Good afternoon, everybody. Thank you for joining us as we roll out the fy 2017 Defense Budget. The Defense Budget request totals 523. 9 billion in discretionary funding for our billion in and 58. 8 overseas Contingency Operations for a total of 582 billion. That sustains the National Defense strategy and the figures conform to the budget levels found in the bipartisan budget agreement. When building this program that informs the budget that we are going to talk to you about today , secretary carter first asked partners to take a long view. How is the next 25 years going to differ from the last . The future is inherently unknowable, but we concluded that five of these strategic challenges would most likely drive the focus of our Planning Program in the budgeting processes. The first to challenge is reflect the most significant shifts in the future security environment. A return to an era of great power competition. We are faced by a resurgent russia and rising china. Both are Nuclear Armed powers. Both building advanced capabilities at a rapid rate. Both are primitive members of the when Security Council and both take issues with some aspects of the Principal International order that has preserved stability and enabled the pursuit of prosperity for decades. Both are becoming more aggressive along their peripheries. Russia and china. Cooperate continue to on issues of mutual interest to both countries, which included the Department Must be prepared for increased competition over the next way five years. Challenge isategic more applicable. North korea is already a Nuclear Armed power and is now pursuing advanced Ballistic Missile capabilities that already threaten our allies. Committed to developing longrange Nuclear Armed missiles which can pose a direct threat to the continental United States if it is successfully designed and fielded. The new leader has demonstrated a propensity for publication. North korea continues to station forces along the demilitarized zone. For these reasons, we must continue to retain forces on the peninsula that can fight tonight if called upon. The new leader has demonstrated a propensity for. Ublication provocation iran seeks to become the dominant regional power. In support of its goal, it is pursuing ever longrange a togrange of the stat stabilizing activities. Destabilizing activities. The fifth challenge is our sustained Global Campaign against terrorist networks. With a nearterm emphasis on degrading and defeating isil and an effort to Train Afghan Forces to counter the spread of isil in south asia. From our perspective, the campaign against Global Terrorist Networks will be an enduring condition for much of the next when he five years. We have to be prepared to monitor it constantly and treat it would necessary. For the next 25 years. This does not reflect a prioritize asian of strategic threats. Ation ofitiz strategic threats. We therefore sought to develop a portfolio with the capacities, capabilities and readiness to address all five of these strategic challenges with some degree of risk. That is important to note. The president s budget allows us to execute our strategies. Given the current level of funding, we simply cannot reduce every risk associated with every strategic challenge. We therefore developed a program that addresses all five and the secretary said if we cannot reduce risks in all of the challenges we have to prioritize. They told us to do three things. We should Prioritize Strengthening our conventional deterrent against the most potential adversaries. To match expect this numerically or symmetrically. He told us to offset their strengths using new technological operational and organizational constructs to achieve a lasting advantage and strength and deterrence. The advanced capabilities where developing we are developing are directly applicable against lesser states and also strengthens deterrence in that regard. With respect to the services, the secretary asked us to focus far more on shape and size. To achieve the best balance of modernization and readiness within the existing budget level. In terms of readiness, he committed us to focus on reconstituting full readiness. He charged us to place heavy emphasis on innovation. Ensure we retain the advantage we enjoy in human capital. Our people are the best and most powerful competitive advantage that we have across all five challenges. The force of the future aims to keep it that way. Plans andupdate our operational concepts. The secretary and chairman are pushing the department to look at each of these challenges in terms of trans regional multidomain answers. Dont just look at it regionally. Look at it by exploiting our global posture. He asked us to seek game thating technologies exploit our advantages and adversaries weaknesses. Become a lean and agile 21st Century Organization and we want to free up Additional Resources to devote to other programmatic needs and fight down any residual risk that remains in the program. The vice chairman of the joints chief of staff and i will be happy to take your questions. Thank you, mr. Secretary. By expressing my deepest appreciation to this team of professionals who are the men and women who work the long hours to develop this years Defense Budget submission. No easy task, even in the best of times. We face the unenviable task of complexo address challenges to our National Security interests despite the enduring strain of constrained resources. This collaboration is what the service jeeps and i believe is the best possible balance based on the resources available. Mistake, todays environment is more unpredictable than i have seen in my 35 years of service. Our soldiers commitment and marines have been battling terrorism around the globe for 13 years. The pervasive threat posed by violent extremist organizations has been and remains an immediate threat. , it has come at a heavy cost, degrading readiness meddling modernization and increasing our overall capacity. The rest of the world has not remained stagnant during this time. Increasinglyd