to, as far as halliburton and everything like that goes, my question is why were you not on the front lines going against that? i will tell you a little story about something that i heard from two kids that went and actually served in iraq. one served for three to wars, one served for two. the point i'm trying to make is that when you talk to the people on the ground, one of the troops over there fighting, what the people over there want is what we have here, and that is freedom. [applause] that is what they want. they want to be like us.

it makes this discussion go way overboard when you put down this country. there are plenty of things wrong with the country, but there is outweighed by what is right with the country including our boys going over there and fighting for those people because those people want what we have. they will always want that. whether they were put down by a tribe over there or not, that is where they are at. [applause] >> mr. to sousa, your balanced and broad historical perspective shows how important immigration is to this country. people like you are the future of america, not the jaded and clichéd blame america for everything tight. i hope your friend gets a visa. why is there such a consistently hypercritical view of america and the west and the right in

our high schools, college, and media? [applause] >> my question is for mr. ayers. i have read a lot of your writing and i would like you to comment on what we can do as activists to help prevent the handing over of public education to corporate interests and testing agencies. [applause] >> if there are no more questions, i would like to ask mr. ayers to give a brief conclusion of his remarks. >> answer these questions at the same time? >> in five minutes, can you do a little overview? >> you start. [laughter]

>> sure. i'll start. i remember before i came to america, on the outskirts of mumbai, there were a group of, i think they were yale anthropologist who would come to india to study the local people. they set up tents and of zoom lens cameras and they were recording those and they were basically recording the lives of the slum dwellers outside of bombay. slum dwellers would come up to the anthropologist and say, i want your jeans. i want your camera. and it's a, oh, no, that is a very simplistic point of view.

you unfortunately inside the prism of ethnocentrism. we're not here to affirm the superiority of western culture. your culture is just as important from your point of view as ours is. clearly, these were veterans of sociologist classes at the ivy league and the slum dwellers would say, yeah, but can i have your jeans? can i have your camera? no. what am i talking about? there is a one-way movement in the world -- away from agrarian, impoverished societies of people who are grinding and eking a living out of the ground, people who were living in the rest of the world the way they have lived for millennia. all of those people can now see that there is a better, more prosperous, more abundant way to live with more possibility and it is nothing short of shameful to go around lecturing those people on what they should want from the benefits of western privilege, enjoying all these accoutrements and telling them, it is a disgrace and you have no right to do it. those who want what we have, and frankly, they do not want our

generosity. this is probably the greatest insult of globalization. the chinese? we don't need you. we will become the manufacturing center of the world. send all of your aid workers home. this is powerful stuff. they have learned our recipe. here is my point -- here we are. what to be in the middle of the 21st century? don't sit around saying, we did civil rights, we did feminist rights, we have done gay rights. whose rights now? you can do that. that this country on the top of the world will be sliding right down to third or fourth status and other countries will come up and take our place and those will have the kind of power that we have had since world war ii and it will be a very different world and it will be a little

bit of a tougher world because those are people who believe in wealth creation but they also leave and conquest. we cannot expect them, when they have our power, to achieve our priorities. i assure you that the rise of the east, the rise of asia, is going to mean not only the end of a lot of western priorities, it is going to be the end of progressivism. why? many of those countries want modernization, yes, westernization, no. what america still has is the gift of the world. let's talk about coria. isn't it wonderful that south korea is a free country? north korea isn't. at the united states not fought the korean war, it is very possible that the north would have engulfed the south. [applause] we would have a dictator who just killed his uncle putting people in mass graves. that is the world we live in. sitting around talking about multiculturalism when we are

living in a real world where there is a north vietnam and a south vietnam and the north overran the south. the world is still the way it is. look, i am optimistic about america because it seems to me not that america does things right all the time. we do things wrong a whole bunch of the time. we do try. we do try to live up to ideals that remarkably were there at the beginning. there is no new ideal that we have invented. the principles were always there. the founders didn't envision abortion, but they did envision privacy. he didn't envision the nsa, but they did envision unreasonable search and seizure.

they didn't envision civil rights, but they did invention equal rights under the law. that is right there in the fifth amendment and that is right there in the civil war in the 14th amendment. the constitution can be amended. there is a process to amend it. that is my point -- if you want to change the constitution, follow the law. follow the process. don't sit around and say, jefferson thought it would be great to do it every 20 years, therefore we get to a point where supreme court justices will ignore the constitution says and do what it should say. there will be a time when the supreme court will be controlled by the other side and they will do it to you. even though we respect with the

constitution says, if we want to change it there is a way to do that. ultimately, i think america remains the great defender of wealth creation. the 20th century, america invented the airplane, america did not invent the car but it mass-produced the car. america invented the computer. the whole information revolution of the late 20th century and early 21st century. america played a critical role in creating possibility, and i'm not talking just about chinese people or indians who can, who do not have to go to the beach to wash their clothes. their lives are transformed. the have the sense of possibility that you have here. they're thinking, how do i get

my kid to dartmouth? that is the summit of their aspirations. i am saying, let's make it possible for them to do it. let's realize that we have a great formula and let's fight, be community activists, not just to redistribute the pie, but to widen the pies. thank you very much. [applause] >> the national geographic did a study some years ago of 18-25-year-old american kids. they asked him to identify countries on a blank world map. 80% could not find a rock. 80% of american young people could not find iraq. 80% could not find israel or palestine. for two percent could not find invalid and 10% could not find united states. that one makes us laugh but the others, not so much. it is hard for americans. does what american exceptionalism leaves you with. it leaves you with a sense that you we are the center of the universe and everyone should be like that.

what is not exceptional is that not everyone feels exceptional. the idea just seems to me like a fool's errand. why would we argue that we are the most important and everyone else should what, bow down? the thing about american exceptionalism and the thing about the history that dinesh brushes past is that it is a false construction. the history of the slave owners that founded this country, they really didn't want to have slaves but they did it because it was necessary to found the union. that is an invention. there is no truth to it. look into the history and understand it. the idea that there are people out there lecturing people on what they should want in other countries -- who? where are those people? the people lecturing on those who want our spending billions of dollars to invade those countries. that is ridiculous. you talk about iraq, 80% of iraqis wanted us out within two years. very typical of invading occupying soldiers everywhere, you can hear almost every week some soldier in iraq saying that we didn't accomplish everything, but when we got here there was nothing here. nothing? in the cradle of civilization? it is an arrogance that drives

us the wrong way. it is an arrogance that is not only foolish but deadly. the country as it is is a massive contradiction as i said. it is rich with beauty and also wishes with human denial. it is a place that both drains us and replenish us. the tools are everywhere. i often say that the bumper sticker that says if you're not pissed off, you're not paying attention. it is a good bumper sticker. you should be a little pissed off that are the things that are out of balance that can be fixed. it is only part of the equation. the other part is love and generosity. we are in a society that asks us to be greedy and small. and

should fight. the recipe for activism is to dive in, to be astonished, to do something and to think. if you repeat that for a lifetime, you will discover for yourself what is great about america. i want to say one word about education. the situation we are in with education is catastrophic in this country because we have construct did education as we have constructed health care, food, housing and a lot of other things, as a market, nothing more, nothing less. i don't buy that construction. i think education is a human rights. if it is a human rights, then everyone has access to it. that is how we should view it. if it is a market, then handing it over to private entrepreneurs makes perfect sense. and reducing it to a test score

as if that is what makes a perfect person. we should resist that and resist it with a view that education in a democracy, if it is anything at all, it is based on the fragile believes in the incalculable value of every human being. what the most privileged and wisest parents have for their children, we as a community should want for all children. we should demand it, we should insist on it, and we should build a movement that makes good quality education a reality for all. thanks very much. [applause] thank you very much. that concludes the debate for the evening. we ask you as you leave to take a look at the tables we have outside. i think both guests will be selling books. if you're interested in speaking with them or getting an autograph, please stop by. thank you. >> defense secretary chuck hagel

today announced plans to reduce defense spending. you can see his news conference with the joint chiefs of staff at 7:00 p.m. eastern here on c-span. here is what he had to say about reducing the size of the army. >> we seek a highly ready and capable army able to dominate any opponent across the full spectrum of operations. to achieve this, the army must accelerate the pace and scale of its postwar drawdown. today, there are about 520 thousand active-duty soldiers, which the army had planned to reduce to 490 thousand. however, the strategic choices and management review both determined that since we are no longer sizing the force for prolonged stability operations, an army of this size is larger than required to meet the demands of our defense strategy.

