Statebystate basis. What a state needs in terms of continuation and moving on building on the healthy indiana plan for indiana. Utah, tennessee, there are other approaches important to those states. We are reflecting is that waivers are a means we can try and test on what works and how it would scale them as a nation. We are looking forward to working with the government as he implements and make sure he can implement quickly as soon as we reached an agreement. We are looking forward to finding out the things we can do better in medicaid as a program. That effort in the waivers is accompanied and complemented by something the National Governors association asked, state innovation model grant. At the same time we are trying things we are innovating in terms of payment models and helping the states through financing. A number of states have received those. There is a first round and a second round. Our governor and those who have participated, including Health Care Providers with their contributions to the program we have a lot at stake and we hope to deliver to you innovative and successful solutions. You can find the rest of this hearing with health and Human Services secretary Sylvia Burwell and other hearings with Administration Officials discussing the president s 2016 logit request online at cspan. Org. German chancellor Angela Merkel and french president Francois Hollande are attempting to work on an agreement to defuse tensions between ukraine and russia. They travel to kiev and moscow to discuss a peace deal. Reuters reports that chancellor merkel conceded it was uncertain if a francogerman hes plan would succeed and reflected on the idea of sending weapons to ukraine. Something the u. S. Is currently considering. The current conflict has killed more than 5000 people according to reuters. We will bring you chancellor merkels remarks are munich later today on cspan. Next a look at the president s request for defense spending in fiscal year 2016 with pentagon officials. A recent hearing held by the Senate Armed Services committee focusing on potential changes to military retirement conversation followed by your thoughts on the subject and other issues affecting the military by telephone, twitter, and facebook. The Political Landscape changed with the 100 14th congress. 43 new republicans and 15 democrats and 12 new republicans and one democrat in the senate there are 108 women and the first woman veteran. Keep track of the members of congress using congressional conical on cspan. Org. The page has useful information including Voting Results and statistics. New congress, best access. President obama has asked for 585 billion in discretionary dispense discretionary defense spending and called for an and to sechrist ration budget cuts two sequestration budget cuts. The first briefing was with robert work and joint chiefs of staff vice chair went to felt is 35 minutes. Good afternoon ladies and gentlemen. Thank you for joining us as we preview the 2016 Defense Budget request. My time with you, i would like to hit three things. We believe strongly this is a strategy driven resource budget that meets 21st Century National security needs. Second, the surest path to a resource driven strategy derived budget is to keep sequestration caps in effect in 2016 and beyond. I will detail in a moment and as others will detail later, we will submit a budget above the sequestration enacted caps. Third, even at the president s level, trying to achieve a healthy balance between capacities, or size of the force, the capabilities of the force and the readiness to respond to challenges will remain a constant challenge and this is especially true with regard to maintaining technical superiority in the 21st century. Our Defense Strategy is outlined in the 2014 qtr. It calls for a joint force to defend the homeland, conduct a global Counterterrorism Campaign , primarily through partners wherever possible, and to operate forward in multiple theaters to share our friends and allies against multiple adversaries. This is designed to help Global Leadership and preserve global peace. Like it or not, america remains the global First Security responder of choice as we have seen. When the u. S. First led nato and responded to russian aggression in crimea and ukraine. And then formed an International Coalition to fight against isil in iraq in syria. And finally to respond to the ebola crisis in western africa. These responses come on top of a volatile security environment. Many in this room, i do not need to tell too much about. But it requires a lot of our joint force. There are 211,000 servicemen and women around the world trying to preserve the peace. We will be fighting against against our adversaries. In this very stressing and volatile environment, if the forces are aligned with what we see happening in the world and if it is keeping pace with emerging threats. At the requested levels, we believe quite strongly that this budget is the best balance of ends, ways and means that we could possibly achieve. Given the level of resources. We are asking for 534 billion in fy 2016. That is 36 billion dollars above the fy 2016 sequestration caps and 38 billion or 7. 