Mr. Bacon: Good afternoon. Happy New Year.
My best laid plans to be here exactly at 1:30 were shattered, but here I am.
I'd like to start with a couple of announcements.
First, as many of you know, the Secretary of Defense will go to Asia, leaving on Saturday, and he will visit Malaysia, Indonesia, Singapore, Thailand, China, Japan, and the Republic of Korea; leaving on Saturday the 10th, and coming back on Thursday the 22nd of January. In those countries he'll be discussing a range of national security issues with his counterparts and other leaders, and also giving some speeches at military academies and think tanks, etc., to discuss U.S. security interests and shared security interests in the region.
Second, many of you know the C-141 that crashed tragically off the coast of Africa several months ago had just delivered some demining equipment to Namibia. A second shipment of demining equipment is going to begin operation in Namibia on January 8th with some soldiers from the Army's 3rd Special Forces Group headquartered at Fort Bragg.
We're delivering something called a demining berm processor vehicle, which looks like a hay bailer and is towed behind a tank or a tractor and it digs up mines from the ground and sort of spews them out -- separates mines from the ground so they can be destroyed. There's a picture of it on the Internet, and we'd be glad to give you a picture of it.
But this is another component of the Department's progressive program to teach people to demine areas that have been mined in the past and also to provide demining equipment in support of efforts to dig up mines around the world.
As you know, we've spent over $153 million to train deminers and provide equipment since 1993.
Finally, I'd like to announce that Secretary Cohen and General Shelton have established two new general officer positions on the Joint Staff. These will be two-star positions to serve as Assistants to the Chairman of the Joint Chiefs for National Guard matters and for Reserve matters. These positions were called for in legislation passed late last year, the Defense Authorization Act for 1998, and the Chairman has written job descriptions and is now in the process of asking the services to propose candidates to fill these two jobs which will advise him on Guard and Reserve affairs as part of our continuing effort to make the total force work as well as possible -- that is integrating Guard and Reserves into the active duty force.
With that, I'll take your questions.
Q: On the trip, does he plan to meet with President Jiang in China?
A: I haven't seen the final list of meetings so I can't comment on that. We're still working that out. I'll have to let you know. I just haven't checked on the meeting list.
Q: He said the reason he put off the trip to China and Asia was pretty much because of the Iraq matter. What's changed now that allows him to go?
A: The Iraq matter is not over, certainly. But what has changed is that the UN Security Council has voted on several occasions to require Iraq to open up sites to inspectors. Inspectors have gotten back into Iraq and are doing inspections, although not with complete access yet, but we're still, the UN is still working for complete access.
When he initially delayed this trip, I believe it was right when the inspectors were either leaving Iraq or had left Iraq; the whole inspection regime had been stopped and that clearly has changed. Iraq backed down from its initial position, allowed inspectors back in with Americans on the teams; the inspectors have gone back to work.
Now the issue is how much work the inspectors will be able to do there, and this is still an issue between the UN and Iraq. Mr. Butler, Richard Butler, the head of the UN Special Commission, plans to go back to Iraq later this month and continue his discussions with Iraqi officials over access.
So I think the situation has changed dramatically.
In addition, we have moved a fairly significant force to the Gulf. That remains there. I believe at the time he initially postponed the trip we were in the process of scripting that buildup and getting the forces over there. So much of that has been done. Now we're waiting for Iraq to realize that full compliance means exactly that, that they have to give unfettered access to their facilities.
Q: Will you consider starting to draw down those forces that are in the Gulf at this point if the situation has changed so much?
A: Right now there's no consideration being given to drawing down the forces.
Q: Will there be a testing, a physical testing of access to those palaces and other off-limit areas by Butler's people? Or do you know yet?
A: There already has been that and I would anticipate there will be more. But that's really a question for the UN and for Ambassador Butler and his team. But there already has been some testing and there's been some expanding access, but we still don't have completely unfettered access.
Q: Have the U-2 flights continued? Have there been any challenges to those, any problems with them?
A: The U-2 flights have continued and there have not been challenges to them.
