Remarks from Military Branch secretaries from the army, air force, and navy expected this morning here at the center for strategic and international eddies. They will discuss priorities at this event. It is about to get started here. Live coverage on cspan. Good morning everybody. Welcome. I am president here at csis, and the reason we are kind of rushing is because we only have an hour. We have a wonderful opportunity to listen to these three secretaries. I will be very short. We always start with a safety announcement. I am responsible for your safety today. They have some guys backstage with guns that will take care of that. Followed bynything, instructions, we will take the exits right behind us, go down Near National geographic, and i will take everyone to see the great new show on the evolution of jane goodall. We have never had anything happen, but i want you to be ready. Know who these people are, so i do not need to introduce them, but you know the absolutely Critical Role that they play. They are running giant organizations and they have to manage today, tomorrow, and 20 years in the future. It is constantly in their calculus about how they posture in shape these remarkable institutions not just so they can do the job today, but the job in 20 years. Each one of them is working on critical dimensions of that as we speak. So think about this unique role that they play. Other people under the other than the secretary, no other person in the department has this kind of response ability. We are fortunate to have them here today. We will lead an initial conversation and bring you into it later on through your questions, write them down on your cards, but welcome with your warm applause our three secretaries. [applause] thank you, john, and thanks to everyone who is joining us here, both in the audience and online today. I know we have a big online crowd. We have cards in your chairs and the way we are going to do this session, we will have a discussion on stage for two thirds of the time, give you plenty of time to pass up your cards. There will be people that come around. Justu have a question, hold it out. People will come by. Most overtly, who will have the best football season, College Football . Wow, no one. We are improving already. [laughter] years ago we had a National Defense strategy out. We hear lots of talks from the department and the community, and you have submitted the president s budget, the last budget of this president ial term. I would love to go down the line and hear a little bit from each of you about the pathway your service has taken. From that strategy coming out to today, and how you feel you have developed your service, helped lead your service to contribute to the joint more fight in line with the strategy. Why dont we start with you . You and you, and to john, thanks for having us today. It is always a wonderful opportunity. You give us wonderful advice when we need your help, so i appreciate this opportunity. For us, we have the challenge of managing the current condition. We are 60 of combat requirements worldwide, people to ploy in 140 countries. The Current Conditions make it very difficult. That said, we conducted the most complex reconstruction of the army in over 45 years, created an organization, collapsed the stakeholders under one roof, so we have reduced the decisionmaking. We have moved 45 billion against our modernization see aties, so you will roughly 5050 mix between investment in new capabilities and legacy platforms. So we are putting our money where our mouth is. We have tried to organize against the problem. Challenge we have faced as the breathtaking demand we face worldwide. We have increased our [inaudible] as well as our defender series exercise. We take our Counter Space and send them to the pacific, as well as european theaters. We have increased the rotation of the claimants to areas of the world where we have a particular competition in play, if you will, against our competitors. We are trying to strengthen the balance between current demand and the National Defense strategy, and we think we are doing pretty well. Targeteddget is really to modernize and strengthen our people. So we are going to modernize by divesting to invest, to connect sensor,ooter to every every sensor to every shooter as well as a and we are looking to strengthen the role of our people. Situational awareness is important to a pilot. We Pay Attention to write now, is a bigpace force part of what we will be carrying in our budget. It is not a massive part of the budget, but it is a massive park of what the budget is focused on enabling. Us, the underlying principle of everything we are trying to do is to increase the agility of our forces and our people. That is because of increasingly complex security environments. Rings are getting far more complicated, far less predictable, and we need to invest in those capabilities and those skills and that Human Capital that can adjust to that. I bucket it into three broad categories, which i call great gray halls, h gray matter, and. 355eed to grow our fleet to ships or more, so we have to determine how we are going to do that. Will it be the same mix that we have been talking about over the last several years, or a new mix that makes more sense . Deals withtter piece the people, developing the intellectual agility and our people. We put a lot of money and education, our higher study, and are receiving a lot of broad reforms across educational institutions to link them back into the war fighting community so that we can have a learning organization that is understanding the challenges, our competitors and adversaries, and adjusting our structure in how we address that through intellectual develop and. And gray zones, when people think about gray zones, they think about little green men running around in ukraine. Im talking about the things that happened behindthescenes at the department of the navy. Our business systems, i. T. Systems. Things people take for granted. When they are taken for granted, band of being sub optimize they end up being sub optimize. Sub optimized. Secretary mccarthy discussed some of the things to be done as you reflected here. Can