given reduced budgets, it is also larger than we can afford to modernize and keep ready. we have decided to further in strengthe-duty to a range of 440 active-duty soldiers. i have also instructed termination of the ground vehicle row graham and redevelopment of the funds toward developing a next -- program, and redevelopment of the funds. i have asked me army entering court to deliver realistic vehicle modernization by the end of this year. the change would result in a smaller army but would help army remainede well trained and clearly superior in arms and equipment. while this smaller capacity entails some additional risk,

our analysis showed that this force would be capable of decisively defeating aggression in one major combat theater as , while also defending the homeland and supporting naval air forces engaged in another theater against an adversary. the sequestration label -- level -- the army national guard and reserves will also drawdown in order to maintain a balanced force. today, the army national guard anders maintain about three a 55,000 soldiers and reserves about 225,000 soldiers. by 20 -- by 2017, there would be 335 -- 330 thousand soldiers in the army national guard and

190,000 in the reserves. the army national guard would continue driving down further to 315,000. army reserves were drawdown to 185,000. we have protected the national guard and reserves from cuts to the extent possible, but in order to maintain a ready and capable force at a time of fiscal constraints, no component be entirely exempted from reductions. this five percent recommended reduction in guard and reserve than the 13%maller reduction in active-duty soldiers. i am mindful that many in the resort of -- in the guard and reserve community and in congress have argued that the reserve component should the protected from cuts because they provide more troops at lower cost. if our priority is having the largest possible force in the event of a large-scale prolonged that would be reasonable.

however, our defense strategy calls for more than that. surge capacity is just one factor, as we must try organize readiness, capability, and agility, and while it is true that reserve units are less expensive when they are not mobilized, our analysis shows ist are reserve units roughly the same cost as an active duty unit when mobilized and deployed. performed well in iraq and afghanistan. but experience shows that specialties requiring grade of -- greater collective training should reside in the were theseorce, capabilities will be more ready and available to commanders. >> you can see the entire news conference with defense secretary chuck hagel and the chairman of the joint chiefs of

staff in about 40 minutes at 7:00 p.m. eastern here on c-span. quake c-span, we bring public affairs events from washington directly to you, putting you in the room at congressional hearings, white house events, briefings and conferences, and offering complete gavel to gavel coverage of the u.s. house, all as a public service of private industry. watch us in hd. like us on facebook. follow us on twitter. nation'sl of the governors met with president obama today at the chamber of commerce headquarters across from the white house. former republican -- four spoke aboutovernors the meeting. this is 40 minutes. >> good afternoon. i want to thank everybody for coming. i want to make some brief

introductory remarks. then i will turn it over and then we will be happy to take your questions. we obviously just concluded our meeting with the president at the white house. we want to thank him for inviting the governors to come meet with him. i will say this. the president talked about using his pen and phone in terms of going around congress and taking unilateral action when they won't act. i wrote an op-ed today outlining specific things the president could do with he was serious about growing jobs. what worries me is that it appears that after more than five years of being in office, the president is waving the white flag of cement -- of surrender. it seems like the obama economy is now the minimum wage economy and america can do better. growth of three percent is not enough. policies like the minimum wage

increase, that will destroy another 500,000 jobs, not good enough. the cbo estimate that because of obamacare 2 million americans will leave the workforce, that's not good enough either. i had a chance to ask the askedent a question and i some of the specific things from that op-ed, for example, increasing domestic oil and production. the president likes to take gasit for oil and production going up. it has gone up on private lands. it has gone down on public land. breaking a monopolies on k-12 education and some other things the president can do if he was serious about using his pen and his phone. action he could take today. it could create hundreds of thousands if not millions of jobs in our economy. the most important point i want to make about the meeting with

the president and the contrast between his policies and our approach is that it is increasingly evident that the obama economy is a minimum wage economy. it is increasingly evident that this white house is waving the white flag of surrender when it comes to growth and opportunity. better thanrves that and america can do better than that. >> we all came back, and we do certainly appreciate that the president was willing to talk to the governors, but i am more convinced now than ever that he truly believes government is the answer to creating jobs. when we look at the fact that he is talking about raising minimum wage, what we are all feeling in our states is the effects of obamacare. employers are now looking at arecing the hours employees working and minimizing the job force. the focus needs to be what works for the private sector. he continues to go back to the

government, and truly believes that. every year we have been there, the governors have asked for increased flexibility. give us flexibility. if you look at the governors and what the states are doing now, we are doing so much more in the states than they ever get done in d.c.. we can do that with more flexibility. bobbie brought up flexibility i can haveally said a bunch of states accrediting schools and having bad schools out there. he just does not understand that if you give governors the ability, we can put good policy in place. he'd just doesn't believe -- he just doesn't believe that. we had quite a bit of discussion over the national guard. it was not so much the discussion of the national guard as the tone of the discussion of the national guard. he made it very clear in this debate of whether they are going

to cut the national guard budget or active duty -- you know my husband just returned from a year in afghanistan and he is a guardsman. he basically said many people in this room have asked for cuts. now you are getting them. you do not go after the national guard to cut. we have survived this war and redacting this company -- country through the national guard and now you're going to punish these people who are asking for debt reduction by cutting the national guard? it is not logical way to do things. you look at the fact that when he talks about using his pen or using the phone, what we can say is look at what the nlrb is trying to do, they are trying to shorten election times, trying to bully people into joining unions. that is how he could use his pen or his phone, back them off. did you not learn from bowing and how detrimental that was to

not just south carolina -- boeing and how detrimental that was not just to south carolina to the country? >> thank you. and bill, thank you for participating today. i was -- i don't mind telling you i was a bit troubled today by the tone of the president. when you have governors -- and we all compete against each other. we are the laboratories of innovation, and for the president of the united states to look democratic and republican governors in the eye and say i do not trust you to make decisions in your state about issues of education, about ,ransportation infrastructure that is really troubling, particularly when you are seeing

reallybe what has performed over the course of the last four to five years that he has been the president of the united states. policyscussion on energy , where the president on one hand wants to take credit for more energy being discovered in the united states, but it is his policies, it is the epa being pushed to close the door on extended energy policy in this country that could secure america for decades going forward, that is being put in jeopardy. by this administration. you are hearing very at cross purposes messages from this president. i want to just add to what nikki democratt the guard.

governors are very concerned. i will suggest to you, about what they heard today about the guard. i left the united states air force in the mid-1970's, in february of 1977 as our country was going through a similar time of reducing the force. but those men and women who had extraordinary expertise in combat were going into the guard and going into the reserves. to makee are not about a tragic mistake in this country inhollowing out our guard some political statement of you feel the pain,o because that is what i heard from the president of the united states today. i heard him saying, if i hear any of you pushing back and saying washington spends too

much money, you will hear from me. if i am a democrat governor, if i am a republican governor, i am highly offended by that. yes, it is our duty to defend the people of this country, but i would suggest that making a political statement about the guard is not in the best long-term interest of this country and certainly not of those men and women who have committed and often sacrificed greatly for this country. >> thank you. i am not sure what i did to be the last in line. a couple of quick comments. first, i think the difference of what you would hear from this group of folks and the white house is an understanding of how jobs get created. all the folks up here believe that jobs are created when businesses and individuals feel the confidence to invest capital.