Q: Back to Secretary Cohen's trip to Asia, and specifically China. When he's in China, will there be any agreements signed? If so, can you describe them in any sort of general way?
A: The primary agreement that will be signed is the maritime agreement that basically outlines rules of the road at sea. This is an agreement between the U.S. and China for dealing with maritime disputes or accidents in a peaceful and efficient way.
The agreement has been negotiated and it's been initialed, but it hasn't been formally signed yet. He will sign that when he's over there. This is very similar to agreements we've signed in the past with other countries.
Q: On the two new positions on the Joint Staff, can you tell us sort of what the parameters are for people in these jobs? Will they be Army Generals?
A: That remains to be seen. I would expect that one probably will be an Army General, but I think that has to be worked out by the chairman after he interviews these people. Every service will suggest somebody to fill one of these two slots.
Q: Since Iran will be in the news probably the next couple of days because of CNN's interview with the president, can you bring us up to date on what Iran is doing? CNN's interviewed the President of Iran, not this President. But can you bring us up to date on what Iran is doing to either acquire or test any intermediate range ballistic missiles, and is that a threat to the region?
A: As you probably recall from reading our report of late last year, the Proliferation Threat and Response Report, Iran does have ballistic missiles that basically go up to a range of 500 kilometers. That's the SCUD-C missile which they've acquired from North Korea. That missile has a range that allows it to hit sections of Saudi Arabia, most of Iraq, into Pakistan, Afghanistan, Uzbekistan, Russia, Georgia, etc. They are trying to buy longer range missiles -- buy or develop longer range missiles -- with ranges of say 1,000 miles or maybe more. We've been engaged in very vigorous diplomacy with Russia and North Korea and other countries to try and limit missile exports or sales, components of missiles, to Iran, and those efforts continue.
We think that the acquisition or development of longer range missiles would pose a potential threat to the region and believe that the region would remain safer without that threat.
Q: We had a report today that the Air Force over at Aviano, Italy has been forced to cannibalize a couple of F-16s for spare parts to continue the Bosnia no-fly mission.
Two questions. One, can you tell me whether or not this has affected the overall mission? Secondly, what does it say about overall readiness of the armed forces? Is this an indication of maybe some problems to come?
A: Let me take the bigger question first, overall readiness. Readiness is a primary concern of Secretary Cohen and General Shelton. It's something we take very seriously and are devoting a lot of money to. The amount of money spent on operations and maintenance per member of the military now is at an all time high. It's about -- I believe it's about $66,000 per soldier per year, and that's for O&M.
We take seriously all reports of readiness problems. There is a very... Set up at the end of 1994 is something called the Senior Review Group, SROC [Senior Readiness Oversight Council] on the Joint Staff, that reviews readiness issues every month. The goal of that group is to act on the first reports of readiness problems, to try to find ways to correct them. I listed some of the accomplishments of that group in the past. One that I talked about was an earlier report that the Army was short of infantry soldiers and there was, in fact, a shortage, and the Army is attempting to correct that shortage by recruiting and training higher numbers of infantry soldiers so that units going to the National Training Center won't be short of infantry soldiers. That's the type of thing that the SROC and the readiness monitors focus on and try to correct when they see the problems.
I can't tell you that there are not readiness problems in the military because clearly, from time to time, we do have needs for spare parts or we run into temporary shortages of people, but we try to address those as quickly as possible.
In terms of the report on F-16s, I think that it illustrates what the readiness situation is in the service generally. The service -- every service is able to perform its job, at the point of the spear in the Persian Gulf, the Arabian Gulf, in Bosnia, in Korea. Those units are ready, they're well trained, they're well equipped and they're ready to do their job.
I think the readiness of the rest of the force is also kept at quite a high level. It's obviously not always at as high a level since they're not out on the front lines as the forces are, say in Korea or Bosnia.
