SEC. GATES: (In progress) -- a brief opening comment.

 

            The -- what I announced yesterday is really in many respects the next step, following up on the speeches that I started giving about 18 months ago, which culminated in many respects in the National Defense Strategy that was issued last fall. The next -- this -- we will do this budget, and then the next step in this process is the Quadrennial Defense Review, the Nuclear Posture Review, and then, of course, the '11 budget. So this is kind of a continuum. I think that the principles that I talked about yesterday and the basic objectives are those that I've been talking about for about 18 months, and so it sort of didn't spring all of a sudden full grown out of the brow of Zeus in the last three months. 

 

            So with that, let me invite your questions.

 

            Q     Mr. Secretary, this is Fred Kaplan with Slate. Good afternoon. 

 

            SEC. GATES: Hi.

 

            Q     Obviously, you said this has been in the works for quite a long time. You stayed home instead of going to the NATO conference -- obviously it wasn't to make your checklist; it was to work out presumably some internal politics. I'm wondering if you can shed some light on that. And also, when you present this to the Congress, is this going to be presented as sort of a package? In other words, if they say, "Well, we're going to keep the F-22 going for another year," will you say, "Well, that means you won't get the extra F-35s that I've added onto the budget" -- something like that?

 

            SEC. GATES: Well, I think -- you know, we'll just have to take it a step at a time. I think -- I stayed home partly because I had not yet completed my decisions. The most difficult of all of these for me was the FCS program and I actually didn't make up my mind once and for all on it until this weekend. But -- and we were also involved in drafting the statement. 

 

            But, you know, we -- what will go to the Hill will be a full scale presidential budget that encompasses these and a number of other decisions that I made. I think all together there were somewhere between 50 and 60 specific program decisions. And all of those will just be reflected in the budget itself, which will go up as one entity.  

 

            Q     Mr. Secretary, hi, it's David Cloud with Politico. I wanted to just follow up on that last comment of yours about the FCS.

I'd be interested in hearing you sort of explain a little bit more about why it was the most difficult decision. I mean, in some ways it is the one that captures most of all the tradeoffs that you're talking about between current wars and potential future wars. And it's also -- there's also a tradeoff there between sort of -- in terms of the vehicles between deployability and the speed of deployability and protection for soldiers in terms of armor on vehicles. I wondered if you could just expand on if those factors played into your decision and just more on why it was so difficult.

 

            SEC. GATES: Well, I guess one reason why it was so difficult was because the Army felt very strongly about it. I spent a lot of time with General Casey and Secretary Geren -- probably more time with them on this particular issue than on any other single issue with anybody else in the building. And I'll respond to your question and then invite General Cartwright to chime in.

 

            Fundamentally I concluded that the program, which was designed nine years ago, had not really adequately integrated the lessons learned in Afghanistan and Iraq into the program going forward. 

 

            And there were several aspects to it: first of all, the vulnerability of lighter armor to EFPs and IEDs; the design of some of the vehicles in terms of learning some of the lessons in protecting the troops, and so on. But it also did not reflect, as far as I could tell, the lessons learned of operational realities in Iraq and Afghanistan, where the commanders on the ground actually have a range of vehicles available to them that they can use depending on the menus -- or depending on the mission, rather -- so that you have a commander who can -- rank who can use an up-armored humvee or a striker or an MRAP or a tank or a Bradley depending on what the mission is. He's got a collection of vehicles. And the point that General Cartwright has made before -- trying to build the capabilities of that range of vehicles into a single vehicle -- really we hadn't gotten there yet. And the question is whether you even can do that. 

 

            So those were some of the issues that -- where I just -- I concluded that the program hadn't sufficiently integrated those lessons-learned. But let me ask General Cartwright to add.

 

            GEN. CARTWRIGHT: I think we've captured most of the issues, but the survivability, the mobility side of the equation to try to get all the way from what we would call a hybrid warfare to the high end of conventional warfare, things that we would normally use in a heavy brigade and things that we would use in infantry in lighter formations -- trying to bring that all into one class of vehicles. They had a flat bottom that they had to redesign to take into account, as the secretary said, the realities of things like IEDs. To move to a heavier capability and a more lethal environment, they were adding on armor that was starting to weigh it down and make it questionable whether the axles, the transmissions, all of those things would in fact be able to function for extended periods of time in a heavy configuration. 

