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U.S. Department of Defense
Office of the Assistant Secretary of Defense (Public Affairs)
News Transcript

Presenter: President Barack H. Obama, Secretary of Defense Leon E. Panetta, and Chairman of the Joint Chiefs of Staff Gen. Martin E. Dempsey January 05, 2012

Defense Strategic Guidance Briefing from the Pentagon

PRESIDENT BARACK OBAMA: Good morning, everybody.

The United States of America is the greatest force for freedom and security that the world has ever known. And in no small measure, that's because we've built the best-trained, best-led, best-equipped military in history. And as commander in chief, I'm going to keep it that way.

Indeed, all of us on this stage -- every single one of us -- have a profound responsibility to every soldier, sailor, airman, Marine and Coast Guardsman who puts their life on the line for America.

We owe them a strategy with well-defined goals, to only send them into harm's way when it's absolutely necessary, to give them the equipment and the support that they need to get the job done, and to care for them and their families when they come home.

That is our solemn obligation. And over the past three years, that's what we've done. We've continued to make historic investments in our military, our troops and their capabilities, our military families and our veterans. And thanks to their extraordinary service, we've ended our war in Iraq. We've decimated al-Qaida's leadership. We've delivered justice to Osama bin Laden and we put that terrorist network on the path to defeat. We've made important progress in Afghanistan, and we've begun the transition so Afghans can assume more responsibility for their own security. We joined allies and partners to protect the Libyan people as they ended the regime of Muammar Gadhafi.

Now we're turning the page on a decade of war. Three years ago, we had some 180,000 troops in Iraq and Afghanistan. Today, we've cut that number in half. And as the transition in Afghanistan continues, more of our troops will continue to come home. More broadly, around the globe we've strengthened alliances, forged new partnerships, and served as a force for universal rights and human dignity.

In short, we've succeeded in defending our nation, taking the fight to our enemies, reducing the number of Americans in harm's way, and we've restored America's global leadership. That makes us safer and it makes us stronger, and that's an achievement that every American, especially those Americans who are proud to wear the uniform of the United States Armed Forces, should take great pride in.

This success has brought our nation once more to a moment of transition. Even as our troops continue to fight in Afghanistan, the tide of war is receding. Even as our forces prevail in today's missions, we have the opportunity and the responsibility to look ahead to the force that we are going to need in the future.

At the same time, we have to renew our economic strength here at home, which is the foundation of our strength around the world, and that includes putting our fiscal house in order. To that end, the Budget Control Act passed by Congress last year with the support of Republicans and Democrats alike mandates reductions in federal spending, including defense spending. I've insisted that we do that responsibly. The security of our nation and the lives of our men and women in uniform depend on it.

And that's why I called for this comprehensive defense review: to clarify our strategic interests in a fast-changing world and to guide our defense priorities and spending over the coming decade because the size and the structure of our military and defense budget have to be driven by a strategy, not the other way around.

Moreover, we have to remember the lessons of history. We can't afford to repeat the mistakes that have been made in the past, after World War II, after Vietnam, when our military was left ill-prepared for the future. As commander in chief, I will not let that happen again, not on my watch. We need a start -- we need a smart, strategic set of priorities. The new guidance that the Defense Department is releasing today does just that.

I want to thank Secretary Panetta and General Dempsey for their extraordinary leadership during this process.

I want to thank the service secretaries and chiefs, the combatant commanders and so many defense leaders -- military and civilian, active, Guard and Reserve -- for their contributions. Many of us met repeatedly --asking tough questions, challenging our own assumptions and making hard choices, and we've come together today around an approach that will keep our nation safe and our military the finest that the world has ever known.

This review also benefits from the contributions of leaders from across my national security team, from the departments of State, Homeland Security and Veterans Affairs, as well as the intelligence community. And this is critical because meeting the challenges of our time cannot be the work of our military alone or the United States alone. It requires all elements of our national power working together in concert with our allies and our partners.

