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U.S. Department of Defense

August 4, 2020

Assistant Secretary of Defense (Strategy, Plans, and Capabilities) Virtual Engagement with the 2020 Space and Missile Defense Symposium

Victorino G. Mercado, Assistant Secretary of Defense (Strategy, Plans, and Capabilities)

MODERATOR: Welcome back, ladies and gentlemen, to the 23rd Annual Space and Missile Defense Symposium. Our theme for this year's symposium is integration of space and missile defense capabilities across all domains. We're very fortunate this afternoon to have with us the Honorable Vic G. Mercado. Honorable Mercado is performing the duties of Deputy Under Secretary of Defense for Policy and is the Assistant Secretary of Defense for Strategy, Plans and Capabilities. His responsibilities include advising the Secretary of Defense and the Undersecretary of Defense for Policy on national security and defense strategy; the forces, contingency plans and associated posture necessary to implement defense strategy; nuclear deterrence and missile defense policy; and security cooperation plans and policies. Mr. Mercado ensures that the Department's program and budget decisions to support and advance senior DOD leaders strategic direction, especially as articulated in defense planning guidance. Please extend a warm virtual welcome Honorable Vic Mercado.

ASSISTANT SECRETARY OF DEFENSE VICTOR G. MERCADO: Hi, good afternoon everybody. I can hear the applause.

MODERATOR: Good afternoon. There's a lot of it sir.

MR. MERCADO: Wonderful, well – well, greetings from Washington, D.C. and it's great to take a break from the Pentagon here and spend some time with you all. I want to thank a couple of people. General Formica. I saw him in the last session. I think I may know him but -- but maybe not, and Mike Tomlinson for their efforts on behalf of this very important forum. When I accepted -- accepted the invitation to speak I -- I had hoped to enjoy Huntsville, visit the Space and Rocket Center, take in some sights, and enjoy some nice southern food, but no such luck.

And I -- I -- I can tell you virtual is good for a lot of things but virtual doesn't cut it here but I do get to spend a few minutes with all of you. So thank you. I understand I am near the end of the day and am following some really superb leaders in the space and missile defense community. While some of my topics will coincide with those previously discussed, I believe it is important to emphasize them from a policy perspective. Alignment between the Pentagon, Combatant Commanders, the services, and agencies is extraordinarily important. I think you all would agree with that.

I reviewed the history of this symposium and I know this audience is filled with deep expertise from both industry and government. So following my remarks, I hope to field a few of your questions but more importantly if there's something that you believe I need to know for -- for my job, I'm happy to just listen as well. I'm going to focus my remarks on a top level view of U.S. missile defense policy, how DOD priorities are driven by the evolving missile threat and how -- how our approach continues to be guided by the 2019 Missile Defense Review.

I am passionate about this topic because I have a long history in missile defense from my time aboard AEGIS ships, my time with AEGIS Program Office, PMS 400, working with then PEO-TAD B and I believe many in the audience remember that organization. My time as a National Defense Fellow with the Congress monitoring the ballistic missile budget lines and Defense Authorization and Appropriations bills, through to my last active duty position at U.S. Pacific Fleet, recently – a few years ago, responding to the threat posed by North Korea in 2017 and 2018 until today where I oversee DOD policy on missile defense.

Let me briefly set the stage by addressing the evolving threat environment, the context in which we make missile defense policy. Adversary missile technologies rapidly maturing and proliferating and in turn the threat to the U.S. homeland, our allies and partners and our forces in the field is becoming increasingly dynamic and challenging to predict. While traditional fixed and mobile ballistic missile threats continue to grow, adversaries are also investing in ground, air, and sea launch cruise missiles with diverse ranges and profiles.

China has over 1,000 ballistic missiles including hundreds of medium range ballistic missiles with likely maneuverable warheads, and a growing number of intermediate range ballistic missiles including the nuclear capable DF-26. The PLA Navy and Air Force also continue to develop land-attack cruise missiles.

Russia maintains one of the largest missile inventories in the world and is building new ballistic and cruise missiles to support its aggressive regional and global policies. Depending on the delivery platform, these new Russian missiles can range our NATO and Asian allies, U.S. forces deployed abroad, and our homeland. Russia's commitment to its missile force modernization is evident in the sheer number of missile types it is producing as well as its prioritization in their military budget. And as we all know, China and Russia are developing and testing hypersonic missile technology with Russia recently deploying the world's first operational intercontinental-range hypersonic glide vehicle, the Avangard, and China not likely far behind.

