>> secretary of the navy ray mabus, you said, "i had a lot of great days. since i became secretary. i got to do some of the coolest things on earth." what are you talking about? >> i get to do things like go see sailors and marines around the world and talk to them. i get to go out on navy ships and fly into them onto an f-18. -- on an f-15. i get to go out with marines and go through some of their training with them. i get to name every ship that is made for the u.s. navy. the best thing i get to do is to lead this group of extraordinary men and women who make up our armed forces today. i was in the navy over four

decades ago. i served a lot of good and dedicated people. we cannot touch the force we got today. we could not touch the skill, the training, the dedication. just to deal with those people on a day-to-day basis and deal with the sailors and marines and their families and to see the dedication and the skill level, to see what this generation of americans is giving to this country is the coolest thing i think anybody can do. >> how does this job compare with your time as governor as mississippi or ambassador to -- of mississippi or ambassador to saudia arabia? >> i have had an incredibly fortunate career. i have had some of the greatest jobs you can have in government. being governor of mississippi was an honor because my fellow citizen's elected me to that job i threw myself into it heart and soul. i worked on education and health care and jobs, worked on the

things that will benefit mississippi and are benefiting mississippi today 20 years later. saudi arabia will always be a great interest to us. it will always have a central role, and whatever happens in that part of the world, to learn about that part of the world and learn by living there, it has been invaluable. this job of dealing with the sailors and marines that i get to deal with on a daily basis, there's nothing to compare. you cannot beat it. >> you were on a cruiser when you were a lieutenant. give us one thing you took away from that experience that is still with you today. >> i was 21 years old. i reported as a lieutenant j.g.

i was responsible for 60 guys. they were all men. i was their mother, their father, their psychiatrist, there preacher, their best friend and their worst enemy. in terms of discipline. that is a huge change for a 21 year-old who came right out of school. it became, those years that i was in the navy, some of the most consequential of my life. it taught me the importance of making a decision and doing something bigger than myself. you had to be part of a bigger structure. the decisions you made did not just affect you. they could affect thousands of other people who were on the ship. i am not sure i would have done what i did with my life had i not been in the navy and learned some of those lessons at an early age.

>> what is one lesson you learned from being ambassador to saudi arabia? >> the one i took away was how important our diplomacy is and how important it is that our diplomats represent america. they are the face of america. they represent the values of america. and how you have to keep foremost in your mind that you are there representing the united states to the saudis, not vice versa. you are there to protect american interests, to push the view of america and what we stand for and not to translate the views of the country you are in back to this country. but second is oil and energy. it is something i've brought into this job. we should not be as dependent

on foreign sources of our energy as we are today. it was driven home very loud and clear. not only in saudi arabia but in that part of the world. >> the president talked about that in the state of the union message, about the navy and energy and all that. what are you going to do? >> i set five goals for the navy. the biggest of which is that we will meet these goals by 2020, that's all the sources we use -- by 2020, at least half of all the energy sources we use will be from non fossil fuel. we are too dependent upon either potentially or actually volatile places on earth for energy. we are susceptible to supply shocks. even if we have enough, we are susceptible to price shocks. when the libya situation started and prices went up $40 a barrel, that was a billion

dollars additional to the navy. $1 billion additional fuel bill. the only place we got to get the money was operations and training. so our ships steam less, our planes fly less. we train our sailors and marines less. we would never give these countries the opportunities to build our ships or aircraft or ground vehicles but we give them a vote on whether the ships sail or the aircraft fly or the ground vehicles operate, when we allow them to set the price and a supply of our energy. we have just got to move away from it. we're moving away from it for one reason, because it makes us a better military. it is a vulnerability that we have to shut down. i will tell you one more story. the marines, who are not known as the most ardent environmentalists, have embraced this in a way that is just astounding, because they know that we import more

gasoline and water into afghanistan than anything else. for every 50 convoys, we lose a marine -- either killed or wounded. if we can make energy where we are, we can use less energy, the marines are doing things like solar panels for their headquarter tents, silver -- solar blankets about this big that can power small electronics or radios and gps, saves almost 200 pounds of batteries for a marine company. plus you do not have to resupply them. it cuts them away from their supply lines. it makes them better fighters and it lets them do what they were sent there to do, which is to fight, to train, to engage, to rebuild instead of guarding convoys of fuel.

