different agency, nonetheless will have a negative effect on the defense department that rely on those satellites. so i am concerned about the reduction in the satellite program and the agency that controls many of those satellites which is the department of commerce. >> your perspective on our nation's future in space? >> i think, just this discussion makes the point which is as general cartwright talks about the need for us to think about competitive advantage in the future, we've got to look at all of these different assets and then understand how that changes the mission, set of mission capabilities we need and what the mission of the future looks like. so whether it's space or air or land or undersea, it's an integrated approach that we've got to be thinking about which is why it's important to apply these judgments at the mission level and at the mission capability level, notwithstanding the fact that we budget at the program or the systems level. i think senator levin's point about sequestration cutting all programs equally like a peanut butter is absolutely the wrong approach, because it ignores mission, and what general

cartwright touches on is the integration of space with air and other capabilities and that's the future, which is why we've got to apply our thinking and the trade-offs with judgment at the level of mission and necessary mission capability for tomorrow's wars, not yesterday's threats. >> thank you. next question? >> senator, bloomberg news, what signal should the public be watching for in the next couple months to see if in fact sequestration may be avoided? can you give us any insight, tips on what we should be looking for? >> thank you for asking the question which will allow me to get the detroit entity, the tigers. the big issue is revenues, whether or not an uncompromising position which has been taken, pledges which have been signed, are going to be maintained. that's the signals.

you're going to i hope get answers from candidates as to whether or not they're going to stay with the haley barbour type pledge or whether you're going to see more and more, as a few have already done, suggesting that they are not going to be bound by that pledge. their first oath is to the constitution and the security of the country, not to haley barbour. you're going to hopefully see people on the republican side who signed those pledges gradually recognizing that there can be no real deficit reduction and you cannot protect defense and other critically important priorities of this country from sequestration without additional revenues. you can't do it. it's been proven over and over again. that's the one tip that i would look for.

maybe the candidate, the presidential candidate on the republican side will answer the question about the barbour pledge. remember, he was asked that question, by the way, in a debate when all the candidates were asked whether or not if they could trade one dollar in additional revenues for ten dollars in spending cuts, would they accept that trade. raise your hand is what the moderator asked all the candidates, including romney. i think none of them raised their hand. that is an extreme position which no president that has been serious about deficit reduction, including ronald reagan, has

taken. that's what i would look for, is that specific question. >> next question? yes? front row. >> yes. question for the senator. what realistically is your goal for what the defense cuts would look like? it's not $55 billion a year. what would you see -- >> no, i would like to see at the most, you know, this is -- i'm going to answer this question but i've got to tell you, i totally agree with what both my colleagues here have said. first, that you've got to acquire things in a very different way and second, you've got to decide what is the strategy, what are the threats that you're going to face and how do they change. when i give you a number, it's with that in mind. my best guesses would be about $10 billion more a year tops which would be $100 billion over a ten-year period. it's a figure that kind of for totally planning purposes and when we look at how to come up

with plans to avoid sequestration, the $100 billion over ten years is a number that i look at because i think defense has got to contribute, but i think we've got to be very, very careful that we don't do the draconian approach either on defense or the other important programs like education, health care and so forth. >> next question? >> senator, i'm from south korea. the united states has 20,000 troops in south korea. the united states needs to reduce spending in south korea and secondly, south korea has been seeking to deliver [inaudible] -- thank you. >> our spending in korea, we've got to reduce some of the planned spending for the housing, in particular. we cannot afford to be spending i believe it was a figure like $10,000 a month for family housing that was planned in order to have families -- more families come over and be with our troops in korea.

we cannot afford that. we also -- so i would say that in terms of the number of troops, the first thing we ought to do is turn over responsibility for wartime control of operations to the koreans. that's long overdue. we keep saying we're going to do it and we don't do it. so if there were a war on the korean peninsula, the question as to who would be in operational control should have been decided that the koreans should have been in operational control years ago but at the request of the korean government, that's been delayed a number of times. that should end and i would hope that there could be some progress in terms of north korea that would allow us to reduce our troops, the number of our troops in korea. as far as the kind of missile system the koreans have, i don't