North Korea has worked aggressively to develop nuclear capable long range ballistic missiles able to threaten the homeland, allies, and partners. Despite our ongoing diplomatic efforts, North Korea continues to expand its ballistic missile capabilities and conduct test launches despite international restrictions. While many often highlight North Korean failed launches, my view is North Korea has a very deliberate testing program where they push their technological limits, learn from failures, and demonstrate continual improvement.

Iran, which possesses well over 1,000 missiles, continues efforts to modernize and proliferate its missile systems. Iran views its missile arsenal as a valuable tool of coercion in the broader Middle East and beyond. A fact demonstrated by its January 2020 launch of over a dozen ballistic missiles into Iraq. Iran is also gaining valuable information from its space launch program which can contribute to an effort to develop an ICBM should it choose to do so. Iran has also shown a willingness to use missiles to attack Saudi Arabia and transfer such weapons to its Houthi proxies in Yemen and have made extensive use of ballistic and cruise missiles and UAVs.

Potential adversaries seek to defeat U.S. missile defenses not just through advances in their missile technology but also through targeted and coercive diplomatic campaigns. We have seen concerted Chinese and Russian efforts to intimidate our allies and partners against cooperating with the United States on regional missile defense as well as attempts to sow disinformation on U.S. homeland defense. They conduct this information campaign while at the same time increasing their own considerable missile defense capabilities. The ultimate goal of these efforts by China and Russia is clear–the increased vulnerability of U.S., allied and partner nations and their forces to missile attack and more importantly the coercion that accompanies this vulnerability.

Those are the threats and any policy that seeks to advance U.S. national security cannot dismiss them. Just as adversaries are adapting their missile capabilities to suit their objectives, we too must adapt our missile defense policies to stay ahead of the threat, address their aggression, lessen their perceived value of missile based coercion, and mitigate any plans they may have for missile use.

The United States therefore is focused on a layered defense or as I learned during my Navy time, defense in-depth, with adaptable systems to outpace the evolving threat environment. U.S. policy for defense of the homeland is to stay ahead of rogue missile threats while relying on tried and tested nuclear deterrence to address the large and more sophisticated Chinese and Russia nuclear arsenals. At the regional level, U.S. policy is to work with allies and partners to defend against common threats and preserve U.S. ability to support, reinforce and achieve our objectives during a crisis or attack.

As for emerging threats, we must hedge against unexpected adversary developments by investing an advanced technology so the United States, its allies and its partners can defend against any future strategy of coercion or attack. Within this framework–homeland, regional and emerging threats–our key missile defense policy objectives are centered on the following areas as articulated in the 2019 Missile Defense Review, which are somewhat self-evident but worth summarizing:

• Defending the U.S. homeland, our military forces abroad, allies and partners;
• Diminishing the benefits of adversary coercive threats and attacks;
• Assuring allies and partners that we will stand by our security commitments;
• Preserving our freedom of action to conduct military operations;
• And hedging against future, unanticipated offensive missile threats.

The MDR continues to be the Department's guiding policy document and roadmap to missile defense implementation efforts. Beyond the familiar roles missile defenses play in U.S. strategy, there are a number of practical benefits that missile defenses provide. First, credible U.S. missile defenses create a level of uncertainty in adversary attack planning which has a deterrent value. Second, U.S. missile defense strengthen the leverage of our diplomats at the negotiating table, such as talks with North Korea on denuclearization by demonstrating our ability to counter its threats of nuclear attack. Third, U.S. missile defenses provide the United States insurance against the possible failure and deterrence -- of deterrence and diplomacy, a distinct possibility when dealing with states like North Korea and Iran. Fourth, U.S. missile defenses can intercept an unauthorized or accidental missile launch which can help decrease the risk of inadvertent escalation. Finally, U.S. missile defenses protect radars and other systems that provide situational awareness, buy time and reduce the risk of miscalculation during a crisis as well as reducing the likelihood of successful missile attacks against such systems.

