some of the other mechanism to o address the issues with security . >> go ahead. >> i think the -- thank you for the question. private sectors also stuck on interface interpretation of contract law and all the things that are covered by the foreign corrupt practices act and things which makes you in hamplet powerful component of the old american values message.

and corporate involvement the private sector involvement is exceedingly important than all of this. if it's just the government working with something, then chevron's efforts and other major companies and even minor companies the private sector involvement means things that directly affect the life style and and earning power of everybody there. it's it's important to forward or promote the u.s. human rights brand, which i think is one of the strongest component we have. i think the differences between john and i are about the implementation of that message. not the value of it.

speaking of that we have been banging on cambodia. but america's got a moral obligation in this area too. we have a moral obligation in vietnam. we were there for a long time. the spill over of the war to cambodia to include u.s. i was struck on a visit to cambodia about the extensive effort of the u.n. was putting in there to teach young women the facts of life about mother hood. the -- had broken the chain from grandmother to mother et. cetera that did all of this in the traditional society, but it was

at the time i visited. it was broken. and the effort of the international community the effort of the private sector as well as government effort to start from basics and work cambodia back up to a functioning society of furntioning country within the cam bode began culture norm. not going in there like american and say we want to create an american-style stock exchange which we have done before. but doing it in a manner supported be the the international institution. and one that was appropriate in the context where we are trying to go it works. you know, i understand the human rights objections to come bode began military. but again, we're back to differences of view on implementation. how do we fix it? how do we get to the right ending we want. we should have learned on 9/11

that chaos and any part of the world can create a threat in many other parts of the world. and we can't fix govern in over place at the same time. we can do what we we're able to go on the political side the diplomatic side, the business side to rebuild places that are tepidding toward chaos so we don't create end up realizing a bigger problem somewhere down the line. the two biggest problems are implicated. you have certain military like burma and cambodia and thailand, which you have some unit or even the whole are involved revenue -- a lot of commanders in

cambodia are essentially , i mean, the prime minister is announced corporate sponsorship. or military unit. when there's a land cosession and the people have to be moved off the land and security needs to be called in to do that, the local military commanders are called in. they're nauticalled in as government we said to -- [inaudible] and we said at times you have to push military not in so many pieces but on the revenue transparency. and then the issue of them being involved in private business needs to be pushed, you know, the idea that it is not appropriate for military to be in business. it needs to be pushed. and i think, you know, again we're for dialogue. it's not about cutting them

off. it's about telling them what is up and what they need to do to change things. very quickly about the moral issue in cambodia. human rights watch obviously agrees. there's a moral obligation in cambodia. the peace agreement since 1990 a u.s. is party to the agreement and the agreements obligate all the signatory to promote human rights and democracy in cambodia. our position is when you have somebody in power for 27 years or 10,000 days or plus is involved in 1975 in some of the again side l act carries out in eastern zone and r calf commander in chief was a commander. and so on and so forth. you have the millions of cambodia living in the one-party state without democracy. you have an obligation to fix that. and it's precisely by using

things like the pressure of conditionality and the appropriations act or the pentagon talking tough about what needs to happen. or the ambassador saying hey, guys, if you don't -- in 27 years it's been 21 years the peace agreement. if you don't shape up, one day we're not going there for you. is a necessity here. and that is consistent having the moral obligation that you refer to. >> john, i think one question. some people see in a new geostrategic balance. and if you allow a country to -- give the country the choices you basically push them completely to the hands of a very welcoming china. how do you think about that issue? >> in the new context what i would say is burma -- [inaudible] they don't really like it and that's probably one of the casual factor that lead them to

realize that they should open up to the united states and everybody else. so our position -- if we're being friendly and he's carrying china's water like the summit last year, give each contestant -- [laughter] there will be a prize at the end of this. i'm reverting to my natural state as game show host. >> what is the price that is right? [laughter] only murray knows. [laughter] but a chance for each of you to make a short final statement that's been a great discussion. jeff?

the questions were all very good. i'm glad that earn any limited us to ten minutes a piece. it's interesting to hear comments and respond then it is for us to graze around the landscape to find an idea while talking. and the days now when we're talking about where we are becoming more inward looking. questioning what we're going overseas. these are the things to talk about. we need to make sure that we preserve our ability to shape the environment to reassure allies and fronds promote those values that the and influence friends and allies in the directions. there's no shortage of evil out there. both wholesale and retail. and to the extend we can try to

affect some of this is is the right thing to do. that's a easy concept to grasp. but a very, very difficult one to get under control. and but that's the way we need to go to make sure that in our differing views of what we need to do with assistance to other countries that we're promoting in the end what we want to promote and making sure that as john just said we're delivering the right message with people who aspouse views we do not support. >> john? >> yeah. i mean, i would close by saying -- sorry i would close by saying the debate isn't whether it should exist. it exists. it has consequences. the debate is about what the

consequences are. good or bad. and whether the decisions the government can make to promote the good consequences. mitigate the bad. what it would mean in practice is basically three things. you can do more of the same keep running imf, and the everything else the way it is. just keep doing it the way it's going. number two, which i think the white house announced last friday is try to improve keep doing the programs and everything else. but try to improve the substance and the process. better courses, better substance to the courses. picking better people attend as opposed to crony and, you know, unmitigateble people. better leahy bedding. understanding the data bases that exist are insufficient. and then last, if you really want to improve everything just

rethink everything and recognize that although in many cases nothing is wrong with the program. there's some countries where everything is wrong. and the administration and -- are a total disasters and scrapped. i'm not suggesting everything is wrong but should there are certain places in context in which everything is wrong. we need to rethink everything and need to be willing to cut or threaten to cut the assistance as appropriate. john, chip, thank you very much. i think this discussion really goes a long way toward helping us think about important institutions and engagement. and how we use these things. thank you very much. hopefully we can carry this discussion on further. thank you for joining us today. [applause]

[inaudible conversations] more now from the center of strategic and international discussion of u.s. and foreign policy in asia. they heard from deputy deafen secretary ashton carter for an hour. [inaudible conversations] [inaudible conversations] good afternoon, everybody thank you for coming. i was unsurprised to see so many people wanting to hear about the future of industrial financing in the defense department. [laughter] i had no idea it was such a popular topic. seriously.

i'm lifelong admirer. he was the first who -- i interviewed from a job. i decided i wasn't up to that. but it lead to a lifelong friendship. and our paths have intertwined through the years i'm so grateful now he's willing to stay on. and be the continuous deputy secretary doing a fabulous job. every conversation in washington these days always tsh in our area, always has kind of a central theme. it's the constraint refrain i hear at almost all meetings. a couple of days ago, secretary carter was? jay carter and gave an important speech on the very subject and since very people are here today. we thought it would be safe for him to give the same speech. i think it's probably going to

be slightly adapted to a washington audience. this is the topic of the day. and the secretary is just chartered by the secretary hague l to undertake the strategic management review. all of these issues are timely. and i think that is reflected by the interest here in the room. without delaying any further. you're here for the secretary. let me ask you to join in welcoming me in applause. [applause] [applause] i have learned so much for john throughout my career. i forgotten that particular. and something tells me there's hip of courseful about that. i'll wrack my brains on that. but anyway i've had a great aberration for john for many years. one that only deepened in my

current role where i can fully appreciate what john accomplish as deep tear secretary of defense. you made it look easy. and i appreciate your inviting me to be here. i want to thank you rick. csis chair for india policy study. who made this event possible. i returnly returned from trip to asia. i attended the international dialogue. the purpose of my trip is to visit first and foremost with the forces deployed there. we're doing great. and also make sure that our forces are, our allies, and partners in the region understand that we're serious about our defense committee there.

we're going walk the walk. and not just talk the talk. this is my second trip to asia since barack obama announced a new strategic for the united. national securitied a adviser. all of whom are emphasizing the same thing. the central importance of the asia paiskt to the united states and our commitment to making sure that the region remains safe, secure, and prosperous. later this week, secretary kerry will be visiting soul, tokyo, and beijing for the first time as secretary of state. and later this spring the secretary who has a senate lead the first u.s. congressional delegation will attend the dialogue for the first time as secretary of defense.