when you turn off a generator, you can hear far better in terms of what is going on around you. >> what would be the source of energy than if it will not be fossil fuel? >> expeditionary energy like the marines were doing solar and wind. at our bases here, the navy has 3.3 million acres of land. 72,500 buildings. we are doing solar. we're doing wind. we're doing geothermal. we're doing hyper thermal. -- hydrothermal. we are doing the wave and a lot of inefficiencies. we're not just doing the same thing, but using a lot less energy. we're putting smart meters to find out where energy is going. we just made the largest purchase of biofuel we think in american history. we have certified all of our aircraft that the navy and marine corps fly. for biofuels. we are doing the same thing with

our surface fleet today. we have an f-18 that has flown 1.7 times the speed of sound using a 50-50 mix of biofuel and aviation gas. >> what is biofuel? >> we're looking at second and biofuels, made from algae, made from camalina, nedible part of the mustard family. part of the purchase came from

inedible grease from tyson foods, from chicken we do not have a specific technology in mind. we just need the energy. >> you have not mentioned nuclear. >> we are 17% nuclear already. we are happy with it. the navy has led this country in changing energy for a long time now. in the 1850's, we went from sail to coal, then coal to oil. then we were one of the first people to ever use nuclear power for transportation and now they're changing it again. every time from the 1850's to today, you have naysayers. they say you are trading one form of energy that you know about that is predictable for another that is not and you should not do it. every single time they have been wrong. i am confident that they will be wrong again. >> give us the numbers. i have some here about the size of the navy and the marine corps.

as secretary of the navy, what is under your responsibility? >> i have about 900,000 people, sailors, marines, reserves. and civilians. there is a budget that is in excess of $160 billion. it is a big organization. but it is the most formidable force in the world. the navy and marine corps is america's away team. when we are doing our job, we are a long way from home. >> can you remember the first time somebody said you should be secretary of the navy? >> i do not. i will say that i think the people on my ship were probably the most surprise people in the

world. >> how did it come about? >> i was approached during president obama's transition. >> what were you doing? >> i was in the private sector. i had just finished being ceo of a company. i had been working in the private sector since i have been ambassador, and living in mississippi. i had a great life raising children. i was approached asked would i be interested in returning to government. >> you had been an obama supporter? >> i had. >> did you campaign with him? >> i endorsed him in april of 2007. >> why did you do that? >> i thought he'd be a great president. >> where did you first meet him?

>> we met here. we have mutual friends. i had a couple of long talks with him and what sort of -- with him about what his plans were for america and what sort of campaign he'd plan on running. i thought with his combination of brains and ability to get things done that he would be one of our truly great presidents. and i have not been disappointed. i did 300 events for president obama during the campaign. >> did you think during that time that you might want to be secretary of the navy? >> i did i do that for that. -- i did not do it for that. i did that because i thought he might be a good president. and frankly, i had no idea that anybody would ask me to come back into government. it had been a while since i had been in government. i had done a good job.

i like to the decision to are -- i like the decisions you are able to make in the things you're able to do. i love the military. when i was in and governor of mississippi, i was in the -- i was commander in chief of the national guard. when i was ambassador to saudi arabia, there was a big military presence there. i went out to carriers all the time that where in the arabian gulf or red sea. when i was ambassador, there were a lot of american troops on the ground from 1994 to 1996 in saudi arabia. but i had this love of the navy and this love of what the navy, the marine corps does for this country. i was asked if i had a preference. this is a preference. i gave a strong preference for this.