until they have that confidence, they are not going to do it. what i think you hear our states working really hard to create that confidence. the jobs arey created is when people feel like they have the right people in place to do that. the reason we say trust states to come up with flexible ideas, people are coming up with creative ideas. in tennessee, we came up with a plan to make me ready college and technical college free for a couple of years. trust us on those things. it is a little hard to hear when it comes to critical issues like health care or education. heare that do what we do that and say that is a little hard to take. we take our jobs really seriously. >> one of the things you have heard over and over is this is

an administration that has not trusted the american people. did not trust them to buy their own health care insurance or keep the products they life. on two separate occasions, you heard two different questions -- i think that is a fundamental mistake and the fundamental difference between this administration -- we do trust the american people and we think they know how to better leave their lives better than a one-size-fits-all government out of washington. all fourestion is for of you governors. each one of you has major investment -- south carolina is getting a huge amount of -- you areall stop getting huge direct investment from companies raining jobs. how can you do more for that?

are the only growing economy in the world now. we have the largest foreign investors project and i will forgive you for that. one thing we can do to continue to attract foreign investment is we need to have a reliable, affordable energy supply all all of these and many other states as well, it's not just bentler steel is spinning hundreds of millions of dollars in northwest louisiana. they are looking at where to invest and increasingly america can be an attractive, competitive option. we have invested in workforce training to make sure they have skilled workers, but one thing

driving a tremendous amount of investment is affordable, reliable energy. gasng affordable natural makes it more affordable to make steel in america, to make fertilizer -- when it is , anddable to make steel makes it more affordable to make cars and other products as well. only continue to allow the fracking revolution and shale revolution taking place across the country, they can accelerate it. the president likes to take credit about the booming natural gas reduction. he did it again today. it has actually gone down since 2007. i always get in trouble when i say things like this but i think it is a texas thing about the rooster growing and taking credit for the sun rising in the morning. it is ironic for the administration taking credit and it's happening despite, not because of her policies and restrictions.

we just added the largest carbon fiber producer in the world. we continue to see a lot of international companies coming. they know south carolina has their back. they are concerned that he whether itn it goes continues to be an issue. those are two things i hear over and over again. the states are very concerned about the consistency and stability of federal government and how that is going to weigh in on their business. >> thank you for recognizing texas was the number one state in foreign direct investment. these three governors are amazing competitors. that is the hearty camber station -- hearty conversation we have.

get lost on washington dc. it is the competition between the states. i can assure you that those hill and mickey and bobby have had a major projects we have one that we have been in conversation with in texas and they scored those, whether it was a beretta in your case and that big cracker you got in southeastern louisiana. that's the beauty of these laboratories of innovation. but there is a reason the states do as well as they do. bobbyut tax policy and has tried to catch up with texas on major legal reform and do some tort reform in his state of stop richard fisher, head of the dallas fed says the most important thing that happened in the state of texas was the tort oform paid in a number

physicians we have been able to recruit, some 30,000 physicians are licensed to practice in the state of texas now compared to 2003. those are the proof and the putting, it is the competition between the states. great want to stop this , let the manufacturing epa put the regulations on ring house gases that will be incredibly onerous. federal government continue to strangle the natural resource production on federal lands will stop what this thenistration stop pipeline. democrats and republicans can enjoy it. this administration must recognize that one-size-fits-all

will not work in the united states. at a competitive disadvantage internationally and we just cannot afford this at this particular time and whether it's issues like the minimum wage or what ever it might be regulatory wise. >> i will add one last thing. each one of us has a strategy that makes sense for us. we think we have a real inside track on automotive manufacturing. say here ise can what our assets and strengths are and here is why we are pursuing it stop we will him use the particular strengths we have to do that. the more you can leave up to the states, the more you will continue to see america grow. >> the governors on your left and right have just opened this to some sort of change in the

way the government handles marijuana. governor jindal said he was possibly open to medical marijuana and you talked about sentencing reform. where is your thinking in terms of sentiment -- sentencing reform in terms of legalizing medical marijuana? >> we have tried to do some sentencing reform and we are trying to analyzing whether that has worked or not. for marijuana reforms, i am not there. there is a bill they are starting to do but i don't get the sense from the people of south carolina, nor do i feel it is a hot topic or something moving forward. we are watching the other states do what they can. the states are allowed to make this decision. while they're making that in the best decision they can, we do not see that in the best interest as of -- in the best interest of south carolina. there was one bill just introduced this past week, so it is being talked about but there is not a big push.

>> does anyone else want to discuss or expand on it? >> we are pursuing sentencing reform in louisiana as well will stop we think it is the right thing to do. viceu are leading the chairman -- could chris christie be the chairman of this group when he does not do as conferences or public appearances when he travels to know he has-- i raised money but how long can he continue to be effective when he's not going out in public and delivering the message? >> a short answer is yes, the longer question is rd a is more important than anyone governor. it's not about the chairman this year. 36 donorst the elections we've got this year. in a four-year cycle, we'll have more to editorial elections and we will have at any point in the

four-year cycle. governors have great success stories where they have done tremendous work in terms of improving the economy and dropping unemployment rates in tennessee. in texas, we have an open governor's race for the first time -- rick perry is not going to be on the outlet. in florida,mbents michigan, ohio and many things that have a great record to talk about. we have some great open seats where we can challenge as well. pick uponfident we can some seats held by democrats today. there's a real contrast between the way republican government lead and have cut taxes. yes,is the real focus, but it -- he can be an effective leader.

he has taken responsibility and said he would cooperate with all the investigations. i don't know what we can ask him to do beyond that. what mandate do you want to see delayed and will you be seeking a higher office in 2016? >> in terms of the aca mandates, it is amazing the administration seems to claim constitutional authority to implement various parts of this law at their will. saidthey came back and they're going to phase in the employer mandate. was toestion last year delay the medicaid expansion that had not started and see was worried -- if he thought they were so dire, i suggested he

reduced savings. my suggested in this year is to go even further and since they have shown a willingness to delay some of the mandates, why not just lay off the mandates, including the individual mandate. i urgently sent out 5 million as a result, 5 million cancellation notices. you asked about the impact in louisiana, there were originally 90,000 folks who are going to you -- to lose their insurance will stop there are still tens of thousands of people who are going to lose their policies thanks to the mandates in obamacare. it was not only implemented poorly, it was designed early. one of the governors asked today , easy doctors leaving the medicare drug ram. cuts to the medicare advantage plans so seniors are not going to be able to get the benefits and provider networks in these plans in every network

across the country. you will see less access for seniors for the plans and benefits they like. i would like to see the entire lot repealed and replaced all stop with the president feels like you've got power to arbitrarily delay parts of it, why not just delay it a whole year? if he is sincere about saying is number one priority is creating jobs, the cbo has said 2 million fewer people will be in the workforce because of this law at a time we're looking at a 36 year low for the number of people for the percentage of the population the workforce. the unemployment rate was was to be five percent and we are at 6.6%. under a normal participation rate, some folks say we would be at 10%. we don't want a minimum wage economy where people are not able to work and find good paying jobs. need to be completely focused on 2014.

my honest answer is i don't know what i'm going to be doing but we need to be focused on 2014. one of the things i'm doing is working to win the war of ideas. we cannot be the party of no. we developed detailed policy answers on how to replace obamacare, so let's when these governors races. that has a huge impact on the quality of lives on the folks back on. money 14, iff governor christie were to come to south carolina and campaign, would you up with him publicly? >> i would appear with any of my and her colleagues publicly. i'm incredibly proud of every single one of them. they have all expressed support for me and i support them, so i would be public with any of them.

