And incredibly volatile security environment with a proliferation of threats. In asia, we see more aggressive chinese behavior that has been undermining the rulesbased order. You have what is going on in ukraine, particularly russias continuing meddling. You have a middle east that seems to be on fire, whether it is the Syrian Civil War or the insurgency in iraq or what is happening between israel and the palestinians in gaza. It is an extremely challenging time. The two major times you spent in the government, what years . I was in the Clinton Administration from 1993 to 1998 and again for president obama from 2009 to 2012. You were either Deputy Assistant secretary or undersecretary of defense. What is the difference . Now you are the ceo of the organization you founded, center for no American Security. What is the difference if you are in the government or in a think tank . In government, you are dealing with attorneys, you are focused on the day. Part of my responsibilities was representing the secretary of defense on a socalled deputies committee, the senior level group that is working on developing options for the president. A lot of Crisis Management focus. When you are in a think tank, your utility is not trying to secondguess the policymaker, but help to do some work to raise their gaze, look over the rise in the horizon and say, how do i think more strategically about america . When did you first get interested in Foreign Affairs or Defense Affairs . I had the wonderful opportunity to be an Exchange Student in high school. I think that experience of going abroad, living in a foreign country, really opened up my aperture and got me interested in international relations. That is when i pursued it in my undergraduate education. Where did you do your exchange . I was in belgium. What got you interested in doing that . I was just interested in the world abroad. I grew up in Southern California and i wanted to have a different experience. You lost your dad at age 14 to a heart attack. What impact did that have on your life . Huge. I was very close to him. It was a loss of a wonderful parent, friend, mentor, someone very important in my life. It also ended up giving me the sort of motivation of not taking life for granted, having a sense that you better make today count because you dont know how many tomorrows you will have. What was he like and what was your mother like . My dad was in the Motion Picture industry. He was a director of cinematography. He was very creative, very funloving. He was sort of a big kid. Growing up, he was a wonderful influence. Andom had been an actress transitioned in later life to doing all kinds of things. Aerything from working in bank to working in an art gallery and so forth. She was more of the daytoday they separated so she was the more daytoday caretaker. Very loving, very supportive, always focused on ensuring that even when he had ups and downs, financially the focus was on education. Education is the ticket to pursuing your interest in life. What is more satisfying for you, working in government or in a think tank . I find both very satisfying. I think that Public Service, there is no more challenging and rewarding opportunity in terms of trying to get u. S. National Security Policy right. An opportunity to shape that and get it right, there is nothing that matches that. That said, i believe in a world in a role that think tanks can play in developing new ideas for the policymaker. Also, new talent. One of the principal roles of cnas is not just to be an incubator of ideas but to be an incubator of talent. An experience of launching young people into Public Service. I read that when you went to the pentagon under the obama administration, you took seven people from your new american ,ecurity group. Yes secretary gates once quipped that why do i have to visit cnas when all i have to do is call a staff meeting. That is part of the Mission Statement of the organization, to really develop the next generation of National Security leaders. When was center for a new American Security founded . 2007. What was the reason . We thought that there was room for another think tank in washington. Wanted to create a small think tank focused on National Security that was fiercely bipartisan, meaning instead of being bipartisan in a way that is so careful that you dont go after the tough issues, we wanted to go and create a safe ,ivil space for people democrats, independents, republicans, to try to come up with the best policies for the United States. We also wanted a place to grow the next generation. Most think tanks in washington are populated by farmers. We wanted to populate hours with that creative young energy, people who have yet to give their best in Public Service. How many people on staff . We have about 30. About 7 million a year. We have a much Broader Community of interests in terms of parttime people who occasionally write for us and so forth. Push above iny terms of our output, our impact. Our recent conference drew almost 1800 people. Event. Quite an what kind of people come to an event like that . People who are interested in national Security Policy. Particularly the whole question of, can we recreate some bipartisan basis for consensus . That has completely collapsed and yet it is so important to creating a Sustainable Way forward for the United States. I am looking for the exact one ofou described the things you described, a democratic hawk or a liberal hawk. How would you describe yourself . You are a democrat. I am a democrat but i would say i am a nonideological person. I tend to be very centrist, very pragmatic in my views. Importancee in the in the unique leadership role that the can that the u. S. Can and must play in the world. I believe that while we need