>> i want to run a video clip of bob gates, the former secretary of defense when you were there. he was speaking at west point. i want to get your reaction to what he said. >> the army must confronted the -- must confront the reality that the most high end scenarios are primarily air and naval engagements. whether in asia, the persian gulf, or elsewhere, the strategic rationale for swift meeting -- swift moving expeditionary forces, be they are made or marines, airborne infantry or operations, it is self- given the likelihood of terrorism, a disaster response, or stability or security forces, in my opinion any future defense secretary who advises the president to send a big land army into asia or into the middle east or africa should have his head examined as

general macarthur stood gently -- so delicately put it. >> your reaction? >> we have been proving that we are the most formidable expeditionary fighting force in the world. i think when you look at the new strategy that the president announced and that secretary panetta has been speaking about that we have been working on for a good while to focus on the western pacific and the middle east and being fast and agile and light and being able to get places fast and when you get -- and being able to win when you get there or do a range of missions using the same people of platforms, you are describing the united states navy and marine corps. now, i do want to say that we

have got to have a great army. we have got to have a great air force as secretary gates said. but the maritime challenges, we can go anywhere by sea. we can do anything when we go there. we do not take up an inch of anybody else's territory. we can project power into -- and do everything from high and combat to disaster relief and humanitarian assistance to irregular warfare to engagement. as we are focusing on the western pacific, as we are focusing on central command. we cannot not engage in africa or with europe and do training, do exercises, do the things you do to prevent something from happening to make sure that you know the people that you're

dealing with. for a lot of people around the world, the only the americans they ever see our sailors or -- our sailors or -- our sailors marines. >> why do we want 25,000 marines? in australian. >> we do not. it is 25 under. -- it is 2500. >> it is 2500. >> i thought it was 25,000. >> when you say a rotational force, they will not be based there. we will not build a big base in australia. the marines will come in into -- and do training, and do exercises with the australians and allies and get back on their amphibious ships and go throughout the pacific. during training, doing engagements, disaster relief, humanitarian assistance. we got a request for humanitarian assistance or disaster relief about every three weeks somewhere in the

world. our navy and marines are the first responders do that in almost every case. we are not going to move 2500 marines and their families and everything there. they will be in a rotational posture, but they will be deployed in the area where they need to be and where they need to engage to do the things that they need to do. along with that, one of the things that secretary gates said, we have known that the marines have been used as a second land army for a decade. they had been magnificent. that is not the purpose for the united states marine corps in its history or going forward.

>> how many active marines do you have? >> 202,000. >> how many are in afghanistan? >> we have about 18,000 there. it was 20,000 at the peak. a few have left. >>your point about these expeditionary forces, but the use of rescue -- why does this country spend the kind of money it spent to rescue the one woman in somalia and the one danish man that was an involvement with the seals team 6, plus the army and the helicopters. they jumped in. what if we would have lost people? was it worth it? >> i think what our job is to give the president the option to do that. when the president makes a

decision that it is worth the risk, and this president has been willing to take risk and to go after things that osama bin laden, this rescue, and you can keep naming them, but when whoever the president is want to make a decision, what ever that decision is, it is up to us to give him the options to be able to do it. this president has that option to go in and use a completely joint force -- navy, army, air force, marines -- that are finely honed iand can do missios like this.

and i think if you ask them, they would say it was not that much of a risk. they know exactly what they are getting into. they are the finest trained, highest skilled people that you will ever hope to meet. they are almost all very low key, very family oriented. they are quite a tribe of warriors. one argument i have made is that as high as the skill level is for the seals and the other special forces, as great as their dedication is and as willing as they are to take risk and as many sacrifices as they made, that is the same level we've got all across our military. particularly the navy and marine corps. >> you are a former governor, the president is a former senator. here's a little politics. see what you have to say about this. >> the most extraordinary thing that has happened with this military is the president is

planning on cutting $1 trillion. our navy is smaller than it has been since 1917. our air force is older than any time since 1947. we are cutting our troops. we're not giving the veterans the care they deserve. we cannot cut our defense budget if the war remained the help of -- if we are going to remain the hope of the earth. i will fight to make sure america retains military superiority. >> reaction, sir? >> factual reaction. number one, we are cutting $487 billion over the next four years. we are not actually cutting the amount of spending. we are slowing the growth of the amount of spending over the next 10 years. secondly, that number that we had the smallest fleet since 1917 came from our chief of naval operations last year. in front of the senate. we have been saying this. but to measure the capability of

today's ships versus those of 100 years ago is like saying the superiority of a smart phone is to be questioned because we do not have as many of those as we did telegraph machines 100 years ago. these are incredibly capable ships. the final thing i would say is that on 9/11, the u.s. navy had 316 ships in the battle fleet. when i got there eight years later, we had 283. so in one of the great military build ups that america has ever seen, the navy got smaller during that time. -- we were not building enough ships to do what we needed to do. we have put in plans to congress. we have been implementing those plans on year to year basis to