by aggressive state actors demand our action. We face growing challenges from russia and china, which are asserting the power at the expense of regional security. Nuclearreas pursuit of weapons and listing missile ballistices this missile technologies and irans activities as the chief exporter of terrorism and the stability. Instability. Preserving force structure and advancing readiness. For the army, it supports the ongoing transition back to highend combat and full spectrum capabilities. In improvements in service capability, tactical aircraft and investments in advanced undersea escape abilities. It maintains the reading core the marine corps as the most and forresponse force the air force, this budget invests in highend capabilities across the range of domains that we expect our air force to respond in while attempting to improve readiness through training for the highend fight. This proposal reflects the hard choices weve made in the context of todays security environment and economic strength constraints. We are in the process of engaging congressional leaders and their staff to address their questions and concerns. I look forward to continuing to work to eventually get an to provide int the investment for the investment effects x ability to address our National Security interests into the future. Thank you again for being here today. Flexibility to address our National Security interests into the future. About the thinking behind the new 200 million in debt countering threats in north africa, west africa, in that region . What you expect to buy with that money. For the afghanistan amount, about what troop levels for the coming fiscal year. And maybe just an overall the increase in funding. What do you expect to buy with the what are you hoping that buys . For 58 million, that was built from the bottom up. Whatdo we need to do to do we need to look operation afghanistan . The president made a decision to keep 9800 troops through sometime this year. And down to 5500 at the end of the year. That,udget fully funds fully funds all the operations going on in both iraq and syria. Asks for iraq train and equip. This provides us everything we need we believe right now to execute our global operations. That left over 5 billion to cover base needs needs. Generally, 5 billion was able to address those needs. That reemphasize the fact in the budget as submitted, we have funded all of our anticipated operational costs across our trans regional fight against terrorism. That has all been fully covered. Of the services will be able to cover the detail of the request. We have covered all the anticipated expenses in that endeavor. What about this 200 million for the africa region . Can you expand on that a little bit . About thethink threats across all of africa, the newly formed isil clerks it goes back to at the secretary and chairman were saying. We have to approach this as a trans regional problem. From theo approach it western coast of africa all the way to afghanistan. Intentionally, also in southeast asia. None of these problems we look at as a Central Command problem. We look at what do we need trans regionally . Doinge are anticipating is with the broader support of our Global Campaign against terrorism. After 2021. How serious is this that the next administration faces . During the republican debate, there has been a constant drumbeat that the American Military has been gutted. Address the selection today when they hear that it has been gutted. Overall ofng about. His verse the u. S. Military amid talk about this way. I would like to turn it in and talk about the physical issue received going forward. The primary problem were faced with is that we really like the budget deal. We applaud congress being able to provide assist two years of stability. 2018, were planning on going up again the sequestration caps. Of the moneyll between 1820 100 million we are counting on that we are not certain we will get. Number two, the future is osha. Howlett be done in the future . That is a big uncertainty. We have money there that should be in the base that has happened over the last 14 years. We have to adjust that. 2135 is 18 between billion per year to reconstitute and recapitalize our nuclear deterrent. That comes out of our date conventional forces, that be very problematic for us. Rather than talk about that, there is future fiscal risk that the country, congress and future administrations must come to grips with. Soon as we have a better understanding of that, will be assured of that our Defense Strategy is on the right track. I will take umbrage with the notion that our military has been gutted. I stand here today after wearing the uniform for 35 years. Been more confident that we have the most powerful military on the planet. Of course we have challenges. Globalure faced with a set of threats, you have to focus your energy. Stated, we have focused on violent extremist terrorist threat for the last 15 years. It that consumes the readiness of our force to do the other tasks. Readiness is a challenge that each of these services will face. Were far from gutted. In your joint force today to most powerful army in the planet. The most determined air force on the planet. We have a marine corps nobody can match. I will argue that is far from gutted. Reality of the men and women serving our army, navy, and air force. They are the best the world has to offer. We have time for one more. Expand on the lcs. Also, if hearing on the growth to 90 caps. What in this budget addresses that growth . Example ofa perfect what the secretary meant by focusing more on shape rather than size. The requirement for the u. S. Navy is 308 ships. , there is aships class kruger or a gutted missile destroyer. There was a requirement for 52 lcs is. For a total of 140 surface combatants. If you take a look at last years plan, the navy was good the navy was going to build up to 321 ships. Ourselves, what cant we buy a since were going for 308321 we cannot by capability. So, this is not an indictment against the lcs. If we