Our views online and those watching on cspan today. Im the founder and president of fdd and im a pleased to welcou to our event today, ruthless prioritization, the armys realization of the National Defense strategy. We are honored today to host acting secretary of the army ryan mccarthy. Thank you so much for coming again. Working overtime to the road americas military power, to threaten our interests and those who are our allies. In the light of these challenges and to support the National Defense strategy the army has achieved commendable progress on readiness, minimization and reform over the last couple years but the threats remain significant and the budgets remain finite. There is much more work to do, and we are ready to reform this effort. As many of you in our audience know we are focused exclusively on National Security and foreign policy. We are nonpartisan and accept no funds from foreign governments, never have and never will. This event is hosted by ftd center on military and political power and seeks to promote on a bipartisan basis and understanding of foreign policy, National Security strategies, a range of diplomatic defenses and capabilities necessary to secure the United States, its citizens, its allies while preserving peace, and advancing american influence. Experts work closely with ftds center on economic and financial power and cyber and Technology Innovation with the goal of integrating all tools of American Power to achieve Better Outcomes for america and our allies. See mpd features ftds journal, and online print journal most of you if you look for it provides original reporting and analysis on ongoing conflict and professional development and Research Opportunities for activeduty military personnel. That is also part of ftds National Security alumni network. See mpp, by former National Security adviser Lieutenant General hr mcmaster serves as chair of board of advisors led by senior director brad bowman who will moderate todays session, served as National Security adviser to members of the Senate Armed Services and Foreign Relations committees, and he was a blackhawk pilot and professor at west point. And ambassador eric aleman, general Edward Cardin and other leading thinkers. For more information on all our work, i want you to receive ftd. Org. Live streamed and recorded, we will be live tweeting ftd. I look forward to this conversation and many more to come. Thank you and may i ask that you silence your cell phones and turn the mic over to brad. My name is brad bowman and i want to welcome all of you in the audience and everyone online and on cspan. An honor to welcome you, thank you for being here with everything on your desk. Im grateful you spent time with us. The plan for our time together is to give the secretary a chance for remarks we will engage in 30 minute discussions and open up to questions. Lets get started. You should have bios, by way of introduction, Graham Mccarthy is acting secretary of the army, and until then about two years, the secretary of the armys senior civilian assistant and principal advisor on matters relating to management and operation of the army including Army Programs and budgets and capitol hill and the pentagon. Earlier in his life he served as army including deployment to afghanistan in support of Operation Enduring freedom. I suspect that helps us explain his admirable focus on how to accomplish the floor is yours to deliver any remarks. Cliff stepped out, but texting with his son backstage, he is going to go to the infantry and he was texting us from italy. It was a fun summer so a different fall when he reports but excited to have extraordinary young men like that in our formation. We worked together in the past, nice to see you again. Great opportunity for us, a lot of transition in the department and still transitioning. I will have to go through the Senate Confirmation process but a week ago, the 40th chief of staff of the u. S. Army. We are blessed to have an officer of such dynamic breadth of experience as the senior aviator of the army in generating background, he was the g1, does not have extraordinary depth of experience, and operating and maintaining complex weapons system, modernization, still having troops deployed in other countries. We have nobody finer as senior officer in uniform. General joe martin is the vice chief, extraordinary talented officer. We are excited about managing transition, our chief to become chairman of the joint chiefs in the army corps door. With that what we work hard on is the remaining focus on the priority we set as an institution but what you will hear us talk about in the future is our people, investing in our people so they can reach their potential but also taking a hard look at how to manage challenges we face, suicide, sexual assault, the kind of things the tear away at the fabrics of all people and organizations, we are a people organization. We are focused on priorities, we are on a unique journey for the army over the last two years. Restructuring our enterprise, Modernization Enterprise where we bring all stakeholders together to achieve unity of command under one roof so two years ago we started a process looking at how we conduct modernization. What does it take to reduce the span time to develop requirements to experiment with a prototype system and field formation . If you look at it historically it would take us 20 years to put the capability in 2 formation, 5 to 7 years to get a requirement, 3 years to test and ten years to buy enough capability to field an organization of 1 million people. It is like having a 19yearold kid that control 100 mile an hour fastball and make the majors in 49 in professional baseball terms. It took too