they have great records, including governor christie and i would be proud to support him as well as saying he is my friend. if chris came down, we would love to have him. >> [inaudible] has talked about coming to tennessee sometime this summer. >> what was the stuff with the white house regarding the keystone pipeline and what did president obama say about the timing of that? >> he said a decision would be coming in the next couple of months will stop he did not show his cards. some people would be happy and some people would be unhappy. according to his own administration, this pipeline would not have a negative impact

on the environment. it would create tens of thousands of construction jobs and allow importing oil from a trusted ally and allow us to create good paying refining jobs and a lot of those jobs will be in texas. onlyll allow us of not on these otherce countries but send the message to canada that we want to buy their exports and making america more energy independent incident is turning to china. not reached and inescapable conclusion -- there's no reason other than political ideology to turn down the pipeline. >> the president is going to turn -- he is going to approve the outline. just write it down. not openingefending the excel pipeline for all the reasons bobby has done a very eloquent way of laying out

today. the president is going to do this. i don't know why he's going to wait for two or three months, but at the end of the day, it's too important to america and too important to job creation. this is a president that wants to talk about jobs will stop one of the quickest ways he can do it is the excel pipeline. project funded, we don't have to borrow money from china. there's a lot of jokes about shovel ready projects, but this is something that they're willing to finance. >> he said a couple of months? i will remind you what we learned in louisiana during the oh oil spill, when they say it's coming tomorrow, that doesn't mean it's coming today. rick is a lot more confident that he will do the right thing.

we have heard this before, that the decision is imminent. he has had a couple of months, so right that down at least. >> the house voted on a delay for the flood insurance rhenium. did you talk with the president about this? >> i did as well as rick scott asked the president about this as well. to talk to others in the administration about as well. they expected the house to pass the bill this week. his administration would not veto the bill and he said they were interested in reforms to the program and in further conversations i had with staff, they emphasize the same thing. the status quo was not tenable and this was resulting in a ridiculous increase and in some cases, unintended increases for families playing by the rules and a did not get specific in

terms of the exact reforms. specific, butvery that is consistent with what we have said all along. the program needs to be main sustainable. unintended in these consequences and these rhenium's that are not attainable. i think there are ways to make it affordable -- she indicated the house was expected to pass legislation this week. they did not know what would come out of conference but the most explicit thing he said was he would not veto -- i want to make sure -- east did not say they were going to veto this legislation. >> all of the governors led off with negative responses to things the president said. was that the tone of the entire meeting? everybody was respectful. the president was respectful,

nobody was ugly to each other, and we appreciate the opportunity to come and ask west and candidly. but many of us took exceptions, i don't want to misconstrue this, it was a respectful tone and demeanor. he spent a reasonable amount of time and took our questions. he wasn't rude in terms of the process but a lot of us took exceptions -- you heard it from a couple of governors today when he said things like -- i asked about raking up the monopoly on accreditation to allow more competition and access for nontraditional students for students who cannot afford to continue their education. i suggested why not allow states to play a greater role? the idea he could not trust the states to do the right wing, that was offensive to a lot of governors. he made a similar statement to health care where they did not

want to give that authority to the states because they could not trust him to protect their weakest and most vulnerable folks. he actually used that language last year. i think there were moments in the calmer station and he disagreed about the lu and quality and they results. there were some serious substantive disagreements but i would describe it as a respectful meeting. to each othery but there were serious substantive disagreements. he talked about things we disagree with and we talked about the minimum wage to keystone and these cuts. rickrd moment that was -- described it well, this idea -- there was a moment where if you complain about any cuts, there are obvious ways to raise revenues. a lot of governors leave there are ways to cut spending without raising taxes or make government more efficient.

the only alternative is to go raise taxes is a false choice. i thought it was respectful. >> it always is a very respectful interchange. the tone change when we started talking about the national guard . it went into an aggressive nature implying that many of you have asked for cuts and this is what you said you wanted, don't start coming in and complaining these cuts are affecting you because you said you wanted it. if some any questions it, i have something to say about it, a completely different change in tone and it was toward the end of the meeting and it wasn't just a change in tone from him to republican governors -- he felt that to all governors and it chilled the room quite a bit. guard issue,ional what is the position of the governors? that there should be no cuts at all in the defense budget or

defense at cuts should fall elsewhere? >> i think the governors were saying if you look at where the growth has been since 9/11 and the military, much of the growth has been in the regular army. should bes come, they proportional to where the growth has been in last 10 or 20 years. >> there has been a major change over the last decade when it came to how the guard was treating -- was treated. you did not see the guard being sent on these major, long deployments on till the last decade. the equipment we have had has been ground up and not returned. the guard has done more than its fair share of serving this country and serving the people and keeping the defense side of our work being done. now isa that the guard

going to take this major ofuction because the rest the active-duty military is taking this is just -- it really falls hard upon governors who of thesehat many governors have served for six or eight years and they know what it has cost their national guard. this is not a partisan issue at all. you've got democrats i would highly suggest you give a call to some of the democratic governors to get their reflection on this as well because this is truly a bipartisan issue when it comes to governors in the states. upwhile i may be sitting here as a governor, i want to speak to the military wife. my husband just got that from a year of deployment. of these soldiers across the

country, they left their businesses and families and left their children and all of these things do go serve their country multiple times in multiple deployments because they got the call. so many of our state citizens and around the country have personally been affected multiple ways by brothers, sisters, wives and husbands and now you are going to say that's going to be the first part we cut? we know we have waste in every agency, we know we have waste and the military, but at what point do you take the most active and most involved with this country and turn around and say you aren't going to hollow out the national guard? it's a slap in the face to anyone who has served and left their life to this. we have active-duty but the active-duty hasn't felt the pain the national guard has felt in this is not how you show your thanks. was tot that bothered me

have that tone to say you want that cut, this is what you get. there are a lot of places you can cut in d.c.. the national guard is not one of those that has to be on the priority list. we're are starting off on a conversation that defies all logic. once again, that shows we are in d.c.. i'm going to give each of the governors a chance to make a closing statement. some of them may have time before they run off and catch their flights will stop i like to thank the chamber for hosting us. be in d.c.great to and great to be with all of our governors. we're all fighting for the same things -- increase jobs and flexibility. i'm thrilled we saw a lot of governors doing very well in spite of ec. >> even our colleagues on the other side of the aisle, it's always good to spend time with them and talk about what is

working in their states and what's working in our states. the future of america is inextricably intertwined these laboratories of innovation, those men and women who are truly representing their constituents and the competition that goes on is very good. i hope our friends on capitol willand across the way respect this more than what they have been historically. >> i will echo that. what was the tone like -- we have been meeting with the governors altogether. incrediblybeen helpful discussions because we are all facing the same issues. health care pressures regardless of what you have done expansion. we realize the training our workforce is going to need is going to be different and the president, to his credit, he recognize we are executives and

have to make a lot of decision like he does. my only point is this -- we were honestly thinking we have some answers that when you see the problem in macro in 50 states, taking it down to 50 bite-size pieces might make these big tasks a lot easier. just close out by saying it's amazing the white house deems to be surrendering when it comes to growth and waving a white flag and declaring the obama economy is a minimum wage economy. the republican-led states are doing better and we've given specific ideas about growing the economy. none of us wants folks struggling to pay their energy cost and that's what's happening in the middle class will stop we gave some specific ideas -- if you want to see conservative ideas in your momentum successfully, it's happening in these republican-led states. at south carolina, texas, tennessee, look at the states led by these great republican governors.

thank you all very much for coming. >> today, the president met with governors for the national governors association winter meeting, including the four republican governors we just heard from. tomorrow night, president obama attends an event for organizing for action, the advocacy group that grew out of his presidential campaign. travels to st. paul, minnesota where he is expected to announce lands for infrastructure investment and job creation. on thursday, president obama speaks about an initiative called "my brother's keeper" aimed at keeping at risk been in school and out of jail. president speaks at the general -- at the democratic national committee meeting. secretary chuck hagel announced plans today to reduce the size of the army and reduce deficit spending.

buck mckeon spoke about those lands and the war in afghanistan today at the national press club in washington. you can see his remarks at 8:00 eastern on c-span. this is the time for reality. next year's proposed pentagon budget would eliminate a 1970's jerett program, retire older naval cruisers and close some bases. and today he was joined by the chairman joint chiefs of staff.

