Thank you. Im kathleen hicks. I direct the National Security program here. Our ceo wanted to be here this morning to welcome the commandant, but hes been under the weather, so i get to both moderate the conversation and also do that. Before i begin, i just want to remind everyone that this is the fourth of our Maritime Security dialogue series of 2019. Our Maritime Security dialogue is cohosted between csis and our partners at the u. S. Naval institute. And our goal is to highlight Current Issues and future challenges facing the navy, marine corps and coast guard. I want to thank our sponsor, Huntington Ingalls industries who has made this possible. Today were talking with admiral karl schultz, a commandant of the marine corps. And i want to get right into it. We were lucky enough to have you join us in august of 2018. Pete daily was the moderator for that session and here we are a yearplus beyond that, a few months beyond that when you began which was roughly may 2018. I would love to ask you to reflect a bit on where you feel the coast guard is really making progress on the key issues youre facing and where you feel like you still have significant hurdles you want to tackle. Sure. Good morning. Good morning. Thank you and thank you for the opportunity to be back here at csis. I took over on 1 june and here we are a year and a half later. Its been a fascinating 16 months or so here. We came in rolling into the job, i think i saw the biggest opportunity challenge ahead of us to be the demand for coast guard services. Number one priority and we really doubled down, we put out a fouryear strategy, focus on readiness. A couple months after we were here in october, we put out the strategic outlook that was looking at the state of the Maritime Transportation system. The average citizen doesnt tie the coast guard to that. Whats our role . Modernizing information systems, how do you build a coast guard that can keep space on the waterfront. Shipping is going to double in 2025. When we talked about it back in the summer of 2018, it was still a notion and were sort of hoping for that. I think we rolled out the term polar zusecurity cutter. Were off to the races. The conversation is not about the first polar security cutter, but how fast can we build additional cutters. We focus in on a 6, 3, 1 strategy. We continue to build National Security cutters. Were focused on people. The biggest challenging facing my successors is really talent management. Its a competitive workplace. Less than 30 of american youth, 17 to 24, eligible to serve, we have 15 women, society is about 50 women in the workplace. Were working hard on a lot of fronts. Its been a busy year. 35 days, where dhs employees went without pay. It rocked us a little bit as an armed service. Its been a pretty fascinating year. Just to put a finer point on that. The department of defense did receive appropriations. Starting the fiscal year on 1 october was fantastic. Now through november 21st the under a continued resolution, that creates some challenges for federal agencies. Coast guard not unique to others. Well see where we go in the coming weeks. I want to go back over many of the things you just mentioned. A little bit of a teaser. You were able to tease all the big issues. Lets start on the people side, the recuruit and retain. How is the coast guard doing . You mentioned in particular the issue of trying to attract more women and reflect on that more broadly, what are the challenges youre facing and how is the coast guard going about let me start on the broadly. Back in january 2018, if you Pay Attention to the armed forces, we went into a blended retirement, a 20year, and then 50 . This blended retirement, you get 2 a year, you can withdraw after 12 years. A young marine looks around and says, hey, do i really want to continue to serve here . And we offer about a twomonth kicker to keep them for four more years. It used to be yesteryear. Ij i think its a good thing for the nation. For an organization like the coast guard, which is aprin tis, its something we got to Pay Attention to. A young, coast guard, female marine science technician down in houston whos very savvy as we become an exporter, working on the water port, got a family and shell comes along and says whats schultz paying you . They offer that smart coast guard woman 150 k to stay in place, thats challenging for us. Our retention models was about 40 of our enlisted people went to 20 years, 60 of our officers. Thats going to be very challenging for the coast guard. We have to have a great brand, focus on the coast, their families, the health care, we cap out at about 50 tuition assistance. Its one of those tough choices we make which is a competitive disadvantage. Another thing you mentioned is readiness operations. Whats your sense of your readiness recovery path . Are you on that path . How do you think about that one thing i didnt mention because i started with the big picture. We rolled out a womens retention study. It had been under way for a good part of the year. We were losing women in a disproportional level. You go in and get on the scale, if you find youre good for another six months. If you didnt get through that initial just jump on the scale thing, then we do body measure. We found we were discharging women threefold rate over the male counterparts. We rolled out some new body composition program, it gives you three ways to comply. Its the way you walk in, its a modified tape and its a new abdominal circumference and a fitness test. We put some policies in place where for michael cohefor li. Say we were a couple, you got four years, i got two, we go to california, what kind of decisions are you making . Were going to see lets figure out what theyre going to get. If you stepped out the to have a child, it used to be because we have a lot of small units, youd be away for a long time. Your 25 shipmates pick up the slack. Now we put a reservist behind you so you can start your family, figure out