i think it's important point how much time, energy, and intellectual capital as well as resources we're investing in our rebalance to the asia asia-pacific across thebred of government. the investment in the region will continue to grow in the years to come. give my role i naturally going to concentrate on the security aspects today. first i would like to briefly address the evolving situation. on the north koreas have been determined of late to create a crisis atmosphere. adjust because they have a habit

of indulging in extreme rhetoric doesn't mean we don't take the situation seriously. as we demonstrated the united states is committed to maintaining peace and security on the korea peninsula and throughout the asia-pacific region. we're a vigilantly monitoring the situation in close contact with the south korea civilian and military counter parts as well as what the government of japan, china, and russia our. our position has been and remains that north crease immediately. and it's international commitments. and we believe that north korea should live up to the commitments and refrain from the provocative behavior. to this end, we're working with our friends and allies around the world to employ an integrated response to these

unacceptable provocations. which include united nations security could believe resolution with unprecedently strong sanctions and unit literal sanction of great effect a. the result of which will be to leave north korea further isolated from the international community. in the security sphere the united states remains steadfast in the defense commitment to the republican of korea. together we're taking important steps to advance the alliance military capability and enhance homeland and alliance security. in particular, we will continue to provide the extended deterrence offered by the u.s. nuclear umbrella and ensure that all of our capabilities remain availability to the alliance. as secretary hague l announced we are taking sanctions to strengthen the missile defense in order to keep ahead of the

missile development. these include the deployment of 14 additional ground based intercepters in alaska. which will provide improved early warning tracking of any missile launched from north korea toward the united states or japan. in recent weeks we moved the uss decatter to locations in the western pacific. where they are poised to respond to any missile threat to our allies or our territory. last thursday we announced that we will be deploying a terminal high altitude area defense system ballistic missile system to guam in the coming weeks. as a precautionary move to strengthen our regional defense posture against the north korea missile threat. in addition to the measures we

recently signed a new joint counter provocation plan with a republican of korea. to enhance our coordination and response in the event of a north korea provocation and mitt gait the risk of miscalculation. we are participating in annual military exercise with south korea including full eagle and key resolve to make sure that our alliances operational ready to meet the security challenges that confront us in the region. as the president has made clear, there's a path open to north korea to peace and economic opportunity. but to get on that path north korea must abandon the pursuit of nuclear weapon and abide by the international commitment. with that, let me return to the broader theme of today's discussion. which is how we're implementing our defense rebalance across the asia-pacific region. i would like to begin to provide

strategic context. we in the united states are currently embarked upon a great strategic transition. after a decade of necessary and very intense preoccupation on two wars of a particular kind in iraq and afghanistan. one that is finished and one will wind down an enduring presence over the next two years. we're turning a strategic corner. and focusing our attention on the challenges and opportunities that will define our future. we know that many of these challenges are continued turmoil in the middle east, enduring threats like weapons of mass destruction, and a range of new threats and new domain like cyber. we also see great opportunities. the most consequential of which

is to shift the great weight of the department of defense both intellectual and physical to the asia-pacific reason to long standing commitment there. the logic of rebalance is simple. the asia-pacific theater has enjoyed peace and stability for over sixty years. this has been true despite the fact there's no formal overarching security structure, no nato, to make sure that historical wounds are healed. enduring that -- during that time first japan rose and prospered then south korea rose and prospered, then many nations in southeast asia rose and prospered. and now china and india rise and prosper. all of this has been welcomed by the united states. but none of this was a foregone

cob collusion when you consider where the asia-pacific region was at the end of world war ii. the asian political and democratic my call was readed first and foremost by the hard work and talent of the asian people. it was and abled by the enduring principle of the u.s. stood for in the region. which we believe are essential to peace, prosperity and security. these include a free and open commerce. a just international order that emphasizes right and responsibility of nations, and fie fidelity to the rule of law. open access by all to the shared domains of sea, air, space, and now cyberspace. and the principle of resolving conflict without the use of force. it was also enabled -- this is the theme of i my remarks today

by the pivotal role of u.s. military power and presence in the region. we believe that our strong security presence of the asia-pacific has provided a critical foundation for the principles to take root and the prosperity to occur. and we bend to continue to provide this foundation for decades to come. our partner the region welcome our leadership and our robust engagement. and committed to answering their call. it's good for us, it's good for everyone in the region. and it includes everyone in the region. it's not aimed at anyone. no individual country or group of countries. with this is background i would like that explain the various feature of our deafen rebalance to the asia-pacific region. it's reflected in first four

structured decision. we have made and are making what we keep what we retire. second, presence and posture that is where we put things and what we do with them. most visible part of the rebalance. next investment, not just in technology and new weapons systems but in human capital as well. then innovations in our operational plans and tactics, and finally in perhaps most importantly the work we are doing strengthen our alliance and partnership in the region. we begin by describing how we are shifting our structure to the asia pacific region. i'll start with the nay have -- navy. as we draw down from afghanistan the navy will be releasing naval surface combatant and carriers as well as navel intelligence

surveillance reconnaissance, isr and the associated processing capability. already e p-3 signal reconnaissance aircraft have moved. the nayly will be releasing -- vehicles from afghanistan. and several electronic surveillance aircraft are available for redeployment. in addition navy p-3 a type of maritime patrol aircraft which have conducted surveillance mission in the middle east for past decade will return to pay come. and the navy is also adding a fourth forward-deployed navel force to guam in this fiscal year of 202015. the navy shifting overall it's posture to the asia-pacific region in such a manner as secretary panetta allowance -- announced last year resulting in 60% of the navel asset being ashined to the region by 2020 a

substantial and historic shift. the navy's accomplishing this in three main ways. they will be permanently basing four destroyers in row to spain to provide ballistic missile defense. previously this mission was performed by ten destroyers that rotated from u.s. to the mediterranean. the six destroyers now being released will be able to shift their deployment to the asia-pacific region. the four ships in spain continue providing the same amount of missile defense coverage for our european allies. just an example. second, destroyers and amphibious shifts conducted security cooperation in humanitarian assistance missions in africa, south america, and europe will be replaced for the missions by new joint high speed vessel and combat ship under

construction. freeing destroyers and amphibious ships to deploy to asia-pacific. they will jen raid more forward presence by fielding ship such as the joint high speed vessel which i mentioned as well as new mobile landing platform in -- that use rotating military or civilian crews. the air force, meanwhile capitalizing on the inherit speed, range, and flexibility in the region will shift capacity from afghanistan to the asia-pacific. ..

the most titanic transitions coming out of these two wars because they have been so deeply involved in both conflicts. the army has 91,000 soldiers and

civilians aside in asia/pacific and maintains a for presence of eight active component per gate combat teams, 12 batteries of patriots, and numerous theaters brigade lead units. the army is ensuring that after a decade of using pay, assets in the scent, area the pay, commander regains command-and-control the other 60,000 soldiers aside to the broader asian-pacific region. as part of this recently allied rotational concept of the -- party -- army units will focus during the training cycle a specific mission profiles such as bilateral and trilateral training exercises and building partnership capacity. i should also add that during these months of sequestration and beyond, the army is preferentially protecting their readiness and modernization of the more than 19,000 soldiers we

have in south korea so that they are able to decisively respond to a north korean provocation. the marines also have an important role to play in the pacific. roughly 18,000 marines are forward deployed in the region, split between a fighter squadron , okinawa, the third expert -- the third marine expeditionary force and the new rifle company. the marines have also put in additional two infantry battalions for a total of three of the ground in okinawa and will put another there this fall . these are rotational battalions that will move in and out of western pacific every six months. all of this will be accompanied by an ea6 prowler squadron this fall along with more heavy lifted attack helicopters. so in reality the asia-pacific

region will soon see more of our army, marine corps, and special operations forces now that they are coming home to the pacific from iraq in afghanistan. in addition to shifting our own force structure, we are modernizing and enhancing our forward presence across the region in cooperation with their allies. let me start with northeast asia. i already mentioned the work we're doing with south korea. in japan we have added aviation capability with in the 22 deployment, upgraded our missile defense posture, as i mentioned earlier, with that appointment of a second radar, and we are working to revise the defense guidelines with japan to meet the challenges of the 21st century. and, as announced by secretary haig last week, the united states and japan have achieved

an important milestone in our effort to realign our marine corps presence in okinawa, moving forward with this initiative says a clear signal that our posture in northeast asia will be operational resilient and politically sustainable for the foreseeable future. in addition to strengthening a presence in northeast asia to we are enhancing our presence in southeast asia and the indian ocean region as well. in this regard, it is important to underscore that we are not only rebalancing to the asia-pacific, but also within the asia-pacific. in recognition of the growing importance of southeast asia and south asia to the region as a whole. and besides the humanitarian assistance and disaster relief, maritime domain awareness, capacity building and multilateral exercises. in australia, for example, our

first cabbie emery's rotated through last year. a key first step toward using this prez's to engage bilateral and multilateral exercises and partners in the region. in the philippines, we are working with our full and equal partner to enhance the capacity of the philippine armed forces. in singapore the first of our for combat ships will be arriving later this month, providing the capability to work bilaterally and multilaterally with our partners in the region. these are but a few examples of how we are expanding our presence in that part of the region. next, we are giving priority in our investments and budget to the development of platforms and capabilities that have direct applicability to the asia-pacific region.

all the while preserving and integrating the counter insurgency in special operations capabilities that we have worked so hard to develop over the last decade in iraq and afghanistan. these new investments include the viejo class nuclear-powered submarine including the submarine itself and the new payload module for cruise missiles as well as that the eight maritime surveillance aircraft in the anti-submarine mh60 helicopter. to the -- together these investments will help the navy sustain its undersea dominance. the navy is also fielding the broad area of maritime surveillance aboard the global hockey may be to expand the range and capacity for isr the region. additionally, the electronic aircraft and next generation jammer with excessive frequency range and increased agility. these provide extensive electronic warfare capability.

in the air force where we have made some reductions in tactical air squadrons worldwide by removing some of the older were single purpose aircraft to make way for new aircraft, we have made no changes in our tactical air posture for the asia-pacific region. in addition, we have continued to invest in this fifth generation joint strike fighter, a new stealth bomber, a casey 46 take a replacement, and the host of is our platforms. the army, for its part continues to invest in ballistic missile capabilities that are being deployed in improved, as i noted , and that the dod wide level we are also protect your investments in future focus capabilities that are so important to this region, such as cyber, certain science and technology investments in space.

in addition to investing in technical capabilities, we are also investing in our people in language and culture skills, regional and strategic affairs. to insure that we cultivate the intellectual capitol that will be required to make good on our rebalance. and with regard to our military installations, we are making critical investments in trading ranges and infrastructure, including in guam, which we are developing as a strategic cub as well as in mary on this, pan, and pentium. we're focused on delivering managing resources and following through on investments. secretary gates and panetta both held regular video teleconferences on iraq in afghanistan. some of you remember them when the commanders and all the key players in the pentagon where work on this very urgent problems associated with both the theaters.