have any strong feelings on that providing they pay for it. i would hope that they would do it in a way which would not be viewed as kind of an offensive, taking an offensive position or a threatening position towards china or towards north korea. if they want to do it in a nonthreatening way, totally defensive way at their own expense, i don't have a problem. >> i think just to pile on there, on the forces and the money spent in south korea, what's important here up front is to do what and what is it today that the south koreans need from america that is permanently based there and available all of the time, and it's not what was 20 years ago. so having a rich dialogue about that, but it's time, really, to make an adjustment on the posture. the second issue of the missile is not a technical issue. it is not a programatic issue in

reality, it is one of understanding the environment in which you would introduce that and the stability change that would cause. it may not be a bad stability change. it may in fact enhance stability but understanding how all in the neighborhood view that change and that they understand it is the key issue here and it's probably generally it just takes time to make sure that the logic and the reasoning is well understood by your neighbors before you field something like that. >> in the back? >> yes. a lot of government -- >> your name and organization, please? >> dave hanson from international affairs. a lot of government contractors may be watching this and thinking it's unrealistic that congress will agree on raising revenues and further cutting

spending to balance the budget. what are the chances that congress could just vote to repeal the sequestration process and just keep borrowing money to pay for these implements to defense and keep defense spending where it should be? >> anyone? >> want to point to me? there is a chance that that could happen, particularly during a lame duck session, that we would once again kick the can down the road, modify the law that now is in place which forces some -- us to be more deficit-conscious so there's a chance that would happen. i don't think it's the right way to go. but to say that congress, there's no chance that congress would kick the can down the road would be kind of inconsistent with a hell of a lot of evidence. not only can you kick the can down the road, but i think we have special gym shoes made just for that. >> i'll just make a point to your question. the focus of sequestration of course is january of '13, but that's a quarter of the way into the next government fiscal year.

so your point about impact on industry, i think there's a growing recognition that the impact on industry is going to begin in all likelihood in october at the beginning of the fiscal year, because if there is uncertainty that continues with regard to sequestration or not and if not, then what instead, in all likelihood, one's going to see the government start to be very careful about how they're spending money because they don't know what kind of a budget they're going to be on for the year and with sequestration hitting midyear, that changed behavior is likely to happen beginning at the beginning of the fiscal year in october. so i think industry is facing a very difficult situation here beginning in what is our calendar fourth quarter as this all plays out. so focusing just on january ignores the point that i think behavior's going to start to change in october. >> next question? yes. >> following on, to what extent do you think that will change political behavior? is that enough to spur action on the hill?

>> there's some evidence that it's already spurring action at least in the senate, where lots of colleagues are exploring possibilities to reach agreement in advance to send some kind of a signal in advance in some way that we're able to act in a way that is rational and a way that involves compromise on the part of everybody. we've got to get over the idea that some have brought to the congress recently, particularly that compromise is a dirty word but there is some evidence, at least conversation taking place in the senate. i think probably a majority of us are involved in those conversations one way or another. >> next question? yes.

>> john donnelly with congressional quarterly. question for you, mr. chairman. you said you're confident sequestration won't happen but you think it will be more challenging, the when part of it. given what was just said about the fiscal year starting in october and my understanding is secondly that pink slips have to go out in i believe september in anticipation of these cuts, is it fair to conclude that the schedule that congress is on really is to do something this summer on this or else face the kind of economic fallout that you worried about? >> i can't say that's the schedule congress is on. i think that is what at least most members i think of the senate and i can't speak for the

house, recognize as the reality is that we should be finding a way to act, sending some kind of signal we're able to work together and compromise, even if it's not the whole thing, that we are able to do something prior to beginning of the fiscal year. i happen to agree with what you said about the problem really specifically beginning october 1. i think warning notices to employees have already gone out from some major employers. that kind of instability and uncertainty is what is going to drive us hopefully to finding a path if not to a full solution, to put in a different context, it's called a confidence building measure that congress is able to at least take some steps down the path of avoiding that train wreck. >> thank you. >> what would that look like? >> it could be -- there's a lot of possibilities but one might be for instance in some of these tax extenders, to take one which should be simpler, frankly, is to find a way and pay for the extenders being extended. that involves things like r & d tax credits and a lot of other

things which i think most people want to see happen and that it could hopefully involve even on some parts the tax cuts. everybody agrees we can't raise taxes on middle income folks. the disagreement is whether we should continue the lower tax bracket for upper income folks. maybe we can find a way to at least agree that this middle income, this median income group that has been so hard hit should not face a prospect of a tax increase in january and agree at least on that part, leaving the question of whether the upper bracket tax rate would be restored to the higher rate for later on as part of a larger deal. >> thank you. next question? >> yes. senator, what is the long term risk on waiting to avoid sequestration and how quickly could private industry recover? and also, i wanted to see if you could elaborate on what 3,000 accounts would be automatically cut and if these were accounts