long to make it utilize in the formation. When we went down this process we knew we had to lockin against investment priorities, look at where the stakeholders were in the institution and how they were spread across Army Commands or across the Headquarters Department of the army. We look at ourselves and said how do we reduce the time span. It was a business problem. How do we make a decision . You over time we put through this process, we realized we had to put an organization to lead this effort and create an army futures command, four start entity on par with the other three major Army Commands. What this organization does is dotted line combat systems working shoulder to shoulder with them. With all the problems with the armys challenges from technology over the last several decades was requirements definition and a definition of sticking with requirements. You have to make up your mind very quickly and stick with it and develop a technological roadmap to cycle new increments of capability over time but you had to have the same discipline in the United States and others. If you want cooling in the Steering Wheel you need to wait for the implant to come in later, you cant stop the production, you lose time and the constant fluctuation confuses those developing the capabilities. We empower the Requirements Community through different policy changes and directives, created a 4star organization in the middle of american city. We need an organization that will help us and work sidebyside and develop capabilities. We developed 6 investment priorities, nextgeneration combat vehicles, aviation platforms, Network IntegratorMissile Defense which we refer to as spanning all fundamentals, shooting and moving armor equipment on an individual server. These investment portfolios are synthetic training and position navigation time into that nature. There are 31 systems across the investment portfolios that are going to have 80 of the s p budget for the u. S. Army and as we continue to unfold from the 181925 budget we have half of the procurement dollars going towards 31 Signature Systems and we crossed by that by the middle. The drive requirements, we went through a series of budget exercises starting in fiscal 18 with the s p budget and as we head to the 21 working with osd on that budget there has been a massive shift of divesting legacy systems and starting to invest against the future but if you look at the 2024 set up a loan there are 57 billion worth of opportunity in business across the 5year future success plan so the army has made a massive change in the way we are doing business and putting dollars against it to invest against our future. With 1819 budget it was wonderful, a huge uplift to get that predictable sustainable funding getting in on time. As we head into the fall we have a budget deal on the table, the fiscal 2021 deal is also great and it will be helpful to have that, recognizing there will potentially be a continuing resolution to smooth out the specifics of the fy 20, it is important we get that deal done in the early fall because challenges as they come back to the system, continuing resolutions create uncertainty, it creates a lot more conservatism in the business world. The fluctuation prevents them investing. They slow their production lines. It creates mass confusion. We will work hard with congress to get this deal done in the fall and what will happen is 18192021, you will see four budgets in a row where the u. S. Army is very specific about what it wanted and put its money where its mouth is against 31 signature priorities. You will see a lot of prototypes landing this fall in the next spring and summer. Some will work and some wont. For the leadership in particular to communicate to osb and others as long as we can learn from prototypes we can adjust and work with these vendors we can continue to progress and bring new capability into the system. A lot of people will be watching to see have you gone too quickly. That will be on the leadership to ensure we can buy time for folks to work through problem sets but we think we will have a lot of success, work hard on the requirements of these prototypes of the 2021 vehicle actions will have the funding required to keep those production lines moving to create these prototypes, test them in the field vigorously and that will be the window where we will see opportunity for initial production, large tranches of capability and Start Testing them in units at larger scale and that is the Tipping Point of how we will be successful as an institution in this modernization effort. 1824 months as we face this modernization effort. One thing, modernization is not about material. It is the operating concept you apply against new weapon systems. The army have a concept about multiDomain Operations. Now you are applying other things. Then how do you change the operating model over time . A lot of that is the doctrinal concepts we developed and put into these formations. We have training and material, bringing in all these pieces together so the team operates as one. Changing the operation of the material will change our structure over time. And other types of formations, how are we going to operate in your future. This is an extraordinary time for the army over the next 1824 months. And getting the opportunity to use vendors like this we learn from all of you and communicate about where we go, we get help from academia, business, think tanks and others. Helps us sharpen the approach and adjust over time. Appreciate the opportunity to be here. Thank you for this comments. You mentioned transitions, the army is going through a big transition and you are a central part of that, transitioning from undersecretary