given the priority of our balance, the secretary decided to use the same model for pay, the model that secretary of state has now adopted as well to provide continuous and focused attention on the region. in fact, i just came from such a meeting. and to support the secretary, i have begin beating a series of working sections of the debbie's management action group which is the principal management forum of the department that i specifically focused on our balance in the asia-pacific. so, we are watching every dollar, every ship, and every aircraft to implement balance successfully. we also recognize that as the world is changing quickly, our operational plans need to change we are changing them accordingly . we are there for taking into account new capabilities and operational concepts, advanced abilities of potential

adversaries and global threats assessments. finally, partnerships. these many elements of our u.s. rebalance, the u.s. was that i will talk about are really only part of the rebalance. we also seek to as we have for decades, to build partnerships in the region, leverage the unique strengths of our various partners and allies to confront critical challenges and realize emerging opportunities. i have already mentioned the work we're doing with allies, japan, korea, australia, the philippines. but we are building partnerships with many others also. for example, last november we work with our treaty allies, thailand, to update the u.s.-thailand joint vision statement for the first time in 50 years. with new zealand, the siting of

the washington declaration a seceded policy changes have opened up new avenues for defense cooperation in the areas such as maritime security, humanitarian assistance and disaster relief and peacekeeping support. in burma we have resumed limited military to military relations and working to ensure that the burmese military support the ongoing and dynamic reforms. with the vietnamese, we are expanding your cooperation to set forth in a new memorandum of understanding maritime security, search and rescue, peacekeeping, and humanitarian assistance and disaster relief. in malaysia and indonesia we are slowly working to build parking capacity and to conduct maritime security and humanitarian assistance and disaster relief. with china we have invited the chinese to participate in the grim pact exercise, which we

host, and we are delighted that they never accepted. we seek to strengthen and grow our military to military relationship, commensurate with our growing political and economic relationships, building in sustaining a positive and constructive relationship with china is essential to the success of our rebalancing strategy. finally, india, a key part of our rebalance and more broadly in the emerging power that we believe will help determine the broader security and prosperity of the 21st century with others. our security interests with india converge on maritime security at broader regional issues including india's look east policy. we are also working to deepen our defense cooperation, moving beyond purely defense trade toward technology sharing and co-production.

multilaterally, we recognize the importance of strengthening regional institutions that play an indispensable of maintaining regional stability and resolving disputes through diplomacy. in this regard we have made key ministerial meetings attendance in priority, especially the defense ministers meeting. we strongly support the unity and applaud the efforts of member nations to develop a binding code of conduct that would create a rules-based framework for regulating the conduct of parties in the south china sea and would welcome china's active participation in negotiations on it. our position is clear and consistent. we call for restraint and for a diplomatic resolution.

we oppose provocation. we oppose coercion. we oppose the use of force. we did not take sides when it comes to competing territorial and historical claims, but we do take the side of peaceful resolution of disputes in a manner consistent with international law. we are also deeply engaged in exercises planned this year, including a humanitarian disaster relief exercise that will be hosted by bernard, a counter-terrorism exercise that we are co-sponsoring with indonesia . maritime six security exercise cochaired by malaysia and as we work to build these partnerships in asia we will complement them with critical new investments in our alliance and partnerships in your. i mentioned the four were based destroyers in spain. we have established an aviation detachment in poland to work closely with our allies and

train the air forces in place land-based missile defense systems and romania 2015 and in poland in 2018. we will redefine our presence in the nato response force with the steady rotation of u.s. army forces to europe to maintain our trans-atlantic military links in cement tremendous inch rubber ability gains that we have made with allies and partners in that part of the world over the last decade of operations together. as we rebalance, in other words, our transatlantic bonds actually become even more important as we face coming challenges outside of europe. so, there is much that goes into the rebalance. let me close by noting that there are those who have concern about and perhaps some who have hope for a theory that our rebalance will not be lasting or

that it is unsustainable. no, i am a physicist, and therefore i put facts against theory. let me tell you why this theory is not fit the facts. the rebalance would continue, and, in fact, gain momentum for two reasons. first, u.s. interests in the region are enduring, and so also will be our political and economic presence there. this presents is accompanied by values of democracy, freedom, human rights, civilian control of the military, and respect for the sovereignty of nations and america has long stood for the fact that human beings welcome and relate to. and so our interest in staying a pivotal force in the region will, we believe, be reciprocated.

second, we have the resources to accomplish the rebalance. some who wish to question very balance of the asia-pacific theater point to the current seemingly endless debate in washington about the u.s. budget . and wonder whether all of this can be accomplished. i am interested to hear this because i am more accustomed to listening to people question why the u.s. spends more on defense than the next 16 largest militaries in the world combined . this statistic is true, in fact. and it will change in the much coming years. it is also worth noting that most of the rest of the money that the world spends on defense is spent by countries that our allies and friends of the united states. these levels of defense spending are a reflection of the amount of responsibility that the u.s. and its friends and allies share for providing peace and security .

you may also be wondering whether the sequester will change these facts in a city of -- significant way. it won't to, and here's why. sequester was never intended to be implemented and is very disruptive. because it gives us very little managerial flexibility in where we take the budget adjustments that we have to take this year. but wherever we have flexibility , we are favoring and protecting the rebalance. we continue to review and revise our plans for executing the fiscal year 13 budget in the face of sequester and in the face also of increased cost of the afghanistan campaign and the fact that we only recently got in the appropriation. and back in january i give direction about what is exempt from or protected from sequestration, and the services and components are applying that guidance. it explicitly direct the

protection wherever possible of activities related to the rebalance this year. the main point is that the arbitrary cuts that sequester imposes of the budget control act a temporary, lasted through october of this year. in other words, a sequester is an artificial and self-inflicted political problem, not a structural one. hopefully the turmoil and gridlock will end and the u.s. can get back to what you might call normal budget process these now, when it does, congress and the president will decide what the defense of -- the part of the defense budget will be in the years beyond 2013. the president has been clear about holding defense spending steady in the long run and reducing it by some few percentage points, including, especially, by including efficiency in defense spending. with the drastic cuts that began

with sequester this year extended in there levels for one decade, u.s. defense spending would be cut somewhere around ten percentage points. this is the range of the debate today. none of these political scenarios changes the map i described earlier. the u.s. defense rebalance of the asia-pacific is not in jeopardy. that said, there is obviously considerable uncertainty about where an overall budget agreement, which is needed to end the current turmoil, will lead and what is clear to us is that we need to think and act ahead of this uncertainty and not in reaction to it. moreover, it is not just the budget the strategic necessity that requires us to examine and reexamine their defense of a fundamental right. strategically, as i said to wear

turn the recorder after ten years of war, and we need to master the security challenges that will define our future. and, as you know, i believe deeply that we need to improve the way we spend the taxpayer defense dollars. all least strive for what i have called better buying power since i was undersecretary of defense for acquisition technology and logistics'. for all of these reasons secretary hegel asked me to lead a strategic choice management review working with chairman dempsey and all of the leaders of the department to examine the choices that underlie our defense strategy, posture, and investments, including all past assumptions. the review will to find a major strategic forces and this too shall challenges to affecting the defense posture of the decade ahead that must be made to preserve adapt defense strategy and management under a

wide range of future circumstances that could result from a comprehensive deficit reduction deal or the persistence of the cuts that began with this year's sequester . the result of this review will frame the secretaries guidance for the fiscal year 2015 budget and will ultimately be the foundation for the quadrennial defense review due to congress in february of 2014. as the secretary said last week, the national defense university, the goal of the review is to ensure that we can better execute the strategic guidance set up by the present, including our rebalance to the asia-pacific. finally, it is important to stress that the strength of our rebalance is not measured only by comparing defense budget levels. the end of the war in iraq any reduction in afghanistan allow

us to shift a great weight of effort from these wars to our stabilizing presence in the asia-pacific region. next this weight has accumulated over decades of u.s. defense spending, so you have to consider a nation's defense investments over time. it takes decades to build a military capability like the kind that the u.s. has. probably, most importantly, another feature of the u.s. military today is that its operational experience is unrivaled, including such attributes as the ability to work constructively with partners, ted hughes intelligence and operations, to operate jointly among the services, to support forces with logistics', all of the skills honed -- honed in iraq in afghanistan. so, for these reasons in doreen

values and increasing military power, the united states can and will succeed in rebalancing to the asia-pacific in the years to come. they keep. [applause] >> secretary carter. thank you very, very much for those remarks. also welcome you. is great to have you here. you can see, the turnout, a great audience. i think the members of the press in the back. of know if you can see them, but this is on the record. did you know that? okay. good. did you also know that we are doing a live tweeting? >> everybody. >> do you? >> i don't.