 

            All of these started to bring into question whether one class of vehicles could in fact cover the range of operations that we envision are going to be the reality of the future. 

 

            So when you put all that together, what we're asking is for the Army to step back, revisit the so-called requirements, revisit the realities that we've discovered over the last nine years in the development of this program -- do they really fit? Can we really adapt the basic chassis to that broader range of activities and expect these vehicles to last and survive?

 

            Q     Could I just -- quick follow up -- was the Army argument essentially that by taking this step on FCS, you are sort of potentially jeopardizing the -- their ability to respond to the high end, you know, conventional warfare side in the, you know, obvious near future?

 

            GEN. CARTWRIGHT: I think their -- I think their pushback at least -- and I'll add my two cents and let the secretary jump in -- but the initial pushback was not that the high end was compromised but that they needed vehicles at what they call the midrange, and that from that midrange they could adapt down or up on a single vehicle. 

And they believed -- and rightfully so -- I mean, they believed that that was an approach. 

 

            The problem was that you couldn't get -- today you cannot get to either extreme. You cannot get to the very heavy without putting on so much armor that it becomes a very difficult vehicle to maneuver on the battlefield, and nor can you get down to what was the humvee level that we're using today and still have these vehicles really have that much maneuverability and still keep the survivability that we need.

 

            Q     I see.

 

            GEN. CARTWRIGHT: You could not bring in MRAPs into the equation either. 

 

            And so we're trying to understand what a formation's going to look like, how much applicability it has across a range of military operations. Their feeling was if they captured the center piece, that would be good enough. The problem is the lethality exists both at the high end of conflict and at the low end today. These shaped charges, the EFPs -- they're very lethal and they're very able to be employed by non-nation states, in counterinsurgencies, and just bringing that fat reality into the equation makes it very difficult to come with a single class of vehicles.

 

            Q     Mr. Secretary -- sorry -- Mr. Secretary, this is Gordon Adams. One question that did not come up much in yesterday's presentation but I know is probably on your mind is the distribution of responsibilities and roles between Defense and State, especially as concerns the kinds of operations that we're involved in now. Have you given any thought to what you might be prepared to do this year with respect to authorities like Section 1206 and CERP, in terms of leaving them temporary or seeking to put them in permanent law?

 

            SEC. GATES: Well, we have a -- on both 1206 and 1207, those have now been authorized for a three-year period by the Congress. And they were plussed-up for FY 09, and I have added for -- I think, 1206 is $500 million. Is that right?

 

            MR.     : Yes.

 

            Q     That's in the 2010. 

 

            SEC. GATES: Yeah.

 

            Q     Okay.

 

            SEC. GATES: And initially 1207 was in for $100 million, and I increased that to $200 million.

 

            Q     And will you seek permanent Title X status for that -- just a quick follow up -- or will you leave it in the temporary category for the time being?

 

            SEC. GATES: Well, I think we'll see how things develop on the Hill and see if the Congress -- I mean, my hope is that the Congress will begin to embrace the greater resource for State and also give State the kind of flexibility that we have in the way we use these funds. And that has been a problem for State in the past. So I think, you know, we have this three-year extension, and I think we'll take that and then see how the resources develop for the Department of State.

 

            Q     Thank you.

 

            Q     Mr. Secretary, it's Spencer Ackerman with the Washington Independent.

 

            How confident are you that you've adequately enlisted the services' buy-ins for these cuts? Some of them gone -- like the FCS, like for the F-22 -- to some of the most valued and desired programs that they have. To what extent are you going to be on the lookout for services kind of going to favored members of Congress and trying to undo them, or do you feel -- do you actually have everyone on the same page? And if so, what did you do to get to that point?

 

            SEC. GATES: Well, I -- let me answer and then invite General Cartwright. 

           

            I -- first of all, these decisions -- there are one or another decisions that did not leave smiles on the faces of the different services, clearly. But I will say we had a process that was very inclusive, that included not only the chiefs and the secretaries of the services, but also included the commanders. And we had a lot of meetings and a lot of dialogue over the past three months on all of this. And so I think everybody knows that they had a chance to put their oar in and to make their case. In some cases the services proposed some of these options themselves.