whats right there, come back to the workplace. We had a reversist came in, the unit didnt miss a beat. Some of those things were proud with. Its resonated well with our workforce and the female colleagues and we continue to march down the road there. On the readiness front, its been a bit of a dialogue. When the president came in back in 2016, it was National Security president ial memorandum number one was how are we going to make the armed forces more healthy. I dont think this was an overt snub of the coast guard, but it was focused on dod. Thats a how you pay for the stuff you deliver to the taxpayer every day. We werent part of that conversation. Weve been on about this eight, nine year flat trajectory. First is education. Talking about, hey, we are an armed force. We have the same challenges, a lot of capital assets, training, retention, recruitment, those things we talked about already. We do about a billion dollars of work in support of the geographic commanders, the pentagon on an annual basis. We get the same 340 million we got back in 2001, no cost of living adjustment in that demand goes up every year. Were trying to have the appropriate conversations inside. Its what they call a nonemergency defense fund, the background on that. If we could close that gap, i think that would really advance the readiness discussion. On capitol hill, i think our messaging has been effective. I think some of the markups show some sensitivity or awareness of what were asking for and about those dollars to help us deliver frontline services. Its going to be a fouryear focus. Its going to be on this readiness crusade. Im going to get to all around the world. This may be an entry point into it, but modernization. Can you talk a little bit about the key modernization priorities for the coast guard, part of which i know youve already achieved beginning of. We took a big step about 9 1 2 years ago to modernize under a different construct, mission support, front line operational construct. And we continued to make some changes on personnel and you dont always get things 100 right. Were trying to perfect that. In terms of platform modernization, we continue to build National Security cutters. The program was eight ships. Congress saw fit to award three additional ships. Those are great ships. They are delivering success and unprecedented fashion down there. I was looking, we have a National Security cutter down range, we have the coast guard cutter into the indoPacific Region. Whether thats partnering with the philippines, the vietnamese. Offshore, we awarded a contract back in september. We got a determination from the secretary here last week on the Shipbuilding Group had a devastating category five hurricane that hit them. And we worked through a process here and the secretary signed on this relief, its going to go cure on capitol hill for 60 days. Theres a way forward where i think it can remain viable. It allows us to put a recompete on the street in the future so that the real season for this, if its sort of a its sort of of a federal accusations pathway under extraordinary circumstances, but we think theres an urgency on fielding offshore patrol cars. Thats 70 that does the counter drug work, were in the thick of that right now. Were going to build can i ask on that piece. How much of a delay do you anticipate in the overall fielding, if you will, of the assuming this process moves forward as proposed and signed off by the secretary, i think we cut that delay down to 10, 12 months. This gives us the chance to give the shipbuilder a chance to be successful. It gives vendors to come back to the table. We sort of spread the risk around. The risk would be National Security cutters, mitigate the risk, if that doesnt go quite so well, we have another pathway to getting ships. Polar security cutters, we talked about, aviation, weve got were fielding we put five c130js up in alaska. Were going to put them out in hawaii. Were looking at recapitalizing our helicopter fleet. We fly helicopters more than anybody else flies. Were going to fly those 30,000plus hours. The coast guard version of the navy sea hawk, we take afrircra from the navy and bring them down through the program in North Carolina and we can get up to 20,000 total hours on those. We got a program now where we buy these new hauls and get 20,000 additional hours. We got some plans and were looking at future vertical lift, how do we follow that but were not hostage to not having a way forward. Thats a lot of the things going forward. Were going to start putting them over in bahrain in late 2021 to support our work over there for the commander. And has the story behind that modernization plan been well received. I think so. You take that cutter and you show its ability, i think that and it can be its supported halfway around the world, you look at that same cutter down there on the drug vector, weve had that cutter up there below the Arctic Circle and some of the non most extreme times of winter, that is a capable ship and i think that return on investment becomes pretty visible pretty quick there. Lets jump out now geographically starting in east asia. So much of how the china challenge is presenting looks like a sweet spot for the United States coast guard. Its using its own coast guard, using Fishing Vessels that are part Maritime Militia force. Last time you were here, you talked about admiral davidson putting out requests for coast guard. You mentioned the degree to which you all are tight operationally to supporting those demands from dod, how do you see the coast guard role both specifically in the asia pacific realm but maybe more generally around these statebased major challengers that are using what i would call gray zone, some people call it hybrid, approaches to take on the United States. From a resourcing standpoint, its a high demand conversation. Six are on the waterfront here. Were building the other ones here and exciting about getting them out and doing missions. I