captions copyright national cable satellite corp. 2008 the united states will be firmly in the role of advising and mentoring and playing the go between in every way that we possibly can. but at the end of the day iraq is now a democracy but they need to act like one and that requires compromise. so i'm hoping that there will be a recognition of that and such a tremendous potential to be realized. iraq can be such a rich country. it's already, you know, showing that with the oil revenue starting to flow again but problems have to be resolved. they cannot be ignored or mandated by authoritarianism. they have to be worked through the political process. [ applause ]

>> madam secretary, we received two very similar questions that ask you about your vision for us. from the most senior employee to the most junior, in an era of limited resources, what is the one thing that we can do every day in our work and ourattitude to make sure we reflect the vision within the reality of the resources that we have. and your vision of smartpower. >> well that, is a very important question that would probably deserve a much longer answer but let me just say that part of the vision is in the

qdtr. that is what drove our doing the qdtr and asked so many of you to participate in help thinking through what the vision is for employee development, to have an openness to chang, to learn new skills, to be willing to collaborate and listen to one another, not to defend the past. if the past is worth defending in the values and the practices that we used, then make the case for them. not a reflexive this is the way we've always done it, this is how we expect to do it forever, i'm too old to change -- i

relate to that. [ laughter ] it's both institutional and personal attributes that we are try together to examine. there's a opportunity -- i always believe that the best change comes from the bottom up. it comes from empowered employees saying, look, i've got this great idea. [ applause ] so to everyone, feel that empowerment. and then to supervisors, managers, et cetera, be open to those ideas. not every idea is a good one. you have to say that. because even if you believe it and you've spent a long time working on it, doesn't necessarily mean it will carry the day. but how do you know unless you ask, unless you deliver and not just stand to one side and say, well, you know, if they only did what i would have them do or why are they doing that? well, that's not helpful to anybody. i am sure that we'll find it increases stress levels and all kinds of health problems. so come forward with ideas and then i want to encourage

everyone at the supervisor level, you know, to be open, to listen. doesn't mean you're going to agree or to accept but to have that give and take. and that is what we're looking for. when you think about 21st century diplomacy, we're asking, you know, our director general, we're asking fsi to envision what is the training, what are the new modes of thinking that we have to equip you with because you're not your mother's or your father's diplomat or foreign service officer or civil service expert. you're coming with a new set of challenges. so how can we help equip you but then how can you help prepare yourself to be ready? i think if you look at the qdr and go through that and imagine how this will lead to the vision of our role in the world, how we can be more effective, more impactful, how we can go further on less because will's no guarantee in these austere times

that we'll have what we ideally like, that starts a conversation. in kind of the office groupings, the subject matter groupings, the affinity groupings, have that conversation and come with ideas either through the sounding board or directly to people in positions of responsibility and let's see where it leads and we'll do our best. [ applause ] >> good morning, madam secretary. >> good morning. >> my name is leon gallanis, i am with the management office of policy right sizing and innovation. i work with undersecretary kennedy. in your opening letter in the qdtr, you ask the question how do we do better? i'd like to say in order to meet the program goals, we need that strong management platform in

the department and usaid and an important component is how we manage data information. i just want you to know that we have an intra bureau working group started in june 2011 that is working to getting all those silos together to share data and access data better so you get that information you need quicker and more accurately and we would be keen on meeting with your staff and briefing them with our success and the work to be done. >> we will do that. you're 100% right. in today's world you can either manage data or be drowned by it. that's the choice. and if you start being drowned, the natural human inclination is just to ignore. so the smarter we can be about managing and presenting and utilizing data, so we'll follow through on that, pat, okay? >> not a question. >> it's okay. a shameless but very important plug. [ laughter ] [ applause ]

>> good morning, madam secretary. my flame is michelle lacome. i'm a member of the civilian response corps. i want to know what your role is in the qdtr in the next few years. >> great question. is rick barton here? rick's right in front of me. we were so fortunate to recruit rick to be the first leader of the cso and i think his vision and what all of you are thinking through will answer that question. i want us to be able to deploy expertise in the form of americans both from the government, from the outside if appropriate but part of our network, to be on the ground, as

i said in my remarks, doing what is necessary to protect us, promote our values and further our interests. and that's why this is so exciting because i can't standing here today tell you exactly all of the different roles and functions that cso will perform. it will -- it already does have a very tight partnership with counterparts and aid that we need to increase the flow of information and cooperation, but then going beyond that into the rest of the government. but i do know this, this was absolutely one of the most important decisions that came out of the qdtr. we entered into it with the question of do we need this?

