclear threat and taking very provocative actions. one last question here and i will take one -- yes. >> thank you, mr. secretary. i am a kernel of the german army. army.onel of the german
you mentioned the generation of young leaders, especially foreigners who have the opportunity to stay here in your country. for sure, me and my family will never forget this opportunity. it has broadened our horizons and deepened our friendship with your country. so my question concerns -- wouldn't it you wiser to have the same opportunity for my american colleagues, budget cuts, the constraints, make them stay here, not allowed to travel, to make the trips overseas and to learn about other countries? [laughter] [applause] so, if i may say so, if i were one of your advisers, mr. secretary, i would say probably delay the delivery of a warship or a tank or f-35 about one