>> the whitehouse released their 2015 budget today. $3.9 trillion has been requested and reductions in army troop levels which house speaker john boehner has called irresponsible. the president and his economic advisors discuss the details in the hour long briefing.

>> good afternoon, everyone, thank you for being here. as you know, today we have the presentation of the president's budget. for today's briefing, as part of the presentation, i have the director of the office of budget, sylvia burwell and jason furman, and cecilia munoz, the director of the policy and gene sperling, the director of the economic council. each guest has an opening statement and we will take questions related to budget matters. i will try to direct traffic in that question and answer section. i will have time for a few questions at the end on other subjects, ukraine obviously included, but if you could hold

questions on those subjects not related to the budget until after we are down. i turn it over to sylvia burwell now. >> the president's budget that released is a fiscal road map for excel growth, opportunity and ensure fiscal responsibility. fully paid for investments in -- infrastructu infrastructures and preschools. the budget shows the president's funding priority at the 2015 levels that were agreed to in the deal. we believe they are not sufficient in 2015 and beyond.

the budget includes an opportunity, growth and security initiative that is fully paid for. it is split between defense and non-defense and it presents additional investments in things like education, research, and manufacturing. building on the model established in ryan-murray, it is paid for with spending cut and tax reforms. it is deficit neutral. supporting what the president said in the state of the union, there is a series of programs to create jobs. it lays out $302 billion infrastructure proposal that is paid for with pro-growth tax.

it strengthens the manufacture base and supports groundbreaking research to fight disease, protect the environment and develop new technology. it enhances the administration's management efforts to deliver a government that is more efficient and supportive of economic growth. and it will expand opportunity for all-americans. it doubles the maximum value of the earned income tax credit to encourage people to enter the workforce. and makes high quality preschool available to every four year old. and drive workforce training. it will focus on the primary

drivers of long term debt and deficits. it builds on the forms of the affordable care act and continues to slow health care cost growth while improving the quality. it will curb tax breaks that benefit the wealthiest. it calls for pro-growth immigration reform. the deficit has been cut in half under the president's leadership. by paying for the new investments and tackling the true challenges, the budget continues with progress reducing deficits as a share of gdp to 1.6% by 2024. with regard to the issues of stabilizing our debt to gdp

ratio that is in 2015 and we start a declining path. the president provides a responsible, balanced and concrete plan that can serves as a guide for congress in the upcoming year. thank you. >> my role is to present the economic forecast that underpins the budget. economic growth will strengthen as the economy continues to return to the full utilization of resources. that will be aided by the shift of policy toward a neutral stance, gains in housing and stock market health, and further potential for home building. this is consistent with cbo who project a similar pace of growth over the next three years. we assume the growth rate

converges to 2.3% growth rate of potential gdp. this, too, and consistent with other forecasters coming in slightly lower than the latest long run forecast by there blue chip panel. in the middle of the range of the federal reserves tendency and slightly above cbo's longer run projection. we project that inflation will remain low, the unemployment rate will continue to fall, and interest rates will rise. i want to note the forecast was locked in late november in order to give agencies time to prepare. the economy strengthened more in the time since them.

gdp in the second half of 2013 grew at 3.3% annual rate exceeding the 2.4% forecasted at the time. and 0.6 percentage points in the unemployment rate exceeding the blue chip expectations. as a consequence, we would be projecting a higher starting offpoint for real gdp and a lower unemployment rate in 2014. overall, however, they would only have a small impact on the median budget control. we will have a review this summer that will incorporate the positive and negative surprises since the budget forecast was finalized. we will go to cecilia munoz with

with that. it will not surprise anything in the room to hear that the child want to insure every child has access to a worldclass education. this budget is reflecting that starting with the president's vision of bringing high quality preschool to all four year olds. it is requesting double the mount for preschool development grants to help states get started and enhancing the programs. the preschool initiative is paired with $650 million to support head start and it will boost toddler care for a hundred thousand children. and it included the race for the top which is a program that will

encourage adopting an approach on closing opportunity and achievement gaps. it includes the high school redesign. an initiative for projects based on real life instances. and there is another initiative aimed to help teachers use technology in classrooms affe. it reflects the president's vision with higher education particularly on access, affordability and completion. funding pell grants, launching a drive for reform and supporting invasion through a first in the world program that will reward

colleges for taking on strategy that drives done the cost and drive ups the quality. i want to flag one additional issue outside of the educational space. this is the one of the elements of the growth initiative called the climate resillant fund. the president talked about it on his trip to california. we take seriously are state, local and tribal governments who are engaged in work to prepare planning for the impact of climate change including the extre extreme weather changes. this includes investing in research and unlooking data and helping communities prepare and funding infrastructure that will help communities better prepare for the effects of climate

change. with that, i turn to gene sperling. he is going to be greatly missed when he returns to los angeles, i would like to say that. >> this is a pro-growth and pro-opportunity budget. it creates more demand in job growth in the outset when we need it, makes more room in the budget for things that invest in the future and growth and product and fairness. and it is a pro-growth budget it because it has sound initiatives that should be alive for consideration by those who want to work together for economic

growth. the high school design is one. and one is, as you saw, the president is putting forward another significant expansion in the earned income tax credit. the proposal that you heard discussed that we put out details yesterday on would be the first major expansion of the earned income tax credit for people without dependent children since 1993. it would address so many policy issues people have raised from how to encourage younger people to work, help people with disabilities get back into the workforce and ensure more people with the combination of the earned income tax credit and minimum wage don't work full-time and live in poverty or raise family members in poverty. the president says this is an important progression.

1.4 million americans were being pulled out of poverty because of the earned income tax credit 20 years ago. today it is 10 million. that is one of the major progressive achievements in which the president has furthered in the 2009 budget and extending them in 2010 and 2012 up for the next five years. he calls for them to be permanent in his budget. this would double the earned income tax credit for childless adults. it would both increase the amount. it would keep the phase in longer so people up to $18,000 would be eligible for this. in term of impact, 13.5 million americans would benefit. 5.8 new million and 7.7 million would get a deeper credit. one specific example: if you

are right at the poverty line for an individual, that is $11, 670 you would get $293 and under this proposal you would get $974. it would be four times larger for an individual right at the poverty level. this concept has bipartisan support. and for those who are serious about not just talking the talk, but walking the walk on reducing poverty and helping low-income working families, they should support the president's initiative on the earned income tax credit. secondly, the president put forward a job compromise on corporate tax reform. it has the same elements. it is revenue neutral.