So I'm going to let Leon and Marty go into the details, but I just want to say that that this effort reflects the guidance that I personally gave throughout this process. Yes, the tide of war is receding, but the question that this strategy answers is, what kind of military will we need long after the wars of the last decade are over? And today we're fortunate to be moving forward from a position of strength.

As I made clear in Australia, we will be strengthening our presence in the Asia Pacific, and budget reductions will not come at the expense of that critical region. We're going to continue investing in our critical partnerships and alliances, including NATO, which has demonstrated time and again -- most recently in Libya -- that it's a force multiplier. We will stay vigilant, especially in the Middle East.

As we look beyond the wars in Iraq and Afghanistan, and the end of long-term nation-building with large military footprints, we'll be able to ensure our security with smaller conventional ground forces.

We'll continue to get rid of outdated Cold War-era systems so that we can invest in the capabilities that we need for the future, including intelligence, surveillance and reconnaissance; counterterrorism; countering weapons of mass destruction; and the ability to operate in environments where adversaries try to deny us access.

So yes, our military will be leaner, but the world must know the United States is going to maintain our military superiority with armed forces that are agile, flexible, and ready for the full range of contingencies and threats.

We're also going to keep faith with those who serve, by making sure our troops have the equipment and capabilities they need to succeed and by prioritizing efforts that focus on wounded warriors, mental health, and the well-being of military families. And as our newest veterans rejoin civilian life, we'll keep working to give our veterans the care, the benefit -- the benefits and job opportunities that they deserve and that they have earned.

Finally, although today is about our defense strategy, I want to close with a word about the defense budget that will flow from this strategy. The details will be announced in the coming weeks. Some will no doubt say that the spending reductions are too big; others will say that they're too small. It will be easy to take issue with a particular change in a particular program. But I'd encourage all of us to remember what President Eisenhower once said: that "each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs."

After a decade of war, and as we rebuild the source of our strength at home and abroad, it's time to restore that balance. I think it's important for all Americans to remember, over the past 10 years since 9/11, our defense budget grew at an extraordinary pace. Over the next 10 years, the growth in the defense budget will slow, but the fact of the matter is this: It will still grow, because we have global responsibilities that demand our leadership. In fact, the defense budget will still be larger than it was toward the end of the Bush administration. And I firmly believe, and I think the American people understand, that we can keep our military strong and our nation secure with a defense budget that continues to be larger than roughly the next 10 countries combined.

So again, I want to thank Secretary Panetta, Chairman Dempsey, all of the defense leaders who are on this stage, and some who are absent, for their leadership and their partnership throughout this process. Our men and women in uniform give their very best to America every single day, and in return, they deserve the very best from America.

And I thank all of you for the commitment to the goal that we all share: keeping America strong and secure in the 21st century, and keeping our armed forces the very best in the world.

And with that, I will turn this discussion over to Leon and to Marty, who can explain more and take your questions. So thank you very much.

I understand this is the first time a president has done this. It's a pretty nice room. (Laughter.) Thank you, guys.


SECRETARY OF DEFENSE LEON PANETTA: Let me begin by thanking President Obama for coming here to the Pentagon this morning, and also in particular to thank him for his vision and guidance and leadership as this department went through a very intensive review that we undertook to try to develop the new strategic guidance that we're releasing today.

And in my experience, this has been an unprecedented process, to have the President of the United States participate in discussions involving the development of a defense strategy, and to spend time with our service chiefs and spend time with our combatant commanders to get their views. It's truly unprecedented.

This guidance that we are releasing today, and which has been distributed now throughout the department -- it really does represent a historic shift to the future. And it recognizes that this country is at a strategic turning point, after a decade of war and after large increases in defense spending.

As the president mentioned, the U.S. military's mission in Iraq has now ended. We do have continued progress in Afghanistan. It's tough, and it remains challenging, but we are beginning to enable a transition to Afghan security responsibility. The NATO effort in Libya has concluded with the fall of Gadhafi. And targeted counterterrorism efforts have significantly weakened al-Qaida and decimated its leadership.