across the board, flat out cuts or reductions in spending? >> the second answer is whatever the cut is, whether 8%, 9%, 10%, whatever it is, to reach that mandated target in law, would have to be applied to every account. there's a different word, called every line in our budget, but i don't think that word is as clear as the word account so i'm using the word account. that's a number which was given to me by my staff, 3,000, and but it would have to be an equal amount. there can be an effort at reprogramming. there is flexibility on the wage, on the pay of our troops. the president can avoid that but then he's got to make up for it in some other way by adding then a slight increase to the percentage on every other account. in terms of the effect of continuing this uncertainty about this fiscal cliff, it's going to have an ongoing, i think, weakening effect on the economy.

i'm not a business person or economist but i would guess that that weakening process would begin sometime this fall. >> are you aware of any planning in the government for sequestration in case it happens? >> i hope there's planning going on. we have a provision in the defense bill that requires the defense department to tell us what the impact is specifically of sequestration, and that's fine, but every department, not just the defense department, every department should be informing the public, informing congress, what the effect would be of sequestration should it happen. so i'm all in favor of requiring the defense department to do that. i joined in the language in the defense bill to make an amendment on the pending legislation to try to do that, and if so, it ought to apply to every department, and the impact

on education and health care and on other important programs as wel well. >> any impact on private industry? >> on sequestration? >> on ways to avoid se kwe sequestrati sequestration? >> there's been so much written. many of you with the paralysis one sees on the industry side. there's i don't know how many hundreds of billions or trillions of dollars or cash on corporate balance sheets. and the reality is that corporations aren't going to invest in capital until they get some sense of the environment that they're investing into. and so this continued turmoil and uncertainty of continued paralysis. and if we're really looking for private sector investment to have a major role in bringing our committee back, we need to create an environment where

business can at least understand the environment in which it is expected to do business. and therefore be willing to -- to invest. so, you know, all of what senator levin is talking about is just another color on this continued confusion and uncertainty, which has business standing on the sidelines waiting to see what will happen. and to expect business to act before they see that is simply foolish. it won't happen. >> general, how about the impact on the delays? >> my sense is that there's a bit of a difficulty here. you want to plan for the future. it's responsibility to plan for the future. you also don't want to give away anything. so often times the worry is t t that, well, if i were asked to do x, y, or z, this is what i would do, and then all the sudden it happens. the discussion is felt to be lacking in whether it should

happen or not. somehow the departments -- not just the department of defense, has to find a way to conduct some serious planning about further cuts. and do so in an environment where they feel safe that they can explore all the options without doing anything. >> what you mentioned were both tax cuts. the r&d and maybe the adjustment with the bush tax cut plan, and it really doesn't give you anything for sequestration or for revenue. so what would be the accompanying thing that you would be looking for on saving money? >> the reason i mentioned it is i think the public needs what the business commune needs, is some clear indication that we are going to avoid a fiscal cliff and a train wreck. they need stability and confidence. and that is what is lacking now

because of what they see. and what they are seeing. so what i suggested is that there may be some actions which could be taken now, which would give people some confidence that were able to work together on a bipartisan basis, at least on some things that we could agree upon. we can agree, i hope on the middle income tax cuts continuing and not being lost. i think db i don't anybody that doesn't agree with it. there may be a few. why not get that done where we can reap the extenders. 90% of the congress would not like to see tax credit lost. there's other things which i would hope there could be agreement on.

we have an agreement to reduce the impact of the offshore tax havens. that provision is in the farm bill actually that is now in confidence. if that stays in there. that is something -- and i hope it will stay in there, it's my provision. i hope it will stay in there, the right thing to do, i should have put that first. i wouldn'ten watt to limit the list, i'm sure there's a lot of things that could be agreed upon. it's not necessarily a sequestration plan? >> if you ask me, would i have a program that would avoid sequestration myself? i would, okay? am i talking to colleagues about it? i am. that's what you're asking me. >> you don't classify that as one of these easy confidence building -- >> you mean total solution? >> no, just -- >> if people could agree, if

there were significant bipartisan agreement on a plan to avoid sequestration, even if you couldn't implement it right away, if there was an announcement, here's a plan, had is what we're going to do in general ways, i think that would be a real confidence building measure, yes. >> thank you, next question. >> eugene, mr. chairman. congressional quarterly. when with the defense bill reaches the floor, that will be the first time any americans see it debated. can you talk about why it is the house can mark up the defense bill in public and you the committee marks it in public and would you ever consider marking up the defense bill in an open session. >> we have many cases where we have classified information that we talk about in the defense budget. it's too complex to clear the room every time we want to go in and out of a session.