we'd had some efforts that were really quite important but never were given the support, the resources, the attention and time that they deserved. so it was a natural question to say do we need this and the answer was resoundingly yes but it has to be done the right way. so i'm hoping that as we go through the startup and the consolidation of the cso, you'll be coming to me to say, well, here's what we need to do to do what we think we need to be doing and i will be as responsive as i can. thank you. >> madam secretary, this question comes from noah donadu from istanbul. it relates to staffing and career development. he says with the recent hiring surge, many mid-level foreign services positions were seeded to entry level to provide positions for those newly minted fsos. now that the first wave of these hires are approaching mid-level bidding, how does the

administration plan to return these positions to the mid level. >> i can tell you that h.r. is developing a plan to move positions where they're needed and when they're needed. this will be done in close consultation with the bureaus because we obviously don't want anyone who came in on an entry level to feel like there's nowhere for them to go. soap we're going to be taking a hard look at this. i mean, it was one of the good problems we had, like how were we going to quickly incorporate, integrate our new entry level hires because we had so many of them and that was our goal, to begin to refill our ranks, but now we have to take a look at what changes have to be made to kind of keep the momentum going for these young -- not all young

but, you know, many young entry level people. so thank you. >> good morning, madam secretary. my name is susan johnson. i'm the president of afsa. i'd like to thank you for that excellent and exciting update of qdtr implementation and for your really inspiring advocacy for all of us to embrace change, participate in it and see what we can do to make our agencies more effective in advancing and protecting u.s. interests. so thank you very much. afsa really welcomes this. >> thank you. [ applause ] >> madam secretary, president obama led his state of the union address with the remarks, and i'll quote, "last month i went to andrews air force base and welcomed home some of our last troops to serve in iraq. together we offered a final proud salute to the colors, under which more than a million of our fellow citizens fought and several thousand gave their lives." the president continued, "for the first time in nine years there are no americans fighting in iraq." madam secretary, you know that

all of us salute the accomplishments and sacrifices of our military colleagues and in fact many in our community are former veterans of the armed services. my question is what are your ideas and thoughts on what the state department can do to ensure that the american people remember and better appreciate that we all, the money and women of the state department and our other foreign affairs agencies, are still there, are still in harm's way, are still taking care of business and advancing the interests of the united states. and the related question, how can afsa help. [ applause ] >> i think that's a very fair question and we are obviously trying to talk about it, trying to raise the visibility of it.

this is the largest postconflict operation the state department has ever tried to lead and manage. it's hard. many of you have spent time trying to help us with this transition. but i think when i see the president tomorrow, i will mention to him the importance of also having presidential attention to our members of the civilian side of the ledger who are still in iraq and who are still facing a lot of threats and dangers. and he is very mindful of that, very grateful for it and i think will look for an opportunity to try to raise it to a higher visibility. so i thank you very much. and of course afsa has been a good partner in all of this work and we continue to appreciate your support and your constructive criticism. thank you. [ applause ]

>> madam secretary, another synthesis of two similar questions from elizabeth williams and adam coughlin, about the future of the state department and ngo in 2014. the state department has been very fortunate to have an experienced, intelligent, productive and passionate secretary these past few years. >> just a couple of minutes left in the remarks from secretary of state hillary clinton. you can see it in its entirety on our website cspan.org. we're going live to the center for strategic and international studies here in washington for a panel discussion on the newly released 2013 defense budget. this is just getting under way. >> seven people who are retired and don't have anything else to do except goevts, this looks li 12-step recovery team that's been through this before and the question is, will we get it bet are or right this time?

i'm john hamry here at csis welcome and thank you to all of you for coming. i feel like that groundhog movie, woken up again and here we are. this has been promised for several years, but it looks like now we're there, and the question is, are we going to do it better this time than we did the last time? you know of course everybody says we won't do that again, or are we going to make the same mistakes all over again. it isn't that people choose to make mistakes. it's that the dynamic that governs all of the complex actions that brings several hundred thousand people together to make choices, produces outcomes, and the question is, can we, with thought and direction, and intelligence,

supersede that. and we're at the front end of trying to think that through. we need to think that through with all of you. we saw the first kind of details here yesterday. lots more yet to unfold. i think we're really just on the front end of this. we do see the large central direction, large central direction where this is heading, and it is grounded in strategy that i think has fairly broad consensus in town and in the country, but but what all coherence u know, they have to at the top, but then the details really matter, you know, really matter, and that's where we're now starting to get to that deeper phase, and we're going to try to understand all of that. i would again like to say thank you to our friends at rolls-royce that make it possible for us to offer this