In Aviano there are two squadrons of F-16 fighters, and our commitment to the NATO operation is to have six F-16s ready to fly at all times, and we do. Because of the nature of aircraft maintenance, it's very common, and I think this applies to a lot of military equipment, that not every single plane is ready to fly at every moment of the day. In fact, in Aviano the goal is to have a capability rate of 84 percent for the F-16s, and they are slightly below that. I think they're about 80 percent. So they're close to what the Air Force goal is, but they're not exactly at it.
What happens is that from time to time if there's a shortage -- a cracked cockpit in a plane, I mean the canopy cover in a plane -- they might take one off another plane while they're waiting for a new one to come in. That's fairly standard procedure.
But the point here is that in Aviano, as throughout the military today, the forces that are actually on point, performing their job, are well equipped and ready and well trained.
Q: What is the cause of some of these readiness problems? Is it just a lack of money, poor planning, an unresponsive bureaucracy?
A: I'm not sure it would be fair to characterize this as a systemic readiness problem. The military is very complex. It has millions of pieces of equipment, 1.4 million people. There are always situations where there may be a temporary shortage of parts, and some parts are moved from one place to another or taken off one piece of equipment and put on another piece of equipment. What we have in place is a system for dealing with these readiness issues as they arise.
So the effort is to try to spend the money as efficiently as possible to keep the force as ready as possible. That's what we're doing. As I said, we've got a fairly high level of spending for readiness, the O&M spending of $66,000 a person in the uniformed military today is a pretty high rate.
Q: On that $66,000 figure, you said that was the highest rate yet.
A: I believe it's the highest rate. If it's not, it's very close.
Q: How does that compare, though, in terms of percentage? Given that the military has downsized pretty dramatically in recent years?
A: Actually, as the military has downsized, the O&M spending per soldier has gone up -- or per person has gone up. One of the reasons for that was to avoid what's happened during downsizings in the past, which is sometimes readiness has suffered dramatically as the military has decreased in size. We have worked very hard to avoid that happening this time.
The Secretary and the Chairman are very aware of readiness reports. They have followed very closely the reporting in the press about readiness. They have initiated looks at readiness because they want to make sure that the force is as ready as we think it is, but this is something we're watching very closely.
To answer your specific question, in 1992, operations and maintenance funding per active duty service member was $59,000 -- and that's measured in fiscal 1998 dollars. Using the same measure, the rate of spending was $67,000 per active duty person in '95 and '96. In '97 it was $66,000; and we anticipate it will be $66,000 again in 1998. So we're not quite at the peak, but very close to the peak at $66,000 per person.
Q: You seem to be saying that the Pentagon views this as a manageable situation. It sounds like it's going to continue as it is indefinitely. There will be spot shortages in parts and personnel, and the Pentagon will try to rush in the people and parts as they can. Is that...
A: I think every newspaper office sometimes runs out of pencils or xerox paper for a short period of time; it might run out of ribbon for printers, for certain types of printers. Or it may run out of coffee for a morning or even a week before a new delivery is made. This happens in the military. These are manageable problems. We don't believe they are serious problems. But we have never pretended that every piece of equipment is ready to go at every minute of every day. What we strive to do, first of all, is make sure that the soldiers who are on the front line, the sailors who are at sea, have equipment that is as ready as possible.
We do not believe we have a systemic problem. We believe we have a situation that bears watching all the time. One of the ways we've tried to deal with this problem is to keep spending on operations and maintenance high. Does that mean there will never be a missing part? Of course not. Does it mean that we'll never have a shortage of trained personnel in a certain specialty? Of course not. What it does mean is that we think we have in place a system that helps us deal with those problems. That one, discovers the problems and two, deals with the problems quickly.
Both the Secretary and the Chairman are looking at that system right now to make sure that it is as responsive and as efficient as possible. We do not have reports from the CINCs of widespread readiness problems. There are always anecdotal reports from the field that a squad was short a couple of people or that there weren't enough spare tires to do something. We live with those all the time. But if we have in place a system that deals with those, we think that's the most intelligent way to solve the problem.