Let me turn now for a moment to missile defense capabilities and posture that I believe that are consistent with and implement our policy to counter the threats and gain the benefits that I've highlighted earlier. In terms of the defense of our homeland, DOD's number one objective, the department is pursing advanced capabilities to stay ahead of the rogue state threats. Today as you know, the U.S. is defended by the Ground-based Midcourse Defense, GMD, system consisting of 44 ground-based interceptors supported by a globally integrated network of sensors and a command and control system.

To improve the current GMD system, we, or rather you all, are working on software advances to enhance sensor performance, deploying a new missile tracking and discrimination sensor in Alaska, refurbishing COBRA DANE, continuing the integration of the Space-based Kill Assessment capability into the missile defense system and increasing the current GBI fleets' reliability through hardware and software improvements. DOD is also pursing more advance capabilities for the nation as missile threats evolve. First, we are investing in the expansion and modernization of the GMD system, including the development of a new all-up-round Next Generation Interceptor with advance technology needed to meet the future threat. We anticipate initial fielding of NGI interceptors as early as 2028 and will continue delivering new interceptors until we meet the optimal fleet mix of 64.

Second, we are enhancing the reliability of the existing GMD system by conducting both Stock Pile Reliability Program and Service Life Extension testing of the deployed GBI fleet to inform potential upgrades to extend the service life of the missiles.

Third, DOD is exploring options for layered homeland missile defense capabilities to compliment the system. Later this year, MDA plans to conduct a flight test of the SM-3 Block IIA Interceptor against an ICBM-class target to determine its feasibility to contribute to the homeland defense mission. MDA is also evaluating the technical feasibility of a new THAAD interceptor to also support homeland defense. This layered defense construct would offer additional opportunities to engage missile threats in the late mid-course phase and a successful SM-3 IIA test would provide the option for a limited layered defense as early as the next several years.

Shifting to the U.S. regional defense posture, the United States is responding to improvements in adversary missiles by increasing our capacity in procuring additional Patriot, THAAD and sea-based SM-3 and SM-6 interceptors; fielding more BMD-capable AEGIS hips to better respond to crisis or conflict; integrating U.S. regional systems to expand the area that can be defended; and employ interceptors more efficiently.

With regard to our friends, and that's important, we must also continue working together with allies and partners to enhance our regional missile defense efforts in the Indo-Pacific, Europe and the Middle East. We face these threats collectively. Our cooperation strengthens deterrence and provides assurance essentially to the unity of our alliances which are threatened by missile coercion and attacks. While our cooperative missile defense efforts involve dozens of countries and range from basic science and technology to co-development of foreign -- co-development and foreign military sales. Much of the recent news coverage in this area has been on Japan's decision to reassess its AEGIS ashore ballistic missile defense plan.

Throughout this, I can assure you, the U.S. defense cooperation has never stopped working to find common solutions to shared threats. The level and frequency of frank -- frank conversations with our Japanese allies is a prime example of how the United States values strategic communication and the strength of alliances. Looking to the future, our investment strategy and priorities were focused -- will focus on how best to address more advanced adversary missile threats. In addition to improving today's operational systems, we are examining advance concepts and technologies such as the development of space-based sensors to improve detection, tracking and discrimination for defense against hypersonic missiles.Key to addressing this threat is early detection and tracking. Much future work remains on countering them.

I can't leave the stage or this monitor, I guess, without a few comments on our F.Y. 2021 budget requests on the Hill. On balance, the MDA budget of approximately $9.2 billion reflects MDR priorities, emphasizing our continued commitment to protecting the homeland, enhance regional missile defenses and funding select advanced capabilities. We also continue to see strong bipartisan support from Congress on missile defense from their recent deliberations on the F.Y. '20 budget – '21 budget which have been generally supportive, for the most part, of the Administration's requests. We shall see.

While the outlook on F. '21 -- on F.Y. '21 is positive, we expect F.Y. '22 to be a challenge where the overall defense budget will face much downward pressure in the aftermath of COVID relief. And we all know that by current events. COVID relief equates to about $3 trillion with possibly another trillion dollars yet to come. We in the department along with our industry partners will need to work together closely to ensure the continuing effectiveness of missile defense against potential adversaries who are continuing to improve their capabilities.