>> well, usually the moderator is asked to give a quick summary. i do not tweet either, but if i were, if i were i would say, the lead of what we just heard is, u.s. rebalance to asia lasting and sustainable and not in jeopardy. you can use these, by the way, if you want to use them. now, to others that i would give, and then we will go for q&a. the second would be, rebalance primarily a political and economic forum or primary a political the economic concept one of the military went to lots of detail. finally, rebalance. that is the policy. so with those attempts at a summary i would like -- maybe we should both start doing this.

it is a lot of the information out there. would like to turn to the audience. we have about ten minutes. regrettably we do not have more time right now, what about ten minutes. would like to ask you away from the microphone, identify yourself and your affiliation, and i would like you to refrain. we are back in the baseball season. it's a started. i used a baseball expression. i would like you to refrain from any law wind up before you deliver the question. custer to the question, and only one question. with that, be prepared. we have people that will come, but i would like to do something that is the prerogative of the chair. says a and the cia sis. gives me a chance, not surprisingly contest about where india relates to the rebalance. i heard your comments at the end about the partnerships. you also referred to india being a key part of a rebalance

secretary panetta called india a linchpin in that strategy. these are all good ways to connect, rebalance, but i would like to ask you just very quickly, operationally what does this mean? web a practical steps that you would like to see the u.s. and your relationship to make this work? >> very good question, and that they get think i. two that is very much on my mind is -- i'm sorry. i'm sorry. i'm sorry. the thing i. two, and there is much that you can point to end the u.s. india's security relationship. you're absolutely right. no one knows this more than you do. india is, i think, destined to be a close partner of the u.s. states. we just share so much in the way of values and aspirations.

our people just seem to sub mix it up so easily. so well. you see that everyday, and it has nothing to do with the defense or military, but i think it will be reflected there. in one area particularly the importance for we have a lot a progress quickly is in building the indian military capabilities they do not want to do it, as i mentioned in the speech, just like buying things, india wants to do it with close technology cooperation and co-production. we have some examples of that successful projects that we are done with the indians that way. secretary panetta, when he was in india about a year ago discuss this with the national security adviser and came back and i think john would easily appreciated. this deputy secretary of defense take it from there.

i have my instructions in that regard and co-production and technology development are the watchwords there within lots of potential. not only build the power and capability of the military, but bring us closer together. >> okay. a question right here. about half back. again. your name and affiliation. >> when you say is not aimed at anybody i get a sense that china does not always by that. to add to that, some chinese commentators in the state media and officials of telling us that they think that even u.s. deployments during the stock. prices are also sort of things that might be in the china. how do you address those concerns? >> with respect obviously the things that we are doing in

response in north korean provocations are just that, in response to north korea provocations. i do think that china could play, and i wish they would play a larger role in influencing the north koreans to stop these provocations. china has more influence than any other country over number three of. and north korea is causing us just the united states, but others in the region to take actions which if that chinese find them the kinds of things they don't like to see cover there is an easy way to address that which is to talk to north koreans about stopping these provocations. more broadly, the rebalance, as i indicated earlier is the

perpetuation of the pivotal american military role of the asia-pacific region, which has had the effect, as i said to weigh in this speech, of providing the piece and stability that has allowed the countries of asia, first japan and then the southeast asia and that china and india to develop politically and economically in a climate that has been free from conflicts. that is a good thing. and that is an event in china. in that think that is the best proof that the u.s. for military presence and u.s. rebalancing, not aimed at anyone, it has allowed all of that political and economic development to take place, and we welcome that. we have a very strong political and economic relationship with china which is the main thing. and it grows every day.

our military to military relationship with china is also important in grows every day. i mentioned the impact in the speech. >> the front row. >> thanks you. >> reporter with bloomberg news. a few u.s. official that has traveled to north korea. defense secretary perry dr. perry. and you have criticized the previous bush administration for not doing much. and now we're here. if all the u.s. doing, the best that the united states can do, more that the u.s. should and must do? secondly, are you seeing any change in the rhetoric from north korea over the last couple of weeks that gives you hope that things are actually cooley of the slowing down? >> there is a lot that is going on to impress upon the north

koreans that the provocations are counterproductive. they're not all u.s. actions. i mentioned u.n. security council lead to sanctions which are unprecedented. i mentioned the actions and statements of others around the world. what we are doing as i indicated , and there are several examples, a great deal defense of the to protect ourselves. so all of this further isolates of three of. all of this just galvanizes opposition in number three and results in the kind of pressure that i the qc reflected in the security council resolutions. >> over here in the front. mike greene.

you can -- >> they key for coming. you mentioned partnership capacity which is probably more important now than ever. we are still living with an outdated export control system. in asia with never defined requirements the way that we have in nato. what kind of structural or policy fixes you think necessary for that to work? >> a great question, and you need to right there in your question. one is export controls to reform. those of you who know many of the undersecretary though that i am a mad dog on that subject. secretary gates was to the secretary panetta, and secretary hazel. the president and so forth. this is something that everyone agrees needs to be revised. i can speak in the defense department. it is a complicated problem because there were other

agencies of government in other branches of government that are participating in the export controls process, but we in the department of defense have improved but not continue to improve the technical awareness by which we make export controls decisions. and in the second part was how we are organized for building partnerships of capacity and there is also an area where i think we can improve. so i take your point and will take your suggestions, as i always do. >> the lady here in the second row, and this will be the penultimate question, one more after that. >> good. >> australian national university. how important is it for japan to embrace collective self-defense?

the rebalance to work effectively? >> well, i think japan's increasing awareness of their own abilities, their own capabilities and their increasing freeing of themselves from the structures they impose upon themselves some decades ago is a constructive thing. they're doing that with respect to arms exports, with respect to the kinds of activities that they are willing to engage it internationally, and that the debt is a good thing. it is part of the u.s. assistance, if i may be so bold, process of healing and putting history behind in that part of the world.

and it gives japan the opportunity to play a role that it can, which is very constructive and security affairs that are already involved in counter piracy activities, maritime domain awareness. and so forth. these are areas where the world has indeed. if japan can be part of the filling that need to move that is good for everyone. >> i also want to give a tip of the hat to the us trillions who are increasingly using the term in the pacific as opposed to asia-pacific to make it clear that india is a part of that whole swath of the region. it's a very good for australia. the final question. please. right in front. >> thank you. thank you. dr. green question regarding the

partnership. the recent visit to and focusing on the nuclear potential said the current threat in north korea and iran and pakistan and all of a potential alliance with china on the nuclear capability, what is your assessment and our current posture in the southeast asia seek has continued to be especially toward vietnam. >> let's see, a couple of points to your question. some sorry. a couple of parts to the question there for those who were unable to year. one was about china's relations with russia as they apply to the region. and there i will simply mention

what i said already. this situation in north korea, like to see china exercise the were the influence. south china sea i addressed earlier. and they said that there, you know, when it comes to these territorial disputes they all have an individual history and so forth. as i said, the united states is a matter of policy does not take sides in those disputes. but -- and i said this, we do take sides when it comes to how they're resolved. then the facts we believe that they should be resolved peacefully.

these are not situations to use force, coercion. we definitely prefer multilateral approaches. we think that is inappropriate way to deal with these historic issues. that is are we are so supportive of the as yet process. we have hit that our where we must all this to a close. if you want to you can tweet best event ever at csi yes. but i would like to say a couple of final words. first of all, we have some things out here for you to pick up. rebecca blog reports on u.s. and the defense trade, military engagement. the pick those up. i also pay close attention to what secretary carter said about the assignment at the got to realize the full potential of u.s. and the defense trade and to cut through the bureaucratic red tape.

i think the only thing that he needs to do is of the all-out present him, the chair in u.s. india policy studies which is the endo god again-who is the removal of obstacles and impediments. so this you can take back with you. [applause] >> thank you. thank you all. please allow us a moment. stay in your seats and tweet or whenever well be get the secretary of. thank you very much. [applause] [inaudible conversations] >> former british prime minister margaret thatcher has died, 87 years old, known as the iron lady, the longest serving british prime minister comment and the only woman to serve in that position.

they're in 1995 but notes interview she was asked what she learned of writing her to bucks. >> in both of these books what do you look? >> i think easy it laid out in the way you never see it when you're living in a day-by-day. you are amazed at how much happened and how much enormous insight into the times and the new capacity. the first time that uc. the end result is you give some day to day. what actually happened. sometimes, the accurate impression. in hindsight. they face each day. and of. that is inviting a bit of history and living in the future.

>> in the few moments military leaders on how budget cuts are effective maritime security. in a little less than an hour and have some of our coverage of the society of american business editors and writers conference, including comments from tim armstrong, ceo available and panel discussions of social media and journalism and the prospects for reforming the tax code.

