SEC. GATES: (Applause.) Thank you. Thank you.

 

            Thank you for that kind introduction, Erle, and a special thanks to the Greater Dallas Chamber of Commerce for the invitation to speak today.

 

            First things first. Howdy!

 

            AUDIENCE MEMBERS: Howdy! (Laughter.)

 

            SEC. GATES: You ought to try starting a congressional hearing sometime with that. (Laughter.) It is a nice way to begin a speech. In Washington most of my public remarks tend to begin with someone asking me to raise my right hand -- (laughter) -- and then asking if I'm actually going to tell the truth. (Laughter.)

 

            Well, it's a pleasure to be here in Dallas, to be back in Texas. Of course, it's a pleasure to be anywhere but Washington, D.C. (Laughter.) Where those who travel the high road of humility encounter little heavy traffic. (Laughter.) The only place in the world you can see a prominent person walking down Lovers Lane holding his own hand. (Laughter.) 

 

            Sometimes back there I'm reminded of President Truman's comment about his arrival in Washington. He said, "For the first six months, you wonder how the hell you got here; for the next six months, you wonder how the hell the rest of them ever got here." (Laughter.)

 

            It is a pleasure to be back in Texas, where, as Erle mentioned, I spent four and a half wonderful years at Texas A&M, and I understand, from the applause earlier, that there's a healthy contingent of Aggies today. There is a certain symmetry. I was the -- as Erle mentioned, I'm the 22nd secretary of Defense; I also happened to be the 22nd president of Texas A&M. You'll notice Texas A&M was founded in 1876 and has had 22 presidents, and the Department of Defense was founded in 1947, and has had 22 -- (laughter) -- there's a message there somewhere. (Laughter.)

 

            The Aggies will be pleased to know that the senior boots given to me by the Corps of Cadets are on proud display in the Office of the Secretary of Defense. Longhorns are not required  to genuflect -- (laughter) -- and their career prospects have not been damaged -- much. (Laughter.)

 

            To the members of the greater Dallas Chamber, let me express my deepest gratitude to all of you who are supporting your Guard and Reserve employees while they are mobilized. You value these citizen soldiers and know they're more than worth retaining. Thank you for believing in them. This is a tough time for them and for their families, and I can assure you that your help and understanding do not go unnoticed.

 

            There are a lot of other activities your members sponsor that benefit the military, from Adopt A Soldier Projects to providing complimentary sports tickets to helping servicemen and -women travel to be with their loved ones or keep in touch while overseas. And of course the Dallas-Fort Worth airport has its Welcome Home a Hero initiative, a great program that organizes local groups, schools, congregations and businesses to be on hand every single day to greet men and women returning from their deployments.

 

            This morning I met a flight from Kuwait into Dallas-Fort Worth, with almost 200 service members from several branches of the armed forces. These kinds of public receptions are really important. Whatever disagreements exist over the war in Iraq, we are all united in our admiration of the men and women who have volunteered to serve our nation during these challenging times. (Applause.)

 

            These heart-warming receptions are a far cry from what took place in the late 1960s and the 1970s, and it's good to see that we've learned from our past experiences and mistakes. 

 

            Nowadays a lot of people do want the troops to know they care, yet some aren't sure how to get involved. A few years ago the Department of Defense launched a program, called America Supports You, that recognizes all the things that are being done across the country to show appreciation of the U.S. military and their families. If people go to the America Supports You website, they will see countless projects they can join. From sending care packages to troops abroad to lending a helping hand to their families here at home, everything you do makes a difference.

 

            In the relatively short time since I became secretary of Defense, I've had the opportunity to meet and work with some extraordinary people dedicated to serving their country.

 

            At the top of list are our troops on the front lines in Iraq and Afghanistan. I've come away from my four visits in four months to Iraq and Afghanistan impressed by their resilience, their good humor, their courage and their determination in the face of danger and personal sacrifice.

 

            And I've been just as impressed with the wounded troops at Walter Reed. To be honest, before I went the first time, I dreaded it, but people kept telling me, "No, you don't understand. They'll lift you up." And they did.

 

            And they do whenever I visit there, especially the wounded officer at Walter Reed who reminded me that I'd handed him his diploma at Texas A&M in August of 2002. He also told me he'd had the doctors play "The Aggie War Hymn" during his surgery. (Laughter.) That's commitment. (Laughter.) 