And now, as these events are occurring -- and the Congress has mandated, by law, that we achieve significant defense savings. So clearly, we are at a turning point.

But even as our large-scale military campaigns recede, the United States still faces complex and growing array of security challenges across the globe. And unlike past drawdowns when oftentimes the threats that the country was facing went away, the fact is that there remain a number of challenges that we have to confront, challenges that call for reshaping of America's defense priorities: focusing on the continuing threat of violent extremism, which is still there and still to be dealt with; proliferation of lethal weapons and materials; the destabilizing behavior of nations like Iran and North Korea; the rise of new powers across Asia; and the dramatic changes that we've seen unfold in the Middle East.

All of this comes at a time when America confronts a very serious deficit and debt problem here at home, a problem which is itself a national security risk that is squeezing both the defense and domestic budgets. Even as we face these considerable pressures, including the requirement of the Budget Control Act to reduce defense spending by what we have now as the number of $487 billion over 10 years, I do not believe -- and I've said this before -- that we have to choose between our national security and fiscal responsibility. The Department of Defense will play its part in helping the nation put our fiscal house in order.

The president has made clear, and I've made clear, that the savings that we've been mandated to achieve must be driven by strategy and must be driven by rigorous analysis, not by numbers alone.

Consequently, over the last few months, we've conducted an intensive review to try to guide defense priorities and spending over the coming decade, all of this in light of the strategic guidance that we received in discussions with the president and the recommendations of this department's both senior military and civilian leadership. Both of them provided those kinds of recommendations. This process has enabled us to assess risk, to set priorities and to make some very hard choices.

Let me be clear again. The department would need to make a strategic shift regardless of the nation's fiscal situation.

We are at that point in history. That's the reality of the world we live in. Fiscal crisis has forced us to face the strategic shift that's taking place now.

As difficult as it may be to achieve the mandated defense savings, this has given all of us in the Department of Defense the opportunity to reshape our defense strategy and force structure to more effectively meet the challenges of the future -- to deter aggression, to shape the security environment and to decisively prevail in any conflict.

From the beginning, I set out to ensure that this strategy review would be inclusive. Chairman Dempsey and I met frequently with department leaders, including our undersecretaries, the service chiefs, the service secretaries, the combatant commanders, our senior enlisted advisers. We also discussed this strategy and its implications, obviously, with the president, his national security advisers, with members of Congress and with outside experts.

There are four over-arching principles that have guided our deliberations, and I've said this at the very beginning as we began this process. One, we must maintain the world's finest military, one that supports and sustains the unique global leadership role of the United States in today's world.

Two, we must avoid hollowing out the force -- a smaller, ready, and well-equipped military is much more preferable to a larger, ill-prepared force that has been arbitrarily cut across the board.

Third, savings must be achieved in a balanced manner, with everything on the table, including politically sensitive areas that will likely provoke opposition from parts of the Congress, from industry and from advocacy groups.

That's the nature of making hard choices.

Four, we must preserve the quality of the all-volunteer force and not break faith with our men and women in uniform or their families. With these principles in mind, I'll focus on some of the significant strategic choices and shifts that are being made.

The United States military -- let me be very clear about this -- the United States military will remain capable across the spectrum. We will continue to conduct a complex set of missions ranging from counterterrorism, ranging from countering weapons of mass destruction, to maintaining a safe, secure and effective nuclear deterrent. We will be fully prepared to protect our interests, defend our homeland and support civil authorities.

Our goal to achieve the U.S. force for the future involves the following significant changes. First, the U.S. joint force will be smaller, and it will be leaner. But its great strength will be that it will be more agile, more flexible, ready to deploy quickly, innovative, and technologically advanced. That is the force for the future.

Second, as we move towards this new joint force, we are also rebalancing our global posture and presence, emphasizing the Pacific and the Middle East.

These are the areas where we see the greatest challenges for the future. The U.S. military will increase its institutional weight and focus on enhanced presence, power projection, and deterrence in Asia- Pacific.