stabilize the size of the fleets and overtime began to grow that fleet. but we have the ships in the navy that we need to be a global force. we have the ships we need to execute the strategy, we have the ships and the people to do everything we need to do for america. i talked to captains and structural commanders before they go out. the only thing that is certain is that you will face something unanticipated. and you have to rely on training, your innovation, you're still to meet it. to meet it.l this administration has been --

the other thing that bob gates said in a speech about a month earlier was that the united states navy was in the best shape it had ever been under this administration. and we are committed to keeping that. we are committed to stabilizing the fleet, but doing so at an affordable cost and at the quality, the types of ships that we need. >> what is the chain of command? the secretary of the navy answers directly to -- >> the secretary of the defense. and you do not answer directly to the president? >> through an anomaly in the law, the secretary of the navy answers directly to the president, but i am not sure it has ever been exercised. i could not ask for a better

working relationship with secretary gates or secretary panetta. they are both incredibly bright, incredibly focused, incredibly dedicated people who understand what it takes to protect america. as i said, i could not ask for a better working relationship or a better arena in which to work. >> what does the secretary of the navy not have? under the law, can you tell the chief of naval operations what to do? ? >> yes. >> what? >> here is the way it works. chief naval operations report through me. they are also members of the joint chiefs of staff who are directly and buys the -- who directly advise the secretary of

defense and the president. three service secretaries, navy, army, an air force, are charged to recruit, train, and equip the force. the central command, the pacific command -- they're the ones that control the ships at sea, the troops on the ground, or whatever. it is the service secretary's responsibility, and the service chiefs to get the people, the equipment, to buy it, to do the budget, to train, to recruit, to get the force ready, and then, acting on the orders of the president and the secretary of defense, when combat commanders

request troops or when the president orders troops in, to have them ready. >> we found this video from the marine corps. >> with the holidays around the corner, mr. ray mabus has taken time to travel around afghanistan. >> i am here to see marines and sailors. i'm here because it is the holidays and they are away from home and away from their families. i'm here to see what they're doing on the ground here, how they're doing. and if there's anything they need. >> it is the best expeditionary fighting force in the world. >> it is important to show people that the whole country remembers them and wish them well on the holidays. >> there is one message he wanted to give up. >> happy holidays, marines and sailors.

come home safe. >> the plane you are on there. >> b-22. osprey. >> it is very controversial. where does it stand now? how many are you going to take delivery on? >> it was controversial about a decade ago. it now has a great safety record. it gives the marines and -- an astounding capability. it can get you in and out of places very quickly like a helicopter and then gets you some place else very quickly. >> it carries how many people? >> full load, it fits about 25 marines in the back. that is with all their gear. it gets them out a danger very quickly.

from the ground. it gets them in very quickly. it gets them from place to place. they can land on ships. marines are going to go back to their nautical routes. but i think that is an example of a program that did have some problems in the beginning. those problems have been corrected, and the marines are planning to buy the whole program. they're getting close to doing that. with the osprey. but i would like to make a comment on another part of that clip, which is exactly what i have been talking about with those marines. i think the place that i was speaking to the marines was one of the combat outposts, a small river valley.meut

they say marines are not really happy unless they are dirty and living outdoors. these guys and women go in for seven months. they have been extraordinarily successful as a military operation. and they have also been very successful in terms of engaging with the local governor, the local police, and the local army beginning to train the afghans to take over. and when you visit, as i got to do -- the thing that the clip did not show is after i made the talk, i answered questions, shook every hand, and talked to the marines individually. everyone of them -- every one of

them, every person can tell you the history of the region, can tell you exactly what their objective is. the marines have something, the strategic core. every corporal ought to know what his job is and how it fits into the bigger picture of the marine corps. a little factoid -- the marines are our youngest force. there are our flattest force. most jimenez and four years in and go back home and do other things. 500ceo's of fortune companies, 163 of them are former marines. most of those were enlisted. so the marines teach leadership, and they go out and practice it. >> you have said that three of four americans 18 to 24 years of

age do not qualify for the navy. >> do not qualify for the military. that is absolutely correct. 75% of american's 18 to 24 not because of health issues, mainly obesity, because of criminal records, or because of education. we do not give waivers very often at all, if at all, for education. you have got to finish high school before you can join the navy or the marine corps. we do not if you have a criminal record. marines have to shut off recruiting halfway through the year because we have so many people ready to join the marine corps. the navy also has record recruiting and record retention, once people are in. it is a really frightening thing.