>> good afternoon. first let me acknowledge and and vice rman dempsey chairman winnefeld, our chiefs, our secretaries ho are here as ell as our comptroller and our acting assistant or deputy secretary of defense christine fox for the work that they have it in over the last few months in particular together at this point where we have a budget that we are going to present the congress next week. i want to talk a little bit

about that today. chairman dempsey will also add his remarks, but i am very grateful. i know president obama is very grateful to these men and women who have spent an awful lot of time and the people that they epresent and their services in putting this together. i think you want to know that the comptroller bob hale this will be his last budget unless we call him back to duty after he goes to find an island somewhere and doesn't return. but i am particularly appreciative of his willingness to stay through this budget which was not an easy task for bob hale. you all know the kind of service he's given this country in this department forer many, many years and to bob hale thank you and to all the team .own there, we are grateful

today i am announcing the key fiscal s for the 2015 year and beyond. they will adapt so we can continue this nation's security in an era of an precedented uncertainty and change. as we end our combat mission in afghanistan, this will be the first budget to fully reflect the transition d.o.d. is making after 13 years of war. along this conflict in our nation's history, we are repositions to focus on the strategic challenges and opportunity that will define our future. new technology, new centers of power and a world that's growing more unpredictable and in some instances more challenges to the united states. we will define our defense institutions for the years to

come. chairman dempsey and i worked in a pragmatic and collaborative way to build a balanced force our nation hust have in the future. i worked closely with chairman, the vice chairman, service secretaries and service chiefs in developing these recommendations in a process that began with last summer's strategic choices and review. i also want to recognize today the senior enlisted leaders in each of the services for their contributions and their involvement and their leadership and what they continue to do every day for our country. but in particular their help and input in crafting this budget. our recommendations were guided by an updated strategy that will build on the 2012 defense strategic budget as described in the quadrennial review report this is focused on defending the homeland against

all strategic threats. building security globally by rojecting u.s. influence and deterring aggression and remaining prepared to win decisively against any adversary should deterrents fail. to fulfill this strategy d.o.d. will continue to shift its operational focus and forces to asian pacific. sustained commitment to key allies in the middle east and europe, 1-800 tain engagements in other region and continue to pursue global terrorist networks. our reviews made two new realities very clear. first, the development and proliferation of more advanced military technologies by other nations. it means that we are entering an era where american dominance and the seas in the skies and space can no longer be taken for granted. second defense spending is not expected to reach the levels projected in the five-year budget plan submitted by the president last year.

given these realities, we must now adapt, innovate and make difficult decisions to insure that our military remains ready and capable, maintaining the edge over all potential adverse -- adversaries. our wudget cuts will assume risks in area. we prioritize d.o.d. specific interest and matched them to sources. this required a series of difficult choices. we choice further reduction in troop strength and forts force structure in every military status in order to sustain our readiness and superiority obbed to protect special operation forces and cyber recently. we choice to terminate or delay some modernization programs to protect higher priorities and procurement research and development.

and we choice to grow the military compensation costs in a way that will preserve the quality for the voluntary force and free up critical funds for sustaining readiness and modernization. before describing our specific recommendations, let me address the fiscal realities and assumptions behind our decision-making. on march 1st, 201, one year ago this week, steep and abrupt spending cuts were imposed on d.o.d. and other agencies across the government tund mechanism of sequestration. this cuts amounted to $37 billion last fiscal year. these cuts came on top of the $487 billion tenure defense spending reductions required by the budget control act of 2011. sequestration was being imposed the president submitted fiscal year 2014 budget plan that

would have fully repealed the spending cuts in favor of the deficit reduction. that would have given d.o.d. to fully implement the president's 2012 defeps strategy and maintain -- defense strategy and maintain a ready and modern force. two months ago rather than fully repealing sequestration, congress passed the waurn budget act which provided d.o.d. with some relief for this fiscal yeared a for fiscal year 2015. the bipartisan budget act is needed for the next fiscal year. but defense spend remains significantly below what the president requested in his fiscal year 2014 budget request and five-year budget plan. under the spending limits under the bipartisan budget act d.o.d.'s budget is roughly $496 billion this fiscal year or $31 billion below what the president requested.

the law also limits d.o.d. spending in fiscal year 2015 to $496 which is $45 billion less than what was rojected in the president's budget request last year so while dfrlt o.d. welcomes the measure of relief and stability that the budget act provided, it still forces us to cut more than $75 billion over this two-year period. in addition to the $37 billion cut we took last year and the budget control acts tenure ductions of $4le 7 billion and the sequestration level cuts remain the law for fiscal year 2016 and beyond. the president will soon subject a budget request with the budget act spending limits for fiscal year 015.

was it is clear that the hilltary will still face significant readiness and challenges next year. to close these gaps, the president's wudget will include an opportunity growth and security initiative. this initiative is a detailed proposal that is part of the president's budget submission. it would provide an additional $26 billion for the defense department and fiscal year 2015. these additional funds would be paid for with a balanced package and tax reform and would allow us to increase training, upgrade training and weapons systems and make needed repairs to our facility. the money is specific to bringing unit readiness after large short falls of the last few yearsle i strongly support the president's proposal. the president's budget for fiscal year 2015 will also contain a new five-year defense budget plan mapping out defense

programs through 2019. over five years this plans projects $115 million more in spending than sequestration levels. the reason we aring this increase over sequestration levels is because the president and i would never recommend a budget that compromises our national security. the cuts would compromise our national security both in the short and long-term. sequestration cuts so deep, so abrupt, so quickly that we cannot train our military fast enough. in the short-term the only way to implement sequestration is to reduce readiness and modernization which would almost certainly result in a hallow force, one that is not ready. in the long term, the results

force would be too small, too shawl to fully execute the president's defense strategy. the president's fiscal year 2015 budget offer as more deliberate and far more responsible approach that protects readiness and modernization while maintaining a force large enough to fulfill our defense strategy, though with some risks. this plan balances the need to protect our national security with the need to be realistic about future budget levels. d.o.d. has also completed a detailed plan should sequestration level cuts return in the fiscal year 2016 and beyond as is the current law. the reality of reduced resources and a challenging and changing strategic environment requires us to prioritize and make difficult choices. federal choices we must make now. for other choices particularly those involving the size of our

armed forces, we have built decision points into our budget plan. we will make these decisions when we have more clarity regarding future spending levels. our budget will give us the flexibility to make different decisions based on different fiscal outcomes. before we recommended any changes in the military's size or capabilities we first focused on implementing management reform and reducing d.o.d.'s operating cost. last year i announced a 20% cut in d.o.d.'s major haws operating budget which is expected to save about $5 billion in operating cost over the next five years. these efforts began in the office of the secretary of defense and in the joint staff. but they will also include ant command combat headquarters. we will cut civilian personnel improving financial information

and take other steps to become more efficient. in addition to continuing to implement the more than $2 billion dfmentofment d. has submitted -- d.o.d. has submitted in the last proposal. we cannot achieve our overhead rezux without cutting necessary and costly infra instruction. for that reason d.o.d. will ask congress for another round of closures in 2017. i am mindful that congress does not agree the barack request in the last two years. but if congress continues to block these request even as they slash the overall budget, we'll have to consider every tool at our disposal to further reduce infrastructure. d.o.d. has already been reducing infrastructure while we can. in europe the barack authority brack -- in europe the authority is not needed.