Now there's another way to do it. You could add $50 billion to the defense budget and you could have big warehouses all over the world filled with spare F-16 canopies. That would be another way to deal with it. You have to make a balance and you have to decide how best to spend your money and how to get the right balance between force effectiveness and efficiency of resource use. That's what we're struggling to do.
Q: The Secretary and General Shelton have paused for a couple of fresh looks at this problem. Can you elaborate? Are these new reviews? Are there queries out to the CINCs out there? What were you referring to?
A: First of all, the CINCs are surveyed every single month, and we also expect that any CINC worth his salt, if he had a real readiness problem that he felt would interfere with his mission, would report back to the chairman quickly and say: I can't do my job because I'm facing a shortage of parts. I'm not aware that there are reports like that coming in.
There is an institutionalized survey done every month where the CINCdoms report on their readiness problems so that they can be addressed. The chairman and the Secretary want to make sure that the system we have for measuring readiness is a good system that captures, that gives an accurate picture of what readiness is. They're just asking the question. We have the system set up. Is the system working? We don't have any evidence it is not working, but it makes sense to ask the question.
We've got a Chairman who's been on the job a couple of months, and a Secretary who's been on the job 11 months. It just makes sense with something as important as readiness, to make sure that we're measuring the right thing, and we're measuring it the right way, and that the measurements are accurate. So that's what they're doing.
Q: Could you tell us where the Secretary and the staff are in terms of preparing for the budget submission? Where the process is at the moment?
A: It's basically over. It's wrapped up and my belief is that the work is basically done. There may be one or two details left, but I think the budget is basically wrapped up and we plan to announce it here, I believe, the first Monday of February. I think that's the date the White House has set for sending the budget up to the Hill.
Q: Dr. Hamre always liked to do the briefing, do you think he'll be doing it again?
A: We'll have to ask Dr. Hamre what his appetite for that is. I don't know whether he considers promotion a good thing because he's no longer the Comptroller and ready to do the budget briefing, or whether he considers it a bad thing for that reason. If he does, maybe he'll want to come down and talk some about the budget. He's certainly been following it very closely.
Q: Can you tell him we're clamoring for him? (Laughter)
A: Yes, I think he knows that he has a lot of fans among the numeral maniacs in the Pentagon press corps who love every number. (Laughter)
Q: Does the Pentagon have any indication whether or not the Administration's plan to submit a balanced budget in '99 will affect things in any way, I guess?
A: The Balanced Budget Agreement specified what defense spending was supposed to be -- the agreement reached last year. And my recollection is that defense spending for fiscal 1999 is supposed to be close to $260 billion, is my recollection, $258, $260, somewhere around in there. I would anticipate that that wouldn't change much. That we'll be very close to that.
So I don't think that producing a balanced budget in 1999 should have an impact on defense spending. I think we'll stick pretty much with what we were planning to spend. My understanding is that one of the reasons a balanced budget proposal is possible in fiscal 1999 is because of the surge in revenues from the strong economy at a time when inflation has remained low and interest on the national debt -- because interest rates are relatively low -- has also remained relatively low. It's still a large number, but because the interest rates are low, it helps control government spending.
Q: So what you're saying is that the balanced budget is not being generated by deep cuts, but by increased revenues.
A: I'm saying that looking at the military, the military will propose a budget that is very close to the number that was contained in the budget agreement of last year, and that's in the range of $258 to $260 billion, as I recall. I don't have the number right here in front of me, but I think that's what it is.
What I'm saying in a larger macro sense, and I'm certainly not an expert on all aspects of the budget, but from my understanding of the larger macro sense, one of the reasons that a balanced budget is possible in 1999 is because of the increase in revenues. There's been a rather large increase in revenues and that's directly related to strong economic growth, low unemployment, low interest rates, and low inflation. A happy combination.
Q: Since 1994 when Algeria became the greatest place for the murder of journalists in the world by insurgent Moslems, it has been reliably reported that there is a connection between Iran, government sponsored terrorism in Iran and the Sudan and the support of those who are now killing civilians by the hundreds, I understand, either kidnapping, impregnating and slaughtering girls and young women. My question to you, does this Department believe, in fact, that Iran is behind and supporting the GIA in Algeria and the destabilization of Algeria? And what's the solution?