 

            Q     Could you give some examples of that?

           

            SEC. GATES: (Laughs.) If you can give me long enough. It's late in the day. Sorry. Let me come back -- if I think of one, I'll come back to it. 

 

            But I would -- well, let me go ahead and just say that one of the concerns that I have had in the past has been the discipline in this building after decisions get made. And I think that -- you know, I understand that the chiefs in particular can give their professional military advice to the Congress and to the president if they disagree with these decisions, but the fact is that for everybody else, and, frankly, for them, in terms of executing the program, once I've made my decisions and once the president has made his decisions, then that is the position of this department and they are expected to execute those programs. And I've made it pretty clear to everybody that I don't want to see any guerilla warfare on these programs. We have a chain of command and that's what it's all about.

 

            General?

 

            GEN. CARTWRIGHT: I think -- I guess the first thing that -- I might just rephrase your question a little bit, but, you know, these are not cuts. This is a reshaping of our basic capability and the capability that the combatant commanders in particular are advocating for, that they need in order to be able to do their job out there. So there are as many pluses as there are reductions. And, you're right; you know, people will focus on the reductions.

 

            The things the combatant commanders and service chiefs basically uniformly endorsed -- the termination of the F-22 at the number that we all agreed on; the 187; the increase in the numbers of the F-35 and the transition to the F-35 as early as possible; the value that we've seen in the battlefield of the Predator class and now the Reaper class as it emerges -- all are things that the service chiefs and the combatant commanders agreed needed to be reshaped and moved in a direction that made sense based on where we were going. 

 

            So, I think, you know, this is a lot about the war fighters, the combatant commanders, and the reality of the fights that they're in and the reality of the fights that they are trying to prevent all around the world, and the capabilities you need. 

 

            And in the earlier discussion about 1206, 1207 and CERP -- these are the kinds of things that really will help us prevent war and move us in a direction that we believe is reasonable and responsive as we go to the future.     

 

            Q     Quick follow-up on that --

 

            GEN. CARTWRIGHT: Sure.

 

            Q     Do you feel you've gotten everyone's agreement and consent on the basic strategic construct? Both of you made the point yesterday that we needed to stop thinking so much about conceivable, hypothetical threats and focus on a vision of war fighting and of deterrence and defense based on something more like what we see now. Do you feel you've got buy-in on that front?

 

            SEC. GATES: Well, again, we'll do the one-two. I think the one place that there seems to me to be broad buy-in is that the -- this black-and-white division of conventional and irregular warfare is something of a fiction that does not reflect the real world; that in fact there is a spectrum of conflict where even at the low end -- the general was talking about lethality at the low end. And so you have -- in an insurgency you have a guy who's carrying an AK-47, but he may also be planting an EFP that can take out a million dollar-tank or MRAP. And you're going to have cyber involved in all of this in a way that hasn't been before, and that could happen at any place along that spectrum. 

 

            And so I think that there is an understanding that preparation for what we are calling complex hybrid warfare can range up and down this scale from counterinsurgency to a regular conventional conflict where, even in a conventional conflict, they will use irregular kinds of resources, whether it's cyber or something else. 

 

            So I think there is broad agreement to that. And frankly I haven't heard any pushback on -- from the chiefs about -- or really anybody else who's participated in this -- about integrating -- about institutionalizing the capabilities needed for irregular conflict in the base budget. 

 

            GEN. CARTWRIGHT: I would add just two points. The cyber point -- that is universally acknowledged by all the combatant commanders and the service chiefs as an area that we needed to put more investment in, that was worth cutting in other areas to ensure the investment was there, and we did that.

 

            The other point is that each year the combatant commanders submit what's called an integrated priority list. It's those things that they feel they most need to do their job. The correlation between those lists and these changes is amazing, and they weren't put together -- in other words, we held off the integrated priority lists. But when you look at them now, all of the things that the combatant commanders have been asking for -- not only the ones that are engaged in conflict but the ones who are trying to prevent conflict out there -- are in this program. And the correlation is very significant.