This region is growing in importance to the future of the United States in terms of our economy and our national security. This means, for instance, improving capabilities that maintain our military's technological edge and freedom of action. At the same time, the United States will place a premium in maintaining our military presence and capabilities in the broader Middle East. The United States and our partners must remain capable of deterring and defeating aggression while supporting political progress and reform.

Third, the United States will continue to strengthen its key alliances, to build partnerships and to develop innovative ways to sustain U.S. presence elsewhere in the world. A long history of close political and military cooperation with our European allies and partners will be critical to addressing the challenges of the 21st century. We will invest in the shared capabilities and responsibilities of NATO, our most effective military alliance.

The U.S. military's force posture in Europe will, of necessity, continue to adapt and evolve to meet new challenges and opportunities, particularly in light of the security needs of the continent relative to the emerging strategic priorities that we face elsewhere. We are committed to sustaining a presence that will meet our Article 5 commitments, deter aggression, and the U.S. military will work closely with our allies to allow for the kinds of coalition operations that NATO has undertaken in Libya and Afghanistan.

In Latin America, Africa, elsewhere in the world, we will use innovative methods to sustain U.S. presence, maintaining key military-to-military relations and pursuing new security partnerships as needed. Wherever possible, we will develop low-cost and small- footprint approaches to achieving our security objectives, emphasizing rotational deployments, emphasizing exercises -- military exercises with these nations, and doing other innovative approaches to maintain a presence throughout the rest of the world.

Fourth, as we shift the size and composition of our ground, air and naval forces, we must be capable of successfully confronting and defeating any aggressor and respond to the changing nature of warfare. Our strategy review concluded that the United States must have the capability to fight several conflicts at the same time. We are not confronting, obviously, the threats of the past; we are confronting the threats of the 21st century. And that demands greater flexibility to shift and deploy forces to be able to fight and defeat any enemy anywhere. How we defeat the enemy may very well vary across conflicts. But make no mistake, we will have the capability to confront and defeat more than one adversary at a time.

As a global force, our military will never be doing only one thing. It will be responsible for a range of missions and activities across the globe of varying scope, duration, and strategic priority. This will place a premium on flexible and adaptable forces that can respond quickly and effectively to a variety of contingencies and potential adversaries. Again, that's the nature of the world that we are dealing with. In addition to these forces, the United States will emphasize building the capacity of our partners and allies to more effectively defend their own territory, their own interests, through a better use of diplomacy, development, and security force assistance.

In accordance with this construct, and with the end of U.S. military commitments in Iraq and the drawdown that is already under way in Afghanistan, the Army and Marine Corps will no longer need to be sized to support the kind of large-scale, long-term stability operations that have dominated military priorities and force generation over the past decade.

Lastly, as we reduce the overall defense budget, we will protect, and in some cases increase, our investments in special operations forces, in new technologies like ISR and unmanned systems, in space -- and, in particular, in cyberspace --capabilities, and also our capacity to quickly mobilize if necessary.

These investments will help the military retain and continue to refine and institutionalize the expertise and capabilities that have been gained at such great cost over the last decade.

And most importantly, we will structure and pace the reductions in the nation's ground forces in such a way that they can surge, regenerate and mobilize capabilities needed for any contingency. Building in reversibility and the ability to quickly mobilize will be key. That means re-examining the mix of elements in the active and Reserve components. It means maintaining a strong National Guard and Reserve. It means retaining a healthy cadre of experienced NCOs and mid-grade officers and preserving the health and viability of the nation's defense industrial base.

The strategic guidance that we're providing is the first step in this department's goal to build the joint force of 2020, a force sized and shaped differently than the military of the Cold War, the post- Cold War force of the 1990s, or the force that was built over the past decade to engage in large-scale ground wars.

This strategy and vision will guide the more specific budget decisions that will be finalized and announced in the coming weeks as part of the president's budget. In some cases, we will be reducing capabilities that we believe no longer are a top priority.