28% rate, 25% for manufacture, revenue tax. but has $150 billion in temporary one-time revenue that comes in. what the president suggest doing with that $150 billion is putting it towards the highway and transportation reauthorization. $63 billion to close the gap because the gas tax doesn't cover everything and an additional $87 billion that would allow $22 billion more a year for jobs, fixing things for maintenance and investments in the future. this should be the type of proposal that is alive for discussion. chairman camp in his reform devoted a similar amount of resources to highway

reauthorization. this idea should be live and well. and third, in addition to the proposals mentioned, the president puts forward in here on the job-driven skills agenda. the skills needed to get people the jobs that are open that they need that will be open. the proposals are based on solid evidence with bipartisan support. $2 billion on an aprinticeship fund and making sure people can connect to jobs and have labor protections. and third, dislocated worker and long-term unemployment. we reformed the trade adjustment program and existing worker

program into one simple program that is clear and reformed. he would increase from 533,000 to over a million to people that could get services trying to find a new job and a $4 million fund for private-public pa partnerships to the long-term unemployment. and also giving credits for hiri hiring high-risk youth or native americans or other minorities. reform brings forth more resources to be used well. we are here for reform. >> we will go to questions now for our four pasticipants tod--

partticipants -- >> we are predicting lower growth after 2018 from the baby boomers and slack labor market. do you agree with that? >> i would describe our forecast as broadly in the same neighborhood as cbo's. the difference between the two forecast is much smaller than the uncertainty that both cbo and the administration face in projecting future economic growth. if you look over the next three years, we are both projecting an average annual growth rate of 3.3%. after that, as you said, cbo is belaw us in terms of potential forecast. the blue ship is above us at 2.4%. federal reserve is 2.2-2.4% and

we are at 2.3. so there is a range and the differences are much smaller than the uncertainty all of us face. >> question, zack? >> discretionary spending is implemented at the lowest rate in 50 years. i was wondering if you consider that an achievement or failure? >> we think the proposed president's budget is the right level over the ten-year period. we believe they are the correct level. i think it is an argument per why the president's budget as proposed and the levels we proposed in discretionary spending.

>> you listed discretionary totals and are those fund dollars or are those not included? >> the totals are what we would do under meeting the 15 level of the ryan-murray agreement. >> there has been debate on whether the affordable care act is bankable savings and health care cost over the long term. can you describe how you calculated the long-term affected of the affordable care act and aca in terms of deficit? >> those estimates are done by cms. they are not estimates i have done. but we have done the advisors and that is consistent with the way the cbo and administration

updated the baseline cost. you have seen three years of very low health growing. if you look on a per beneficiary bases, medicare growth has been 0.0 percent and medicaid has fallen and the economy doesn't have an impact on medicaid. people debated if the recession caused the slowdown and i think anyone would argue that is the major cause in medicare. policies in the affordable care act reducing the cost and quality, and underlying changes in the structural system. and you have seen the health expenditures assume the effects will continue and result in lower spending in the future.

>> the cbo is predicting the deficit, and how much health care factors into the that? >> policy is the biggest difference. you quotes policy. the president's policy reduced by 1.8 percent. the deficit is better with reduction and that is what we are showing. if you didn't have deficit reduction, a budget baseline would show that. there are other differences, but on the revenue, not the spending side mostly. we include aca because it is the law of the land. >> this is for anyone: do know of the budgets very from occurring law apart from the tax

provisions or extenders? >> well, obviously, we have a set of proposals in there. one of the places where -- that is assumed in our budget is that in the 2010-2012 budget, the president extended his increase for the refundability in the child tax credit, increases in the earned income tax credit for families for three children or more, and the marriage penalty. and a portion was refundable as well. in the budget agreement, those were extended for another five years, through 2017 and we would

expect extended permanently. we believe that would be a significant tax increase in those years, if they expired, for well over 20 million working low-income households. we have a range of tax proposals in the budget. many have been there before. there is a couple new ones. one of the way we pay for the earned income tax credit is to close a loophole where people in pass throughs who had materially involved or work there try to take income to avoid payroll tax cuts, and that is becoming a significant way with carried interest of paying for the earned income tax credit increase. so that is a deficit neutral we we could provide that help.

the 13.5 hardworking americans and do so in a way that is revenue neutral and we would be closing existing loopholes as opposed to adding new taxes there. but, of course, it includes the basic provisions the president had the last few years and that is part of a balance agreement in terms of reducing expending for high income individuals and closing loopholes for overseas tax evasion and other measures. >> yes, sir? >> what would you say to democrats on the hill and federal employees complaining the 1% pay increase isn't enough coming off a three-year pay

freeze and isn't keeping up with inflation. >> i would respond with the importance of the federal employees and workforce and the respect the administration has and the recognition it has been a challenge number of years as you and i discussed at o and b. we have felt that deeply. i would say there are provisions in previous budgets with regard to relationship to federal employee pensions and we are pleased we can do the 1%. the last thing, is the budget levels agreed upon, the 14 and 15 levels are the same when compared to together. when you account for things with natural growth, such as veteran's benefit in the non-defense side, you see how tight the numbers are to produce

a '15 bunnedget. we do this first and congress does it second. there are tradeoffs that have to be made and we believe the federal employees deserved an increase and one percent is what we felt we could do. >> could you discuss the training and development for federal employees and reducing spending on conferences and travel? >> i don't think in terms of the relationship between the two things, the office of management and budget with gsa and others, have been a part of trying reduce conference spending and that has occurred over the last several years. with regard to training and the federal workforce is part of

thinking about how the overall government does better management. you will see articilated in the volumes, a discussion of four major areas of emphasis where we want to build on and they are in affe effectiveness, efficiency and things like shared services where you would see the department of housing and developing using services done at treasurery because they are the best. and the third is making sure we promote management of the government that promotes economic growth. and that is permitting. the forth area is people.

we need to think about how we think about helping our workforce be the best it can be. so there are investments we are doing in training the federal workforce. that is how that piece fits into the broader picture. we don't consider it related to the conference part. we consider this a piece of a bigger overall management agenda that is emphasising -- emp sath. >> can you comment on the balance between tax cuts and infrastructure jobs in that the congressional research report said direct jobs are four-time as effecive in creating jobs and the jobs act would create 1-2 million and drop unemployment so

why value tax cuts versus infrastructure jobs? >> a lot of the budget isn't on short-run support and the types of multiplers you are talking about. but it is about how to expand the capacity of the economy. in that respect, infrastructure is important. on the revenue side, one of the most important things for growth isn't something that cost money or raises money, it is what is neutral over the medium and long-term system. it will generate money in the short-term but it will help simplify the tax system and ensure that capital is being allocated to its highest rate of

return. the other measures that include higher revenue by cutting back on tax expenditures. that is part of the reduction to help ensure the economic plan is sustainable over the medium and long run. >> gene, i wonder if, as a parting gift, you would give us your most candid assessment when you think the most recent budget talks will take place after this? do you expect next year? >> you couldn't wait until thursday to ask that? [laughter] >> i think that what you see in the vision of the president's

budget that he has put forward, and this is going to zack's question as well, is a lot of what is most important for growth and opportunity, isn't the level of deficit reduction, but the composition of how we get there. and you know, the vision of bringing the deficit down on a sustainable pace for long-term is to make sure we don't crowd out private investment. it was designed to make sure we are not crowding out the public investment in the future as well. if you let the budget go at the levels it has with the sequester, your deficit goes down, but it does so at the expense of crowding out the investment and the things the president, and many people believe, are most critical for the future. you may not have the greatest