to acting secretary. You were confirmed in the senate to be a voice vote and the workings of the way the Senate Floor Work means it was unanimous support to be confirmed as undersecretary but im interested in how you view the transition personally to acting secretary. How do you think about transition from role to role because those are very different . It is difficult. The way you approach each day, i love working with all sorts of issues taking hold of certain portfolios, driving the budget in modernization and Reform Efforts, shifting gears, got everything so the way you approach your behaviors is everything is different. Of confirmed i it three times, you have to adjust. I have seen it already. General mc congo has made the announcement quickly. He has extraordinary experiences as command position. It is making that adjustment and checking yourself and editing yourself each day of how you approach every engagement. It is a big adjustment and i have to rely on my teammates and i have wonderful ones. A member of the board is ambassador adelman who knows you and respect you and he was cochair at the national costrategy commission that came out a while ago, and that Commission Found the us is confronting a crisis of National Security, might struggle to win or lose a war against china. A lot of americans might be startled by that, people who do this for a living might be startled that this bipartisan independent group of experts would come to such a conclusion or might view that as fear mongering and undo alarmism. Do you agree with that finding . Do we confront weve made strides in the last two years but where do we stand in deterring and if necessary defeating china . If we had to fight them today it would be an extraordinary cost and would change our way of life. The challenge is the trajectory of their investments and the Energy Behind the growth in the National Security space. It is breathtaking. That has the attention of serious opinionmakers and we are trying to live and breathe that as gospel in the army and they have grabbed a hold of this and recognize it is the longterm threat, the way we approach multiDomain Operations as a force. We are putting our shoulder to the wheel to ensure we can stay ahead of pace and deal with that threat. It seems to me one of the central challenges for the army as well is how do we shift to focus on Great Power Competition, china and russia and addressing threats from iran and north korea as well. How do we walk and chew gum to focus on Great Power Competition and address these interests and threats in the middle east, how do we do both . A couple things, we have to be clear about national objectives. Where do we compete against competitors . Weve got to be aggressive on the utilization in the enterprise but it is where can you take risk . For the army why we continue to grow albeit modestly but 2000 year over year but we are 50 of combat requirements worldwide. We still need a lot of people. The challenge of that is we continue to grow and train and have units ready, 55 65 of the Balance Sheet so you are very fixed of what you can invest against. You used the word ruthless earlier and we will continue to be and with that comes every Investment Program comes divestiture. We would like to cut programs that are not the highest priority so night court as the army staff pointed two years ago, obviously a sense of humor in tough times, we will continue that and that is the Reform Efforts they put us on and it is going prime time and we are going to keep doing that for years to come. Based on the extraordinary contributions and sacrifices of the army since 2001 in iraq and afghanistan it seems to me the army appears to be the service facing the largest adjustments moving from preoccupation is not the right word but a focus on counterterrorism, counterinsurgency and the ability operations to the competition we are doing. As you lead the army how do you think about that adjustment . Are there things we can learn from those tough experiences that apply to the conflict in china and russia inside the middle east and beyond, just not in the indo pacific, global competition . Counterinsurgency operations are not going away. We it is not and that demand will remain for decades to come. We focused on creating security forces, institutionalizing behaviors and trying to protect large formations we had to break up to support these missions and focusing their readiness against competitors and we have across all verticals through the combat rotations where they do larger collective work. The armys goal in deterring russia seems clear to me. The pivotal role the army plays in securing additional what role do you see the army playing in the indo pacific in terms of deterring china . A lot of people focus on maritime aspects like navy and air force. What is the armys role in the pacific and what is the delta between posturing capabilities we need for the army and what we have today and how to close that gap . 2 or 3 wars in the last century were all on the ground over there so we will have a role for something to happen but in the great competition, space, advise and assist capability will be critical with allies and partners throughout the region. We will work hard with our partners throughout the region and longrange fire and Electronic Warfare theres a lot of capabilities we can bring forward and a variety of formations whether we had a stryker brigade in thailand so we have increased our presence from units that have been assigned and brought domestic units forward to conduct exercises. The work general bob brown has done is remarkable, looking at how the army participates in pacific pathways exercises so we have increased our presence