a very strong and balanced portfolio of National Security tools, part of that is the military. That instrument is very important to making our diplomacy successful, to making sure that we can deter aggression and so forth. How robust is it now . I think that under sequestration, pressures, frankly the u. S. Militarys capabilities are being hurt. We see declining readiness, declining investment in the future capabilities of the forces. This is an issue that i think we have to reevaluate as a nation. Whether it makes sense to balance the budget on the back of defense spending. Is awe really need comprehensive budget that puts entitlement, tax reform on the table and so forth. What are the chances that are going to happen . I dont think they are high, but one of my hopes is a new congress, new administration, perhaps we could get back to that conversation. I think every american is frustrated that we arent getting the deal we need to move forward. We have a divided government by design but the founders always believed that pragmatic compromise was going to make that model work. When compromise becomes a dirty word and the parties polarize and go into their corners and refuse to work together, things get very dysfunctional. You wrote a piece back in july of 2013 that talked about a force you were worried about, an much force structure, overhead with too little spending on modernization. Historically, when we have gone through periods of drawdown after wars, we tended to keep too much force structure and not invested enough to make sure those forces are ready to respond to crises and that they have the equipment that they need not only now but for a more challenging future. We also failed to reform how the department of defense does business. We have too much overhead in terms of personnel bureaucracy. We have too much infrastructure in terms of bases and facilities we dont need. Everyone would agree that the way we acquire systems is in great need of reform. It costs too much and it doesnt give the best value. There is ample room for reform. You wrote that the department of defense rarely achieves expected return on investments. Most weapons programs run over cost and over schedule. Today, the system often penalizes Program Managers who dont spend every last dime of their budget. I have been in town for a long time. When i was in the navy, the same thing existed. Spend this money are we are going to lose it. Why hasnt that been stopped . Incentives point in the opposite direction. If i am a Program Manager ieking to advance my career, want to be in charge of a bigger program. The last thing i want to do is have money unspent in my program. On spending what you got to make sure that congress doesnt cut your funding the following year. There are some things that can be done within the pentagon. I want to give credit to the current undersecretary for acquisition to try to get at changing some of these incentive structures. Constrained by all the laws and regulations, the thousands and thousands of pages on the books, governing how we do acquisitions. What is really needed is a zero basing of the system. Through with congress to really rewrite the system based on what we know works and doesnt work. Why hasnt it been done up to now . I think it is a question of critical will. The inefficiency isnt as costly. Budgett there are real constraints, every dollar wasted is a dollar that doesnt go to readiness or modernization. The Inspector General for afghanistan was on here a couple months ago. I want to run a clip from him and get you to try to explain what he couldnt explain. We still dont have a central database of where we spent all the money. Why not . That is a good question. Stillpartment of defense cant give us all the financial records. I spoke to a former comptroller general saying i wont mention which one, but he said, we put the Defense Budget procurement on the high risk list in 1991 and they still havent gotten off. How is that possible . This has been true for several u. S. Government departments. What i do know is the comptroller of the department of defense has really made this a priority, getting the department to work towards the point where they are truly amicable in all financial dimensions. This is a huge endeavor. Everybody understands that this is imperative. It is difficult to make hard choices about tradeoffs and how to manage risk if you dont really know what you are spending on things. And everybody agrees to my knowledge, the department is working towards that goal. You always hear that we spend more on defense than all the rest of the countries in the world combined. Is that true . It is true but i dont know how relevant a metric it is. The u. S. Has such a unique leadership role to play in the world. We have a network of alliances. We are the architect and the underwriter of the international rulesbased order. I dont want to say we are the worlds policemen, but we have an unusual level of responsibility to try to prevent conflict, maine staying maintain stability and so forth. Becausefficult to make our responsibilities are so different. Ofwhat was your opinion going into iraq in the first place . The initial decision to go into iraq was a mistake. That said, by the time i came back into government, when you , theommitted to a war question at that point was, how do you responsibly achieve u. S. Objectives and end our involvement in a responsible manner . That was the focus we had with the obama administration. Reuters did a story a couple days ago, saying there was a study that shows we spent 1. 