group of people that will be better because they got early childhood education put i think that what you saw in ryan murray and what you see in the president's agenda is to see that we have to have a very important discussion about what is the composition of our budget in terms of how much we invest in the future. and the president is putting an extra $56 billion above and fighting because he is recognizing it isn't just the level, it is the composition and that is what has made us great, which is investing in the young people and productivety of the

fuc future. my hope is people on both sides of the aisle realize the importance of that going forward. >> there are $650 billion in revenue taxes. you talk about who is feeling the pain, who is spending more to put this in place? >> first, you do have in the budg budget, tax relief for hard working families that will be continued. expanded for individuals who may not have dependents like in the earned income tax credit. there is a proposal to increase the dependent care credit for people with a child five years and under. the relief goes very much to

working families families and in terms of where the revenue is we think they are reasonable efforts to decrease tax expenditures for the people that are the most fortunate. but there is questions, that many people raised, and that is whether a middle income family gets a 15% deduction or credit when they do things, and then somebody who has significantly more income can deduct three times more than that. we may think of that as being upside down. the president's proposal to have there be a limit on tax expenditures for the most well

off raises the most significant part of the budget. the president has long proposed that. if you can remember back to the winter of 2012, the speaker of the house said one could raise $12 million with this. making the tax code more fair and progressive will be better for people trying to invest in college and get up the ladder and ask more from the most fortunate families. the budget is about tough choices and how we invest in the future that is good for growth, productive, and ends up benefiting everybody, including those with a few less tax

expenditures. >> the only two brief things i would add, the bulk of the revenue would affect the top 1-2 percent of taxpayers. and that is proposed by a range of economist on both sides. all of them have talked about limiting the value as a way to address the deficit. and the buffet roll is the second and that is only on households over a million a year. >> can you talk about how you get interest in consideration during something they feel like

they have seen. >> there are two parts. one is what is new and the other is how do you get the ball moving. we brought the tax together in a way and we saw a republican bringing forth the camp tax and we saw that approach. that is new, but showing the bipartisan. and something you have heard republicans, whether it is ryan or rubio discuss, it is work-based. the opportunity, growth and security initiative is new, too. one thing that is important to recognize in terms of the

question what does this mean in terms of getting something done. i think it is important to reflect to the omni bus. if you look at that and tiger grants and administration proposals from last year, you saw double digit increases from sequester. you saw language put into the omnibus that will allow us to make progress on the state's ability to start providing universal preschool. this budget is now in a place where we proposed what we would do, and now making sure it will influence the choices made throughout the appropriation

process and forms the debate and i think those are two important things we tried to construct the budget. >> i would add there are some things that have been in the budget that were not passed but never rejected. they may not have gotten the attention. the high school redesign proposal is making the cover of national news magazines. there is increasing support with the business round table and council for those proposals. the proposals for more job-dr e job-driven training. we had a debate on ui not going the way we wanted. but we saw republicans talking about connecting community

college and how we should deal with long-term unemployment. the unemployment funds are new proposals in the budget. there are things in the skills part that were never rejected but there is a greater emphasis on them now. >> corporate tax reform is something you talked about. and how would you see the united states companies foreign operations and overee -- oversea -- investors being effected by this? >> among job creators, there is great support for the combination of a new business tax reform as well as more infrastructure investment.

it doesn't seem like a controversial issues when you hear from people making decisions on where to create and locate jobs in the united states. i think what the president's proposal, to reduce expenditures, have a lower rate, as low as 28% or 25% for manufacture, they have a minimum tax on foreign earnings that would take away significant incentives to play the various shifting profits around the world. the game is going on and hurts public trust and also takes away a lot of activity that should be focused on adding value and

jobs. people under there are provisions with higher savings. and there are revenues that come in the first ten years that are not sustainable. the idea of that being used for infrastructure investment, which has wide support, is one that is right. the time has come. i think the fact chairman camp took the same approach should be a positive sign this is an area we as a country should come together. whether we do or, i will not try to predict. but we should. >> i would like to ask a question about ukraine and the situation over there when you

get there. isn't there a budget question in that republicans are saying the administration should reexmine the budget due to the potential ukraine situation? >> i think it is important to reflect there is an agreement that set the levels for '15. in the president's budget you see proposed today, the president suggested that the 050 account, defense department, and the opportunity growth and security initiative suggests we believe a better place is to have an additional $28 billion. we make choices about offsets

about closing loopholes and we believe that is a choice we should make. and in a lot of out years of the budget, the president's budget has higher levels of defense spending than those that are law and those that have been supported and i think that is what we will see when we see the proposals as they come out. the starting point is great. let's all sign on to the president's budget in terms of getting the defense level to the higher levels we believe are appropriate. as secretary hagel and dempsy pointed to, give us the flexibility so we can modernize the force, provide the training and readiness and the third point is give us the certainty.

it has to do with equipment and what proportion of the entire defense budget has to do with people. so certainty is one thing. the president's budget is at hire levels and that is where we need to go. and we said what will the president's budget do and influence, we believe we should be buying back on the non-discretionary side and the defense side and we should not operate at the lower sequester levels. >> if i could just add, it merits examining the logic of the republican critique you mentioned which says the president on one hand is spending too much, and on the other hand says the cut in

defense are too deep when the spending they are criticizing is going half. so if republicans are serious, they ought to support the initiative that would add another $26 billion to our defense budget. >> there was a case you made for increasing the defense budget by $26 billion. would you accept a proposal in replacing sequestration and not doing the discreatitionary? >> it replaces one for one. defense and non-defense. we believe both are equally important. >> any others on budget related

questions? >> sorry. director, i would like to ask you, the budget talks about the details on the wake of the website rollout. can you go to details in terms of what you are planning? i think you talk about more efficiency but any more details? >> we will speak to three particular areas with reforming the way we do it precurement and delivery. we will focus on making sure the government has the best people as number one. as part of the conversation we had around the health care website and procurement and planning in the place and making sure we in the federal government are able to attract the best talent. and second is how do we attract

the best companies in terms of the problems we are working on. and do your rules and approaches do that. that is the second area of focus. the third is the best process and they are both about how you attract. these are all interrelated. the companies that provide the services as well as the processes. how we think through the federal acquiring. we are working in those three are are areas. >> how does the climate plan react to the initial plan?