A: First of all, this Department is very much against killing journalists. (Laughter) I can't answer the question about Iranian connections. I'll look into it. It's not something I've looked at.
Q: Is this Department concerned to find a way of closing support for those who are committing these atrocities?
A: They are clearly terrible atrocities from what I read. We condemn these atrocities. There has to be a more peaceful way to resolve political and religious disputes in Algeria. But beyond that, I just don't have enough details to comment at this time.
Q: On the trip, do you know whether Cohen will be meeting with Kim Dae-jung? And also...
A: My expectation is that he will have an opportunity to meet with Kim Dae-jung. But again, I'm not sure that all the details have been worked out yet.
Q: Will the economic crisis in the region... How will that figure into his discussions with leaders as he goes around...
A: Clearly, it's part of the general context of the visit. The visit was planned long before, or contemplated long before there were widespread economic problems in Asia. But the message of this visit is that the United States has a strong interest in security in Asia. We have nearly 100,000 troops forward deployed in Asia. We want to work with countries throughout Asia to maintain peace and stability in the region. Economic stability is a very important part of general stability in the region, and one of the big benefits, I believe, of the American security commitment to Asia, is that it has allowed economic growth to prosper without requiring people to devote huge amounts of money to defense spending. It's created a security umbrella in the region that has made stability really one of the foundations of the Asian economic growth.
So he will talk mainly about security issues. I'm sure that economic problems will come up in terms of military modernization programs, for instance, is one area where economic problems could have an impact. He'll discuss the implications of the economic problems, and the need for these countries to balance their military and economic interests -- just as we have to do and NATO allies have to do all the time.
Q: I'd like to follow up on that. In his previous trips to that region he's been very public in trying to press for some of those countries to buy American defense equipment for their modernization needs, and he's been very publicly opposed to some efforts in the region to look especially at Russian air defense equipment, which is much less expensive for them to purchase. Given the economic crisis of the region, does the Secretary again plan to publicly push these countries to modernize by purchasing American equipment and press his notion that that's the only interoperability solution and that they should reject Russian equipment overtures?
A: You're asking a very specific question and I don't really have an answer to it. I think that more often the question he's going to get from these countries is, or the issue these countries will raise, is can we afford to continue with modernization programs given our current budgetary and economic problems? In terms of buying equipment, the Secretary's primary view has been first that countries that operate side by side with the United States should buy equipment that is compatible with U.S. weaponry so that it reduces to the maximum possible extent the threat of conflict, the threat of confusion, the threat of misreading IFF and other types of signals that come out of weaponry.
The second is that they make investments that increase military capability and improve their own defensive posture. Particularly if they're working in concert with U.S. forces. Those remain very important issues and I'm sure he'll stress the importance of those when he talks to them.
Q: Is there anything he can say or offer to them that makes any type of non-U.S. equipment less attractive, whether it's Russian or any other...
A: I think he just, I think the two points I just made are very important points. One, compatibility with U.S. equipment so there are not conflicts; and two, highly effective equipment. In other words, sometimes the lowest price doesn't always buy the best equipment. Also there's another question which is continuing maintenance and ability to provide the training and support that's necessary to keep highly sophisticated equipment operating.
Q: So he would bring up all of these points?
A: He's not going to just bring them up on his own for the sheer joy of bringing them up. He'll bring them up if the issue arises. There's going to be a background briefing here at 11:00 o'clock on Thursday on the details of the trip, and I think that it might be more appropriate to save some of these questions for that briefing. I have not been intimately involved in the scheduling for this trip. Obviously the background briefer will be able to give you a much fuller account than I can today.
Q: Does Secretary Cohen have any New Year's resolutions? Either personal or professional?
A: I haven't asked him. I'm sure that he does. He's a resolute person, I'm sure that he has some resolutions, but I haven't asked him what they are.
Press: Thank you.