But in other cases, we will invest in new capabilities to maintain a decisive military edge against a growing array of threats. There's no question -- there's no question -- that we have to make some trade-offs and that we will be taking, as a result of that, some level of additional but acceptable risk in the budget plan that we release next month. These are not easy choices.

We will continue aggressive efforts to weed out waste, reduce overhead, to reform business practices, to consolidate our duplicative operations. But budget reductions of this magnitude will inevitably impact the size and capabilities of our military. And as I said before, true national security cannot be achieved through a strong military alone. It requires strong diplomacy. It requires strong intelligence efforts. And above all, it requires a strong economy, fiscal discipline and effective government.

The capability, readiness and agility of the force will not be sustained if Congress fails to do its duty and the military is forced to accept far deeper cuts, in particular, the arbitrary, across-the- board cuts that are currently scheduled to take effect in January of 2013 through the mechanism of sequester. That would force us to shed missions and commitments and capabilities that we believe are necessary to protect core U.S. national security interests.

And it would result in what we think would be a demoralized and hollow force. That is not something that we intend to do.

And finally, I'd like to also address our men and women in uniform, and the civilian employees who support them, whom I -- who I know have been watching the budget debates here in Washington with concern about what it means for them and for their families. You have done everything this country has asked you to do and more.

You have put your lives on the line, and you have fought to make our country safer and stronger. I believe the strategic guidance honors your sacrifice and strengthens the country by building a force equipped to deal with the future. I have no higher responsibility than fighting to protect you and to protect your families. And just as you have fought and bled to protect our country, I commit to you that I will fight for you and for your families.

There is no doubt that the fiscal situation this country faces is difficult, and in many ways we are at a crisis point. But I believe that in every crisis there is opportunity. Out of this crisis, we have the opportunity to end the old ways of doing business and to build a modern force for the 21st century that can win today's wars and successfully confront any enemy, and respond to any threat and any challenge of the future.

Our responsibility -- my responsibility as secretary of defense -- is to protect the nation's security and to keep America safe. With this joint force, I am confident that we can effectively defend the United States of America.

Thank you.


As chairman, it's my responsibility to work with the Joint Chiefs to ensure that the armed forces of the United States keep America immune from coercion. The strategy just described by the president and the secretary of defense enables us to fulfill that responsibility. It sustains the sacred trust put us -- put in us by the American people to defend them and our country.

This strategy emerges from a deeply collaborative process. We sought out and took insights from within and from outside the Department of Defense, to include from the intelligence community and other governmental departments. We weighed facts and assessments. We challenged every assumption. We considered a wide range of recommendations and counter-arguments. I can assure you that the steps we have taken to arrive at this strategy involved all of this and much more.

This strategy also benefited from an exceptional amount of attention by our senior military and civilian leadership. On multiple occasions, we held all-day and multi-day discussions with service chiefs and combatant commanders. The service chiefs, who are charged with developing the force for the strategy, were heard early and often. The combatant commanders, charged with executing the strategy, all weighed in time and time again. And we were all afforded extraordinary access to both the president and the secretary of defense.

Frankly, the breadth and depth of dialogue to arrive at today's strategic choices was both necessary and noteworthy.

Today we're here to discuss the broad contours and central choices of the strategy, but this is not the end; rather it's a way- point in a continuous and deliberate process to develop that Joint Force for 2020 that the secretary just described.

There are four budget cycles between now and then. Each of these cycles presents an opportunity to adjust how and what we do to achieve this strategy in the face of new threats, in the context of a changing security environment.

It's a sound strategy. It ensures we remain the pre-eminent military in the world. It preserves the talent of the all-volunteer force. It takes into account the lessons of the last 10 years of war. It acknowledges the imperative of a global, networked and full- spectrum joint force. And it responds to the new fiscal environment, though as a learning organization, it's important to note that even if we didn't have fewer resources, we would expect to change.

As a consequence, it calls for innovation, for new ways of operating and partnering. It rebalances our focus by region and mission. It makes important investments, as the secretary noted, in emerging and in proven capabilities, like cyber and special operations.