>> it is part of the common action plan deals with the range of internally policy like investments in clean energy, moving out greenhouse and being a local good governor as we prepare for the change. through fema to help state, local and tribal governments prepare and to include research data and unlocking information. and making sure we are investing in the right technology that is help water systems for example. multiple parts to that. >> last question on the budget. the ryan murray deal for 2014,

shows 1012, fwhbut the budget ss the 1030. can you explain that? >> there are parts that have different technical places. the wild fire proposal in how we do the wild fire proposals is one of the example of the numbers you see in the budget. to go over the wild fire proposal, we believe the issue of wild fire financing in the united states isn't being done in the cost effective way. on an annual bases, when the wild fires start they end

hollowing out the types of investments we need to make in the efforts in the space. they can't do planning and take money from other places. we should be investing. what happens is those monies get replenished at a later point. we think it is better to think about using the disaster relief fund that has levels above. the fund is above the caps. we would use space within that for a portion of funding for wild fires. that is what one of the types of things that adds to the numbers. so the budget is built. there are things like that which is within authorized levels. >> okay.

so we have time for a couple questions on other subjects. >> russia is remaining in cri a crimea -- [inaudible question] >> ukraine's territorial sovereignty must not be violated. the action taken from russia is unlawful and inappropriate. it is in violation of the number of regulations they have and the 1994 budapest agreement russia signed off on. we don't find that to be acceptable is your answer.

i think it is worth looking at what the president said, what the secretary said in kiev and what was said at the united nation's security council yesterday. the mobilization we saw russia undertake and the movement of troops we saw russia undertake, the closing of roads and surrounding of military basis in crimea, was all done in response to an imageinary threat. there is no credible reporting of violence against ethnic russians there at eastern ukraine and the president or ambassador may clear if there is an issue and protection that

needs to be provided to ethnic russians in crane ukraine, the need to go about it the probably way and with we would provide means of protecting the rights of ethnic russians in ukraine. to use that as a reason to use military mobilization along the lines of russia isn't legit or lawful. >> what was the agreement to sign off for extended peace talk. if you look at the comments made to jeffrey goldberg, it doesn't

seem like there is a meeting of mind? >> we are working with israel and you saw what the president and secretary kerry said about the opportunity to move forward and the necessity of the framework of negotiations and that effort continues. yes, mark? >> putin said he doesn't think the use of force is necessary in crimea. what would you say? >> i would say we are monitoring the situation there and in the rest of ukraine closely. we stand by our support for ukraine's territorial integry

and sovereignty. we support the ukraine government that is responsible in the handling of the events of in the last few days. secretary kerry announced a package we want to work on so ukraine and government can deal with their economic challenges. >> putin is denying the forces in crimea are russian. what is the whitehouse response to that? does the president believe he is putin is being honest? >> the president is very open ability officials when we deal

with them including putin. we workwer together and achieve national security aims. when we have disagreements we are blunt about them. this would be one. it is a fact that russian military forces have taken over ukraine boarder post. they have taken over all of the military facilities in crimea. it is more difficult to advance pretext or threat and have that f fabrication stand. it is obvious the things russian officials are saying that are

happening in ukraine are not happening. you, me and everyone has means to varify that fact. our focus is on making the point that russia has an alternative path to dealing with whatever concerns russia has about ethnic russians and russia's other interest in ukraine. ... we urge russia to utilize the paths legally available to aid

through international organizations to address the concerns that they have about their interest in ethnic russians in the ukraine. [inaudible question] >> indicated that he is pausing and reflecting, taking a for the comments that president putin made and give us an observation about the statements. >> is the white house plan to issue any knew directives that will allow health care insurers some additional time to offer plans that do not currently meet dca requirements? >> i do not have policy announcements regarding that. this time i would refer you to hhs. >> then loan guarantee package as a first order of business, can you expand on any commitments that the president that might happen and whether he has ex plan?

>> i don't have any conversations between the president and members of congress to report out. i think that there is ample opportunities and so many members have been speaking about the ukraine for those that they have been speaking to, namely reporters to ask us in the plan to act on a package of assistance to the ukraine which would be an excellent use of their authority in time. thank you very much. [inaudible conversations] [inaudible conversations] >> we will have more on the white house budget request tomorrow when treasury secretary jack lee testifies before the senate finance committee. live coverage begins at 1030 eastern on c-span three. later time the house budget committee beginning at 2:00 p.m. eastern. and you can weigh in at both of those hearings.

>> the new c-span.org website gives you access to an incredible library of political events with more added each day through the c-span nonstop coverage of national politics, history, and nonfiction books. find c-span daily coverage of official washington or access more than 200,000 out two hours of archives c-span video, everything c-span has covered since 1987. our video is also to go and viewable on your desktop computer, tablet, smart phone egregiously for the prominence search bar at the top of each page. then 83 makes it easy for those two watch what is happening today in washington and what people and events from the last 45 years, the most comprehensive the -- video library in politics .

>> the president's fiscal 2015 budget calls for $496 billion in defense spending. in annual decrease of less than half a percent. senior pentagon officials discussed the review. this is 50 minutes. >> good afternoon, everybody. in a moment you will hear from leaders to have spent a great deal of time preparing the budget and quadrennial defense review under secretary of defense and comptroller bob hale who you all know very well. not want to remind you that the end of this mr. hale would like to have a couple of minutes after the briefing is over. deputy undersecretary of defense for strategy, plans, and forced

development and from the joint staff and director of force structure resources to meet lieutenant-general mark ramsey. following briefings leaders from the army, navy, air force unmanned missile defense agency will provide further information on their respective elements of the larger budget submission. last week you heard secretary hazel and chairman dempsey preview some of the key decisions contained within the documents we are releasing today. firmly believing that the key br represents the right strategy to a vin the united states and secure our interest during this historic transition from military. directing that that team define our goals and a fiscally informed manner which enables us to bill the budget that police supports our strategy. the analysis you will hear today the mysteries of the president's budget submission enables the department of defense to meet the strategic interest.

this gdr makes clear that sequestration is an and the step will path to the problem of defense. when he and the chairman testified before the senate armed services committee and on thursday at thought -- house armed services committee. the secretary looks forward to discussing our updated defense strategy and budget as we grapple with tough fiscal and strategic realities. with that i will turn it over to brief the details of the quadrennial. >> good afternoon, everyone. thank you for coming. you know that we do that quadrennial defense review every four years and deliver it with the president's budget. i am happy to have the opportunity to doctors of the highlights with you law and take your questions before we also go and talk about the defense part of the budget. before i start i want to take a

minute to think the leaders here in the apartment and a staff of 0s t, the joint staff, services, combatant commanders. this was a team effort and the entire department but in a tremendous amount of work. i just wanted thank everyone in the building who participated with the very collaborative things as a process. we also work closely with the national security council and our counterparts in the agency. very much appreciate all of our work has gone analyze several months. in terms of the main points of the report which i think should be available to you on the apartment website family have three primary themes. the first is to provide an updated defense strategy in the que de our report that its ford division for protecting and advancing u.s. interest and a strategy that would sustain u.s. global leaders. it would talk about how we

intend to rebalance the joint force to adjust to this changing strategic and fiscal environment . several of the high points of the rebalancing adjustments the secretary announced last week. i would also like to talk a little bit about some of the investments we are making in key capability areas that support where we think our joint force need steel. the third main theme in the report is ducking a letter of the apartment itself needs to a rebalance and reform to put additional continued emphasis on being more efficient, effective, and in particular controlling internal cost growth, particularly in the area of compensation while at the same time maintaining our commitment to preserve the health of the all volunteer force. those are the three primary themes in the document. the report will also talk at some length about what we see as the implications or the risks that are posed by prolonged sequestration levels cuts