it is a statistic that we have got to reverse. three out of four of our young people cannot qualify to defend the country, to have the honor of defending our country. i think that we have to make sure that we did a goes back to what i worked on as governor. that we have a great educational system for everybody, not just for a few. that we worry about stuff like obesity. we have a great future. we worry about things like obesity like the first lady is doing. we cannot maintain a great military indefinitely. we cannot maintain a great country in definitely unless we fix some of these intimate -- endemic issues like three out of four young people cannot qualify for the military. >> how old are your three daughters? >> 21, 19, 10. >> have the others to thought -- have the oldest two thought about going into the service? >> they have talked about ways to get back to the country.

whether that is military service or something like teach for america or americorps or some other way, you will see my other two daughters give something back whether it is the military i do not know. i also do not think it matters how you give back. >> here is one of the big critics of the military. let's get your reaction. >> the 11 aircraft carriers are part of our national self interest -- seth image -- self image. i think that is about to change. if iraq and afghanistan have taught us anything, it is that we are fools to be doing these kinds of things in these countries, occupying them and thinking that we are doing them some kind of favor. my expectation is that along

with the change and the vector of the defense budget in the next few years, we're going to see rethinking, just what do we think we are doing out there? what do we need to do to help us what we need to? one of the answers is going to be the aircraft carriers. >> is he right? >> no. secretary panetta announced two weeks ago when he was on the uss enterprise that we will keep the 11 aircraft carriers. there is a law that says we have to have 11 aircraft carriers. as a matter of strategy, we're going to keep a 11 and 10 aircraft wings to go on the carriers. that is exactly what we got today. he was mixing apples and oranges. one of the things that our strategy says is that wewe will be able to project power and the fast and agile and aggressive where we need to be.

we need to be flexible. the carrier is one of the most flexible platforms that we have. he was also talking about ground war in iraq and afghanistan. at the same time. in your clip from bob gates. but also the strategy talks about how there will be less emphasis placed on long-term ground stability operations in military terminology. we will not have an emphasis on stability operations. but we will on being able to project american power and in a flexible, agile, a small footprint sort of way. those 11 carriers give us just

an astounding array of flexibility. last spring, the uss ronald reagan was heading to do combat air operations over afghanistan. when the tsunami hit japan. that ship change course in a matter of hours and headed to help the japanese. they used -- i went and visited them a couple of weeks later, visited the sailors and marines that had done that. they used the same targeting techniques that they were going to use in afghanistan to do disaster relief, humanitarian assistance. they made sure the right stuff got on the right aircraft, the right sequence, going the right place by using those targeting techniques. they went from doing a very high combat mission to doing

humanitarian assistance relief on a dime. they just turned, did it. when the mission was over, they went back and did the combat. >> as you know, there are three aircraft carriers in the planning stages, one of them is being built. the one in 2018 will cost $13 billion. >> well, the jerry ford will be 78. john f. kennedy will be 79. we have not even gotten to 80. >> those are $10 billion at least. >> as you pointed out, the ford is a brand new class of aircraft carrier. it is different. plan, when this came

up in the late 1990's, early 2000's, was to put this technology on three ships, to incrementally change the ship. the secretary offended -- the secretary of defense in 2002, secretary rumsfeld, said we're going to do it on one ship. when you do that, you raise the risk of problems exponentially. it just goes through the roof. you have a new launch system, .ou have a new power plant you have a new hold shape, you have a new island. that contract was supposed to be signed in 2006 because of all the stuff that was going on. they were trying to jam it all into one ship. that contract was not signed until late 2008. when the contract was signed,