Now, there's been much made -- and I'm sure will be made -- about whether this strategy moves away from a force structure explicitly designed to fight and win two wars simultaneously. Fundamentally, our strategy has always been about our ability to respond to global contingencies wherever and whenever they occur. This won't change.

We will always provide a range of options for our nation. We can and will always be able to do more than one thing at a time. More importantly, wherever we are confronted, and in whatever sequence, we will win.

We do accept some risks in this strategy as all strategies must. Because we will be somewhat smaller, these risks will be measured in time and in capacity. However, we should be honest. We could face even greater risks if we did not change from our current approach.

I'm pleased with the outcome. It's not perfect. There will be people who think it goes too far. Others will say it didn't go nearly far enough. That probably makes it about right for today. It gives us what we need in this world and within this budget to provide the best possible defense for our nation at a time of great transition. It prepares us for what we anticipate we will need in 2020.

This is a real strategy. It represents real choices. And I'm here today to assure you that it has real buy-in among our senior military and civilian leadership. This is not the strategy of a military in decline. This is a strategy -- and a joint force -- on which the nation can depend.

I want to wrap up by saying just a couple of words about leadership. It's always important but it's absolutely essential during tough times. And make no mistake -- these are tough economic times. And this strategy required some tough decisions. I want to thank President Obama and Secretary Panetta for their leadership throughout this process.

The real test, though, will be in execution. Fortunately, the young men and women who will be charged to carry out the lion's share of this strategy know something about leadership too. It's the very cornerstone of our profession, the profession of arms. And for the past 10 years, they have done nothing but lead under the most difficult circumstances imaginable. And it's for that reason, above all others, that I'm absolutely convinced and fully satisfied that this strategy will meet our nation's needs for the future.

Thank you.


Press, we will have a -- this is a two-parter. We're -- we will have a chance for a few questions here with the secretary and the chairman, and I'll field those. And following that, the process here has been led by the deputy secretary of defense, the vice chairman of the Joint Chiefs of Staff and the undersecretary of defense for policy, all of whom are here. And they will then come and be able to answer quite a number of questions in depth. [note this second part is covered by a separate transcript]

So why don't we start on questions on strategic guidance. Bob?

Q: Mr. Secretary, this document says, and the president himself said when he was here, that the military will get smaller. The question is: How much smaller? How much more do you propose to cut the Army and the Marine Corps, over what period? And also, this document says that the U.S. military presence in Europe will, quote, "evolve." Is that another way of saying that it'll get cut?

SEC. PANETTA: Well, I -- as we've said in the policy statement -- and the president referred to it and I referred to it and Marty referred to it as well -- we are going to have a smaller and leaner force. What those numbers are will be part of the budget that will be presented by the president. And at that time, obviously, we'll reveal what those final decisions are as to the exact size.

But there's no question that, look, under any circumstances, we were looking at a drawdown as a result of the end of the war and, hopefully, what -- the end of the transition in Afghanistan. But budget constraints require that, in addition to that, we are -- we have to develop a smaller and leaner force, but one that has to be more agile, flexible, innovative and creative.

With regards to Europe, you know, we will maintain our commitments with Europe.

We'll maintain our Article 5 requirements. We'll be able to deter aggression. We want to build our partnerships there. And one of the things that we've made clear with them is not -- you know, not only are we going to continue our commitments there, but we are going to develop the kind of innovative presence that we think will make clear to Europe and to those that have been our strong allies over the past that we remain committed to protecting them.

GEN. DEMPSEY: Could I elaborate on the European one, sir?

The strategy talks about a shift to the future. And all of the trends, demographic trends, geopolitical trends, economic trends and military trends are shifting toward the Pacific. So our strategic challenges in the future will largely emanate out of the Pacific region, but also the littorals of the Indian Ocean, for that matter.

But the point is -- so our strategic challenges are shifting, and we have to pay attention to those shifts. But what we do will always be built on the strong foundation of our traditional strategic partnerships, and NATO is chief among them.