policy series to the defense community in washington, and let me turn it to you, david. are you in charge of this motley bunch that will guide us through this? >> more or less. >> more or less. a little less than more, but let me turn it over to you. let me say thank you again for coming. we look forward to having -- this is going to be an ongoing discussion we're going to have to have because it's going to take some time for us to understand where we're heading and what it means and we're appreciative of all of you coming and you're going to have to be a part of that. david let me turn it over to you. >> thank you, good morning and welcome not only to those of you in the room but to our audience on the web, webcasting this on csis and also to our viewers on c-span, and we're grateful for the opportunity to reach a larger audience that way. a couple of administrative details, if you would in fact, those of you in the room silence your cell phones and other noise devices, i would appreciate it. i've just tried to make sure that mine are silenced as well. for those of you who are viewing on the web and when it comes to

questions, if you would like to e-mail questions to us, you can do that to my e-mail, dberteau@csis.org and we'll try to answer those questions as well, if we like them, otherwise we'll ignore them. we can't quite do that with the ones in the room obviously. the panel that we have today is particularly well suited to addressing what is essentially an issue of where are we in the defense budget drawdown at a time when we have enough information to speculate about what it really means but not really enough to know what it really is, right? we had earlier in january the new strategic diviguidance issuy the defense department. yesterday we had secretary pa net ta, general dempsey, the chairman of the joint chiefs of staff and pentagon officials elaborating a little bit over how that strategic guidance is going to be reflected in the reductions and also what some of

those reductions look like, but in both of those cases, that is the president's announcement three weeks ago and the secretary's announcement yesterday, it actually raises more questions than it answers, so what we're going to try to do this morning is fill in a little bit based upon our knowledge, experience and pure speculation on what some of those might turn out to be. so the way i would like to proceed, i've actually got a little overview set of charts here, and those will be posted on the web as well afterwards for those of you who would like to get through. we'll run through those very quickly, make a couple of additional comments and then i will introduce our panel and turn to them, and we intend to have a lot of time for questions at the end as well. so thank you. let me have the next chart. this is not the first time, of course, that we've brought the defense budget down, and this chart actually takes you back to the pre-korean war period. we had to build up, draw down, build up, draw down. the bars, if you will, the blue

bars are the base budget amounts that the defense department put into place. the little white bars on top are the supplementals, that is the funding that was done on the emergency supplemental basis. you'll see that while there's a substantial amount of that in the recent years, that is the post-9/11 big chunks of money being appropriated under emergency appropriations or as the pentagon calls it now, oco, the overseas contingency operations account, but the same was true in korea and vietnam in terms of large numbers and a little bit in the balkans during the '90s. so the process is that we do go up and we come back down again. there's also a black line on this chart and the black line allows you to see that the up and down is not just dollars. it's also the active duty in strength, and there tends to be a correlation between when the budget is going up, the end strength goes up when the budget's going down the end strength is going down. 'not purely cause and effect. one of the challenges and one of the ways in which it's different

this time, even though there are some in strength reductions projected in the budget they're not commensurate necessarily with the long-term dollar reductions that we anticipate. let me have the next chart. this actually allows you to see that in a numerical way, if you will. what you have on this chart is the four drawdowns, the post-korean war, post vietnam war, post cold war and even they we don't have a name for the current drawdown we for the purposes of this chart call it the post budget control act. i don't think that's a name that will catch on and survive over the decades. [ laughter ] so we're seeking a new and better name for it. we thought about putting post, question mark, on the chart there but that allows to you sort of benchmark the peak and the trough. what you have on the first column is the peak and those dollars are in fact in millions, so it's really $717 billion is the peak, and the trough and

that's a projected trough for the post budget control act of about $567 million. that includes base budget and overseas contingency operations, as laid out in yesterday's announcement by the secretary, so those numbers are updated as of yesterday. it's a reduction of about 21%. that compares in fact with reductions of ,31% and 36% in previous drawdowns so on a pure percentage basis this drawdown is not as dramatic as the previous three have been. on the right-hand side, you have active duty troops, 32%, 43%, 35%, and a 7% reduction. that's where the challenge lies, if in fact we're taking a drawdown that on a percentage basis is three times higher than the percentage reduction in ctive duty instrument, that in this budget on something other than personnel costs. and that's one of the dramatic challenges we face. let me have the next chart. this actually just depicts it