 

            SEC. GATES: To go back to the 1206, 1207 discussion and sort of global posture, one of the areas where we have plussed-up is in the funds going to combatant commanders and into the train-and-equip piece of this -- sort of the Phase Zero stuff where the investment is intended to try and prevent us from having to deploy our troops at some point.

 

            Q     Secretary Gates --

 

            Q     Mr. Secretary, this is Max Boot from the Council on Foreign Relations. I wanted to ask you about where we are in the overall size of the Defense budget because I believe you said this was roughly a 4 percent increase in the Defense budget. But now Congressman McHugh has put out a statement where he makes the point that apparently a lot of the supplemental spending is going to go into the base budget, and so he says that "if implemented, this proposal will be tantamount to an $8 billion cut in Defense spending." Now, is Congressman McHugh right?

 

            SEC. GATES: Well, the math is as follows, as far as I'm concerned: The FY 09 budget, which was $513 billion, submitted by President Bush, had a figure for FY 10 in it of $524 billion for the Defense Department. The -- we got roughly $10 billion more than that. 

 

            We made the decision to put the full cost -- to cover the full cost of the increase of the end strength of the Army and the Marine Corps and holding the strength of the Navy and the Air Force into the base budget. We probably could have put some of that into the supplemental or into the -- the supplemental for '09 and the overseas contingency operations for '10. So some of these things that we have put into the base budget we elected to put into the base budget to send a signal to the troops that these things were going to be a permanent part of our budget; we weren't going to be dependent on supplementals for them. That included some -- the plus-ups in the medical research, in quality of life issues for the troops, in several of these things that amounted altogether to about $13 billion. We probably could have justified a significant portion of that going into the supplemental. We elected to put it into the base budget. 

 

            So, you know, how you count where we are depends on your view of the whole thing. And so you can come out with a bunch of different numbers. I think that the 4 percent is simply what we got compared to what was in the '09 enacted legislation. So the 533.7 (billion dollars) or whatever it is, is 2 percent real growth over where we were in FY 09. How you then beneath that calculate in what we chose to put in that could have been in the supplemental and so on is probably how Mr. McHugh gets to his numbers.

 

            Q     Well, if I could just follow up -- I mean, I'm a little bit puzzled by the sort of austerity being imposed by the administration here at the same time that we're seeing massive economic stimulus bills being signed and we're talking about a need for stimulating the economy, creating more jobs and so forth, and at the same time it seems like we are squeezing Defense spending. And you can argue about whether it's a slight increase or a slight decrease, but at any rate it's not -- you're having to make some very difficult trade-offs, which you've been talking about. I mean, where do you see the need for that coming from?

 

            SEC. GATES: I tell you as I said yesterday, virtually every decision that I announced yesterday I would have made regardless of what our top line was. If our top line had been $581 billion, I would have made the same decisions that I made and announced yesterday because they went to what should be in the base budget; they went to program a rebalancing of getting more of the irregular -- the resources for irregular warfare into the base budget; putting a cap on programs where there was no military requirement for additional resources; and then killing programs where the budget was out of control or they were overdue or the technology was too great a risk. 

 

            So I -- you know, the top line number debate aside, in terms of the decisions I announced, I would have made those decisions regardless of how much money we had been given. 

 

            Q     Mr. Secretary, it's Noah Shachtman with Wired Magazine. Speaking of programs with budgets out of control, there's a couple programs that have been pretty heavily criticized, like the Marine EFV and like the Littoral Combat Ship, that seem to have budgets out of control, too. Why did you decide to keep those while cutting the others?

 

            SEC. GATES: Well, on the LCS -- and I'll ask the general to join in -- on the LCS I think it has a capability we just have to have. And I think that the program has had some difficulty at the outset. I think that we'll get it right and get a cap on the cost of those ships, and then our intent is ultimately to build 55 of them. This is a good example of where getting the prototypes right and then being able to buy them in numbers and with a multiyear program will help bring down the cost or keep the cost under control. 

 

            On the other vehicle, it seems to me that one of the issues that I kicked to the Quadrennial Defense Review is the size of the amphibious capability that the country needs, and obviously the vehicle you mentioned is a part of that, although I didn't single it out. But I have delayed the 11th LPD till after the QDR so that -- and also the Mobile Landing Platform -- so that we can assess how much amphibious capability we need. 