>> next, leaders of the navy, marine corps, and co-star of how budget cuts will affect maritime security. they host this hour and 20 minute discussion. [inaudible conversations] >> well, good morning, everyone. welcome to this year's service chief panel. first, i would like to say how pleased and honored i am to be able to moderate this panel this morning.

and usually not know for my moderation. [laughter] this is a great opportunity. the older you get the more new experiences you have. i always was told, the first day i was sworn in as secretary of the navy, never go to a ribbon cutting unless you are cutting the ribbon. today i broke that rule. i was never the less -- it was nevertheless a pleasure, a special pleasure because the navy league has its, as teddy roosevelt called, never been more important to the country and to world security and it yesterday. as they great dr. johnson said, nothing concentrates the mind like that prospect of hanging. and today the senior leaders of our naval services really need

the help of clear thinking and dialogue, and this forum is unique. as i look about today and i saw earlier the quality of the people that we have attending from industry, from the public at large, and from the services, there has never been a more important opportunity to take advantage of the three days a you have here to really think through and debate the best approaches to carry out what the navy league was established to do, which is to communicate to the american people the importance of the sea services and what we can do to help carry that message and get through this time of crisis to see that we are not permanently set on a

different course than this country's great destiny. today we're going to do is have each of our panelists to let chief of naval operations speak first. the commandant of the marine corps, the vice commandant of the coast guard will he speak in turn, and then we will have questions, first from the of one or two easy ones and then from the floor. i would urge you all not just to toss questions, but to give them some high, inside fastballs as well. this is a unique and opportunity. and, indeed, among the three of

them we have more than 100 years of operational leader, which is unique. a little while, you know, a few more years and two of you would have a hundred years. [laughter] but first up will be our chief of naval operations, a fellow pennsylvanian and he confessed to me this morning that he is a disciple of pat steaks, not gino's. and he has led the navy at every level, commended the u.s.s.r. lou. he commanded the seventh lead. he commanded u.s. forces command or what we, from my era called sack. end he has been vice chief of

naval operations and know he has become the 30th chief of naval operations as of september september 11th. so please welcome chief of naval operations. [applause] >> they keep. thanks, mr. secretary. what an honor and privilege to be on the stage with the venerable secretary. i mean, you know, back when i was a little puppy, a junior officer, you were the secretary. here is what i remember. the aviators have flight jackets and we, the submariners, got piece suits. i know you were ecumenical. well, at least that was the jargon. any help, we are all the better for it because you did give us a lot of submarines goss of that is all that matters. i am very proud of to be up here with jim amos. basically my shipmates, but

nobody. we are here together because collectively we execute the maritime strategy, the cooperative strategy for the 21st century, our current maritime strategy is a three signatory document, and we are currently revising that very accurate based upon the strategy which was published just about a year ago. more on that letter as we bring that out. i want to thank also the navy league for what you're doing. this is a terrific venue. i am completely behind it. i know my colleagues are. is not to the for conversations with industry. we discuss shared challenges, shared opportunities, but to me it was most import as we can get solutions out of this. we, about a year ago, got solutions out of things like mine warfare, counter fast attack craft and also improved missiles with ranges by going around and having a good

conversation about payloads with some of our industry and not just worried about the big stuff so i also like the theme. it is a good team. maritime crossroads, strategies for action. well like to talk to you briefly about is where we are today and what the navy will look like tomorrow in the near term and talk a little bit about partnerships. today, well, we have the rate for reduced visibility for while in the navy. what i mean by that is, this budget situation has been coming to me, kind of like when things are hard you cannot see head. you have to slow down and kill in a very slow, deliberate pace. in all hands evolution, and desert difficult to plan ahead. everybody, all hands on deck, to be sure that you can properly navigate through this difficult time, and that is what it has been like with our budget as it yesterday, but things are clearing. as you know, we got a bill. for us in our operation that

cost about four nap billion dollars -- almost 9 billion, so we still have a different challenge. some of sequestration in effect. we have a $4 billion challenge in operations and maintenance and about $6 billion in our investment account. our priority as we look for the remainder this year will be to make sure we get are reimbursable fund, the must pay bills. we will reconcile our fiscal year 13 global force management distribution. we are working with the combat commanders of the joint staff to do that right. we need to prepare to meet the fiscal year 14 deployments, the global force management plan, get our priorities right, get the maid instead, trading done so that we are ready to meet our requirements. been to restore critical support base operations support and our fleet sustainment, restoration and organization projects. we will not be able to do it all but we have to do the was that arrive with the money that we have. manpower has been exempted in

this issue. and so many will be able to continue. actually, we are growing as we build and bring in more ships and restore and take care of gaps that we have to see which will continue. we have a lot of ships under contract, under construction. we just brought in the arlington , lpg last saturday. jim amis was gracious enough to be the keynote speaker. thank you for that. and so our ships that are already under contract for coming along at a pace and we will have about 13-16 more by the end of this decade. my way forward will remain looking through these lenses. we need to operate for word. we need to be ready. our mandate in the navy is to be at these crossroads to mendicancy the mob on the screen. things that look like -- the things that channel and control the trade of the world, the lifeblood of the world to the energy of the world's top

producer of the world, and the products of the world. we need to be there at the crossroads to lead many to have access. we need to be where it matters committee to be ready when it matters. i want you to know up there on the screen they you see, look over in asia. that is where we are predominant and where we have been predominant deployed. you look at the non rotational, 42 gun rotational ships. that is an important distinction. if you're out and you are not rotation, you're not cycling back to the, the u.s. to be right there in theater reassuring allies, deterring potential adversaries can respond quickly to amend is happening today in the northwest pacific. of the specific, it sees me, depending on how you look at it. in asia, north east asia with the issue with north korea. i call to your attention the squares, the black squares. those are places. those are where our allies and friends allow us to arrest a

more relaxed, resupply, repair as appropriate, and in some cases to bring airships and to support our ships. he go from left to right the important places, naples, down by the red sea, the gulf of aden . incredibly important. singapore, just emerging for us. star when where are partners in the marine corps will operate today and we will continue, growing toward the end of this decade. the republic of korea japan, it goes to, you look cuddy, the osama. of course, diego garcia and guantanamo bay. these are places around the world where strategically and when i looked at my mandate today, that is where -- those of the places we operate in and around the crossroads of maritime crossroads of the

world. no, if you look ahead to tomorrow, our current strategy emphasizes ten key mission areas. when i walk my way through the mission areas, it comes up to tell me, you have got to be present. our navy has got to be present. as i said, where it matters and be ready when it matters with relevant capability. that is where we built our budget. that is what we do day in and day out. that is what folks are getting done up there regardless of the budget, the size may vary, but that is the main strategy. that is the main focus. next slide please. if you look ahead 313 n. abcatwenty where we are today and where we will be at the end of this decade, our presence grows around the world. it is not just ships. it is shifts for word. what do you have in place where it matters so that you are able to react when it matters. as we rebalance to the asia-pacific, our peas will continue.

our pace will be dictated by the budget, but it will continue. fine and resources and it will require an efficient generation a presence. what i am talking about are things, as you see, we go from 13 to 20, from 47 to 52 non rotational forces. overall from 54 to 62, and it is a requisite increase around the world. as we bring in tough for destroyers, as we bring with combat ships. as we bring combat ships it to singapore where freedom is on her way today leaving the philippines. that to hundred and 83 ships that we have serviced a global force management allocation plan. a lot of that is the fall were deployed naval forces and for worst fishing ships are round the world. if we did not have these schemes and means to use what we have most efficiently i would need

376 ships to do the presence of today if all we did was to do rotational deployments. that is how many ships who would need. to keep one ship forward, rotational the play from the come in the united states takes for a total. what is there, what is on its way back, what is getting ready to go over, and what is in the maintenance, and that is an emotional number. it works pretty well. the capabilities matter in a huge weight. this is representative, as we look at the unmanned systems, our aircraft, as will the capability of palin's that we bring governorships, putting the most civil ships with the right payloads in the areas of responsibility is what matters as we rebalance and move forward the little combat ships, as i mentioned before, is going to singapore, and she will really bring through the concept of operations for what we need to

use, how we will use the ship and what its potential capabilities are. the new maritime control the aircraft, the first squadron is established, it will soon be established, and she will deploy the western pacific this year. ..

>> we are increasing our cooperation in the asia pacific and we are doing it today. i will be traveling the asia pacific next week for the international maritime expo. and i will oversee all my counterparts out there in the asia pacific, on to japan and korea. in the rim pack in 2014 come we are on track. the chinese have agreed to join us. i suspect the russians will be there again. we are going out there in the asia pacific and intellectual capacity. there are new challenges ahead. what you see depends on where you are looking from. if you are from canada, if you are from a northern nato country, the arctic is a challenge. i call it a two or three-year challenge for us.

we need to develop an approach like i just showed you on the other chart, where you can see the maritime crossroads, probably the bering strait. the northwest passage there. and the passage is up north of russia as the polar ice cap shrinks and the inevitable occurs which means commerce and we need governance and security. next, i would like to talk about partnership. we have a great partnership with my colleagues and their respective services. our coast guard partnership is important and i do shoji where we need to operate with the requisite partners there. we have a unique qualification in the marine corps and the navy. we share naval heritage. we operate together and we enable immediate responses. our current situation and one that we have in the near term gives us an opportunity as i mention these new ships.

the integration and the opportunities as retailer we talar capabilities with our marine corps brothers and sisters will be an important piece of our future. we will need to plan and train and deploy together and we need to find common consonants and equipment and procedures. we have a means to do that as we meet with our naval board at our headquarters as we meet with marine forces. down in moscow. putting together exercises, we have a tremendous amount out of it. it has been 10 years since we actually had a fleet exercise out there. with the marine corps brother and sisters. it went well. we will improve our core competencies and again, another live exercise here on the east coast. on the west coast, it is about

the same philosophy. bringing together our capabilities and looking forward towards the future. i just mentioned that we brought in another lp-17 class, and it is a quantum leap above its predecessor. if you ask me what we need to be bringing into the fleet today is ships. we need to move them into the fleet, we need them badly. we need them quickly, and we need to come later through this year. we need to increase our command and control with our naval operations. satellite phones, lithium phones, especially as we look to the future here in the near term. we are investing ship to shore connectors and we are continuing landing craft air cushion says we look to the future. our partnership with the marine corps remains the cornerstone of

who we are and how we will move ahead operating forward in the future. today it is time to move ahead and set the pattern. looking at the budget challenge, keep the main thing the main thing. we will solidify our partnerships as we look forward to the future. i look forward to your questions. [applause] >> thank you. our next panelist will be the commandant of the marine corps. jim amos is the first aviator to be appointed to that position. he has gone through leadership on every level from the university of idaho and he has

commanded every level he had to commanding squadrons he commanded air group 31 and the third marine air wing and the combat development command. and this happened to be the commandant of the marine corps gentlemen, thank you.