notionally so you can see that in fact for today the steepness of the curve is not that much less for dollars, the steepness of the manpower is of course virtually nonexistent. and the final chart. just a time line, how did we get here? last february the president submitted his fy '12 budget and by the way, all of the numbersl is down is off of the benchmark of the president's budget request from, for 2012, including the out years of that request. that request had a significant increase, so in typical washington parlance, a reduction is not necessarily a reduction. it doesn't necessarily mean you have less money next year than you had last year. what it actually means is you had less money this year than you had originally planned to have this year. that's the nature of these reductions. and in fact, in terms of the actual year over year spending, really only fiscal year '13 base

budget which is the budget about to be proposed by the president, compared to fiscal year '12, that's the only real reduction in real dollars. the other years are essentially when inflation is taken into account, flat, but the reduction of the $487 billion that the secretary talked about yesterday over the ten-year period, that reduction is from what they planned to spend. so congress back in april you remember passed the full year continuing resolution. that cr had in it a defense appropriations bill for fy '11. then in august, as we were sort of railing about whether we were going to default as a nation or not, the budget control act was passed that set a fiscal year '12 cap for all of national security, the defense department gets a share, the lion's share, of that reduction, and it set a cap for fiscal year '13. it also set in place of course the super committee, we know where that ended up, right the monday before thanksgiving, the super committee announced that

they had failed to achieve one of their objectives, which has come up with numbers. they had, in fact, achieved another one of their objectives, which is they had universal agreement that it was the other guy's fault, and so they did achieve that goal, but what that set in place is a trigger that said there are now additional cuts to come through sequestration. the sequestration kicks in on january 2nd, 2013. that's a very magic date. it happens to be after the presidential election, and the congressional election in 2012, but before any of the individuals who are elected in that election actually take office, which means that if anything's going to be done about that sequestration it's going to have to be done by the 112th congress, the congress we have today. so the baseline then for the budget that we're going to be discussing this morning, the fiscal year '13 budget is actually the fiscal year 2012 appropriations, which was passed

by congress late in december. there are two interesting dynamics at work here that we'll come back to over the koufcours the morning. one is the sec. dear of defense has made it clear that he anticipates the reductions that he's taken so far, you know, all that he wants to take. he does not want sequestration and he stated that crystal clear yesterday. now there is a little bit of ambiguity and room and we'll look at some of the nuances if you will because when you don't have numbers you have to look at words and the words yesterday have a little bit of deviation between the written word that was approved by the communications professionals for the document, the spoken words in the actual transcript of the speech, and the expected words of what's really going to happen, and we'll look at some of those nuances as we go. nonetheless the law of the land is sequestration will take effect unless it changes. the pentagon has said we don't

think that should happen. the president on the other hand has stated unequivocally, unambiguously, i will veto any attempt to change the sequestration. so this is a little bit of a strategic political dilemma for the defense department. on the one hand i don't want to take any more cuts and i've got a president who seems to be in line with that, because this is his budget. on the other hand, i've got a president who says he's going to veto any attempt to relieve me from the responsibility of taking more cuts. that's a strategic dilemma that will hang over us this entire budget season if you will. so with that i'm going to throw the floor open to our panel here, we're joined by three wonderful people to comment on this, this morning. todd harrison is the senior budget person for the center for strategic and budgetary assessments. he has a constant, never ceasingly amazing ability to find useful information in budgetary process that i love to take advantage of. he'll be followed by stephanie sanok, a senior fellow in the international security program

at the center for strategic and international studies and clark murdock, senior adviser here at csis. i'll provide a few wrap-up questions and allow questions from the floor. todd would you like to talk up here or from down there? >> i'll be happy to talk from here. good morning, everyone for coming out this rainy day here in washington. i'll just start by saying that the numbers that came out yesterday are really not that much of a surprise. the base budget for dod, so that's not including war funding, is going to be $525 billion. war funding will be about $88 billion. this is really driven by the budget control act. that was the deal passed by congress last august, that allowed the president to raise the debt ceiling. that put caps on the defense budget for the rest of the decade, and that is what is driving this budget. you know, the real question now

is, the budget, does it reflect the new strategic guidance the department came out with back on january 5th? and fundamentally when you're talking about strategy, you're talking about choices. any strategy is really about choices. those choices are often expressed in the budget, so that's why we're looking for details about what the strategy really means in terms of choices in the budget. so where did they cut and are those cuts consistent with the strategic guidance? they obviously talked to a great extent about cuts in ground forces. they're taking the army down to a pre-9/11 size, about 490,000 in strength. they're taking the marine corps down as well to 182,000 in strength, and these are expected, but they did not spare the other services from cuts either. they're taking about 17 ships out of the