 

            I think one of the questions that has to be addressed in the QDR also is the --

           

            Q     The Expeditionary Fighting Vehicle.

 

            SEC. GATES: Yeah. The EFV is a part of this, and how much are you prepared to spend to get from the ship to the shore? And so I -- while I haven't -- while I didn't go after it in this budget, I think it's a piece of the analysis for the QDR.

 

            General?

 

            GEN. CARTWRIGHT: I think the LCS certainly represents the type of capability we -- that the Navy and certainly the department believes we need. Putting it on a footing where we're getting enough of the vehicles -- or, I'm sorry, the ships early enough to be able to understand its capabilities, assess in a test environment what it can do and what it can't do, and then move forward at an economic rate of production with a stable industrial base, is going to be critical. But at the heart of it, it is a capability that we believe we're going to need, and in quantities that we believe are going to have to be significant.

 

            The Expeditionary Fighting Vehicle -- exactly. This is really a question about how much amphibious warfare capability does the nation need, and a lot of what we'll do on the analytic side of the QDR is try to understand, one, how we're going to rebalance the force; two, what capabilities we need in what quantity; and then three, many of our capabilities have -- are duplicative in many cases. Conversation that we had earlier today which was, if you have bombers in the Pacific, then do you also have to have aircraft carriers, or can it be an either/or for much of the time? Do we always have to have everything in every service? How much of this do we really need, especially given the situation that we face, which is a much broader spectrum of conflict over a much greater geographic dispersal than we've had to face in the past? And we just can't afford to have everything in every service.

 

            Q     Quick follow-up, then -- what's the risk in your -- in this plan to rebalance the force? You know, when -- obviously every program's got risk, so what sort of kept you up at night here? What risks did you have in this one?

 

            GEN. CARTWRIGHT: The question -- I'll certainly kick off first -- but the question that certainly keeps you thinking is, where is the sweet spot, so to speak, and how stable is the sweet spot? Is it going to change quickly on you? These are capital investments, and they're going to be around for a while. Are they going to be able to work at the high end, so to speak, and the low end of conflict with the significant lethality that's coming? We know there's going to be a nexus between terrorism and WMD. We know that these kinds of threats are coming. Are these platforms going to carry us into the future? Are they going to be as viable as -- in 20 years as they are in five or 10? 

 

            Those are big issues that certainly, for me, you look at. But I believe -- and I said this in the press conference -- I believe these are the right choices. These are going to put us in a position of advantage as we move to the future and rebalancing this force.

 

            SEC. GATES: I think one of the risks that I see is an endemic problem with Defense programs, and that is, how can you put in place a program that can be maintained -- can be kept stable and sustained for a protracted period of time, given how long it takes to develop most of these weapons systems or capabilities? And when you have -- when things change from secretary to secretary, from administration to administration, from Congress to Congress, one of the reasons I think that there is so much cost in some of these capabilities that can be avoided is because they keep -- people keep pulling these programs up or changing these programs on a fairly regular basis. And anytime that the programs get changed, you have to -- you add cost, it seems to me. 

 

            So I think the key to this process is first of all -- just as an example, I believe that an Army vehicle modernization program is absolutely critical. It will take 15 years or more to implement that program. We need to get agreement on -- with the Army -- and kind of broad agreement on what the program ought to look like and then build it out and get it -- start bending steel just as soon as we can and keep that program going. 

 

            So I think that what is important here is to reach a level of, if not consensus, at least agreement looking forward by the principle figures on what these programs ought to look like, and then let them go forward. And this -- and frankly when we keep changing the requirements is when the cost begins to get out of sight and when the delays get built in. 

 

            MR.     : Is Matthew on the line?

 

            Q     Yes.

 

            MR.     : I wanted you to -- I think you're the last one who hasn't asked a question. Is that correct?

 

            Q     Excellent. Yes. 

 

            Could I ask you, Mr. Secretary, to say what specifically about the LCS capability is so compelling?

 

            SEC. GATES: I'm sorry?