Finally, let me put our collective effect -- efforts in proper perspective. The next time you wonder how important your work is, imagine you and your family living on the island of Oahu on January 13th, 2018. I was there. And getting a text on your cell phone that warns, I quote, "Emergency Alert. Ballistic Missile Threat inbound to Hawaii. Seek immediate shelter, this is not a drill." You have about 25 minutes or so before impact to take any action and get your family to a sheltered area.

I won't tell you where I was during that time but one of my military assistants on my staff now was CO of a nuclear powered submarine in Pearl at the time. He woke up his family, put his wife and kids under the stairs and headed to his submarine where his crew was making preparations for emergency reactor start-up.

My niece and her husband were on a hike and when they got the alert, they stopped, sat down, looked at the view of the beach and the ocean and they just prepared themselves for possibly the end. There were stories of parents placing their kids under manhole covers. That day really put missile defense in perspective for me and I have always been an advocate. With this in mind, thank you for all your efforts on behalf of our men and women in uniform and all of the people of our great country. Thank you again for the opportunity to speak. I wish I could be there in person. I'm glad to field any questions you may have.

MODERATOR: Mr. Mercado, thank you so much for being with us this afternoon and making time available to share your thoughts with us at the symposium. We have a few questions that have come in and I'm going to pose those to you now if you don't mind.


MODERATOR: The MDA being designated executive agent for homeland cruise missile defense, are there plans in the current or out year budgets to fund that mission either in MDA or other funding lines?

MR. MERCADO: I could -- I can tell that there has been a really close relationship with NORTHCOM, MDA and this office. And -- and that, General O'Shaughnessy and John Hill are really in great position to address that. I -- I don't know of any specific plans but, you know, like I said at -- at the start. I'm open for questions and open for comments so I can review this in more detail. So, as far as future plans, I can't talk to that right now.

MODERATOR: Next question. Particular -- particularly prevent I'm -- I'm having difficulty reading this question. Let me move on to another one. The Foreign Disclosure process and other bureaucratic hurdles regularly prevent deeper integration and needed information exchange at the needed speed of relevance. Care to comment please?

MR. MERCADO: Absolutely --

MODERATOR: From the policy perspective.

MR. MERCADO: There has been numerous discussions with Ellen Lord, the Secretary in Industry on our needs to lean into making systems available upfront to -- for releasability. For example, when we develop a system bake in the ability to make it releasable upfront. So pay that cost upfront so that downstream we can more timely release it to our partners. Because we're kidding ourselves right now when we look at some of the systems we have, whether it's air-to-air missiles and fifth generation fighters.

If we don't spend the money working with industry and bake those in upfront, then we are going to be behind the power curve from competitors such as Russia who are -- who very freely sell their systems to partners. And the partners want the relationship with the U.S. and they want our systems. So absolutely, we are looking here in the building at reforming our processes and investing upfront on hooks to make our systems releasable downstream much easier.

MODERATOR: Thank you sir. The president is putting additional emphasis on the Arctic, aside from over the horizon radar and systems such as the Cavalier Air Station's radar. Isn't there a need for Mid-West range, in North Dakota for example?

MR. MERCADO: A Mid-West range? What -- what kind of range --


MR. MERCADO -- are you talking about? Just a radar?


MR. MERCADO: I know that we are working with Canada and there is a string of sensors that we're working to improve with the Canadians. I think that's one of the first levels of effort. You know, I think there is a realization in the department of the importance of the Arctic and as it becomes more accessible we do see the activity from China increasing. We see Russia introducing dual use technology to try to impose their will in the Arctic and -- and make countries gain permissions and things like that. So I would say, with NORTHCOM and with our Canadian partners, we are looking at investing in a range of sensors renewing those up north to facilitate the detection and also homeland defense.

MODERATOR: Thank you sir. The MDR stated an acceptance to and I quote, "potentially destroy offensive missiles over the attendees territory rather than the targeted state." While this quote is from the space-based interceptor section, could it apply equally to other interceptor capabilities such as boost-phase intercept?

MR. MERCADO: Missile defense is becoming so challenging and when we talk about layered defense, we -- we talk about anywhere from a boost-phase intercept all the way through when we're talking about some of the layered defenses I mentioned with regard to THAAD and SM-3. So I would say everything is on the table. What I see in the future is that this mission is just going to be so much more challenging with decoys and things like that. So we have to up our game and we cannot -- we cannot give any part of the engagement envelope throughout all phases of a missile attack. And we cannot ignore any opportunity we have to engage an incoming threat.