please welcome him. [applause] >> i remember flying and you are walking all around the building and your flight jacket and you inspired all of us to new heights. so just suck it up, john. [laughter] we look forward to coming back every year. it is an opportunity for us service chiefs to kind of share what is the latest in what is on our minds. i'm excited about that. i look forward to your questions. please go to the next slide. this is is not the "los angeles

times" or the san francisco chronicle. these are places that earned the headlines even yesterday when we opened up "the washington post." you look at all those hotspots and it is yet to be seen how certain things will play out it is something that our nation will have to deal with we know colombia is doing particularly well. there is an insurgency going. this includes the norco terrace in colombia. it is yet to be seen what is going to happen in venezuela if

you take a look at all those on there, those are areas where we are focusing. we are focusing our military attention there. these are areas that we have global interest in. piracy in the gulf. the entire eradication of piracy, yet it still continues out of africa. it is hard to imagine. afghanistan, pakistan, that entire area is still playing out and we are not sure how that will play out yet. we have a vision. we have a plan. but it is yet to be seen how that will work. the same thing with iraq. we spend not only our money, but the sons and daughters of our allies in iraq.

it is yet to be seen how rock will be played out now. not sure exactly how that will turn out over the next several years, look at what is going on in syria. every day the papers are full of headlines and all of the issues that the world and the rest of us are trying to figure out how we participate. is there something we should be doing with regards to syria and that part of the world? was our interest in the asia-pacific area? we got five of our nation's most long lasting enduring treaties.

tsunamis, earthquakes, people die. $35 billion worth of disaster. 100% of the oil for japan -- are big partners down there we will continue to develop this partnership. you are familiar with the disputes. the disputes between china and the philippines. the disputes between japan and

china you read the same papers that i do every single day. there is no sense of stability. there will be these types of issues that our nation is going to have to face. these are part of the deployed naval forces.

there is plenty of opportunity to redeployed around the world actual presence matters. and we are the stabilizing force in the asia-pacific area, the partners look at us with a sense of competence that we will be there with them. you can only do that if you are forward, you can do it virtually, you can't sit back and will it to happen. so it's the advantage of minimal deployed forces. this is what we do for a living.

we have the lifesaving abilities to be able to quell a crisis. it has a calming effect and we are really serious about being here to hell. so this is the world that we are going to live in. the global uncertainty and the advantage of naval forces are that we can be deployed. not all of america's arsenal needs to do that. we need to be deployed.

because we fail on the seas of the ocean as john talked about. that is our job. i just came back from afghanistan a little bit ago. i spent christmas there and then went back again, the major and i did. i want to tell you that i watched the police report for the last 4.5 years, going in and out as we have gone down from 27,000 to 7000 people, many tend to be critical and say that that is really the wrong plan. i will would say that that is absolutely incorrect. the campaign plan that general john allen put in place and has administered so skillfully that same plan is actually working. on february 10, i was there when john allen turned a command over and john turned and looked at his coalition partners from around the world. and they said, given the

opportunity to let this campaign plan complete at the end of 2014, we will be successful. i talked to all of my commanders on the ground and i with them in the eye and said, okay, how are we doing? are the afghan forces doing. the afghan answer was uniform and resounding. it is over matching the child in every single area. so i feel good about it. it allowed us to complete our mission by the end of 2014.

>> we operated out of cuba all the way down to peru. we have done this over the last 10 years. the red and green. it gives you a sense of magnitude. we have the green radius that you see on there, and that is the radius coming through. so imagine a ship going through the straits.

it is pretty significant, as you can tell. next slide. it will commission later on this year, it is an absolutely wonderful ship. it is a purposeful decision and they were made and designed so that you can enhance the capabilities of the marine task force.

it is a one of a ship. it is absolutely wonderful. this is an engineering design. we were on the top of that wonderful ship. we have six more landing spots for our airplanes. significant capabilities.

that is a state-of-the-art ship. we are going to build 11 of them. we don't have to come up with these engineering specifications. we have to think about what replacements we need. okay, next life. thirteen years ago, i was a deputy head of aviation at the pentagon. and we lost our two airplanes.

it is a game changer. in 18 tender when you start thinking about these ships moving around that i showed you on that combat radius. several countries are looking at buying that airplane. it is phenomenal. and it has increased our capability in the marine corps and it's a game changer. lastly, the f-35 stood up the first squadron and we got it done in florida. the training of the birds in the u.s. during chorus. and we stood up our first tweets at a one to one in arizona.

this is going to force us to spend our money wisely. thank you, very much. i look forward to your questions. >> the navy is made up of young studs and old studs in the senate commander. it came as a jolt when the admiral referred to me as venerable.

including the coast guard. the longest-serving naval aviator. [applause] our previous panelist served at every level of leadership. especially in the coast guard. he was designated as a naval aviator in 1977.

>> but it is quite an impressive resume in the coast guard and quite an impressive record. please join me in welcoming the vice commandant of the coast guard. [applause] i think i'm going to reconsider this effort.

>> [inaudible] >> secretary, admiral, general, all of us in the navy league, is an honor to be in the presence of the service leaders. i believe that we, americans, owe them a debt of thanks. for over 10 years, they have been involved in unabated warfare across the globe.

with the other military services. to ensure that security of this nation, they have made untold sacrifices. i would like to offer a personal thank you. i would also like to comment on the value of this forum. as we go into resources, downsizing, art signals certainly haven't diminished. one important number that u.n. industry and we in-service understand each other and understand their requirements and strategy and how we plan to take her services going forward so that we can waste not to providing the services with what we need to operate. we thank you for the opportunity to be here. it is very appropriate. my coast guard has had a very successful year despite a variety of challenges.

we face a prolonged period of diminishing resources. to do that, we must restore a culture of efficiency so that every precious dollar is used to his best advantage at the tip of the spear. we must be sure that people are supportive, including families.

we must ensure that risk in our mission is recognized and managed well so that when our people are called out, they are fully prepared and really to accept any challenge. i can tell you from experience the response is difficult in the presence of uncertainty and risk. from piracy cases and from distress at sea, thousands have called and we continue to answer the call as we have in the

tradition of our forebears for over 230 years there is no power on the planet in my estimation that can stand up to the kinetic force this team can bring to bear. only through the cooperation of all of our services on a daily basis can we adequately meet the totality of these threats i

would like to thank the coast guard for his interest in framing of the maritime strategy 21. a couple of facts to consider when you're looking at this, 90% of the total world trade is carried on board ship. the great circle route the atlantic and pacific our arteries to the economy in this nation. the eastern pacific and the western grid income as i

mentioned, are still the primary operational areas for some of the world's most powerful and ruthless transnational criminal organizations. ensuring that requires a robust capability to address the security end of the maritime threats.

their unsecured waterways and ports. it is interesting to observe how the countries in various areas are engaging with law enforcement, maritime, or coast guard in trying to resolve conflict sure of open hostility. the threats depicted on the slide are real. they exist on a daily basis. they pose a real challenge to our country. the interagency, they could be met and defeated. please go to slide three. i will take a minute to discuss an example of an area not often considered. but nonetheless important. every nation has made claims of

sovereignty. there are exploratory wells in many feeds and we have flown up there. let me tell you that they are pretty lonesome in the arctic ocean. even ecotourism is expanding at a fast pace in the arctic region. the options are quite revealing. while there is likely to be a hiatus this summer from drilling, make no mistake that the industry will fully engage in the near term. the arctic is gaining attention at the national level and we are

proposing a service level strategy that will detail how we plan to engage further and output partnerships outlook partnerships and resources will be required. i highlight this as it will likely receive more attention in the near future. it also presents a nontraditional sector that will have to address from the maritime services perspective. many states are claiming sovereignty. sovereignty demands present. in closing, i would just like to say that this theme is very appropriate. maritime crossroads, strategies for action. if i haven't adequately address addressed that, let me close with this. our strategy is to build a forward-looking coast guard, one that pierces to the outer edges of our headlights, one that does not have probably looked in the past, the build strategies in the future, given the realities of today's economy.

we will be aware of our proud past but committed to building what we need in the future based on the challenges and opportunities our service level strategy will be to maximize the value of what we bring to the nation through professionalism and efficiency. because of that, we bring the authorities and competencies and capabilities necessary to face an array of threats in the maritime domain. we bring the capabilities of the fire department of homeland security department which is considerable and growing more so each year. as one of her nations armed services, we are proud to partner with the navy and marine colleagues.