think we bring something unique there. Were an organization, i think when you see the United States coast guard, it stands for model maritime governance. If you look at a lot of coast guards of the world, they mimic that with a blue stripe, but i dont think they mimic our behavior. Were not running down fishing boats in disputed areas. I think the coast guard brings that model governance, a model of restrain, really, the rules based. Now you say, what do you add to the equation, the work with the dprk, were helping vietnam build their coast guard. This is on a peopletopeople basis. Vietnam is going to grow their coast guard. You look at the sri lankans, defense articles, weve sent ships to the philippines, to vietnam, security cutter, were going things in the indoPacific Region, look at the cofa states. We sent a Fast Response cutter in recent weeks. Thats a humantohuman interaction. Most of those islands receive their gdp from fisheries, we partnered with the australians, with the new zealanders, they both had ships down there while we were there. That looks different than checkbook diplomacy. China looks across the swath of the western pacific and has different designs than we do. We bring that humantohuman alternative. I think you see a lot more of that coming. When i talked last year, were thinking about what do we do beyond big ships to indopacific. Thats the other part of the conversation. Were going to put three new fast cutters in guam. When you support it with a bigger ship, thats a really potent package. Just really conveys interest, concern, humantohuman partnership and im excited about that. How do you prioritize . Whats the process youre using . You have limited resources, coast guard capabilities are in high demand. Coast guard has the Law Enforcement ability to not look like, you know, big u. S. Defense department asset. What are you doing to try to make sure youre hitting the highest Priority Areas . The navy, through the Global Force Management process requests forces. We process those. We have our internal coast guard way of meeting the capacity. What weve done a little bit recently in the past year or so is weve probably in the past pushed resources out to the areas and sort of had a model that is built on each other. They were taking a little more of an enterprise view. I think the counter drug mission, that is a campaign that will go on forever. You say, how many ships do you put against that at the expense of the other one in the indopacific, theres 70,000plus deaths on the streets of america because of drugs. I think thats important. Then theres the what kind of couple additional coast guard ships do in the indopacific. We need domestic fisheries off the pacific northwest. Were taking a little more of an enterprise internal maybe global view. We have our own process, thats probably taken a little more Senior Leader headquarters dialogue to get to the right place on that. I want to end up at the arctic with this question, but beginning with the navys reestablishment of its second fleet. Has that changed in any way, the way in which the coast guard and navy are coordinating in the atlantic . Yeah, weve been very deeply invested in a lot of venues, forums, japan, china, russia, different stakeholders, canada the coast guard, north Atlantic Coast guard was a little atrophied over the years. You think about why do we bring a second fleet back. You look at whats going on here and you say theres a coast guard forum, piece of that. I got back from greenland last week and you look at the kingdom of denmarks relationship from a security standpoint with greenland. Greenlands economy, fishery is about 27 of their economy. When you take out that green land block, its 95 . Russia is offering off of greenlands waters. That has them concerned. Were looking to the atlantic. I think we look you mentioned ending up in the arctic. But weve been very alaska arctic focused. Denmark, norway, the other members of the arctic forums, i think were broadening our aperture into the Atlanta Ocean about reenergizing our partnerships, thickening those lines. You have a new strategy out. Can you describe for folks the three the major thrust of it, the three lines of effort that the coast guard is pursuing how it frames up its roll. We talked about the arctic emerging. We know what the arctic is now a little bit and were trying to figure out how do we operate, how do we project a sovereign presence. If you go back to that alaska arctic, china has been up there five, six of the last nine years, theyre going to outpace us on ice breaking capable ships if we dont keep our foot on the gas. Theyre not an arctic nation. Theyre a selfdeclared near arctic state. I think secretary pompeo took the wind out of that a little bit. Theres no such thing as a selfdeclared state. Were up there, that line of effort is continuing to learn to operate. As ive studied the space, the conversation, my first six, eight months was getting our first breaker. You have very limited maritime domain awareness, very little communicati communications. Our medium cutter is off the grid. But the work of that ship really suffers, theres no connectivity. We have to figure out how do we partner with north com. I was having a conversation about what can we do in terms of additional satellites to get after those problems and its about continuing to build partnerships. You have the Indigenous People who have their lifestyling up there. And then you pivot to the other side of the world a little bit. A lot of the disputed water space is about the east china sea. But russia is tripling down in terms of their ice breaker investment and looking at ships coming out of asia that can cut that route. That could be lucrative and the i think the future disputed regions might been on that sea route. I think youre going to see if we build out this fleet, that might be the United States with a heavy role. They know its in our Arctic Partners backyard, its a little more ice reinforced