7 trillion on iraq and then you see other predictions that before it is all over, we will spend 3 trillion to 6 trillion over time. How did we do this without paying for it . This will go down in history as one of the greatest mistakes ever in American Foreign policy in terms of deciding to go into quiters, one of which was necessary in afghanistan, and an optional war in iraq, without ever going to the American People and saying that these were such important endeavors that we needed to actually raise taxes to pay for them. What that did is it created enormous deficits. It said the stage for the economic crisis that occurred in 2008 and it is a hole that we will be digging ourselves out of for a decade or more. It is an enormous mistake. On the whole you idea of the sequester in the beginning . I think the sequester was a dumb idea. I understand the intention. The intention was to create a prospect of something so horrible, these deep acrosstheboard cuts, no distinguishing between egg priorities and things that were unimportant. It was supposed to be a sort of hanging over the heads of the budget negotiators to ensure that they would come to a deal. ,hat this would be so draconian you couldnt possibly not come to a deal. Well, we didnt get to a deal. It came down on our heads. This is not the way to govern effectively. This is not the way to make the budget decisions. I think it has already done tremendous damage. Readiness of all military services has declined substantially. That are being grounded and told they cant fly. In thee only a handful army who would be ready for crisis response. You have ships that dont sale and cant provide that presence for determinants and stability stability. Rrence and once we recognize how dangerous that is, it will cost us far more to recover net readiness of those units that have been stood down than it would have been to keep them at a reasonable level of readiness. What about the size of the force . The size of the force is also at risk. Reviewdrennial defense that was just completed and visions cuts that would take us below the level at which we would need to sustain our strategy going forward. There is very real risk being taken with the u. S. Military because of sequestration. I would hope that after the toterm elections we have got get ourselves out of this situation. Ourill eventually imperil National Security if we continue down this road. Back to the beginning, you went to harvard, how did you get in . Good question. Myen the standards now, eldest son is going through the process, it is such a much more difficult process today. I had a wonderful guidance counselor who said, why do you think about the ib why dont you think about the ivy league . And miracle of miracles, got in. It was a wonderful experience. Not only a chance to meet a much more diverse and International Student body, make wonderful lifelong friends, but tremendous quality of teaching and learning. Who did you meet in the classroom that you might have seen later on in your policy jobs . Actually a number of my classmates have ended up going into Public Service. Dan benjamin who was secretary counterterrorism coordinator of the Defense Department. He was someone i met in the first year. Meal role in is someone neil rowland is someone i met later at oxford. He went on to become deputy secretary of treasury. It is nice when you find yourself looking across at someone you have longstanding relationships and deep trust what about some of your professors . Some of them did. The way i came into the Clinton Administration was very much from the encouragement of several harvard professors that i was working for as a postgraduate fellow. Name somebody that we know. , they had all been in and out of Public Service and were very encouraging of young people to follow suit. If you examine your own life and how you got to where you have been, what triggered that . Where did somebody say, Michele Flournoy is that your maiden name . Where would that have started . I think it was more i got ,ery interested in issues Public Policy issues specifically those of nuclear arms control. It seemed like the one problem, if we didnt solve the Nuclear Tension between the u. S. And soviet union, we wouldnt be around to solve much else. Again, having the good fortune of having some mentors who were going into Government Service and said, why dont you, along and be on the team, that was a great opportunity for me. What was your very first job in government . My first job was the Office Director of a brandnew office in the office of the secretary of defense called strategy. Frightening to think there was was a period when the pentagon didnt have a strategy office. We were mandated to recreate a new strategy office. Internalmost like an think tank for the secretary of defense to help him think more strategically about the issues. Now, former secretary of defense very is perry is one of your Board Members. He is now Madeleine Albright also . She is also one of the original Board Members. Where is the bipartisanship . Give us an example. Staff, as we mentioned, i have served in ocratic and frustrations democratic administrations. Fontaine, we are strongly bipartisan. That trickles all the way down to the staff. Again, we have that same flavor today. Both in terms of people who served in government but also people in the private sector. Where do most of your funds come from . It is a mixture of foundations who fund the projects, corporations who give us general support, and wealthy individuals who provide donations. We are nonprofit. How hard is it to raise the money on a yeartoyear basis . It is always a challenge. When the economy takes a dip. But i think cnas has established a track record of turning out , thatwork that has impact we dont have much problems raising the funds. Does thech impact money that comes in have on a position you will take as a think tank . Non. None. We are very careful not to take money that would b