>> we hope to fully debate the spectrum. i look forward to your questions. [applause] >> i'm going to limit myself to a few minutes at the microphone. the visibility is not that great. i can't call and you individually, so i would like you to come up to the microphone and then we will just go left and right and leave most of the time for you all. we are looking forward to that. my question has to do with this

crisis and what we make of it. and if some of you in this room know, i am kind of go crazy uncle in the attic of overhead and bureaucratic bloat. it is my judgment that the greatest threat that we have is precisely that constant growth in overhead. today, even with the sequester, we are spending more money than we spend at the height of the reagan administration in the defense budget. we have less than half the size force than we had in those days and we are producing considerably less than half of the output in ships and

aircraft. this is a real crisis. gradually we had lost a commonsense accountability and efficiency. we have been losing the industrial base as a result of that. the numbers for the suppliers, but thousands of suppliers, for interest, they will soon be 80% sourced. including 80% of the suppliers that will be sourced. we are escalating well above what happens in the stability sector. the secretary of defense did a tremendous service in providing a two-year effort to establish

what ground truth really was in the growth of bureaucracy and the growth of overhead. that database is available today. 970,000 civilians in the department of defense, some 250 joint task force staff, almost half of the army never deployed because they have to deal with the bureaucratic entities. forty different entities in the combatant command that have the ability to block and slow down. the average of the programs from

origination to first building is 22 years. we now have a crisis that everybody is focusing on. it is unilaterally part of the judgment, but the perfect alignment of forces to enable that to happen just coming have

to concentrate on what cuts and how you're going to adapt to things. including getting back to the line of accountability that we used to have in these services.

he was in charge of acquisition in the coast guard. so admiral, would you like to start off? we need to look at acquisition, in my opinion. as the service chief, i would like to have more authority in the acquisition of systems. we must be accountable. i would say that that hand off and continuations should stay as much as feasible as possible.

therefore, what was originally designed to do in this regard, considering altering it, as you mentioned, i enjoy a relationship with a professional as well. one that enables us to get through things. if we did not have that, we would have a nightmare. it is the means to quickly get important issues programmed and budgeted. doctor carter has an initiative called the fast lane, which is a very good program. it requires tremendous oversight in his personal effort and the effort of a service to you. and then working on things in defense that are quick and important, and it requires a biblical amount of attention, and i think that we should have a process to do that.

in the budget environment that we see ahead, a very complicated, maybe another continuing resolution with sequestration. it is inevitable and we need to be able to program and reprogram quickly and have a means to recognize it. thank you. >> secretary, a couple of comments and i would like to dig into this a little bit deeper. this is not a hypothesis. in 2003, the young corporals, in his kit from his boots to his at that time, almost a vietnam era flight jacket, helmet, his weapon, it cost about $1700.

today, to outfit that same young man, it costs almost $10,000. so it is almost four times for the cost. that is ceramic body armor that he wears on the front. stuff costs more. a couple of things in regards to acquisition. i use the term constipated acquisition process. we need to be in charge of the acquisition process. congress doesn't give the program manager a dime. they allocated in the service

budget every year through the appropriations process. it is our money. these are our programs. so my sense is the service chiefs need to get back in, as john talked about, to bring down this different thing that we are being told that we either have to do with attesting that we have to have. so there is plenty of this to go around with regards to the acquisition process. when i took this job 2.5 years ago, i had been the assistant for 27 months. so i would watch the fighting vehicles as they were moving along in a number of issues. i made the decision and i i took the job that we could not afford this in its current state.

so talk to the secretary of the navy and defense in the program was canceled. but before i do that, i sat with my team and i said, okay, this does not mean a requirement for it service one vehicle goes away. that is part of our character and core competency. we have to have that. let's look at when we will design it, how will come in, this was 2010, ladies and gentlemen. i was told by the acquisition deal that would be 2023 before i would have a vehicle that would be part of the initial operation capability. doing all the stuff you have to do, actually have it stand up. the process is broke, it's constipated. we need to fix that. the last point i would make is, what would we need to do?

chairman dempsey said never allow a good crisis to pass and you can get in there and change that behavior and i think that's where we are. we are at a fiscal crisis. so let's look at this thing and enforce ourselves. industry and us to make good decisions and decisions that are in line with our fiscal resources. i will give you an example. we said, okay, we are in this time of austerity. we will be in it for the next 67 years or maybe a little bit longer. when we said, okay, what is good enough? what is good enough? vehicles that we were going to

take you can just turn her back on modernization. that is where we are right now, 44-year-old helicopters that are turning into other types of aircraft. that is where we are with the colors that we have continued to extend service life. we will not be driving around in some of this stuff. we will be driving around what we have. but we are in the process of rebalancing the modernization. >> thank you, mr. secretary.

i have a little bit different take on this, but look at acquisition is a system that was built every time it was highly visible and it resulted in another procedure or another regulation or more oversight or all of these things that can be described as overhead. and i think there is a compelling need to act because of the resource that we find ourselves in, the budgets that we are going to be in. and the need for recapitalize in this hardware. it's going to take a lot of courage and a rethinking of how we buy things. i use this as a general term of art. what it does is forces us the management of risk.

and cost. until we come up with a streamlined system that doesn't just look at a major systems acquisition. but look at each one of them as and isolation for real areas of cost growth and risk. i don't think think we will succeed others. there are some basic elements and acquisition that must be addressed and it will take significant courage on the part of not only government, but industry. until we can come to a methodology or cost and risk exposure can be shared, we know that we may not come out with everything that we want. but we could come out with most

of what we want. and that is good enough. until we come to that understanding, we will be just chasing our tails and this won't happen. the processes are so ingrained, so institutionalized, that we are going to have to break some china to change this. i think the way forward is to look at a couple of pilot acquisitions and push them through. do an assessment. not an academic study, but actual systems acquisitions and then reframe how we do business based on that experience. >> now we have questions from the floor? >> the first question. >> yes, this is the ship transfer. my question is for the admiral.

do you think the navy will postpone decommissioning this until the new legislation is passed? >> no, i do not. i think that those ships -- they would need read modernizing. so i think your question, the only reason i can imagine postponing this would be to assure ourselves that we have a hot transfer. i would tell you that that can be done on a case-by-case basis if we have clear ways ahead, meaning that you transfer it while still active. does that answer question, sir? >> yes, it does. >> case-by-case. but as a policy, we will extend while we wait for the transfer of legislation.

again, case-by-case. >> okay. >> thank you. i am from london, england. my question is for general amos, but i'm interested in your take on it. we talked about the new platforms, but you did not mention the classic ships. i would be interested on your take on how you visualize this, which is pretty unusual and different. >> i want to make sure that i answer you correctly. or at least i think that i understand the question. the issue is what we think of this. >> and what do you you plan on doing with it, serve them at. >> okay. i will say that i was there at the christening probably about a

month and a half ago. it is a strange looking ship. but don't be confused by that. i have had the advantage of looking at all the powerpoint briefs and cartoons and slides that talked about different capabilities, how we would pull alongside and actually do sea basing within an articulating stabilization and actually be able to have all of our combat vehicles, offloading of stuff on a ramp and putting it down on that ship in the center barware looks like it is missing part of the ship. double sink and will drive

things up and we will take them ashore. this will be the very first time we have had the ability to really do at the sea, sea-based logistics in a combat environment. so i sat there next to it during the christening and my imagination kind of ran away with me thinking about all the different things you can do with this. my sense is that we are probably only 10% they are with all of the great original thoughts. you put this in the hands of sailors and iranians and i think that over the next five or six years, whether it be some kind of natural disaster, some type of actual combat operation, we will be able to use this in the future that i think will actually be stunning. i think we are probably only 10% were we can use that. it will be a heck of a combat

multiplier. >> next question? please speak distinctly then slowly. because it's very difficult to hear this. >> sir, the f-35. despite progress, problems remain. and it is important, is it time to start looking towards investments of alternatives as well as the continued commitment to the program? >> the question is what is your support. i need the fifth-generation and that provides it. we are all in.

when you say should we look for alternatives, we are always looking for alternative payloads. in order to enhance and make the entire package better. i believe it is time to look for an exit ramp, if you will, in the navy for the f-35. >> okay, there is no alternative for the spirit i want to make that crystal clear to everybody in the audience. that airplane is performing well but i think it's important for everybody to remember that we are doing developmental testing. whether it be a ship or an

airplane, you bring a vehicle or that capability and you develop it. you can do all of the modeling and simulation in everything that you have done prior to that, but you're not going to discover 100% of everything. there will be cracks and issues and you will deal with them, it has been that way with every single platform that we have ever built. some of the greatest airplanes that we have flown. even today. and those had issues, but we worked our way towards them. we will start operational testing here sometime soon. the airplane is performing well for us. i'm very bullish on it. >> next question? >> sir?

>> as far as the end strength of the marines and army's and others, you could have somebody who has 18 years who finally finds that he is out of the service and he also loses his retirement. i was wondering how these realities of fiscal difficulties are impacting your ability to support the family to encourage people to continue to make a military near korea. >> general? >> well, the question concerning the targeting of thinking of

congress and the executive branch, the growth and cost of personnel. today, the pentagon had to devote $484,000 per active duty person to fund the entitlements for retirement and pension and family services and so forth. so this is clearly a major area that is being focused on. how do you protect the 18 year veteran and family and the people that get cut? >> thank you. that is a very good question. last year, the service chiefs were pretty faithfully with the secretary of defense and proposed some ways that we could

reduce the personal cost overhead. ..