defense strategy and the ability of the department to execute the strategy which is a very important part of that report. i would characterize this updated defense strategy in this overall qd are as an evolution of our strategy. it is continuing its transitions from the words of the last decade to looking at a future threat and looking at what our joint force needs to be able to read do in the next ten to 20 years. it builds on an inco breaks many of the priorities that were outlined in the defense strategic guidance and 2012. we talk, as you would imagine, but how we see the security environment in some detail. it is fair to say we see this strategic environment we are facing is continuing to be complex. it is rapidly changing. dca continued importance focusing on the asia-pacific region. we see multiple points in the

middle east. a range of challenging problems. suny, she it tensions. that is an area of continuing importance in focus for the department. the security department, we talk about how we see developments in the cyber and space domain. these are vital to our securities that is under considerable challenge by nation states in various places in the world. an important piece of the security environment is how we see the terrorist threat metastasizing. i think it is fair to say that while the direct threat to the homeland is not as strong as it was immediately after the 9/11 attacks, we certainly see al qaeda continuing to morph. it is a major focal point of our strategy which will talk about in a little bit more. we talk in the report about how we see technology changing and influencing the strategic environment. on the one hand it is very much enabling and president's cooperation with allies and

partners but prose is a variety of threats from military and particularly the ability to counter anti access. in the updated strategy there are three pieces. let me walk through those quickly. first of all -- and i want to say up front that these three pillars of the strategy, if you will, are interrelated. they complement each other, or together. they are not stand alone. it is important to think of them in a comprehensive waifs says. the first is to protect the homeland and ensure that we can deter threats in defeat threats if necessary but also we are focused on continuing to be able to provide support to civil authorities when called upon to deal with natural disasters and things of that sort. as a propeller is building security globally which is really looking at our forward

presence, building partnership, capacity efforts, milton l. engagements and exercises around the world and the purpose behind building security globally is to deter threats wherever we can as far away from our shores as possible and to work together with our allies and partners in dealing with common security challenges. the last piece of my strategy is at -- arguably the morganatic pillar of the strategy. we call it projecting power and winning decisively. here we see the ability of the joint force to project power around the world as a signature of our u.s. military, one of our core strengths, is essential to protect that, particularly in environment that we see becoming less permissive where we see threats growing. primarily through talk about the ability to conduct counter-terrorism operations and an airport we would talk about low we would certainly continue

to make investments to ensure that we have the ability to conduct direct actions of braces against terrorist groups and they're going to be putting greater emphasis on building partnership a dozen and a to. more share the burden in terms of dealing with terrorist threats in countries around the world. rebalancing a little bit. in this strategy's and particularly in terms of building security globally we restate and emphasize our commitment to the rebalance to asia pacific, sustaining a focused in the middle east. 305,000 forces in and around the gulf which is indicative of how seriously we take that part of the world. we also will continue to work very closely with our european allies and partners to ensure not only that we have -- that we have focused on providing euro

atlantic stability, but also on working with them to deal with common challenges, partnering with european friends to deal with terrorist threats, to deal with near normal threats in places like north africa. underpinning across all three pillars of this strategy is a real focus on innovation and adaptability. i think it is important to say that we are not trying to say that we can close the gap in an era of fiscal constraint solely through innovation, but we think it is important in a fiscally obscure environment to put a renewed focus on trying to be as creative and forward thinking as we can in an apartment. for example, we are looking -- we spend a lot of time in the qd r looking at things like how we can provide for a presence in new ways to get more bang for our buck. if we are looking at joint training ranges at, perhaps, the plane elements of our carriers

try groups in different ways than we have in the past to try and get more bang from the buck, we are also trying to work with particularly close allies like the brits to harmonize how we do security cooperation activities to make sure that we are maximizing effort and pursuing complementary objectives and activities so that we are all getting as much possible out of our more scarce defense resources. at the president's budget level we believe we can execute this defense strategy with increased risk in some areas, continue at this budget level and with this updated defense strategy to defeat an adversary and denied the objectives of the second anniversary as well as being able to do the other elements. frankly, deconstruct tends to get boil down to that to bumper sticker, and i think it is important that we try to articulate that we see a much

broader range of activities that the joint force is to be capable of doing in any given time. it is not just denying, not just a feeding an adversary in denying the objectives. it is protecting the homeland, deterring and sharing in multiple regions in peacetime. it is being able to conduct operations and then the defeat and denied. i just want to take a moment to sort of foot stomp on a comprehensive construct. again, i think you all are familiar with the major announcements that the secretary made last week in terms of sort of how we are rebalancing the force on a service by service basis. i will say briefly that in addition to the rebalancing that we are doing in the specific services, we are trying to protect key investments and capability areas, like cyber,

space, continuing to grow special operations to almost 70,000 forces in, but continuing investments in missile defense and other important areas in the nuclear triad compete to buy pieces of our force that we think are essential. but another sort of -- before i come briefly to the implications of the sequestration part of the strategy and want to say that important parts of our vision going toward is the need to rebalance the apartments. we have asked congress for authority. we are continuing to work on acquisition reform. we are looking at how we can consolidate our infrastructure in europe and inefficient way. we are, of course, looking in a series of proposals to try to slow the growth of our compensation packages because we think that part of what we have

to responsibly do us to maintain a balanced force will talk about that in some detail. i know that they will also speak to that in just a moment. let me close by saying, the final piece of the report talks and some length about the implications of returning to sequester level cuts for the joint board. and while we firmly believe that the president's budget level, we can execute this strategy, is fair to say that we believe that if we return to sequester level cuts in 16 we will be facing a significantly higher level of risk. the secretary has characterize that as posing unacceptable risk to our ability to provide national security and to do our part in providing national security for the nation. and in particular, where we see those risk manifesting we obviously would be seeing the

force get even smaller than the reductions that the secretary outlined last week democrats to modernizations would go even deeper which we think would put at risk our ability to keep pace with technologically advanced adversaries. readiness would be a serious problem, has been a serious challenge over the last couple of years. we would not be able to recover readiness levels that we need which would never to have netted to have negatively impact not only our ability to be absent present in the world but also to be able to respond promptly to a crisis. so i think our view is that the combined effects to capacity to my capability, and readiness that we would experience under prolonged sequestration would significantly raise their risk of our ability to execute this defense strategy which we think is the right one for what our nation needs going forward. that is why the president has asked for about $150 million more than a sequester level cap.

we believe the strategy we have outlined is the right one for us given what we need to do and given our responsibilities as a global leader. i will close there and turn over the podium to mr. hale and look forward to your questions at the end. >> good afternoon. our job is to give you an overview of the fiscal 15 budget rule. you heard then beach. we are kind of the post-game show. we will give you some commentary . the joint staff. an introductory. just to piggyback, this was a very concentrated effort on the part of the department to work through the elementary view and inform the president's budget which we will talk about for the next few minutes. a collaborative effort.