 

            All of these young men and women are so impressive. And the military and the federal government are putting a full-court press on to make sure we solve the problems relating to outpatient care that have come to light in recent weeks. Not all parts of the job are so edifying. This is budget season in Washington, another reason I looked forward to being here today. (Laughter.) 

 

            One of my first duties when I became secretary was to present the department's base budget and war request for the next fiscal year. I'm here to tell you, you haven't lived until you've gone before Congress and asked for nearly three-quarters-of-a-trillion dollars from the taxpayers' wallets. It gives a whole new meaning to the term sticker shock. 

 

            But I also believe that it's important to put that Defense budget in some historical context. Consider that at about four percent of America's gross domestic product, the amount of money the United States expects to spend on Defense this year is actually slightly a smaller percentage of GDP than when I left the government 14 years ago, following the end of the Cold War, and a significantly smaller percentage of GDP than during previous times of war, such as Vietnam and Korea. 

 

            Someone once said that experience is the marvelous thing that enables you to recognize a mistake when you make it again. Five times over the past 90 years -- after the First and Second World Wars, Korea, Vietnam and most recently after the Cold War -- the United States has slashed Defense spending or disarmed outright in the mistaken belief that the nature of man or the behavior of nations had changed with the end of each of the wars, or that somehow we would not face threats to our homeland or would need to take a leadership role abroad. Win, lose or draw, we cut back at those times, not just in Defense but in other vital elements of national power such as diplomacy and intelligence. 

 

            In 1992 when I was director of Central Intelligence, I testified before Congress when it was considering CIA's budget at the end of the Cold War. I noted that while we had just witnessed the implosion of the Soviet Empire, the end of the superpowers struggle by no means meant that history was over. Rather, I argued that history had been temporarily frozen by the Cold War and by World War II and might well thaw with a vengeance. Intelligence officers are traditionally pessimists. But in the early 1990s, not even I would have predicted how rough history's thaw would be.

 

            There's a lot that's good about American optimism. But on occasion, that optimism has led us to believe that if we would just deal with this or that crisis abroad, we could then pay less heed to the rest of the world and then turn inward and pay attention to domestic affairs. That's why our nation once again pursued a false peace dividend in the 1990s. With the complicity of both political parties, key instruments of America's national power -- military, diplomatic and intelligence -- withered throughout the decade. Consider that between 1989 and 2001, the active Army declined from almost 800,000 troops to fewer than 500,000, the number of Navy ships decreased by more than half and the Air Force went from 37 tactical wings to 20.

 

            As CIA director, I tried to fight off reductions in the intelligence budget. And while CIA's spending and manpower figures are closely held, the public knows through the findings of the 9/11 commission that by the mid-1990s recruitment of new case officers at CIA had hit a(n) historic low, and the agency's funding was a prime target for budget cutters. Indeed, within three years of my retirement in 1993, CIA's clandestine service had been cut by 30 percent, just when Osama bin Laden was gearing up his war on the United States.

 

            The place where we may have taken the biggest hit was in our ability to engage, assist and communicate with other parts of the world. The State Department froze new hiring of Foreign Service officers. The Agency for International Development saw deep staff cuts and relied more and more on outsourcing, its permanent staff dropping from a high of 15,000 during the Vietnam era to 3,000 today. In what had been an enormously successful organization for communicating America's values and message abroad during the Cold War, the United States Information Agency was abolished in the 1990s as an independent entity and folded into the State Department.

 

            But even as we throttled back, the world became more unstable, more turbulent and more unpredictable than the Cold War years we had left behind. Our hopes for peace once again gave way to the realities of disorder and conflict. The attacks of September 11th, 2001, abruptly ended our holiday from history and the illusions that came with it. Those attacks and the subsequent campaigns in Afghanistan, Iraq and around the globe revealed military, intelligence and diplomatic short comings that our government has had to work hard to correct.

 

            As a nation, I believe we have to do two things. First, we have to deal with the challenges we face now, to commit the necessary resources to the current campaigns in Iraq and Afghanistan. And second, we must recoup the under investment of the past and commit ourselves to strengthening the instruments of national power across the board. This won't be easy. As General Pete Schoomaker liked to say about some of his efforts as chief of staff of the Army, this process is like tuning a car engine while the vehicle is moving.

