Alright, well good morning everybody, and I think I should say happy St. Patty’s day, but I’m not wearing any green. First of all, I have to warn you in advance, anytime you have the duo of the deputy secretary and the vice chairman speaking on the same morning, you’re likely to hear a fairly similar message from each one of us because we are joined at the hip and we tend to to share the same meetings, co-chair the same meetings in the Pentagon, whether they’re DMAGS or what have you. And I have to warn you that the deputy is far more articulate than I am in expressing what we’re going through right now as a department, partly because he’s such a proficient historian of what this department has been through over the last three or four decades, and he also has such a great mastery of the budget numbers.
So, even though this is a defense programs conference, like him, I’m not going to provide a great deal of comment on specific individual programs for you today – winners and losers and that sort of thing.
I am very happy to leave that to the very qualified speakers you’ve half during the remainder of the day from the various services. But I hope to give you a very macro sense of perspective from the strategic level about the big muscle movements that are driving how the Chairman and I formulate our recommendations regarding the use of force, the allocation of resources, and assessment of risk to the Secretary of Defense and the President.
And first and foremost, and I want to sort of show you how I think about this sort of stuff. We view these recommendations through the lens of the balance that has to be struck among five very important strategic variables. Those are: first, the very familiar ones of ends, ways, and means, but they also include risk and also the security environment, both present and future. All five of those are a big balancing act we have to work every single day. And when one of those five variables changes, the others have to adjust in some way or we’re going to find ourselves in an imbalance, living a dangerous fiction, if you will, about what we can and cannot do as a department and as a nation.
So for example, if our means go down, or if the security environment becomes more chaotic or dangerous – both of which I believe are happening today – then we have to either trim back our ends, or we have to find better ways, or increase our means or we have to accept more risk.
As much as people in this town like to have it both ways, in this business, you all know, there is no free lunch.
So I want to go through the five variables in turn this morning, to give you a sense of how we think. They’re all very inter-related so it’s a little hard to know where to start, but let me begin with the security environment.
I’m not going to spend much time there, because you’re fairly familiar with it or you wouldn’t be here today, and you probably have a fairly well established set of your own opinions about what’s going on in that environment. But while we’ve been fully invested in two of the three longest wars in our nation’s history – all of which, by the way were counterinsurgencies – the rest of the world hasn’t simply stood by.
Major states like Russia and China, convinced that the unipolar moment was fading fast, capitalizing on our distractions in the Middle East and South Asia, and chafing against the rules-based international order, have begun re-asserting themselves. Russia’s aggression in Ukraine is only the most recent, but by far not the only, example.
Meanwhile, we contend each and every day with insecure, authoritarian regimes, like North Korea and Iran, who covet weapons of mass destruction as insurance policies for their regimes.
At the same time, violent extremism and severe instability continue to feed off the deep ethnic and intra- and inter-religious divisions engulfing the great swath of North and East Africa, the Middle East, and South Asia. You name it, ISIL, AQAP, AQIM, the Taliban, Al Shabaab, Hezbollah, Boko Haram too many to mention in detail but they’re currently drawing the lion’s share of our daily operational effort.
Other threats present different challenges – including the transnational criminal organizations that deeply impact our friends in Latin America and that affect many thousands of Americans each year.
Pandemics such as the, hopefully concluding, Ebola crisis and natural disasters and tensions exacerbated by droughts and food shortages and the like.
Some say conditions are spiraling out of control. Maybe not, but it sure feels like we’re shifting from a state of relative order to relative disorder.
The world is indeed an increasingly dynamic and dangerous place. So, of the five variables in our strategic balance, the security environment seems to be one that’s trending in the negative direction and the others may have to account for it.
So, what about our means, the fiscal resources the citizens of the United States entrust to us to obtain the capabilities, capacities and readiness required to protect our nation’s security. You know the story well.
Today, what I call a trifecta of challenges is severely undermining the means element of our strategic balance. The first leg of the trifecta, of course, is the recent decline in funding for defense, which we as a nation undertook to look after the national security imperative of deficit reduction. You heard the numbers earlier, probably from Secretary Work, I won’t repeat them for you.
The second leg of the trifecta comes in the form of what we call the “congressional no’s” of individual member interests in which we’re prevented, as a department, from achieving the efficiencies and reforms that we need, such as sensible adjustments to compensation, clearing out the underbrush of old force structure, and unloading excess base infrastructure. Imagine a business, and many of you are businessmen, imagine a business being told it must retain old product lines that siphon away the resources required to allow it to compete in a highly dynamic market, or being forced by law to maintain over 20% excess infrastructure, in your capital equipment. But that’s what we’re being required to do.
Fiscal uncertainty is the third leg of the trifecta. We face the spectre of possible – and I would say at this point very likely – cuts to the BCA level under the chainsaw mechanism of sequester. But, we don’t know, and that’s the hard part. It’s really hard to plan.
I believe Secretary Work in his speech did cover the numbers that come out of that trifecta, and those numbers are having their inevitable effect on your force.