it's a practical solution. the votes are all made public. the outcome is made public. the debate on the floor is made public. there are too many instances where we either contemplate having them classified or we actually talk about things which are classified for it to be a practical way to do thens. >> next question in the back? >> laura peterson taxpayers for common sense. senator levin, do you you agree with some of the comment that is general cartwright has made about the unnecessary size and expense of our nuclear arsenal? >> i do. >> next question. yes, go ahead. >> this is a question for the senator. the fiscal 13-year budget continues -- the house version called for the unfreezing of the budget. will you -- is the senator going to compromise the house -- or is

this going to be a major source of conflict? >> i can't say we're not willing to compromise on anything, since i've been putting in a plea for compromise on the sequestration. the answer is, of course, we're open to discussion and argument. this is one area where the senate -- where senators web and mccain and i particularly have felt that we are with on a totally unsustainable approach relative to certain changes in okinawa. and that before we -- before we make decisions on major spending, because there's a lot of spending involved here, that we have our long term strategy in places to where we want to go and what we want to do. that is not the case with the situation in okinawa, japan. mainland of japan and guam. we do not have that report, which we're waiting for. and it's a report which we believe we should get as to what

the future requirement is in that area, and until we get that report our feeling,we should not be committing large sums of money to improvements in guam or to other pieces of that puzzle. >> thank you, next question. >> compromise, always willing to talk. >> yes, go ahead. >> john harper. general cartwright, to what extent do you think merging u.s. cyber capabilities will offset the need for defense spending in other areas. also, i was wondering if you think, just reporting about olympic games and other u.s. cyber operations against eye ron that actually enhanced the u.s. deterrence posture. you talked about cyber capabilities, versus defensive ones. and senator levin wants to comment on that. that would be great. >> the emergence of cyber capabilities, both defensive and

offensive, part of what we're trying to make -- what i had, at least advocated for was that like missile defense, like the conventional capabilities that this nation has in the kinetic sense. that the balance and the utility of those activities and how they're put together and integrated in a way against the problems we actually have. not the ones we aspy to have or wish to have are critical. to ignore the emergence of the capabilities of missile defense. to ignore the emergence of the capabilities and defenses associated with cyber, and to continue to do everything else the same way we did it in the past doesn't make a lot of sense. i don't know that there's a one for one offset mind approach here, what you're trying to understand is, where does it fit in defense parlance it's called

fires. all of the things that you have in your quiver to be able to use, where is the utility? and for me, i only speak for myself. having defensive systems on alert rather than offensive systems gives senior decision makers time to make decisions rather than to react and recover from an attack. the things that we have against the threats we see in the future need to be more diverse in the transition from nuks lee ar which is atted very high end of warfare to general conventional forces. so, in other words, if the best we can do is, we have an airplane that can go drop a bomb, and the next thing the president has to drop a weapons that's not choices. from the standpoint of offense, i believe -- and i've said this publicly many times that we need

to have more offensive capabilities, we don't have to discuss what they are. but the elements that we have to have for them to be useful are that we are actually building them. number two, that we are, in fact, reviewing them, testing them, and understanding them. and number three, we're practicing with them. that's what builds credibility, which is the essence of deterrence. and if you can do those things, you don't necessarily have to did close the secret sauce, but people have to understand that you are willing and capable to use these things as alternatives in your case two nuclear weapons. >> senator, would you like to finish our conversation with your thoughts on cyber? >> yes, it's a huge problem, taking up a lot of time.

i think your question is, could a leak have an effect? i think that was the question. and the answer is, it could, but that does not -- cannot justify a leak. it can justify a speech. you know, the administration decides they want to declassify and make a statement about certain activity which previously had been classified. that's awe policy decision, which i hope people would understand and support. because obviously that decision was made in one the instances here, that is in the press. in the case of iran, this was not a policy speech that was made here. as far as i'm concerned, people that either leak that classified information or who confirm those leaks need to be appropriately dealt with.