we will recommend further cuts which d.o.d. will pursue. reducing overhead will continue to be important. but the potential savings will not be by themselves enough to meet targets under either the president's budget or sequestration level. to meet the reduction of the scale required we had to carefully examine the military force structure. our recommendations are lewded in three realities. first, after iraq and afghanistan we are no longer going to conduct large and stability operations. second, we must maintain our technological edge over potential adversaries. and third the military must be ready to respond quickly in all contingencies and decisively deter them. our recommendations require a

more favorable force putsing a premium rapidly deployable that could defeat more technologically advanced adversaries. we will make important investments to preserve a safe, pure, reliable and effective force. the forces we prioritize can effect great power over great distances and carry out a variety of missions more realable to his strategy such as homeland security defense, strategic deterrence, building capacity and defeating asim metric threatses. their all well suited to the strategies to sustaining security commitments to the middle east and europe an our engagement in our nations. most notably special operations forces used for

counterterrorism and response. accordingly our special operation forces will grow to 69,700 personnel and roughly 66,000 today. let me now describe the operations for each of the military services. for the air force, an emphasis on capability or capacity meant that we protected its chemo dernization programs including the new bomber, the joint strike fighter and the refueling tanker. we also recommended informsing $1 billion in a promising jerett engine technology which we expect to produce sizable crost cost savings to reduce fuel con sutchings and lower maintenance needs. this new funding will help insure a row wust industrial base, a very strong and important industrial base itself a national strategic asset. to fund these investments the air force will reduce the

number of air squadrants including the entire a-10 fleet. retiring the a-10 fleet saves $3.5 billion over five years and accelerates the air force' long standing modernization plan which called for replacing the a-10's with the more capable f-45. the war hog is a venable platform. and this was a tough decisionful but the a-10 is a 40-year-old single purpose airplane designed to kill enemy tax on a cold war battle. it cannot survive or operate effectively where there are more advanced aircraft or air defenses and as we saw in iraq and afghanistan, the advent of precision munitions means that many more types of aircraft can now provide effective close air support from b-1 bombers to remotely piloted aircraft.

and these aircraft can execute more than one mission, the a-10's age is also making it more difficult and costly to maintain. significant savings are only possible through illuminating the entire fleet because of the fixed cost associated with that aircraft. keeping a smaller number of a-10's would only delay the inevitable of forcing worse trade-offs elsewhere. in addition to the a-10 the air force will also retire the u-2 in favor of the global hawk system. this decision was a close call as d.o.d. has previously recommended retaining it because of cost issues. but over the last years, d.o.d. has been able to reduce the global hawk's operating cost with ilts greater range and endurance it makes a better reconnaissance platform for the

few. the air force will slow the growth and its arsenal of unmanned system that while effective against terrorists cannot operate in the face of enemy aircraft and modern air defenses. instead of increasing to a force of 65 around clock combat air patrols of predator and eaper aircraft, the aircraft will go to 55. given the continued drawdown in afghanistan this level coverage will be sufficient to meet our requirements and we would still be able to serve to an unprecedented 71 air patrols. d.o.d. will continue buying the more capable reapers until we have an all-reaper fleet. if sequestration levels cuts are reimposed in 2016 and beyond, however, the air force would need to make far more significant cuts to force structure and modernization. the air force would have to aircraft more

including the tanker fleet and the global hawk lock 40 fleet as well as slow down purchases resulting in 24 fewer f-35's through fiscal year 2014 and sustain combat air patrols. the air force would have to take e cuts in flying hours. the spending leveling proposed under the president's budget plan will also enable the navy to maintain 11 carrier strike

groups. however, you will have to make the final decision on the future of the george washington aircraft carrier in the 2016 budget submission. if sequestration spending levels remain in place in fiscal year 2016, she would need to be retired before her scheduled nuclear refueling and overall. that would leave the navy with 10 carrier strike groups. but keeping the george washington in the fleet would cost $6 billion. we would have no other choice than to retire sequestration level cuts be imposed. at the president's level, we would pay for the overhaul and maintain 11 carriers. in order to help keep a ship inventory ready and modern under the president's plan half of the navy's cruiser fleet or 11 ships will be laid up and placed in reduced operating

status while they are modernized and even chull hi returned to service with greater capability and a longer lifespan. this approach enables us to sustain a modern fleet of cruisers which are the more capable ships in a strike. overall the navy's fleet would be significantly modernized under our plan which continues buying two destroyers and two attack submarines for year as well as one additional afloat staging base. we are presuming the ho dernization programs and provided for increases and shipment to them other over the next five years. am concerned that the navy is relying too heavilyly for ship numbers. therefore no new contract negotiations between -- beyond 32 ships will go forward. with this decision, the l.c.s.

line will continue beyond our five-year budget plan with no interruptions. the l.c.s. was designed to perform certain missions such a mine sweeping in relatively submission environment. but we need to examine whether it has the fire power to survivens against gonzales a more military adversary and emerging new technologies especially in the asian pacific. if we were to willed out the program to 52 ships as previously planned, it would represent 1/6 of our future's 300 navy. given the fiscal restrabets we must provide resources to platforms that can operate in every region and along the full spectrum of congress. additionally at my direction e knavey will proposal ter

nats generally consistent with the capabilities of freightle i directed the navy to consider a new line shifting designs and a modernized l.c.s. these proposals are in time to reform next year's position. if he returns returns in 2016 and beyond, we will be forced into much tougher decisions on the navy fleet. >> six additional ships would have to be laid up. and that result of sequestration level cuts would be 10 fewer large combatant service ships in the navy operation inventory by 2023. under sequestration spending levels the navy would halt procurement of the carrier of area of the joint strike fighter for two years. the marine corps' inherent

agility, crisis response capabilities and mary time to focus make it sufficient. today, the marines number is about 90,000. they will -- about 190,000. they will draw down to 182,000. se question tration are imposed marines would have to dwindle down to 175,000ful we will devote about 900 more marines to provide and enhance embassy security around the world. finally the army. a highly ready opponent. the army hust accelerate the pace and increase the scale of

army.st war -- post war the army planned to reduce to 490,000. however, the strategic choices and management review and the kudr both determineded that since we are no longer sizing the force for security military operations, an army of this size is larger than those require to meet the demand. given the reduce budgets it is larger than we could afford to modernize and keep ready. we have decided to further increase it to a range of 440, to 450 soldiers. i've accepted the army's recommendation to terminate the ground vehicle program and recorrect the funds towards developing a next generation platform. i've asked the leadership of the army and the marine corps

to deliver new realistic visions for a vehicle modernization by the end of this fiscal year. the changes and strength would rult in a smaller army but would help insure the army when they remain well trained and clearly superior in arms or quim. of the smaller capacity entails some additional risks, even if we extend it or the ground operation. this force would be capable of decisively feeding aggression in one major combat theater as it must be while also defending the homeland and supporting navel forces in the air and another theater against an adversary. if se question tration level cuts are reimposed, the active duty would have to have an instrength of 420,000.