 

            Most pressing to me as secretary of Defense has been the stress the ongoing conflicts have placed on our armed services and in particular our ground forces, the Army and the Marine Corps. Who have both bore the brunt of underfunding in the past and the bulk of the cost, both human and material, of the wars of the present. In fact, investment in Army equipment and other essentials was underfunded by more than $50 billion before we invaded Iraq.

 

            In addition to allocating tens of billions of dollars to repair or replace damaged or destroyed equipment, we will also be increasing the size of the active Army and Marine Corps by some 92,000 over the next five years. One of the effects of this increase over time should be that with a larger pool of ground forces it will be less necessary to call on National Guard units as often for deployments overseas.

 

            We're also recapitalizing and modernizing our air, sea and land forces for all kinds of conflicts, whether they are conventional battles or counterinsurgency campaigns that may come in the future. A rethinking of strategy and redirection of resources is taking place throughout the government. I note in this connection the change in our diplomatic posture being directed by the secretary of State, Condi Rice. As the secretary noted last year, it makes little sense that our embassy in Germany, a nation with a population of 82 million, has about the same number of U.S. State Department officers as our embassy in India with over a billion people. The State Department has begun to shift its assignments in post locations to better suit the realities and priorities of the 21st century.

 

            In the area of intelligence, I'm encouraged that CIA has dramatically ramped up recruitment and has boosted our human intelligence efforts. The goal is an integrated effort, a reinvigoration of the key elements of national power so that the United States does not let down its guard again. We will not achieve the goal tomorrow or the day after tomorrow, but I think we've at least made a start.

 

            This is a crucial time for our country, our nation, for all our allies. Violent extremist networks and ideologies will continue to be a threat to the United States and our allies for many years. The ambition of these networks to acquire chemical, biological and nuclear weapons is real, as is their desire to launch more attacks on our country and on our interests around the world. 

 

            There are other areas of concern -- the nuclear ambitions and missile programs of Iran and North Korea, which pose a threat to their neighbors and the entire world because of their record of proliferation; the uncertain paths of Russia and China, which are both pursuing sophisticated military modernization programs; and a range of other potential flash points. 

 

            There is no doubt that the challenges we face are daunting, and certainly it can be depressing to read the latest news bulletin from the Middle East. But I also remember what things were like when I first went to Washington in the summer of 1966, at the height of the U.S. buildup in Vietnam. What lay ahead were violent domestic turmoil, two assassinations at home of historic consequence, a major war in the Middle East, the seizure of a U.S. Navy ship by North Korea, the Soviet invasion of Czechoslovakia, and the resignation of a president in disgrace. 

 

            And by the end of the 1970s, we saw a collapse in Vietnam and the deaths of millions across Southeast Asia; high inflation, high interest rates; two energy crises; the Soviet invasion of Afghanistan; a revolution in Iran and an embassy taken hostage; and tens of thousands of Cuban soldiers in Angola and Ethiopia. By 1980, the Soviet Union seemed ascendent, and we were reeling. 

 

            Who would have anticipated during that discouraging period that the groundwork was being laid, through policies pursued by administrations of both political parties, for the remarkable turn of events that occurred a decade later -- the fall of the Berlin Wall, the liberation of Eastern Europe, victory in the Cold War, the reunification of Germany, the dissolution of the Soviet Union, the liberation of hundreds of millions of people behind the Iron Curtain and around the world, and an American economy beginning more than a quarter of a century of vibrant economic growth.

 

            There are, I think, two lessons from all this. First, our weariness with conflict, with the setbacks and tragedy of war is understandable and even to be expected. But second, we must not let that weariness cause us to withdraw from the world or diminish our ability to deal with the threats and challenges of tomorrow. There is no way to predict the future, nor can we predict the effect that decisions made today will have a decade or two from now. 

 

            One thing is clear, though, from history: When America is willing to lead the way, when we meet our commitments and stand with our allies even in troubling times, when we prepare for threats that are on the horizon and beyond the horizon, and when we make the necessary sacrifices and take the necessary risks to defend our values and our interests, then great things are possible, and even probable, for our country and the world.