86 above the enacted fy 2015 limits. When you add it all up this is approximately 150 billion over the sequestration caps. In addition to the base budget we are asking for 50 1 billion in overseas contingency operations. This supports our effort to continue the drawdown in afghanistan, to operate forward in a Central Command area of responsibility, the persian gulf, and the environments they are, and to assist iraq and our partners in combating terrorism. This strategy driven resource is designed to support the five key priorities of the 2014 qtr qtr strategy. Number one, continue to rebalance the asiapacific region. We will continue to do so. Second, maintain a strong commitment to security stability in the middle east. Third, sustain a global Counterterrorism Campaign through and with partners whenever possible. Four, we want to strengthen our key alliances and partnerships. And finally, prioritized key modernization efforts. We what to make sure the number of forces in our Program Remains sound. We recognize the offense of the the events of the past year past year will cause us to question the assumptions that will underpin each of these priorities. Especially with respect to what is required to keep security in europe and the middle east. For now, we believe the requested fy 2016 budget levels will allow us to execute the 2014 qtr strategy at manageable levels of risk. With elevated risks in some areas. At funding levels lower than the president is proposing especially at full sequestration cap levels, our strategy will become brittle and more prone to breaking. For that reason, the leaders believe that any reduction in funding below the president ial budget, or a broad denial of the reform initiatives we have proposed to congress will make proposed to congress will make the overall strategy unmanageable. This comes to my third key theme. Even at the president budget level, maintaining a prudent balance remains extremely challenging for three reasons. We are coming out of 13 years of war. The longest sustained combat in our history. This is causing enormous strain on the men and women in uniform as well as the civilians who support them and our contractors. It has been very stressing on our equipment. We have long planned to take 23 years of a reset. What is happening, because of high demand and a volatile environment, we are going to be doing a running reset over the course of the next several years and we will not return to full combat readiness until 20202023. Second because o m costs, or operation and maintenance, the personnel costs going faster than the rate of inflation Defense Department needs to see 1 growth per year or the balance starts to get out of kilter. We have been at the same level for three years. Between fy 13 and fy 15 we have been at 496 billion. Due to high demand, the services have to keep their structure. On top of that, we have been digging out of a Readiness Program when sequestration hit. We have been trying to attack this problem, but it is still very hard to keep up with what we have had. We continue to pursue these forms aggressively, especially so we can put more money into modernization. That is the third reason were having so many problems. We are facing challenges unlike anything we have seen since the cold war. Our Nuclear Deterrent force is aging. It will be modernized in 2020 and 2030. We need to keep the old equipment going, but it is more expensive for us to do so and requiring us to divert resources in that regard. Our Space Capabilities support Global Operations face unprecedented threats. Were forced to spend more money on space resiliency. The proliferation of guided missiles makes it more difficult for us to guide power so we have to shift money into counter access area denial areas. This has to come from somewhere. Even at the president s budget level, it is a constant rubiks cube trying to figure out the best mix of capabilities capacities and readiness. The white house has helped us in this regard adding 21 billion in requirements. Specifically more toward modernization as compared to the budget levels. This is a deferred modernization problem and we are trying to tackle it in this budget. We need help above sequestration caps to do so. We look forward to congress we think this is the right budget this afternoon we will answer any questions that you have and we expect to answer a lot more over the course of the next several weeks as we deliver our budget and talk to the members of congress. Thank you mr. Secretary and good afternoon. The first message i have is internal, assembling the Defense Budget is hard enough in the best of times, but is extraordinarily difficult to do in our time due to the trifecta of declining resources constraints and uncertainty over future resources. I want to start rethinking the start rethinking the many able to put in the long hours. They are as dedicated and hardworking as anybody else in this department. The deputy secretary as outlined the contours of this years submission. No budget is perfect we believe we have assembled the best domination of capability capacity and readiness investments that we need. We also believe it meets the current and future needs of the all volunteer force that has served us so well. That represents our most asymmetric advantage. As such, the chairman and i fully support this budget. We feel it is what we need to fully support and remain at the edge of manageable risk, but we have little margin left for error for strategic surprise. I heard the term third and manageable a couple times last night. It should not come as any surprise, that we dont like to hear third and manageable. We dont like third down at all and forth down is not an option. Any Defense Strategy represents a delicate balance among the ends, ways, means, and risk inside a security environment. That balance is inescapable. If you disturb one variable something has to change among the others to reset the balance. The means that we have aligned to defense have steadily decreased over the last several years. At the same time the security environment has become more chaotic and potential adversaries are eroding our technical advantages. At the end of the strategy we are trying to serve, we are making progress in some of our ways to efficiency and the new technologies, but the variable that has carried the lions share of the strategic balance is risk. Our best military advice is any decrease below the request will require adjustments to the Defense Strategy to restore balance. It does not mean it