>> the they will not draw down in order to balance down a balanced force. >> today they have 355 soldiers and the reserve is about 2505 soldiers. by 2017 under our recommendations there would be 335,000 soldier in the army, national guard or structure. >> how do i right 95,000 in the reserves? >> if sequestration returns to 2016, the army national guard would continue to drive down further to 250,000. army reserves would be at 180,000. in order to maintain a ready and capable force at a time of fiscal constraints, no component of d.o.d. can be entirely exempted from

reductions. this 5% reduction reserve soldiers is smaller that the 13% reduction in active duty soldiers. i'm mindful many in thethat regard and reserve community and in congress have argued that the should bemponent protected from cuts because they provide more troops than it will cost. our priority was having the largest possible force in the large-scale prolonged war, that would be reasonable. our defense strategy calls for more than that. just oneacity is factor. as we must prioritize readiness, and agility. and while it is true that expensiveits are less when they are not mobilized, our analysis shows that a reserve roughly the same cost as an active duty unit when

mobilized. experience shows that specialties requiring greater collective training to achieve proficiency and service integration should reside in the force.me where these capabilities will be more ready and available to commanders. national serves our security is is when reserve units complement the active forces. that's why we recommended army guard apache attack helicopters active duty the active army will transfer helicopters to the national where they will bolster in area where needed like emergency response. to the guard's helicopter fleet are part of a broader realignment of army

designed to modernize the fleet and make it highly affordable.more its jete will retire woulds, the overall fleet decrease by about 25% but would be significantly modernized president's budget. the guard's fleet of helicopters would decline by 8%. but it would gain new blackhawks and the army will sustain the light utilityof helicopters. if sequestration level cuts are reimposed in 2016, the army thesehave to cut 50 of helicopters from the guard force. while any force reduction has risk, the future guard helicopter force will still importantn operational and strategic complement to our active duty force. while also being equipped for state and federal requirements

defense, disaster relief and support to civil authorities. in making these difficult the guard and reserves, we affirm the value of capable reserve component. while keeping the focus on how best meetry can future demands given fiscal constraints. based onhoices strategic priorities, clear unbiased analysis, and fiscal realities. focused the bottom line on how best we can defend the states. d.o. dodd has complied with congressional direction to civilian personnel numbers and work to reshape our civilian work force, so that it needed for the future. given the steps already taken to civilian personnel calls including a 3-year pay freeze,

realistic effort to find further significant savings can militaryling with compensation. that includes pay and benefits troops,ve and retired both direct and in kind. reducemary way to overall payroll spending has already been discussed. reducing the total number of people in uniform by bringing down the military force structure. but since too small a force has our national to security interests, we must also address spending on pay and benefits for service members, aboutsince 2001 has risen 40% more than growth in the private sector. thatf the reasons is congress boosted pay increases above the levels requested by d.o.d. and budget submission. new benefits and increases in benefits wered also beyond what most active duty personnel sought, expected

promised when joining the military. as the united states, as a united states senator i supported these proposals. it was the right thing to do at the time. given the burden of being placed our service members, the military's recruiting and retention challenges, and the had few constraints todayense spending, but d.o.d. faces a vastly different fiscal situation. services continue to meet recruiting and retention goals. concludinge are combat operations in america's longest war. has lasted 13 years. we must now consider fair and ouronsible adjustments to overall military compensation package. williscal year 2015 we recommend a 1% raise in basic military personnel with the exception of generals and flag officers whose pay will be for one year. basic pay raises beyond fiscal

year 2015 will be restrained, though raises will continue. we are also recommending a number of changes. we will slow the growth of tax-free housing alawances, which currently cover 100% of expenses, until they cover an average of 95% of a 5% outxpenses with of pocket contribution. , the average out of pocket spend tour was 18 -- expenditure was 18% in the 1990's. we will also no longer reimbus insurance. over three years we will reduce by $1 billion the annual subsidy provided to military commissaries which now total 1.4 billion. are not shutting down commissaries. all commissaries will still get rent and pay no taxes. they will be able to continue to a very good deal to service members and retirees, postage changes,

which do not receive direct subsidies. oversea and those in remote locations will continue subsidies.irect and we will simplify and tri-care health insurance program by consolidating plans and adjusting deductibles and copays in ways that encourage members to use the most affordable means of care. treatmentlitary facilities, preferred providers, and generic prescriptions. will ask retirees and some active duty family members to theirlittle more in deductibles and copay. but their benefits will remain generous, as they should. protect the most vulnerable under this plan, medically retired service members, their families and the survivors of service members who die on active duty would not pay the participation fees charged to other retirees.

of would pay a smaller share the cost for health care other than the retirees. proposals do not include any recommended changes to military thosement benefits for now serving in the armed forces. we are awaiting the results of compensation and retirement modernization commission, which is expected to report in february, 2015. await the commission's report before pursuing with area.in this but d.o.d. continues to support the principle of grandfathering for any future changes to military retirement plans. adjustments to military compensation presented in this year's budget plan will enable each of the military services to invest in more critically important modernization and while still allowing them to recruit and retain a quality force and reserve, generous and competitive

sustainable benefits. the saves will enable us to sustain a well-trained, ready, agile, motivated and technologically superior force. recommendations do not cut anyone's pay, i realize they will be controversial. congress has taken some important steps in recent years to control the growth and spending, but we must do more. and comprehensive approach must be taken to compensation changes. continuous piecemeal changes will only magnify uncertainty doubt about our service members, and with our about whethers, promised benefits will be there in the future. we must keep faith with our men and women in uniform. fulfill the promises that we've made to them. america has an obligation to members andrvice their families are fairly and

compensated, and cared for during and after their time in uniform. a responsibility to provide our troops with the finest training and equipment possible. so that when ever america calls withem, they are prepared every advantage we can give them so that they will return home families.their the president's budget fulfills both of these promises to our service members and their families. our proposals will carefulfully crafted to reform military fair,sation in a responsible and sustainable way. servingnize that no one our nation in uniform today is overpaid or what they do for our country. but if we continue on the current course without making modest adjustments now, the choices will only grow more painful down more the road. we will inevitably have to either cut into compensation more deeply and abrupt, or we'll

deprive our men and women of the training and equipment they need to succeed battle. but either way, we would be people. faith with our and the president and i will not happen.at to the recommendations i described will help bring our military in the balance over the next decade, and responsibly position us for an era of both strategic and fiscal uncertainty. that will allow the military to protect our country and fulfill president's defense strategy. -- with some increased we should be clear about these risks. over the near term, because of budget limitations even under the bipartisan budget act, the toitary will continue experience gaps in training and maintenance, putting stress on and diminishing our global readiness even as we sustain a heightened alert posture in regions like the middle east and north africa.

additional $26 billion provided to d.o.d. by the president's opportunity growth and security fund would allow us to continue to restore and sustain readiness, helping to mitigate this risk. we also face the risk of a dynamic and increasing dangerous security environment. inevitably reduce the military's margin of error in dealing with these risks. are continuing to modernize their weapons portfolios to include antiair antiships. and a strong force strains our those. to respond to but with the president's budget, our military will still be able aggressor.ny we can manage these anticipated risks under the president's plan. but they would grow sequestertly, if level cuts return in fiscal year 2016, if our reforms are not

or if uncertainty on budget levels continue. made clear, the scale, the timeline of continued sequestration level cuts would require greater reductions in the military's size, reach, and of technological superiority. under sequestration spending levels, we would be gambling that our military will not be required to respond to multiple major contingencies at the same time. that requires recommendationings provide anal 2015 alternative to sequestration level cuts, sustaining adequate mostness and modernization relevant to strategic priorities over the long term. achieved by only be the strategic balance of reforms, and reductions the president and i will present to the congress next week. congress,require congress, to partner with the department of defense in making

choices,ly difficult which i will address more specifically when i testify before congress. weigh these recommendations i have, as i often do, look to pages of american history for guidance. in doing so, an admonition by out. stimp son stood ii,ing after world war roosevelt's secretary of war during that time said that world as itt in the is, and not in the world as we were.t stimpson knew that america's security at home depended on sustaining our commitments abroad, and investing in a defense.tional he was a realist. reality. time for this is a budget that recommends the reality and the magnitude of fiscal challenges, the dangerous world we live in, and uniquerican military's

and indies pencible role in the security of this country, and in today's volatile world. there are difficult decisions ahead. that is the reality we're living in. but with this reality comes opportunity. the opportunity to reshape our defense enterprise to be better prepared, positioned, and secure america's interests in the years ahead. leaders, these men and women sitting here and i have every confidence that this will be accomplished. thank you. >> as the secretary has laid out proposal, this budget represents the response and more wayrtantly a realistic forward in any view represents both sound national security and fiscal responsibility.