We aren’t modernizing as fast as we should in a highly competitive technical landscape so our technical overmatch is slipping. Almost every element of our force structure is actually getting smaller, it’s shrinking, while potential threats expand theirs – so our capacity overmatch is slipping. While we’re slowly gaining ground and recovering the readiness we lost during the FY13 sequester period, we’re running our forces so hard right now our proficiency overmatch is slipping. All this means less deterrent presence and fewer units ready to fight on a state-of-the-art battlefield.
We’re starting to really struggle to meet our deployment demands in several key areas, and it’s putting a real dent in our ability to surge into conflict. That’s why Deputy Secretary Work probably told you earlier that we are currently able to execute our strategy at manageable risk, but that we’re at elevated levels of risk in certain areas.
So, I would say our reductions in means join the declining security environment as another element in our strategic balance that’s trending in the wrong direction. One could argue that the latter, the strategic environment, will only get worse unless we fix the former, the means that we have to apply to the problem. But in any case, unless we simply accept much higher – unmanageable – risk to balance those two factors out, then we’ll have to either adjust our ends or our ways.
So let’s start with ends. There are two ways of codifying our ends are of particular use and interest to me because they show where adjustments might have to be applied. First, is the list of prioritized national security interests the Chairman and I use that we derived from the enduring national interests articulated in the President’s National Security Strategy. These are specifically what we believe we must defend, and in what priority we must do so.
Such a list enables a more meaningful discussion about strategy because it’s a powerful way to support the recommendations we are expected to make regarding allocation of scarce resources, assessing risk, and the use of force. It’s especially valuable because it’s prioritized, which some people in this town don’t like, because that unlocks the door to difficult decisions.
Threats, with different degrees of likelihood and severity, reside within each of these security interests that I’ll describe to you in a second. The difference between those threats and our ability to mitigate them is ultimately what we call risk. Clearly, we want to keep risk lowest in the most highly ranked security interests. It’s a simple concept, but it’s very difficult to apply within the daily press of one crisis or another.
Where highly ranked interests are directly threatened within that daily rhythm in a particular location in the world, we’re more likely to recommend the use of force to augment the other tools of statecraft, to do so unilaterally, at greater risk to our force, at greater cost and at greater opportunity costs elsewhere – and the reverse is true.
So what about that list? We believe our first national security interest is, of course, survival of our nation, which among other things implies we have to maintain a safe, reliable, and effective strategic deterrent. For those of you wondering whether we intend to do so, you should know that the answer is yes.
Second is prevention of catastrophic attacks on the nation, which implies protection from a major terrorist attack, or a rogue state’s nuclear weapon, or a cyber-attack on our infrastructure. Clearly, there are key investments we make in this area, such as special operations forces, missile defense, and cyber forces, and we will continue to make them.
Next is protection of the global economic system, which means providing security for both the physical flow of goods and services and the virtual flow of information. We rank highly because it’s the driver of American prosperity and the key foundation of American power.
Ranked fourth is maintaining secure, confident, and reliable allies and partners. We have the most extensive system of allies and partners in history – they count on our leadership and support, and our power and prosperity are deeply linked with theirs. This interest happens to be where most of our conventional force structure lies. In protecting our allies against potential mischief, we’ve always counted on the overmatch in capability and capacity to offset the challenges that we have in initiative and distance. We aren’t going to start a fight and we have a long way to go, usually, to get to one. That overmatch is now narrowing, as potential adversaries invest in both new capabilities and additional capacities.
Our next national security interest is looking after the protection of American citizens abroad, which is self-evident, but requires a very special kind of forward presence and reactive capability.
And finally, we believe we have a role in protecting universal values and a rules-based international order. These are fundamental to who we are as a nation a great deal of our moral power is derived from our continued support and adherence to these values, even if some of our competitors don’t seem to be doing the same thing.
Cross cutting all six of those interests is the overall goal of retaining American leadership and freedom of action across the globe. The truth is we can’t buy all the capability, capacity, and readiness we need to perfectly protect all of these interests, all at once.
As Henry Kissinger said, “No country can act wisely simultaneously in every part of the globe at every moment.”
When nearly a trillion dollars will likely leave our budget over ten years, we can turn to this list to make deliberate choices to ensure our resource decisions are aligned to protect our most important national security interests.
If you don’t like national security interests as a method, the other useful way of assessing our ends within the strategic balance is the 2014 QDR’s force planning construct. I tend to use this rather than the three pillars of the QDR because it is so clearly stated about what we’re going to need to be able to do. Under steady state conditions, it says we’ll protect the homeland, conduct global counter-terrorism operations, and deter and assure through forward presence and engagement in multiple regions.
Under the President’s budget submission, we can do all this with manageable risk, but we’re on the edge. Anything less than that, and I’m not talking about going down to sequester, I’m talking anything less than our budget submission, we’ll have to make some tough choices.
We will not compromise on our ability to protect the homeland, and we will continue to conduct counter-terrorism operations, because that’s also about protecting the homeland, but our forward presence is either going to have to be at the same level in fewer regions or at a lower level in the same regions. And you can draw whatever conclusion you want to from that.