MODERATOR: Thank you sir. Some media outlets believe our international relationships are in tatters and Congress seems to try and block FMS sales to certain Middle East allies. Could you comment on this and the possible paths forward?

MR. MERCADO: I can tell you that I have spent a number of engagements with our close allies and partners around the world. And I know, so does Dr. Anderson, James Anderson, and in every instance it has been extremely positive. Some of our closest allies have engaged me in my office on helping them develop their strategic reviews and updates because they want to be more interconnected with us. And we talk about selective interdependence in the National Defense Strategy, in fact, LOE II is strengthening allies and partners. So just about in all of -- I can say in all of my engagements with partners in the Middle East, Europe, and in Asia, it has been very, very positive in spite of what you read.

MODERATOR: Thank you sir. With space-based -- will space-based kinetic or directed energy weapons ever be feasible from a policy -- policy perspective?

MR. MERCADO: I go back to my earlier answer. If this mission area gets so difficult that the best opportunity to defend the United States comes from space, than we cannot close the opportunity to pursue that. So, again, this is the most challenging missile -- mission area that we have and we can -- we cannot just neglect to even study and look at the possibility of it contributing to defense of our homeland.

MODERATOR: Thank you. Could you comment on the expiration of the INF Treaty in August of 2019 and how that has affected policy?

MR. MERCADO: I believe that we gave every opportunity to try to bring Russia into compliance. And we worked very closely with our allies and partners in NATO and we wanted to stay in the treaty. But when Russia cheats and deploys the SSC-8 then we have no choice and we were very deliberate in what we did and from then in policy what we have done is we have tested a ballistic missile. We've -- we've tested a cruise missile. So we have turned industry on now for us to engage in that area and I think you will see over the next couple of years that industry will respond and we will soon be fielding a significant capability of ground-launch cruise missiles.

So -- and if you -- if you shift your focus over to Asia and you look at what China has been fielding from the F-21, DF-26, hypersonic missiles like I mentioned in my remarks. You know, from a policy standpoint, we have made the shift and we have now allowed industry to pursue this mission area and I have not doubt what I've seen in plans from the services that we will be developing plans to not only field those, but weave them into our -- our operational plans as well.

MODERATOR: Indeed. Thank you sir. One final question. With the focus starting to shift toward the Arctic, should we incorporate our NATO allies into any future missile warning systems and defense systems?

MR. MERCADO: I think anytime we can weave our allies into warning and command and control systems we must. Arctic is important because there are only a few Arctic nations, you know, in addition to Russia. And -- and most of them are in NATO, so we have a mechanism whereby we can work with our NATO partners on-- on a warning system and all things Arctic. Because, you know, they can fill in areas that we don't have capacity in, not only from a warning standpoint but operational standpoint to icebreakers has been in the news lately. So I think consistent with the National Defense Strategy, LOE II, any opportunity we can leverage our partners and particularly the Arctic is important.

MODERATOR: Thank you indeed sir. Honorable -- Honorable Mercado, we welcome your closing remarks sir.

MR. MERCADO: No, I just want to close with how I close my remarks earlier is that yes, I mean, I have been a missile defense advocate for the longest time. I grew up with missile defense and I'm very -- I'm very upfront about it including some of the deficiencies we've seen in the past. So there's nothing like absolutely -- I'll go back to a previous life when I handled the defense of the Pacific and defense of Guam. We put a Baseline 9 ship conducting that mission and we learned an awful lot about where we fell short when we fielded Baseline 9 on some of our ships. We learned from that and we advance and we move on and we get better. So I am a -- a missile defense advocate. It's hugely important and we -- we need to continue to work together to advance this cause and defend our homeland and forces.

MODERATOR: Thank you sir. Honorable Mercado, thank you for your very informative and timely briefing and for sharing your keen insights with us this afternoon.

MR. MERCADO: Thank you --

MODERATOR: Your service and leadership are greatly appreciated. Our nation is indeed fortunate to have your service. Thank you for taking the time out of your valuable schedule to be with us.

MR. MERCADO: Thank you.

MODERATOR: Thank you sir.


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