is this strategy, resources, and they inform the strategy. okay. next slide. you heard this strategy. i will not spend time on this other than i spend probably a couple dozen budget meetings and almost every one of them has strategic discussion. strategy did inform this budget. let me get more comfortable, the dollars, this goes back to 2001. projected 15 through 19 under a plan. large growth after 9/11 compete in 2010, comedown, focused on fiscal 15 and focus on the top bar. there is a place holder of $79 billion. there is no substantive detail behind it and tell the conditions allow the president to make an enduring decision in afghanistan. we cannot provide a budget.

once that happens we will provide a formal budget amendment. zoan not going to say any more about that in the rest of this briefing. focus on the dark blue bar. asking for for under 96 billion in budget. grows sharply between 15 and 16 and gradually after words, about 3 percent growth per year. next slide to let me put this in context. the top line shows last year's plan for these years. we think that is relevant because in our view is fully funded defense strategy. the red line at the bottom is a sequester level cuts, the caps that adjusted this is what we are submitting. focus on fiscal 15. that is consistent with the caps, recurrent caps our highest

priority. it is $45 billion less than we thought we needed last year to fully fund the strategy. you will hear arrest talking about more risks and problems of a near-term readiness. the green line is above of the red one. we are budgeting at levels higher than a sequester caps, asking for 535 billion in budget authority. a total, we are above the cap by 115 billion. i am going to focus. what are we trying to accomplish the main thing is balance, trying to balance readiness, technological capability, size, capacity, capability. throughout we will be talking about things we do not particularly want to do but have to in order to achieve a

balanced budget and the number of other themes institutionally from readiness problems that you will u.s.a. more about as we go along. let me turn to key initiatives. if you ask the public for half a jillion dollars you owe it to them to do everything that's a can to squeeze out deficiencies. efficiencies are short and relief for getting rid of lower priority programs, which is so we are doing. the total inefficiencies, 20 percent cut in had quarter operating budget. you have heard about that before. it's about 5 billion, not a lot of money, but important symbolically and in practical terms. the money comes in things like making judicious cuts in contract funding by eliminating lower priority contracts, restructuring civilian workforce, health care savings other than the compensation related ones which we will talk about and a few minutes, we need another round. we have at least 25 percent

unneeded infrastructure in his department. if we cannot get congress to allow us to close it we're simply going to waste taxpayer money and won't have that money to invest in other things. so efficiencies where the first things we looked at and an important part of our efforts. need to slow the growth in military compensation. i will ask the general if he will brief this slide. >> one of the things that became obvious was the need to look at our total military paying compensation package which goes back to what we have said which is we have to keep a balance. at any budget level we know that they're coming down, and we are looking at trying to balance of the force cost in terms of people against the capability, capacity, and readiness of that force. as the force comes down in size we took a look at the compensation of those other coming in the force, serving today, and those who have served

with the senate-passed. we were guided by the principles of we were not looking at getting paid the slowing the growth of paying allowances and want to make sure we are able to recruit and retain the best all volunteer professional force in the world. we worked hard with the joint chiefs of staff to look at proposing a package of major initiatives that uc on the slide very briefly we are requesting a 1 percent pay raise. we will slow the growth the basic allowance for housing until we reach about 5% of the pocket for the members over three year timeframe and eliminate renters' insurance from the computation which will bring about 6 percent, reduce the commissary subsidy. they are not asking are telling them to close. this is a reducing the appropriated funds subsidy to have them become more efficient than they already are and operate more like a business. we are going to remove the proposal that was put in it and

have taken a clean look at this with health affairs leading the discussion and submit a single, simplified plan with a series of fees to incentivize at all in the best care, but the most inexpensive care. we will also resubmitted the proposals for those who are not already and, 65 and elders, and the pharmacy proposals for co-payments from last year which represents our package for the president's budget in 2015. >> if top -- of congress tuesday -- chooses to turn down these it will create hellhole and our fiscal 15 budget and that $30 billion all. next slide. >> we have a substantial but targeted and streamlined modernization package, some of which addresses the points that kristine made. there are high priority programs

. several activities. not on here, probably should not have been. in a number of cases like the joint strike fighter and others we are still going forward with the program. sometimes it grows, but less than anticipated losses because of affordability. in a few cases we have made specific cutbacks. for example we accepted the army recommendation to terminate the ground combat vehicle, too heavy for the kind of wars the army invasions' fighting. they will invest in technology and within this year up to have another plan for modernizing ground and combat vehicles. a substantial but streamlined and targeted modernization program. next slide. >> we also need to gradually restore their readiness of this force. >> i said before you let 11 months ago and we had just been sequestered.

that took about 37 billion from our budget. that on top of the initial round of budget control lax, we found ourselves hitting the brakes on our readiness recovery from over a decade. in fact, at 513 shortfalls will take us awhile to recover from and in some cases we don't know the effects of. the president's budget for a 515 and we are submitting, the key phrases it puts the joint force back on a footing to get back to full spectrum readiness. there is growth rate, funding readiness. an increase. you see some of the examples across services which i am sure they will discuss later and grows our cyber mission force and finds readiness as well. >> next slide. >> even after it efficiencies, slowing the growth in compensation and targeted modernization we have to get smaller.

if we don't we will not have funds to adequately provide for training and maintenance which shows you our reductions during the and a 14 and our goals without sequester in the absence of sequester. about a 6% overall growth in active duty, reduction in active-duty forces. proportionately smaller, but a reduction in guard then forces in the 5% reduction in civilian full-time equivalents. and with those come force structure cuts in the absence of sequestration. the air force will cover almost 300 aircraft -- aircraft. a venerable platform. but it is getting old. it is a single mission aircraft. there are other planes that missions can accomplish the task. so reluctantly and because of affordability also what they change from last year, retire

our shrink wrapped and global 30 the operating cost on a global $0.30, down. there is always a close call. now it comes down in favor. we will keep him in gradually retire the youtube. i will not go through these others. i cannot go through them with you. if you want to come back and ask us questions. next slide. i want to address a particular aspect of this budget which is the service calls verses -- i describe this to you in connection with the army acted. at the end of 14 we expect 510,000. our goal is to draw them down to about 440-4 under and 50,000 by fiscal year 2009 in the absence of sequestration. we talk about risks. we are thinking about foreign and 40-4 under and 50. sequestration is prolonged and

continues we will have to draw the army down. the point of want to make, that is in the 5-year plan that we are submitting to congress. you might say, wait a minute. the budget above the sequester cap level. why is the army has a question levels. the answer is, we don't know what the army will do. sequestration is a law, so we cannot be sure where we will end up if. takes time to plan for major force changes. and so we have put this plan in our 5-year plan for major items that the sequester level. if congress gives us an indication they will budget, we will and the army drawdown and leave them at 440-450. let me address it with regard to carriers. it will go back up to 11. we would like to stay at that

level. with sequester we will have to go back by decommissioning. our 5-year plan has tin in there because we have to plan for a major force that. if congress indicates that they will budget we will not decommissioned a george washington lead the carrier fleet at 11. next slide this would normally be the wrapup. there are special features to this budget. some fairly unusual times, and i want to address two of them. the first is the opportunity of growth and security focused on the of the red portion of this chart and in fiscal 15 there is government wide initiative called of gsie to at discretionary funding fully offset by cuts in mandatory spending and increases in taxes associated with closing tax