you talk a little bit, and i will come down the line and give secretary mccarthy a second shot on the same type of question, about the challenges and barrier in front of you that your most looking at in this coming year you are most looking at in this coming year . Sec. Mccarthy we are facing in competing several pressures. We are trying to push to a larger fleet. We also have a whole we are trying to dig ourselves out of, and the third piece is, we look at the budget projections going forward. It is relatively flat for us. We have to figure out a way we look and see what that future force looks like. We did a new future force structure assessment. It is a bit of a different mix than we have been talking about before. We will iterate that to determine what the right path is, but there are some north stars in that structure that say we have to start moving out in certain directions. That is going to challenge our topline considerations. What i told the department is, we need to look internally first, at ourselves, to see where we can find savings within the way we traditionally do things to help fund that before we can ask for anything more from the taxpayer. That is the process we are going through, that is what the stem to stern review is, and it is a staggeringly low number relative to our topline. Our topline is over 200 billion a year. 5 , 6 offree up that, we can move down the path and get to a 355 ship plus navy in the next few years. But we have to do some soulsearching to get to that. Finding the most confounding challenges to confront right now . Sec. Barrett this will take a toll on all of us. [inaudible] [laughter] [inaudible] sec. Barrett motion activated lights. So we are working especially ways of process reform, building faster, better processes. The acquisitions process has been too cumbersome, too slow. We need to find ways of doing that faster. But at to minimize risk, the same time we are looking to investof old equipment, in more modern, more capable, more lethal equipment, and with all of that building our space capabilities. Oft is the transformation how we have been doing it and moving into new capabilities in a domain that has previously not been perceived as a war fighting threat. The significant risks we will areaking risks that measured, calculated risks, and building for a longerterm, strong future. Enter the psychological warfare section, your thoughts . Sec. Mccarthy the comments i had at the beginning, 60 of the ourirements, readiness is number one priority and will be there for as long as i have this job. We would not be able to have the first of the eight or second 82nd deployed, literally coming out of new years eve parties and be boots on the ground in the middle east the next day. We are proud of that. To be able to deploy that quickly, locked and loaded in less than 24 hours is amazing. Because of the investment and the leadership in particular in the execution and training plans. 60 of the Balance Sheet is fixed. We will have to stay that way, because you have to meet those National Objectives every day and forms of deterrence worldwide. When you have 40 or less of a budget to be able to modernize a force, the challenge is striking that balance between the new capabilities and did a stitcher iture, andt divest that is tough. Able tot, you will be flesh out the new capabilities over time. You have to deal with components , with congress and industry and others, so that will be a challenge for the army in the future. Am glad you brought up those other stakeholders in other industries. How have those conversations been going in terms of looking ahead to the future and all the services are dealing with areas where there may be very good arguments for divestment where there is strong and strong congressional interest otherwise . How are you approaching those conversations and how have the members bent to it . Sec. Barrett sometimes it is a bit of a challenge, because what we need to invest in might not be visible, or tangible. Not on the production line already. Sec. Barrett it might not be associated with the constituency yet. Things like connectivity. Those things are invisible and harder to identify with. Similarly, space it is ubiquitous but invisible, therefore, a lot of people do not appreciate how engaged each of us are now with space. Investments we that may be a bit out of the past patterns will be space and technology linkages, and those are harder to sell because there are no tires to kick. That is a challenge that will be faced. The Defense Industry likes predictability and stability, and we understand all that. But all of us are moving into an era where things are going to become less predicable. We have to work with industry to be able to adapt with us as we change. As mentioned, our four structure, we look forward to we will needships 10 to 15 years from now . They do not exist right now, and it takes a long time to develop and research them and make sure they actually work, but we have to get after that right now. Someugh we may be shifting capabilities around, there will be tremendous opportunities for industry to participate in that. We cannot do it without them. It is just establishing that dialogue. To some degree, we would all like to move faster. We put a lot of constraints on ourselves in terms of how we can actually do that. Mandate for uste that we have to figure out how to work with them, and work with them more quickly to iterate as we move forward. Sec. Mccarthy reinforcement, made, the points tom and predict ability. We have been consistent with our priorities and we have put our money where our mouth is. That is the only way you can get an executive to make a bet, to put that investment in their own dollars, to change the tune on the production line and make it go for a new capability. Robust communication and conviction behind your budget proposals, because the underlying theme here is you have to have the will to Look Congress in the face and say, we need a product in a district where they do not make it anymore. But it becomes a trust issue that you have to build with the communities committees first and then the rest of congress. It is that consistency over