So this is not a separation in any way from NATO. And we're in dialogue and will be in dialogue with them about what it means.

STAFF: David.

Q: Mr. Secretary, I wonder if you could square a statement you made in your remarks, "We will have the capability to confront and defeat more than one adversary at a time," with the guidance, which pretty clearly states that you will have the capability to fight one regional conflict and what would essentially be a holding action in a second regional conflict. Are those two consistent?

SEC. PANETTA: You know, I think that the structure for making defense decisions, looking at the past as well as the present, has always been -- can the United States confront enemies, aggressors, more than one, and be able to defeat them.

That's the key question. Whatever strategic formula you use, that remains the fundamental question -- can we confront and defeat any enemy that faces us? And the answer to that question is, with the Joint Force that we are creating here, we can. We can confront more than one enemy at a time.

The nature of warfare today is that as you -- as you engage, you have to look at how you do it, what forces do you use to be able to confront that enemy, what exactly is involved. I mean, the reality is you could face a land war in Korea, and at the same time face threats in the Straits of Hormuz. We have the capability, with this Joint Force, to deal with those kinds of threats, to be able to confront them, and to be able to win. That's what counts.

Q: (Inaudible) -- past 10 years that -- in Iraq and Afghanistan -- that you cannot fight to defeat an enemy in two theaters at the same time?

SEC. PANETTA: Well, I think the bottom line of what we're seeing happen is that we've just ended the mission in Iraq, and we're in the process of ending a mission in Afghanistan. And I think our view is that we've achieved those missions, or we're in the process of achieving those missions.

Q: Mr. Secretary, could --

Q: Mr. Secretary, the president said that you're going to be getting rid of outdated Cold War systems. Can you give us any sense for what he was talking about there? What types of systems?

SEC. PANETTA: Well, again, the budget drop here at the end of the month will illuminate programs that have been adjusted or terminated or -- and others that have been reinforced. I think what the president had in mind, or at least what I believe he had in mind, is that -- is that there are -- you know, back to the question about -- can we do two wars?

That two-war paradigm has been a bit of an anchor, frankly, in trying to help us figure out the future. And it's not about whether we will fight adversaries as they confront us: it's how. And so, to thread those few questions together -- your question about, what are the outdated systems and processes and programs -- that's the work that we have been doing, must continue to do, to determine the “how” of it without tying ourselves to a paradigm that, frankly, is a residual of the Cold War.

STAFF: Chris.

Q: Mr. Secretary, will efficiencies be enough to reduce your personnel cost, when you take an honest look at what you spend per man in the military? Or, honestly, are you going to have to look at reducing retirement benefits, asking service members to pay more for their health care?

SEC. PANETTA: Well, again, the specifics will be provided in the president's budget that hopefully will be released within the next two to three weeks -- I guess soon after the president's State of the Union address. But, as I've made clear, I felt it was important that everything be on the table, and that we look at a number of areas in order to be able to achieve our savings and be able to develop the kind of defense force that we want for the future.

So yes, we look at efficiencies. We have a responsibility to look at how we can try to make this place more efficient, get rid of duplication, get rid of waste, and my predecessor began that process, and we're continuing it as part of this budget. That's a significant part of the budget that we've worked on.

Two, we've got to look at the whole area of procurement and weaponization, and look at all of those areas -- those tremendous costs associated with those areas.

We want to make sure that the weapons that we select meet the needs of the defense force that we're building. That's the key. But clearly, that's another area that was reviewed.

Thirdly, the area of compensation. We -- that has been an area that's increased in terms of cost. We want to maintain the quality of benefits that flow to our troops and to their families. That's a key red line for us. We're going to maintain those, but at the same time, we have a responsibility to control costs in those areas as well. And that's part of what we will present as part of our budget.

And then lastly, force structure reductions. All of those pieces are part of the budget and you'll see the decisions associated with that when the budget is revealed.

MR. WILSON: We’ll have time for two more questions. Bill?

