Thank you, Mr. Secretary.
And good afternoon, everyone.
First message I have is sort of an internal message. And that is assembling a defense budget is hard enough in the best of times, but it's extraordinarily difficult to do in our time due to the trifecta of declining resources, constraints on our flexibility, and uncertainty over future resources.
So I want to thank by -- start by thanking the many people both civilian and military who put in the long hours required to put this thing together. They are as dedicated and hardworking as anybody else in this department. So thanks to those folks.
Deputy Secretary Work has outlined the contours of this year's submission and the details are online. I'm sure you've probably already looked at them. This budget -- no budget is perfect, but we believe we've assembled the best possible combination of capability, capacity and readiness investments that we need to protect our nation and our national security interests.
We also believe it meets the current and future needs of the all-volunteer force that has served us so well and that represents our most asymmetric advantage in this world.
As such, the chairman and the service chiefs and I all fully support this budget. It's what we feel we need to remain at the edge of manageable risk in our ability to execute the defense strategy that's outlined in the 2014 QDR. But we have little margin left for error or strategic surprise.
I heard the term "third and manageable" last night a couple of times. It shouldn't surprise anyone that when it comes to defending our national security interests, the chiefs don't really like to hear "third and manageable." In fact, we don't like third-down at all and fourth-down is not an option.
Any defense strategy represents a delicate balance among the ends, ways, means, risk, all that live inside a security environment. That balance is inescapable. If you disturb one variable, something has to change among all the others to re-set the balance.
As Mr. Work outlined, the means that we've aligned to defense have steadily decreased over the last several years. At the same time, the security environment has become more chaotic and potential adversaries are eroding our technical advantages.
But there's been no corresponding change in the ends of the strategy that we're trying to serve. We are making progress in some of our ways, through efficiencies and a few new ideas and technologies. But the variable that has carried the lion's share of -- of the strategic balance is risk. And we believe there's no room left on that end of the balance.
So, our best military advice is that any decrease below the PB16 request, to echo Mr. Work, will require adjustments to our defense strategy to restore balance. It doesn't mean the strategy completely breaks, but we will have to make adjustments to that strategy if we're going to stay in balance. All you have to do is look inside the unclassified QDR's force planning construct to get an idea for what that means.
Ultimately, it will mean reduced American leadership and freedom of action, and that's, of course, an option, but not one that I think most of us would prefer. I'd underscore that when I talk about reductions, I'm not only talking about reductions down to sequestration, as the service chiefs testified to last week. I mean anything below the level that we're submitting.
I'd also reiterate, while fully respectful of Congress's role in not only how much money we spend, but how -- what we spend it on, unfunded changes to this submission are the same as a reduction and would require adjustments to that strategy as well.
That's what makes this strategy -- or this budget a strategy-driven budget because we're asking for what we need above the sequester levels in order to keep risk manageable. We have to do better than manageable in the most important things, such as nuclear deterrence, which this budget does.
And again, it represents an opportunity to arrest the decline in our investment in protecting our national security interests under the current strategy, rather than having to adjust or rewrite it.
We do look forward to working with the Congress to get this submission across the finish line, hopefully on time next fall. In the meantime, we'll continue to work hard on the ways part of how we defend our country through our innovation initiatives, and we'd be happy to talk about that.
So thank you again. I believe we'll now take a couple of questions before turning it over to the real experts who are sitting off-stage.