the ship was only about 30% designed. that is one of the things that has been one of the things we have focused on the most, is before we start building ships, we are going to have to have a stable design. before we build it, we have to have a mature technology. we will put it on the next version of the ship. we will not put it on that ship. and we will try to give industry some view into it. but the cause of trying to jam all that stuff in, there have been some cost overruns on 78, on the ford. we are focused very precisely on bringing those, on capping that. there was an article in the

paper yesterday, or very recently, that said that the builder of that ship was going to make no profit because of these overruns. >> is it a fixed-price contracts? >> it started out as a cost- plus. and while i insist on fixed- price contracts in every situation, the first is usually impossible to do. quote we have done is just cap things. we're not going to spend more than this. it is your money, and you are not earning any profit on it. now all you will be getting is the money that it is costing to build the ship. but there were things outside of the shipbuilders' control. >> who is building it? >> huntington engels in norfolk.

i think that, while we need, have got to have a very strong defense, industrial base, very strong defense industry, and we've got to maintain that industrial base -- in r&d, engineering, and manufacturing -- but once you take on that sort of thing, we are going to negotiate a contract that is fair to the taxpayers. we are going to negotiate contract that requires you to do certain things on time, on budget, or the taxpayers will not be there to pick up the tab. >> let's go back to personnel, word carrier from the -- >> those people on reserve status who are in an active duty, they were told we do not

need you, you can go home. that kind of thing is already happening. the other thing is, promotion requirements will get more stringent. so guys who maybe would have been advanced in previous environments will not be this time. and failure to advance is reason to get shown the door. so it will be tougher to stay in, and those who would have liked to have made a career may be forced up. >> any time you get smaller, that happens. >> how much smaller will the navy be when it is over? >> what i was going to point out is that the navy has come down over 40,000 sailors in the last 10 years already. if you lose those ships we have talked about, you also lose the sailors that man those ships.

i think you will see the navy pretty much the same size. you will go up and down by a few thousand. in the 320,000 range. we are i think at 323,000 today, more or less, not counting the reserves. but we are already having to do in listed -- enlisted retention boards and officer retention boards because our reenlistment rates are so high. it was beginning to clog up. people were not getting promotion opportunities. we have gone through two retention boards, one officer retention boards. we have gone through readings

that are overmanned. if they did not take the opportunity, these boards just went through record by record and selected people to separate from the service based on merit, based on how good sailors they were. they are all great sailors, but it was simply we have got too many, we have got too many at this level, we've got too many in this rating, and these are always hard. they are always difficult. but the military, more than any other organization i have been in, promotes and manages people based on merit, based on the job that they do. now, the marine corps -- and i have said this publicly, i said

it publicly last spring to congress -- we know the marine corps has to be smaller because they had a surge of 27,000 during the surge in iraq. they increased the number of marines by 27,000. we know it has got to go back down. the marines will end up at 102 and eight -- and 182,100, where they will be slightly larger than they were after 9/11, but they will be a completely different marine corps than they were on 9/11. because the marines, if they looked at how to come down, they did not just say we world -- we will take a percentage off, they said what marine corps do we need for the future, and they built one from the ground up. so you will see more marines in

certain areas. you will see more in special operations, enablers. you will see more marines in some highly critical things, and the marines will get lighter. they are going back to sea, to be that expeditionary force in readiness, to be able to get something fast and win when they get there. >> how big -- i should not even use the word -- of a threat is china? >> the secretary of defense has said this. what we would like to do is -- we do not fear the rise of china or india or brazil or any of a number of countries that are growing, coming up economically, militarily. now, that is not the issue. the issue is transparency.