Q: First of all, what's the reaction that you've been getting from Congress in your conversations with them on this plan? And on the issue of sequester, the sacrifices that the military is making, downsizing, will that be enough to kind of sound enough alarms to forestall sequester or do you think that some other action is going to need to be taken or is the military going to have to give up more, you know, sort of as a half step between now and the end of the year?

SEC. PANETTA: We -- I've made it a point -- we've all made it a point to stay in close consultation with the members of Congress that we deal with on the key committees up there. And I spent time sitting down with them and their members, briefing them on the discussion we're having, briefing them on the defense strategy. I briefed the chairman yesterday as well and the ranking members with regards to the strategy that we're working on.

I think all of them recognize the challenge that we're facing. All of them recognize, you know, how tough these decisions are. But I think all of them also recognize that we can do this in a way that protects our national defense and that establishes a defense force for the future.

So I -- I'm confident that, you know -- that as we work through this and ultimately as we reveal the decisions on the budget that reflect the policy we're putting out there that, you know, there are going to be members that will clearly not support some of the -- of those decisions. I mean, that's the nature of making hard choices. But I think overall, because we based this on strategy, because we based this on a policy of saying this is the kind of defense force we want for the future, I think that, within that framework, if we can all stick to that and if we can all use that as the basis and the foundation for the debate that's going to take place, I am confident that ultimately Congress will support what we're trying to do.

MR. WILSON: Last question, Jennifer.

Q: Sir, let me follow up on what Dave and Martin just asked. The strategy talks about moving away from a -- to potentially fighting two land wars simultaneously. You mentioned the tensions in the Persian Gulf. Clearly the Iranians know that the U.S. is fighting a ground war in Afghanistan until 2014. Are you saying with this new strategy that fighting a land war in the Persian Gulf -- in Iran, for instance -- is off the table as a result of this new strategy?

GEN. DEMPSEY: Could I take it?


GEN. DEMPSEY: I want to make sure that I get a shot at this one because -- (laughter) -- you know, this is -- Secretary of Defense Gates said, you know, we're never going to fight another land war, and I had the West Point class of 2014 at my doorstep. (Laughter.)

So we're a global power, and we have to be able to conduct military activities and operations across the full spectrum. Nobody and no -- nobody has said and nowhere in the document does it say we're not going to fight land wars. It doesn't say we're never going to do stability operations. It does say explicitly we have to be capable of conducting operations across the full spectrum.

It's a matter of scope and scale, time, risk, reversibility, and those are the issues that we continue to work as we work on this living document. But it would be really a mistake to suggest that -- or for you to walk away with the impression, or anyone to walk away with the impression -- that we're going to niche ourselves to some point on the spectrum of conflict and declare ourselves a global power.

Q: Thank you, Mr. Chairman.

Q: What message do you have for Iran --

GEN. DEMPSEY: I'm sorry?

Q: What message do you have for Iran as a result of this new strategy?

GEN. DEMPSEY: The message for -- you know, that we've had consistently for Iran is that, you know, we expect them to be a responsible member of the -- of the community of nations, not deny freedom of navigation, freedom of movement, freedom of access, and we are determined that they will not acquire a nuclear weapon.

Q: Could I get clarification on one thing you just said? You said you're committed to maintaining the quality of benefits. That seems to leave room to reduce the quantity of benefits. Specifically, will there be cuts in future benefits for our armed forces in the coming budgets?

SEC. PANETTA: Well, again, Mik, that -- you know, that's something that we'll present as part of the president's budget, but I want to make very clear that we are going to protect the quality, we're going to protect the benefits that are provided to our troops and to their families. At the same time, as I said, we have some responsibility to try to control costs in this area.

I think the troops understand that we've got to control those costs. But when it comes to their basic benefits, when it comes to the retirement benefits of those who have served, when it comes to the benefits that we provide their families, we are going to continue to provide that and not break faith on those ?

MR. WILSON: Folks, it will be about, oh, seven or eight minutes while we set up. And then the deputy secretary, the vice chairman, and the undersecretary for policy will be here to address any more questions.


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