time. Sec. Modly there is a great example we are all working on together, and that is in the hypersonic space. It is pretty obvious we are investing in this capability. We are doing it together. We are using the technology, but moving it to Production Capacity is a big, big leap. We will have to send some very strong signal to industry that that is the direction we are inded, otherwise if i was their shoes and controlling other peoples capital, i would want to have a better sense that that is the direction we are headed in. A lot of this technology is really new, so we have to make sure that it works before we jump to fao far. Secretary esper has hinted or implied that there is a desire from dod to be a higher top line at the end of this budget deal, the fy 21 budget is constrained by, so presumably he means going and a new trump administration, or the new administration might want more top line. But the history is not supportive of that. Even in the reagan administration, there was a strong effort to constrain defense spending in the second term, and the debates going on right now on the democrat side seem to be indicating stable or less versus more. Let me assume for the moment that plan a is get more top line. My question is, is there a plan and are you allowing more ensuring that your teams are thinking through what those backup approaches might be . Im not moving out with any assumption of an increase in topline. I think that is too presumptuous, and that is one of the reasons why we are doing this review, to see how we can fund this internally. We have a pretty big mandate to grow the fleet by 30 to 40 from where it is today. At some point, those elements of math are not going to match up. We support secretary espers request for that. If one thing is consistent over the last 40 years, the navys percent of overall gdp has gone down consistently, as a percentage of gdp. The entire budget is being squeezed out by things that are not defenserelated. If you look at statistics, you can see that it is clearly not the fence putting pressure on the top line of our overall putting defense pressure on the topline line of our overall budget. We need to learn how to work more with the means that we have, be more innovative. Great example, a we have concentrated in our costs onot more a fewer number of platforms. If you look at the fleet we built under the reagan administration, 600 ships, the average cost of that fleet was about 1 billion per ship. Our average cost today in real dollars is about 2 billion a ship. We have to reduc reverse that t, mannedhter, more lightly ships as well. Echo tomshy i sentiment as well, the fiscal environment is tough. Investiture of legacy capabilities, the only way you are going to get there is by increasing your buying power. There are a lot of things we are doing better. We have reduced the obligations by billions of dollars. Count making every dollar within the Balance Sheet. Improving your buying power can help you mitigate the risk of not getting the fiscal increase [inaudible] so a tough environment and again, the challenge the army is facing will be the modernization wave that is coming with growth and strength. That will be two big verticals in our budget, and it will hit no later than 202020 2022, 2023. Sec. Barrett we do not anticipate a topline growth, although we certainly have ways we could use it. We face two thirds of the Nuclear Triad modernization, and that is coming. We have all of the expenses that would go with increased capability in space. The same time, we are implementing reforms. The acquisition reform taking not just money but time out of the process to the extent possible, improving efficiencies, cutting time, our Acquisition Team at the century project taking already over 100 years out of acquisitions procedures and targeting 200 years of aggregate time in the acquisition process. Looking at reforms that will help improve efficiencies, but at the same time, the expenses of the technology that we buy, the air and Space Business is an especially Technology Dependent and that is a growing part of the economy, of defense, and higher expenses. Is there a hope there can be some joint approaches, joint solutions and so on . Hadthere efficiencies to be there . Some of them might be jaundiced from past experiences with joint programs. Should we be hopeful . Sec. Barrett absolutely. Some of these things cannot be done individually, in the individual services. We must be cooperating, and we are. Building connections, connection shooter ach connecting each shooter with each sensor, working in the Artificial Intelligence center and on hypersonic stash we are all involved in that. The development of technology is very much a joint effort. If we didnt it individually, we would be finding duplication and did it individually, we would andinding duplication inefficiency that we cannot afford. What is the navys view of space force . Barbara said it well. We are completely dependent on each other. Pacific look out at the theater, a lot of water, a lot of space, we have to have awareness on it and our ships cannot have their dependence or interdependence on the space domain. We are working very closely with the air force on that. Is the same true on the army side, in terms of space . Sec. Mccarthy absolutely. We are the largest consumers of space in the department. It really comes down to the operating concept of how you are going to fight in the future. For us to be able to mitigate a you will needeat, a lower orbit satellite architecture, a much wider array, and the ability to queue targets very quickly to mitigate the threat. There is a technical aspect, and a war fighting one. It isng from changing from a prostyle offense to a spread. Tank is really going to have to drive the outcome of how we are going to change the way we do business in the future. Directedary esper has the joint war fighting concept, with all the chiefs signing on. What is the role for the Service Secretary in that discussion . If i can flesh that out a little, in building out the funding for the force over the future, part of this too is ensuring you have a healthy service, innovative culture, etc. Maybe that is a better way