tools fors the today's force to accomplish the missions we've been assigned, readiness in areas that were by necessity the past deckver a. it modernizes the join force and ensuring that we're globally networked and can deliver options for the nation and it terms how weeal envision our cost of doing business and working to ensure righthe force is in the balance. in authority this budget helps world's fineste military, modern, capable and ready even while transitioning a smaller more affordable time.over our campaign to find every way to become more effective will do smarter and more efficiently, more in line with the source of security face, and in line with a fiscal reality. approachesinnovative just not in technology but also on how we develop leaders,

andegate our formations work with our partners. we'll improve how we buy weapons and goods and services, stream line our headquarters and with the support of our elected leaders shed excess infrastructure and weapons systems that we no longer need simply can no longer afford. at the same time this budget recognizes the imperative of costs inur personnel balance. otherwise, we'll be forced into disproportion al cuts to readiness and to modernization. i know this weighs heavily on of our men and women in uniform and on their families. our force is extraordinarily accepting of change. they are less understanding of approaches. they want and they deserve predict ability. the chiefs and i also continue strongly recommend grandfathering any future changes to military retirement, continue to place premium on efforts that support withed warriors and those mental health issues. it's important to note that the services will be able to

reinvest the money saved by slowing compensation growth into closing some of the dire readiness gaps, and into other programs and capabilities that the allow us to meet nation's needs for the future. i've said before that we must be the joint force can achieve, how quickly, and long, and at what risk. to be clear, we do assume higher in some areas under the we'll have toand nang those risks. however, if sequestration level return in '16, the risks grow and the options we can dramaticallyation shrink. we'll are willing to take risks, to none of us are willing take a gamble. because at the en of the day sailors,soldiers, airmen, marines, coast guards and daughtersns who will face tomorrow's challenges with the strategy, structure and resources that we

today. our most sacred obligation is to make sure they are never send too a fair fight, which is say that they must be the best led, the best trained and the in theuipped force world. thank you. >> secretary, what would you say critics who say this budget cannot survive contact with congress? thatllies may be fearful these proposed cuts and the ones suggestld come in 2016 a military in decline if not in -- >> well, let me answer your way.ion this i framed up in my remarks the of the kind of world we live in. my remarks what we collectively, the leadership, of defense,nt believe is going to be required

to deal with the threats and challenges that the real world to america and our allies and our partners. we believe that we will present a budget that can fulfill the commitments that ourave to this nation, people, to keep them safe and secure, and also the commitments to our allies and partners around the world. there are differences of opinion that. we do but at the same time, we owe it american people and our congress, individuals who american people, the risk involved and further our budget. a we've tried to present budget based on the balance of those realities. in a done it collaborative, pragmatic way

can we think that we defend. and i understand there are many audiences here, but i believe, as i said in my closing remarks, this country should be assured that we will retain the defend our country and our interests around the world. i believe that our allies, as willas our adversaries, understand that. there is no military in the anywhere near as capable as the american military. any metric applied, whether it's the quality of the people, institution, the technological edge, if it's the apply.es we so i have confidence in this defendnce that we can the interests of this country. >> i have a question about the $26 billion opportunity fund. you clarify a little? because it implied that this was

a done deal. going to get the money automatically? can you -- events have to happen in domestic discretionary spending order for you to see any of that money? >> i think, as i said, and i in your prebriefing that received, is that we will present the $26 billion in the budget that will be presented next week to the congress, as.b. is working that issue part of the total $58 billion package on behalf of the entire administration. the d.o.d. part of that is $26 billion. i hope i didn't make reference to any point about guaranteeing anything. no budget is guaranteed. $26 billion that we collectively believe needs to be to back in to get us back up a standard of readiness, and buy operational the

shrinkage that we've had over the last two years, get it back on a track that we have fallen last two over the years of these cuts. so that's what it's about. will beanics of that presented in the bts and through president'she larger budget. >> a capabilities questions. the f-35, the largest weapons program in the history, budget?in this it's nicked a little bit in the plan, but if the money is there why wasn't more taken from that andram to preserve army marine corps? >> did you just say that i have there? out ( laughter ) well, this was all about trying to balance capability, both today's capability and future based on emerging threats, and you're well aware f-35 brings as a

fifth generation fighter, with capacity, size and readiness. and in that equation and with the serviceation of chiefs, we managed it and it wasn't managed exactly the same by each service, by the way. this has been a user-long process. -- year-long process. >> you and other secretaries road before,n this trying to contain benefits, congress has rejected most of them. what makes you think you'll be any luckier this time? you know the veterans this morning, how tense was that meeting and did you make a sale? them.'d have to ask i wasn't there to make a sale on that particular meeting. have been, to, as i since i've been here as secretary of defense, this is withourth time i've met all of them, and it wasn't a sales job. all, to explain

to them how we came at the the choices.d and what we used as reference points. them a clear understanding of that. then i wanted to hear from them. opinion,to get their and we listen to them, it isn't just four times a year, we all the time. these organizations representative, inactive, they veterans, and this is the whole universe of the people much for our country and have done so much. so i wanted to hear from them. to get their feedback on what's possible, what's not possible, and also explain, they know this better than almost anyone, there are tough choices there. they get that. assure them that i want their input, i need their input, we all do, but we're going to proceed, as i use the term a number of times in my

speech, a fair basis. basis.opriate a basis that we can sustain, something that the chairman said in that, andortant i mentioned it briefly. whatever decisions ultimately are going to be made on pay, compensation, ultimately retirement, it needs to be done our men and women and their families in uniform, served and those who are thinking about serving, don't constantly live under this of uncertainty and threat. what are they going to do to us next year? this outgoing to take next year? i don't want that, we can't have that, and we won't let that happen. it was a number much things, tom, that we talked to them about. as to your initial question, the only thing i can say in answer

to past secretaries, this secretary, efforts have been made before, i said in the speech here and everybody here knows this, this is a different time. seen this time in our budget, threats in the world, world,going on in the certainly every year is different, but this is the first time in 13 years we will be budget to the congress of the united states budget.ot a war footing now, you might say so what. budgett is a defining because it starts to reset, , marty's comments, rebalance, redefine, our future.se for the so what we have that we're dealing with, and i use the term is a the reality of what we have. so it is a different time, it is a different situation. mean that we're going to accomplish everything that we have proposed and the

congress will accept the recommendation. but it is a different time. that we are required to deal with that different time in a very way.nsible >> secretary hagel, you mentioned that we need to be about the risks involved in this. in 2016 if sequestration continues you mentioned the army might go down to 420,000 soldiers. withs the risk entailed that? does that mean the army will have difficulty in prevailing in conflict? >> well, the risk is, and the chairman noted this in his noted it in mine, others we've talked to not just the chiefs and the secretary time you bringny force structure down and capability down and resources the, that's going to add to risk of the dimension of the missions that you're expected to carry out. fewer troops, fewer ships, fewer planes, readiness is not the same standard.

course there's going to be risk. that means there's risk across the whole horizon of responsibilities. and that's what we're talking about. other way, ifny you're going to fulfill the president's defense strategy guidance, and protect our interests around the world and the commitments that we have not only to our own security interest but the tomitments that we have allies and partners around the world. >> i need to add something to that, because there's always this tendency when you look at what's happening to the budget to look at what's happening to each individual service. but don't forget we're a joint just take for me example you mentioned the army's itength and what effect would have an the army. it would certainly have an army, but itthe would also have aan effect on the joint force, because it affects a lot of controls, signalses, things a the other

theices fall in on that army provides. by the way, the army falls in on other things that the other services provide. will have an effect on all of the services if we go to all the way to sequestration levels. and that, when you add to that human dimension of this, so that, for example, inside of a of 420,000,ure about a third of it is consumed other soldiers, the institutional support to itself, whether it's school programs ordical all the things that make a service a service, it really begins to limit in some significant ways that which is combat.e to deploy and so 420 is too low. that will come out as we discuss this budget, i think. >> thank you.