 

            A final thought. Our country is troubled and divided by a long and difficult war in Iraq. We want our troops to come home and be out of harm's way. And yet most know or at least sense that leaving chaos behind us in Iraq will bring dramatically more suffering from -- for Iraqis and also disaster for the Middle East and ultimately for us.

 

            At such a difficult time, it is perhaps fitting to close with the words of Winston Churchill, who said of us, "The price of greatness is responsibility." The people of the United States cannot escape world responsibility. That was true when Churchill said it in 1943, and it is still true nearly 65 years later.

 

            As a nation, we have over more than two centuries made our share of mistakes, from time to time strayed from our values, and on occasion become arrogant in our dealings with others. But we have always corrected our course. And that is why today, as throughout our history, this country remains the world's most powerful force for good, because we stand for liberty and we stand for the God-given worth of each and every person.

 

            This country will continue to be a beacon for all who are oppressed, and it will continue to accept its responsibility for leadership in the world. And that is good news for the world.

 

            Thank you. (Applause.) Thank you.

 

            MODERATOR: Secretary Gates has agreed to answer a few of your questions. And these are in no particular order.

 

            Mr. Secretary, what is your outlook for manning the Army over the next couple of years? Challenges, solutions.

 

            SEC. GATES: Well, I'm happy to say that the Army is meeting its -- both its recruitment and its retention goals as of even last month. I think the fact -- and we're actually -- the Army almost ends up competing with itself, because there are three elements of the Army that are recruiting from the same pool -- the Army Guard, the Army Reserve and the active Army. And the fact is, all three are meeting their recruiting goals. The Army's a tad behind for the first quarter, but it's because the other two are over 100 percent. 

 

            So I think that the prospects are really very good. And what's amazing is that enlistments are so strong, given the fact that the young people who are enlisting know exactly where they are going and the difficulty of the struggle in front of them. The Army was at 482,000. The Congress authorized a temporary increase, to 512,000, of about 30,000. The Army is now at about 507,000 and will go to 547,000 when the expansion of the Army is complete. So I'm pretty optimistic, given the record of recruitment over the last -- and retention. 

 

            MODERATOR: What are the next steps to restore or revive the U.S. moral leadership position in the world, given many people's concerns over our military involvement? 

 

            SEC. GATES: Well, I think that our involvement, our engagement with other countries -- first of all, I think there's a temptation to forget that we're not alone in this fight. In Afghanistan there are 42 countries and 12 non-governmental organizations involved in working with us, or we are involved in working with them. We have 36 countries working with us in Iraq. Obviously we have the overwhelming percentage of the forces. But when small countries like Estonia and Macedonia and others are willing to commit some of their relatively small number of troops to fight alongside us, I think it's an important message. 

 

            I think that our leadership role in the world is -- has really never been in doubt. I think that it was inevitable after the end of the Cold War, when there was one superpower left, that other countries would resent our overwhelming military, cultural and economic power, and would look to align with one another to try and balance that power and assert their own interests. Frankly to the degree we have had any setbacks in terms of moral leadership, I think that they are transitory. This is one of the reasons that I've spoken out in terms of closing Guantanamo. I think that's one of those areas where we've taken a -- we've gotten a black eye for things not that are going on now but things that happened in the past there.

 

            So as I said in my remarks, we sometimes make mistakes, but we correct course. And I have no doubt that other countries will continue to look to us for leadership in the future.

 

            MODERATOR: What has been your most pleasant surprise in your new role? (Laughter.)

 

            SEC. GATES: How long have I got? (Laughter.)

 

            Well, I think, really, there's no question about it, it is the extraordinary caliber of the people that I get to work with. And it's not the only more senior people that I meet with every day in the Department of Defense both in and out of uniform, but especially the opportunities to meet our young people in Iraq and Afghanistan and around the world. They are really extraordinary.

 

            I met with the internal review group that I appointed that was co-chaired by former Secretaries of the Army Togo West and Jack Marsh yesterday, and one of the members was a long retired command sergeant major. And his view was that the soldiers that we have today are the best in the history of the country, and I believe that.

 

            MODERATOR: Are you optimistic regarding Secretary Rice's visit to Syria?