 

            Q     Which capability specifically that the Littoral Combat Ship has did you find so compelling, as you referred to before? 

 

            SEC. GATES: Its ability to work in coastal areas, in, as we call it, green water; to move in close. It is the kind of capability that would have enormous value against fast boats, for example, in the Persian Gulf. It would have -- you don't need a $5 billion-ship to go after pirates. You don't need a $5 billion-ship necessarily to do a humanitarian mission. And so I think its flexibility and its ability to get into tighter places than other ships that make it so attractive.

 

            I don't know, General, if you want to --

 

            GEN. CARTWRIGHT: I think all of those, and I would add the modular design -- the ability, one, to design the modules in today for things like mine hunting and rockets and naval gunfire, and to start to look to the future about the problems we don't know we're going to have, and have a hull form and a ship that can be adapted for the future. So its got the agility we're going to need to change as the warfight changes.

 

            MR.     : One more question? 

 

            Q     Gordon Adams again -- I'll leap in here, Mr. Secretary. What -- you've talked about discipline in the building and you've talked about making sure that this goes through the process in a way that sends a very clear signal. What arguments would you make to the Congress, to the members who are going to be tempted to -- obviously to try to put some of the things that you have terminated or cut back on back into the budget? What's the most compelling argument that you're going to deliver to them about why they should stick with your program? 

 

            SEC. GATES: Well, I think that there are probably two levels of concern -- two kinds of concern in the Congress. One is the concern of people who are worried about losing jobs in their states and in their districts. And I think the other problem is people who have genuine concerns about the decisions that we've made for substantive reasons -- for example, Senators Lieberman and Kyl and so on, on ballistic missile defense. 

 

            And in the former case, my hope is to try and persuade them to look beyond the parochial interest and do what's in the best interests of the nation as a whole. If we -- I mean, there isn't a single program -— everybody agrees on the need for acquisition reform, but the reality is you can't change a single program in this building, in this entire Defense budget, without affecting somebody's district or somebody's state. And so trying to get them to look more broadly at the national interest is my hope on the first.

 

            On the second, we just have to sit down and work with them and talk to them about what we are doing, why we've made the decisions we have, what we've done to mitigate risk, and so on, and just have that dialogue with them and trying to persuade them that the direction that we're pointing is a good one and that the concerns that they have have been addressed and mitigated in some way.

 

            You know, one of the other things that I think -- one area that -- where we will get total support on the Hill based on past experience -- we haven't talked about this at all -- the one area where we get total support is in putting all of these programs affecting our troops, our wounded and their families, into the base budget. These have been carried in the supplementals for the last umpteen years -- the last number of years since we went to war, and to put all this into the base budgets sends a powerful signal about the fact that our highest priority is taking care of our people. As Admiral Mullen has put it, "If we don't get the people part of this right, none of the other decisions that we make will matter." And so I think one of the areas -- one of the points I think in leading off on this in dealing with the Hill is -- that's a place where I think everybody will be in agreement. 

 

            Thank you all very much.

 

            Q     Thank you.

 

            Q     Thank you.

 

            Q     Thanks.

 

            (C) COPYRIGHT 2009, FEDERAL NEWS SERVICE, INC., 1000 VERMONT AVE.

NW; 5TH FLOOR; WASHINGTON, DC - 20005, USA. ALL RIGHTS RESERVED. ANY REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION IS EXPRESSLY PROHIBITED.

 

            UNAUTHORIZED REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION CONSTITUTES A MISAPPROPRIATION UNDER APPLICABLE UNFAIR COMPETITION LAW, AND FEDERAL NEWS SERVICE, INC. RESERVES THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO IT IN RESPECT TO SUCH MISAPPROPRIATION.

 

            FEDERAL NEWS SERVICE, INC. IS A PRIVATE FIRM AND IS NOT AFFILIATED WITH THE FEDERAL GOVERNMENT. NO COPYRIGHT IS CLAIMED AS TO ANY PART OF THE ORIGINAL WORK PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS PART OF THAT PERSON'S OFFICIAL DUTIES.

 

            FOR INFORMATION ON SUBSCRIBING TO FNS, PLEASE CALL CARINA NYBERG AT 202-347-1400.