completely breaks but we will have to make adjustments if we stay in balance. All you have to do is look inside the planning construct to get an idea of what that means. It ultimately will mean reduced leadership and freedom of action, which is an option but on one which we would prefer. When i talk about reductions im not only talking about reductions to sequestration, i mean anything below the level we are submitting. I would also reiterate that while fully respectful of congresss role, and not only how much we spend but what was and it on our the same as a reduction and would require an adjustment to that strategy as well. Thats what makes this a strategy driven budget. We are asking for what we need above the sequester levels to keep risk manageable. We have to do better than manageable in the most important things such as nuclear deterrence. It represents an opportunity for an arrest in decline in our investment. We do look forward to working with congress to get this submission across the finish line and hopefully on time this fall. In the meantime, we will continue to work on the ways part on how we defend our country to the animation initiatives and would be happy to talk about that. Thank you again, we will now take a couple of questions. Before turning it over to the real experts offstage. I wonder if you could talk a little bit about what happens if you dont get all the savings or you dont get a budget above sequester, how does the Strategy Change or how does it break . What can you not do . This is something i would hope everybody here and members of congress consider first. It is easy for us to tell you if you go to the sequestration level budget level we will by this many jsfs, but what does that mean . Were trying to get to the strategy we wont he able to do. In the broadest sense, our program is designed to allow us to do two things simultaneously, to respond to crises responded to two crises simultaneously. To have a large joint campaign involving the av, army, marine involving the air force army, marine corps, combined operations etc. The other is to respond to an opportunistic aggressor in which we try to impose costs or deny the adversary the objectives. We believe the pb154 four structure is broadly sufficient to need and if we would take more cuts we would have to consider moving down the number of forces that we have. At that point you have to ask yourself, would we still be able to do those two things simultaneously, could you still have the same level of presence . Would you still be able to respond in the timelines we think we could respond to today . The answer to those is not likely. We want to maintain focus on this budget. We believe this budget is what the nation needs. If congress does not agree, we would answer that question specifically. You have a lot of people doing the math saying, so what if we lose 36 billion in sequestration, that is roughly where you were in 2009, why could you not live with 400 billion . When the iraq war was running out of control. What do you say to that . At the wartime peak, we dropped 22 to 33 off of that. We see challenges to our space constellation, the demands of keeping the Nuclear Deterrent force going, the demands and the problems we are facing potentially projecting power into certain theaters. Because of the proliferation of these forces. In the past three years we have had flat budgets but we have taken risks both in readiness and capabilities to maintain the capacities the size of the force necessary to respond. We have three years of tilt up we have built up demand on modernization that we have not been able to get to. If anybody says, you have been at 496 billion, that is true, that we have been accumulating risk. The president has said i am not comfortable with those risks and thats why he is asking for the increase from 15 to 16. And release of the sequestration caps at 150 billion over. How close are the joint chiefs to telling the white house, we need to rewrite the strategy because it is too uncertain whether congress will in this hyperventilated partisan environment will release the cash. Release the pentagon from caps from caps. At what point you tell the white house we have to rewrite this before you leave office . I would not want to put words into the white house these, but i think they would agree that with sequester we will have to recraft the strategy. I dont know that i would say abandon it, but we would have to make adjustments. If you look, as i mentioned in my remarks, it talks about the forced planning construct talks about steady state operations and crisis operations. Steadystate asks us to do three things, defend the homeland, Counterterrorism Operations and provide a presence in many regions. We are not going to compromise on homeland defense. In sequester cuts he probably wouldnt have to. The other pieces could probably affect counterterrorism efforts a bit. We may find we would have to do presence and fewer locations or lower amplitude presence in many locations. Those are the kind of decisions will have to make and that will impact our ability have action our freedom of action in the world and american leadership. I think we would have broad agreement across the government and that we will have to make adjustments. In fy 13, we took a punch in the gut and sequestration. When it hit and 13. Hit in 13. If you are member we had to stop flying, we stopped putting ships into dep oh maintenance. We dug a readiness hole. We were not satisfied at those levels, but we accepted them happily. It help us get out of the readiness hole. We said, we have been surviving but not thriving. We have not been able to get to these modernization issues that have been facing us. When we presented this to the white house this fall they agreed with us. That is why we are asking for a budget that is above. We believe this is the right