 

            SEC. GATES: Is she going to Syria? (Laughs, laughter.) She's actually at the meeting in Sharm el-Sheikh in Egypt for the neighbors conference with respect to Iraq. I think that this is a step-by-step process. I think that the number of countries that are represented there in one way or another is a very positive step forward. So I -- you know, it's hard to say. It's a tough slog, to tell you the truth, but I think that each of these steps is an important step forward, and I think getting so many countries to come and talk about how do we address the problems of Iraq is a very positive step.

 

            You know, the line about Syria -- one of the things that I've found that really sometimes throws some of the Pentagon press corps off stride is they'll ask me a question or say something has happened, and I'll say, "Well, I didn't know that." And I don't think they're accustomed to that. (Laughter.)

 

            MODERATOR: Would you address what the Saudis are doing to help us in Iraq?

 

            SEC. GATES: Well, I think that the Saudis, first of all, are a very strong ally to the United States -- for the United States in the war on terror. There's no question, in my view, that the Saudis are concerned about what they see as Iranian influence in Iraq and among the Iraqi Shi'a. I think they are concerned. But I think I read in the paper actually that the Saudis are prepared to forgive 80 percent of the debt that Iraq owes them. So I think that the Saudis, despite their concerns, are trying to help where they can.

 

            MODERATOR: The question is, why isn't there more communication to the general public regarding the reconstruction effort in Iraq?

 

            SEC. GATES: Well, for one thing, it has been in the past year or so pretty dangerous for the press to venture beyond the Green Zone in Baghdad. And those who are -- have been embedded with our troops and have gone out I think have reported some of the positive things that they've seen. There was a piece just a couple of weeks ago on one of the evening network shows that I just happened to catch that showed several different neighborhoods in Baghdad where the markets had revived, where the children were out playing, where the men were going to the coffeehouses and so on. There was a return to some measure of normalcy, and that was on prime-time news.

 

            So I think that there is an effort to try and present that information when they can get it. I think also we have to be honest and acknowledge that when one of these huge vehicle-borne IEDs goes off and 200 Iraqis are killed, that tends to squelch whatever other good news may be coming down at the same time.

 

            MODERATOR: I've been informed that we have two more questions. Do you think that the United Nations might play a role in peacekeeping eventually in Iraq? 

 

            SEC. GATES: Well, the United Nations is, first of all, stretched pretty thinly in terms of peacekeeping. After all, the way the U.N. does peacekeeping is by nations contributing forces, and most of the nations that are willing to contribute those forces already have forces in Iraq or Afghanistan or in Darfur or someplace else. And so -- or would be willing to put them there, or they have them in the Balkans.

 

            So you know, I think that it's possible that that might happen at some point. But I think, as all of us have said in -- from the President on down, the best assurance of a more stable and less violent future in Iraq is for the process of reconciliation among the different factions in Iraq to go forward.

 

            MODERATOR: Please comment on CIA's human intelligence capabilities and how they have changed from your time as DCI to now.

 

            SEC. GATES: Well, I would say that they are -- first of all, the intelligence challenge today is in many respects dramatically more complex than it was when I was director of CIA. Then we were -- we had about half of our resources focused on the Soviet Union, and the only place in the Soviet Union you needed to be was in Moscow.

 

            Now there are 15 successor countries. You need somebody in each of them. You have all of the changes in Eastern Europe, you have the changes in Southwest Asia and so on, and a much worse proliferation problem, along with the whole global terrorist challenge.

 

            The good news is, the agency is hiring, as I mentioned in my remarks -- hiring a lot of new case officers. They are very high-quality people. I might just mention, in a little aside, that the agency hires about a hundred a year, on average, from Texas A&M. (Laughter.) That was before I got there. (Laughter.)

 

            But I think that their capabilities both in terms of collection and analysis are improving significantly. And I -- and in terms of a true difference, I think it is in the close collaboration that is taking place in places like Iraq, between CIA and our military -- this is very different.

 

            And I would just close with a quote. I met with the head of CIA operations in Iraq, and I was asking him about the collaboration between the agency and the military. And he proceeded to make me feel very old by saying, "Sir, it's just so much better than when you were here." (Laughter.)

 

            Thank you all very much.

 

            MODERATOR: Thank you, Secretary Gates. (Applause.)

 

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