The QDR also says that if deterrence fails, we’ll be able to defeat one adversary’s aggressive actions in a major campaign and deny the objectives of, or impose costs on, a second adversary. Again, if our means drop below the President’s budget submission, we will simply not be able to do both of those things, and will have to recast our capacity for conflict.
There is no free lunch. If you look at a chart depicting the supply of almost any force element we own alongside our daily demand and surge demand, you will see that gaps are beginning to open between supply and demand.
The military ends of our strategy, however they are articulated, whether it’s with national security interests or QDR force planning construct, those are going to have to change if we go below the President’s budget submission, and even more if we go to sequester.
That, of course, is a choice; it’s a choice we can make. But it’s a pivotal choice at an important moment with the world watching, and we need to make sure we get it right and that we don’t overcorrect.
And that leads me to ways, the last of the five variables we have at our disposal to strike a balance. Ways are the creative space in which we have the opportunity to make a real difference, at least partially offset the challenges we might find elsewhere in our strategic balance. It’s where I try to spend a lot of time, because it’s not only fun, but it may be the only variable over which we actually have any real control right now.
The Department’s innovation initiative is a great example of how we’re attacking ways. It has five pillars: First, is developing 21st Century leaders. We’re stepping back to take a close look at how we recruit, train, and retain our most asymmetric advantage that we have, the wonderful young men and women who defend this country. We’re going to have to take a hard look at who these millennials are – and who the post-millennials are going to be. Based on my own research, I, for one, believe this generation is almost perfectly suited to what we do, so we’re very happy with where we are there but we have to look ahead.
We also have a pillar based on gaining greater efficiencies. We believe there is more we can do, beyond simply cutting staffs at military headquarters. If congress will let us, we may actually make some progress here over the next couple of years. The defense business board will hopefully be able to help us. Frank Kendall, who speaks after me, is making solid progress on the Better Buying Power initiatives he and Secretary Carter started several years ago and I think you’ll very much enjoy hearing what he has to say about that.
Our other three pillars, in the innovation initiative, have to do with the ways that we have to fight wars, the ways that have changed. We can talk in detail about our technological offset strategy, I believe Deputy Secretary Work probably mentioned and I won’t repeat everything he said. But I believe the next offset will be as much or more about payloads as it is about platforms.
I would say we’re actually on a pretty good trajectory with platforms. For example, to all the F-35 skeptics, I would say that airplane is in its V-22 moment, remember when people were saying - what a lousy program that was? . . . and now we simply can’t get enough of ‘em. No, I’m more interested in what we put on our platforms, because that’s where we can get really creative, innovative and agile.
This can even be about payloads that are actually themselves platforms and the subordinate payloads that they carry. It’s about greater autonomy and automation while staying on the right side of the ethical problems that we pose.
It will involve every warfighting domain, and will almost certainly demand combinations of very diverse technologies. It’s going to require bright, broadly educated people coming together to forge previously unimagined synergies. It will require doing an even better job of putting our DoD special sauce on top of commercial technologies. And it’s going to require continued commitment to research and development in these ideas. It will require real agility, which may be the dominant characteristic of the future battlefield.
All of this technology will be developed alongside and work hand in glove with new concepts. They’re inextricably intertwined. A concept developer comes up with an idea, with a dream of what is state of the art technically, and a technologist says, “Well, I can do that,” and a technologist comes up with an idea that the concept developer when exposed to it, can apply to the concept he or she is developing.
It won’t be easy, because some of those opportunities are going to be found in less advantaged service communities, which means we may have a hard time finding empowered champions. So we will be in an upward climb against Liddell Hart’s maxim that, “The only thing harder than getting a new idea into the military mind is getting an old one out.”
There’s much more to the ways piece. I don’t have enough time to cover it all, but it’s really exciting, and it’s probably the most interesting part of what is an already very interesting job.
But one thing is certain with fewer means available to our department, in a less secure world, in which we want to retain American security and leadership and keep risk under control, we have no choice but to bring our imaginations to bear in creative ways.
We are also going to have to avoid what former IBM CEO Sam Palmisano said about companies under financial stress, “You spend more time arguing amongst yourselves over shrinking pie than looking to the future, so you miss the big turn.” Well, we need to keep reaching for that big turn, and we will.
But, while our current means challenges have been very useful in driving us towards new ways, I would submit to you that the easiest way to relieve the pressure on our five part balance is simply to undue the magnitude and mechanism of the BCA and sequester experiment.
I once again had the opportunity a couple of weeks ago, as I was privileged to lead a USO tour around the world, to see the amazing, bright eyed, and proud young men and women I saw who will have to live with the decisions we make in this town. Young people with the courage to sacrifice everything they have for this nation, people who will always rise to the occasion and do the right thing for us. It’s time that we in this town, rose to the occasion, and did the right thing for them.
We owe these sons and daughters of America the very best we have, during and after their time of service to their country. And we need to strap on the same kind of courage they show us each and every day when they go outside of the wire, or airborne, or underwater, or whatever it is they do, and we need to get a ways and means of this problem right now or we will have let them – and the people they defend – down.
And with that I thank you.