do not like the ship, we would stop buying it. Those 12 ships would take us from 321 down to 309. It allowed us to put more money into torpedoes advanced munitions. More money into tactical aviation. It was more about achieving that balance between size, readiness, and modernization. We think the navy is much stronger because of this decision. And, the plan, will get the 300 ships. We will get the 308 ships. Ships. Stay above 300 of this was the type challenge and the trade that the vice chairman was talking about where, you look at it and say what i rather have the 12 extra ships are what i rather have all of the capability that allows us to buy . Where building the 90 lowend caps. Healthy isr caps on the air force. That means they will have 10 highlights her line. For orbit. That is a sustainable force structure. Cap. Rmy is going to add 16 that is a Global Force Management allocation plan. They will have 16 orbits. Governmentfind 10 owned shock absorbers. That kansas upwards of 86. Then, the other are supporting the software today. That is how we get to 90. We would not get to 90 until the latter part of this. We are on track. Theres no slowdown. We hope that congress will support us in that goal. Did you have anything . Thank you. Thishave to push you on one. You say you have one out of 17 . Flexible onys are these points. The navy came in and said that in terms of competition, it would help if both yards had a ship. Change the 40. We are going to get 40 ships. It was a slight change in the profile. It was allowing us to make sure that the frigate was a way to do it. On all of these things, these are hard choices. Choices between size, modernization, and readiness. Each of these services will explain to you the choices they had to make. About what we think is the best balance. Thank you. Thank you for being here this afternoon. Will get started with the general. Well have a little more detail about the secretary will be talking about. The deputy secretary is a tall man. Critics this is mike mccord, on his left is the director of resources and assessment for the joint staff. General anthony ird. Thank you. Good afternoon. First, want to say deputy and vice chairman have been a great the internment over many months. Since this is the last time i will be doing this, i want to recognize the hard work that withon across the building some people with services and command. Were going to get the budget done. I want to take a second to get the enormous contribution of two people. Moore, herejimmy was leads a great team over there. Ill get to the second one, it was not early november where we got the budget deal. It started back in late spring. So, were far along our process. Were building the budget. Scramble for the last six weeks to cap 17 billion. I will explain that number. It was only last 10 days of our project that we knew what congress had done to the 16th budget. A lot of information came late. My staff, a particular works to get a quality product. Close my remarks by thinking my staff. We did the work of two people throughout the entire process from november. We were missing and are still missing the top career budget officials. He has been out for illness for an extended. Of time. In the meantime, it is done enormous work to do his job. Slide,n go to the first the deputy kind of covered, first of all there are three things. Number one, there are the facts. Budget. A total a think it of you can read that. The second, he talked to some degree about the secretarys guidance to us and the idea that you have to fight to win across a range of challenges. It is really the important place to start. What problem are trying to solve. What problems does the secretary moniz to solve. For anybody listening who did not read the secretarys remarks from a week ago, oh encourage them to go to the website and kind of start their come if you would with his speech for what he is trying to do into a little more meat on the bones in the challenges which is what the government is trying to address. Finally, the w touched on this. A word on this as we hit it off to the next administration, the sequester issue is still hanging out like a bad cold. News to taking care of. Our plans have been consistent. Well talk about that over the course of several years. If weans will not work can i can this Problem Solved and get back up to the level of resources that we need to keep this process going. We do think were making progress here. I will skim past the next slide which shows you the history of i want to moveet to the next light after that and theled down little bit on three your time. We have just been through and are about to start. So, what is important about the budget situation and budget deal, a few things. From 1617, the two bars on the right, we are up to . 5 billion. That is under the terms of the budget deal. It is very flat from yeartoyear. The yoko budget for this two years, were only up to billion dollars. What did you have this suit compared to what you had last year . If you do the math, the pay raise that we had basically consumes that amount of money. A, taking that aside, we had flat amount of money once they got of the compensation that really speaks to the deputies point about this being more about the shape of the budget and the size. The shot the size is not growing. If you look back to the year before, one reason the secretary said he was grateful for the budget deal is that it jumped us up from where we had been stuck in a rut for three years. I would certainly much rather be in the 520 neighborhood than in the 490 neighborhood heard that is with the budget did for us. It is a better jumping off point for trying to get the next jump up we need in the future. Again, when his secretary talks about being grateful for the deal, i think you speak in terms of the fact that he has been calling all your for compromise. When he says he is grateful, he does not mean he had to get her thing he wanted come he still thinks it is a good deal. He got some stability which is important to the troops