why are you building the types of equipment, buying the type of military things you are buying? we would like to work together on this. it is in everybody's best interest. >> they have what? they have had half of an aircraft carrier? >> they have an old soviet -- i may be wrong -- an old russian aircraft carrier that they have now got at sea. we will see how that works, but they are clearly moving into this area, and in terms of whether aircraft carriers are valuable or not, i think that is a pretty good notion, that other people think they are valuable. >> every time you see the figure that our military is 10 times bigger, bigger than 10 of the other navies in the world -- why

should we have that big a military, given the condition of our financial system? >> number 1, we are the only country that has a global reach, global responsibilities. i think it is crucial that we keep that global reach. the world economy depends on the oceans, and 90% of all goods flow over the oceans. 95% of all communications go under the ocean. i think we have got a responsibility to do that, to be that global navy, to be that global military power. but i also think that we have got a responsibility to spend taxpayers' money wisely. the military cannot be exempt from this drop down, and i think

this new strategy points that out. that is what the president, secretary panetta has been talking about over and over again, the need to get value for your money. i would give you a very navy example here. when i came into office, we got a new type of ship, a combat ship. when i got there, we had two variants, one of each kind in the water, one of the kind being built. the prices that came back were unacceptably high. we could not afford it. the first ship of the class, you can understand the prices being hire. >> $5 billion or $6 billion. >> no, no, it was in the $700 million range. you made my heart stop there.

but i made the decision that these two variants were going to have to compete against each other, even though we wanted both variants and we had a use for both variants. over the next year the prices came down dramatically, 40%. i went back to congress, and congress gave me the ability to, instead of -- the first plan we were going to buy 10 ships from the winner. they were going to give us all the drawings, and we were going to bid out the next year. congress gave me the ability to buy 10 of each. so we got 20 ships instead of 19, and we saved $3 billion. we did it on firm, fixed price contract. the last ship will cost $350 million. so the last ship will be far cheaper than the first ship. that is the sort of thing we need to do, that is the sort of

thing in terms of managing the keeping ouroney, global responsibilities, but doing so in a way that is fiscally responsible, that is flexible, that these are ships that are modular. we are not going to have to build any ships for new weapons systems. they're very fast, they can go in close to shore. their platforms for undersea, the air, on the sea. it is a future that is affordable, and it is a future that is no less capable. >> i would -- i think i was talking about is sumwalt 4000. here you are maybe 23 years ago. >> my status is about to change.

i was reminded of that pretty graphically at a grocery store a few weeks ago. even governors go to grocery stores, and particularly future former governors do. i noticed she was looking at me and trying not to be obvious, but something was on her mind and she finally got her courage up and she came up to me and said, "didn't you used to be ray mabus?" [laughter] i said, "maybe." when you lose, you have got to be able to laugh. you have to have a sense of perspective. in the last eight weeks i have certainly been given the opportunity to develop one. >> it actually was 20 years ago.

any desire, when you lost the races for the governor of mississippi, to run for office again? >> not really. as i said, being governor of mississippi was one of the incredibly high honors of my life. i was elected by the people of mississippi, by the people i lived with, and i think i did a good job. i think mississippi is different and better because of some of the things that were put in place during that time. but i am very, very happy doing what i'm doing, and i am very, very happy in terms of being able to work with the military, being able to work -- i have been talking about the sailors and the marines, and i do not see any political races in my future. >> can you, as secretary of the

navy, campaign? >> no, i cannot. >> frustrating? >> no. as i said, there are a lot of cool things, great gent -- great things about this job, and i really mean this. one of the great things about it is that it has to be non- partisan. it has to be the interest of the military and the interest of america and not the interest of a political party. i think you see that in the service secretaries. i am a former democratic governor of mississippi. john nicu, the secretary of the army, is a former republican from new york. mike conley was appointed by george w. bush. it is one of the places in washington where party lines, we work across those.

in fact, you don't know that there are party lines. that is one of the great strengths of the american military. they are not partisan. they are there for one reason, and that is to protect america. i am just so happy to be part of that. >> ray mabus, secretary of the navy, we are out of time and i am glad you joined us. >> glad to see you. >> for a dvd copy of this program, call 1-877-662-7726. for free transcripts, or to give us your comments about this program, visit us at q-and-a. org. >> next, live, your calls and

comments on "washington journal." then, our live gavel-to-gavel coverage of the house of representatives with general speeches and legislation beginning at 2:00. >> tonight, "the communicators," development and to medication, technology, policy, this week with the head of mercedes-benz cars. and toyota's vice-president for technology. they will discuss voice command, car safety, in some cases aiming for crash-free cars. "the communicator's," >> this morning, scott hall, from the alliance of manufacturing, discusses manufacturing, jobs, and what they consider unfair trade practices by china. then ed whelan, president of