loopholes. for the apartment of justice that would amount to a $26 billion increase in our budget. again, the 496 as a stand-alone budget which is what we describe to you. that is what will be in our detailed budget documents, but the president's budget will ask for those 26 billion in additional funding. let me tell you what is in that. next slide. about 40% of who would go for direct readiness assessments so that they can train more. about 40 percent of it would go for modernization improvements. to spend more on helicopters in the army for the black hawk and a patchy. we would buy more aircraft in the navy, to more f35 and a number of items that are there. the final 10 percent goes for installation, support increases, sustainment, and also a military construction, both of which have

been cut quite a bit in recent years. it is our judgment that we do not have -- we have shortfalls and training and maintenance which lead to some readiness risk, near-term risk has characterized them. if we were to get this added appropriation in was significantly mitigate those risks. next slide, the last special feature is what happens if we go to sequestration level budgets and focus on the red part of the slide, i have been talking to you about the vast green line. in order to realize the request congress is going to have to change the camps -- along and praise that discretionary caps. what if they don't? what happens to our forces? that me give you an idea in the next slide. we would see reduced capability in a variety of raise. cuts would be below us preach

sequester roles. marine corps instead of staying at 182-175, smaller reserve and the army, ten aircraft carriers and nine wings instead of the 11 carriers and ten wings that we would prefer to keep. same proposals and military compensation in terms of growth, although probably more important further force cuts beyond what i have already described. retiring in the global fleet, fewer predators' and reapers, less recovery and readiness. the operation and maintenance budget is important, but there is at 3 percent per year -- less than 2% at sequester level budget which will hamper the recovery and readiness. less growth and procurement in a variety of ways. overall what the secretary has said is that the prolonged sequestration was significantly increase their risk

significantly increasing the chances we could not carry out the strategy. as the secretary said in his speech, if we accept full on sequestration we are gambling that our military will not have to engage in simultaneous military contingencies. next slide. let me summarize what the dollars and the words of secretary hazel to describe there risks in this budget, the budget for 96 is at camp levels. disco 15 goes beyond the years. near-term gaps in training and maintenance cannot post risc readiness, the a pitch and it digress and security initiative would mitigate longer-term risks as well, especially with regard to simultaneous contingencies and much higher risks if we end up going to prolonged sequestration. my last slide is it you cancel you can go to our website and they're is a lot of mind numbing detail on.

what that i will stop. i believe that you will join us and we will try to join the take questions. >> thank you. >> before you ask her question, why keep the briefings on schedule. people are going to look, read through it and wondered, the template. obviously you couldn't -- could not have predicted that. to what extent to they provide a framework. and will that force any kind of real look or strategy over the next month or two? >> what i would say is this is a strategy that presents a broad framework. you want a strategy that has the flexibility to address the real

world challenges. this strategy, particularly, that is where we talk about partner in with our european allies, working with nato to focus on euro atlantic stability to be able to address a range of common threats them all the terrorism which probably we were very focused on and now to deal with a different kind of threat that we are seeing in europe itself. and then, of course, the third piece of the strategy eligibility to project power, we feel like under that strategic approach we have the kind of capabilities we would need to be able to provide a range of military options. i would argue this strategy is flexible enough to address the kinds of challenges we are seeing. i think in terms of the situation right now we will

focus primarily on looking at partner with our allies and complementing the diplomatic and economic options that the administration is working on. >> the 420 figured, you have seen at drumbeat of media coverage saying that would bring the united states of the lowest level since 1940. is that a relevant metric? >> it is basically strategically meaningless. me to let the size of the army along with the rest of the joint force against the press that we faced. maybe it provides some perspective. from a strategy standpoint. >> the narratives of the public saying that this will get defense based upon the -- >> half a trillion dollars on the fence. as bob gates used to say to me, it's something for half a billion, and adding that he is right. we should be able to provide a reasonable level of defense

command at think that we can, though will be more risks. >> thank you. foreign policy. your budget overview refers to a reduction in select capacity and at the same time referring to a budget increase for special operations flexible have selected the ." they're going from 60,000 to 69,700. definitely narrowing. between 14 and 15 the budget grows. there is considerable growth. now will have to look at the overview. >> their readiness. >> in terms of their readiness, they have also been heard but will gradually recover. the same recovery path.

>> they qb our question. as we talk to mark the homeland offense in nation that it was lowered. what i the homeland defense france kept hog be tech to the diaz. is this another carrier in asia? what is the presence? >> happy to talk about all of those buried in terms of the threats to their homeland, we see a range. we are concerned about ballistic missile threats. cashews like north korea because of the importance of a national missile defense system. while i think we would take the position that the defense from terrorists to the homeland have declined, direct threats, there are certainly groups out there with the intent and desired a strike the homeland like a que

ap, and we also have the potential for natural disasters or industrial events, things of that nature. as other types of things that we are talking about. so, for example, has set a descending and the carrier's record as one large entity, perhaps letting off the surface action group to go and do exercises are building partnership capacity activity, potentially even in a different alar under different combat commander, and in the real world we have sometimes pursued those types of deployments. they have not been, as our standard operating procedure, and we are exploring whether it -- whether there is the potential to do that but. those are a couple of examples.

i'm. >> used up a little bit above the average into the air for the security initiative, and i realize this is a one-year funding. some of the procurement and readiness, the funding, would it require anything additional? >> there is not allowed here. we are increasing specific procurements. readiness would get better quicker, but we are already finding enough to sustain that at the president's budget level. miguel above the camps. i think that with the 26 billion we would be better off and readiness and the load the patter of. adult think it would interfere at all, and fact it would support our program in the out years. >> a lot of your critics have said if he tried more focused sequestration, an enormous

amount can be cut without endangering the strategy. given your discussion today and the sequestration, how do you answer those critics? >> let's just say we did not cry wolf. we shut down for three months, 12 combat for crack -- aircraft squadrons and stop them from flying. it will take as a year or more. we stopped army units from going through the combat training centers. that is a culminating training even that gives them ready for continuous operations. we did bad things. we've furloughs' 650,000 people, delayed work, number of other adverse effects not to mention seriously damage -- damaging the round. i don't think we quite wolf.

it still is going to damage or reduce the ability to grow military capability in ways that end to risk. we have already said there are near-term risks that will is significantly worse under sequestration. >> last week he spoke of the programs. i there any other industrial base sectors. >> i have friends here, frank kindle. i will not be able to give you other specific examples. i suspect that there are. we are not trying to the company's bit capabilities. >> not of the top of my head. >> a lot of this is the type of environment that mr. kendall can provide information on. >> the question on military compensation, if congress rejected the package would

create a $2 billion. is that just for this portion? >> no, that is everything. assuming they went back to hire pay raises, turned down the commissary cutbacks and the try care. try care stars the consolidation in fiscal 15 because we need a year to do all the contacting changes. it does not play -- the consolidation does not play in. >> have you h'm made changes? the department's, have you gotten any indication that they may be changing? >> i don't want to try to get inside their heads. i think that many on the hell realize that we need a balanced package. we don't particularly want to do this.