>> there were those kinds of initiatives that honestly many of them in fact, most of them did not see the light of day through congress. i think we will have to go back and do this again but it is important to remember we have the all volunteer force. that is an expensive for ears. there is a balance caring for those that we are about to bring in, those that have served or are currently serving and with any of the service chiefs are the chairman or anybody else to take benefits away from pulitzer have served faithfully. one of the recommendations is to look at the retirement system. for all the joint chiefs was

it you go back and do that and our recommendation, a position is we ought to grandfather everybody on active duty. let's night mess around with the retirement system for those that the seven year mark but there is recognition with their retirement, health care, a bachelor allowance for housing. this is a great example of the misinformation. bachelor allowance for housing what we give grows automatically two or 3% per year automatically. all lee did as service chiefs is say shallow the rent and make it grow out 1% or level off the growth for one year or two and start it back up again. that was not accepted.

if you take a look at those kinds of things and there's a lot of money tied up in without breaking faith with the servicemen and women there are things that we can do and need to do looking at sequestration. frankly america has a military to do its bidding, national defense bidding and so we have to keep that in mind. >> one final question. >> good morning i am the d.c. lawyer. i would like to applaud general amos for not only correctly pronouncing the name of the strategic and small islands off the east coast of asia. my question is a quick one and if i remember correctly nobody on the panel this morning has used or

mentioned the name carrier battle group. is there any reason for that? >> the carrier battle group, all of these things be the better not have a definition and ships that make up carrier battle groups, if you will are called carrier strike groups is nothing more than a definition. the context i use it with deployment and where they need to be and how do you rotate to deploy. >> i would like to think everyone for being with us and to remind everyone we have 46,000 members of the navy league around the united states and overseas and these individuals will be made more aware than ever of the industrial base as a component to defend the united states of america. my deepest banks to the service chiefs for being

with us. enjoy see airspace. [inaudible conversations] >> the age of chivalry is gone. as the economist has

calculated to look back with quiet satisfaction of all those years as to serve the country and a world statesman. >> i think, mr. speaker, the age of chivalry will not be gone as long as my honorable friend is a member of the house. and i do look back with some pride and some satisfaction over the last 11 and a half years. of

>> good afternoon everyone.

welcome to the 50th anniversary conference. i flew in this morning from chicago and feels just as cold as when i left. i am very privileged to introduce our keynote speaker. this will be a give and take question and answer session more than a formal speech and we appreciate him doing that because it allows us to get more questions and to talk about his business. i am an editor with reuters. the first thing i would say about jim armstrong, the ceo of the aol is that he must of been overcome with a bit of insanity in 2009 when he took over the job.

[laughter] he had a brilliant career prior to that at google and to juxtapose that a little bit, to'' the famous philosopher dolly parton she once said if you want the rainbow you have to put up with the rain. so i think that is what tim signed up for. i say insanity because maybe you are familiar with the sale will story. back in the day, when i say back in the day down more than a decade ago, they'll well -- aol was on the lips of every one. it peaked at 35 million

subscribers then it has been downhill putt we have seen the industry transform with high-speed internet and we also remember the blockbuster deal buying time warner in 2008 and we know how that turned out. by 2009 aol looked like it was looking at oblivion. but tim stepped in and a lot has happened in the last almost four years now. he engineered spinning aol off from time warner so we have gone full circle with this. he aggressively moved into content acquiring the huffington post and we want to hear at least one story about the area on

them, okay? and he started hatch the hyper local service looking on the most recent 10 k and it says it has told hundred employees the bulk of whom are journalists. it is very much a media company now and it also has the eclectic group of brands such as one that is a must read text log and map quest his tenure has been a race against time can he reinvent the company fast enough to more than offset the decline with the traditional customers? we would like to hear a little bit about that.

he got good news that the end of last year when for the first time in eight years revenues increased year over year for that quarter. that is how far this company has declined and now the uptick. so we are fascinated to hear not only what you have to say about aol but also the direction of media in general. >> guest: thanks for having me. it is nice to be here and it is my passion. i spent the last couple-- in d.c. and i was really looking forward to this event because this is one of the most important organizations of people of the future. i will talk a little bit about that but i will spend two or three minutes detailing what i think what is happening at

aol and what we have invested overall but i will start that my first job after college was teaching at wellesley college and i did that for a summer program. after that i thought i would go into investment banking and did that six months and realize that was informed me that i started a newspaper in boston and i sold my car, my mountain bike and bought a computer from apple and learned page maker and i program to my own designs and we did all the editorial, printing, ad sales and that was an incredible experience. that was my introduction to content of journalism and the editorial was in great and not a great product but

a great learning experience but today were the internet is with things are mobilize still believe fundamentally journalism as whole is very, very very important concept of the future. a zero paul has invested very heavily has said good group of people who are passionate about content and brands and i would say at the top level we have proxy battle we had to go through a dissident shareholder that is content a good investment at the high level is journalism a good investment? fundamentally the answer is yes. i believe it is a good business the way humans are programmed whether we like it or not most human beings

are constrained by themselves to need a journalist to curate the information for them. that remains a big and robust opportunity for a journalist and journalistic organizations and brands to have a material impact on people's lives. by doing that you can create great businesses behind that that is the core thesis' behind the content. that is the investment level of why we are invested in content. this second thing for journalists, one of the things that is powerful about journalism overall is that they are a walking network. a lot of people who don't know about content business always ask me what is the point* of having a journalist when you could

have the user generated content? but journalists are people who basically who are not only able to grow followers if they are fairly good but that they can connect to networks of people and ideas together that away that a normal person is not able to do and that is a powerful part. there is a network defect in general is on that does not get rich inner talked about but it is the underlying premise why a journalism is important with the networking fact. there is a science do journalism that does not get discussed publicly that our people think about a lot how you on the staff power of the network can broader and broader ways overall. that is important. add a historical level, when

i have done over the years to read about the history of journalism there are certain aspects one is new york city with park row and more newspapers than what the population could sustain at the time and he saw a very creative content people and the wide-open in playing field like the internet today printing very quickly to make their journalist more attractive to the world. if you look at hearst and moving from san francisco to new york and i think we are in that type of an era right now. i would describe the business as an audience

development business purses the audience sustainment business. on a simple level, that means a journalist and journalistic brands and companies need to innovate very, very very quickly constantly because really what has happened is the distributionas changed every than the distribution changes, you have to figure out very quickly what type of content, programming, and journalism will fit in that new curve the best. there has been a lot of notice what the internet has done to the journalism and content it is a significant opportunity for those that want to innovate. that is where i think there is opportunity. i would finish by saying the power of the journalistic brands is that in a dna for humans.

some of our people are here, the huffington post as this are he human beings want to rely on brands help them to give to their lives even the most sophisticated internet mobile platforms. what you find on twitter more people follow the journalistic print on facebook number two content sharing and e-mail is content sharing is the power of france and having to post shows the number one shared brand on facebook. the reason is the huffington post as an unbelievably great job to curate interesting and society that human beings in a plea wind. if i had one thing possibly part of this is because of

the public challenges we have investing in content as the company, i don't think people should be afraid to invest in content and you have to take a longer-term look at the value. that is why i am here and we have done a very good job overall i think. we have eight innings and then the game will be tied. but it is nice to be here. [laughter] >> talk about investing in content there is a lot of interest from this group as a huge amount of discussion over the last few years about hyper local if that is the way to go with journalism. i believe aol said they will stick with it until the end of the year but you wanted to break even by then. what is the outlook for

patch? you have fired hundreds of journalists. will you meet that goal? >> yes. we are headed in that direction quickly. we would like to sustain patchy and keep it running. if anything with the model is keeping the journalist in place to figure out business wise how to add more revenue or reduce cost to get it do break even that hyper little is hypers human where we see the opportunity with batch most people live in their locations for many years. you have the audience in an area that cares about where they are. the kids go to school, they own homes, the single largest investment is where they are. and the markets have seen a reseeding amount of information over time because more traditional media has struggled with the

internet was more disruptive but the reality is still there and cares and i would argue the fact of the matter is when they put patch into town three did not do marketing we did on papal go there but it has tremendous penetration. so from the standpoint of the hyper local audience were the vast majority of the commerce that people do within the tender 15-mile radius even with the internet, 70 percent of internet users comet it is likely within the spectrum of science local emigration is importuned. and patch roughly halves, i live in a patch down nine

know the editor where i live wall. if you travel around with a patch editor cover the impact they have this tremendous. during the sandy storm there were 329 towns hit that were patched towns. most of the people in those towns got their information from patch. whether or not you like the idea or don't like it the fact that aol has taken the risk to try to put very good information in local towns i think has been helpful to those communities. and in our business it has creative tons of noise on wall street but the only noise we're trying to create was to help the human being locally and that is where patches and a remarkable job overall. we have more work to do. >> host: but you mentioned you need to get cost more in

line. it is the age-old problem how do you make money off of it? >> the average patch town runs under $150,000 and the media market that support other forms of media are between 80 and $20 million markets confuse strip out houses and god knows it is about 350 million of disposable cash. so our model running patch profitably on a per town basis comes down to whether the cost structure can we learn a commercial model around it that makes sense to monetize at that level? the answer is yes and towns it is definitely yes.

real life to get all the towns to run that way. the thing about the profitable town is to have the engagement level correct do you have the sales person there who has been there for a while to work it out. there are other things we are looking at that are higher forms of modernization that are possible with different products and services. we just rolled out yesterday's 40 towns across the u.s. and that model is journalism plus more interaction in the community and a new ad models coming out that are differentiated. i think we're taking a thoughtful approach overall. i think pat has been the

long term investment where investors and aol have a short-term mentality. not all of them but it is the standpoint trying to do something really big and bold in the space where most other people have given up on content. we are believers in content and plans. >> host: that is your way to say you will not pull the plug? [laughter] >> just so we are clear, the plan has never been to pull the plug or get a partner. >> our job is to keep patch going in the communities profitably. i think the of press writes a lot about patch will have been but our job is to keep

14 million i guess the we see over 20 million people live there all hyper local the highest gdp towns in the west to keep those consumers happy and build a business model around it and we're working diligently to do that. but the plan has never been to pull the plug on patch. >> host: we will throw it to the audience. if you could go to the microphone, say your name and affiliation. >> nice to meet you. i have a skeptical question warren buffett buys the newspapers and makes quite a bit of money. they have 9,000 circulation was seven columns, three columns full-color is the beautiful