if we are going to live with these caps and don't want sarah go to further forced cuts or degradation and readiness we have to do a variety of other things, smaller, slower growth. there is realization of that, but landers and that it is tough. and need to let them speak for themselves. >> is no longer have your are planning and organizing for the armed forces to perform. >> i certainly don't want believe you with that impression though it we think inside the department is much broader --

that is protecting the homeland. that is what i was trying to say at the president's budget level our ability, we continue to have the ability to do that to wars, that a feed in adversary and denied the objectives of the second. i hope that clarifies. >> that sounds to me like we don't have the ability to us take on to adversaries if there were two wars. mcanally defeat one and denied the other. >> that is a great question. that if he denied formulation was part of our defense strategic guidance. we were trying to get that was delineating between -- we look

at the range of scenarios. there may be some potential conflicts where we would be looking and regime change. end of the where -- we in some departments and to call the steps of scenarios defeat scenarios. there are other situations where we may not necessarily be looking at defeating a regime, but we would be looking at a full-scale combined arms major combat operation to deny the objectives and adversary might have where we may well back whenever the aggression is significantly degrade the military capabilities of an adversary but not take down the regime. that is believed that is trying to articulate. both of those types of operations and a substantial full-scale join operations cat's-paw. >> operational, and perhaps some

from military forces as well as military assistance through latin american conference. >> sir, at the president's budget level we are again remaining committed to building security, a partnership capacity with countries like mexico. and we certainly would envision north, and south, continuing to work with countries in the southern hemisphere. our focus in the western hemisphere is really working with countries that want to work with us to go after transnational criminal organizations and to go after institution building. that is a lot of our focus in that part of the world. if we were to experience prolonged sequestration we would be concerned about our ability to do all that on the scale that we do today. i was going to the question that i think was posed earlier about crying wolf. on the international side, the impact that we added 13 we did in some cases cancel exercises

are scaledown exercises. we revisit some of the deployments that we had planned to do and dad did take some of those of the board as a result of sequestration and 13. there are real and pacs to that kind of activity. >> i wanted to ask about one of the priorities that has been identified. in the scenarios, how are you revisiting are reconsidering? >> all tickets shot at it. in terms of forces, not think that we are reconsidering. we are going for with a variety of issues some discussions with singapore. getting the marines, i think that these are not primarily

financial decisions. we have a fairly robust shipbuilding program averaging about nine per year which is a long-term contribution. i think the budget definitely supports the rebalance and we are not reconsidering it. >> i would agree. as we went through the program budget review process we will the -- we looked at investment choices through the lens of our strategy and the rebalance of asia-pacific is a big part of that. we projected investments to go after capability. our affiliate myself of mr. hill's comments. >> have a question about cyber funding. does that include any augmentation about the services themselves, or is that number going towards cyber management? >> it is fair to say that there is no set of program elements that lead to this number. maybe there need to be, but there are at the moment.

we were to come up with this number, and it includes this service contributions. cyber operations, defense, an offense, but elsewhere as well. another part of it is our overall information assurance, public key infrastructure, some r&d activities, dark by, and others as well. we have tried to capture it all. i would say that there is a gray area. does anybody want to add to that? >> thanks, everybody. >> coming up on the next washington journal reexamine the president's 2015 budget request. "washington post" white house and economic reporter discusses the budget and the administration's priorities for each agency. washington journalists live every morning at 7:00 a.m. eastern, and you can join the conversation on facebook and twitter.

>> the new c-span.org website gives you access to an incredible library of political events with more added each day through c-span nonstop coverage of national politics, history, and nonfiction books. find c-span daily coverage of official washington are access more than 200,000 hours of archived c-span video. everything c-span has covered since 1987. our video is all searchable and fuel on your desktop computer, tablets, or smart on. just look for the prominence search bar at the top of each page. the new c-span.org makes it easy to watch what is happening today in washington and find people and events from the past 25 years. the most comprehensive video library in politics. >> the white house 2015 budget request calls for 46 billion in

state department and international spending. global health and food security. the state department deputy secretary for management and resources and u.s. at the administrators. [inaudible conversations] >> all right. hello, everyone, including those watching on cnn. welcome. we are here today to rollout the state department budget. we are fortunate to have a vested the secretary of state and the u. sai t administrator. they will be delivering brief remarks. as everyone knows there will be a background call at 2:00 p.m. starting shortly after this to answer all of your questions. what that will turn it over to deputy secretary of state. >> thank you.

good afternoon. i will take a few minutes to make some remarks about the fiscal year 2015 budget request for the state department and the u.s. and -- agency for international justice. i am delighted to be joined by administrator's job. one fact was front and center, just 1 percent of the federal budget, america's investment has never been more vital to our national security or economic prosperity, more global leaders. weather in the asia-pacific, middle east, ukraine, europe, or our own hemisphere and american leaders are needed now more than ever and the resources we invest our returned in the form of security, stability, economic prosperity, and jobs. this budget finds the work that is required to sustain long-term investment in american security and prosperity while recognizing the significant fiscal constraints the air facing as a nation. all details are on line in our congressional budget

justification. i will it a few highlights. first, the top line. the overall state and budget request is 46 billion. the base budget of 40 billion is consistent with the fy2014 level which will enable us to carry out our global, diplomatic, and development missions in advance the president's signature policy and development initiative, honor our security initiatives to allies and partners, execute conflict prevention, non-proliferation and peacekeeping activities and respond to humanitarian crises such as the devastating typhoon in the philippines. our $6 billion request for overseas contingency operations financing deprograms in pakistan and helps sustain a hard-fought gains in afghanistan through the 2014 transition. the budget also enables us to respond to the ongoing humanitarian and refugee crisis and syria and its neighbors as well as an unanticipated the -- peacekeeping missions and remains an essential tool for

our immediate national security objectives without undermining long return diplomatic efforts. to carry at these diverse critical missions we have to continue to invest in the dedicated diplomats and development experts to make all this important work possible. this budget ensures we have the resources and tools to do that and delivery effective results with the american people. of course we also have an important obligation to protect our people. accordingly, we are investing for a half billion dollars in programs to sustain that security enhancements made for in response to new threats and the recommendations of independent and accountability review boards. at its heart this budget is designed to protect american national security. it supports our crucial engagement in the middle east including partnerships with key allies like israel and jordan and maintains a robust partners support in tunisia, egypt, libya, and lebanon including

$5 billion for programs in afghanistan pakistan which is a reduction from prior years and part of our ongoing effort. at the same time we have significantly increased funding for our programs in the asia-pacific region. that is up 8% since fyi 13 which directly supports the president's decision to rebalance the growing political and economic importance. the budget request to continue engaging with the united nations and other key multilateral organizations such as unicef. it also enables us to make urgent international peacekeeping needs including mali, south sudan, darfur, and that prc. and to connect directly to the people of the world the budget requests 1 billion for public diplomacy in citizen exchanges dramatically increasing the breadth and reach of american leaders in the world