delay modernization programs to protect higher priorities or procurement, research, and development, and we chose to slow the military compensation costs in a way that will preserve the quality but also free up critical funds needed for before i get into the specific recommendations, let it get -- let me address the fiscal realities. one year ago, this week, abrupt spending cuts were placed on dod under sequestration. these cuts came on top and there was a ten-year spending reduction. sequestration was imposed in the fiscal year 2014 that would repeal these cuts in favor of balanced deficits reduction. that would give dod resources

needed to fully implement the 2012 event strategy and maintain a relevant modern force. two months ago, rather than fully repealing sequestration, congress passed a bipartisan budget act that provided relief in the fiscal year. the 500s and that's the bipartisan budget act health in the next fiscal year. but, that spending remains significantly below what the request is for the five-year budget plan. under the spending plan, dod has 490 billion for this fiscal year.

that is $31 billion below what is requested. the law limits spending in 2015 to $496 billion. that is $45 billion less than what is requested and the president budget's request last year. the relief that the budget act provided has forced us to cut over this two-year period. the $37 billion cut we took last year and the budget control act's ten-year reductions of $487 billion. the sequestration level cuts remain the law for 2016 and beyond. the president will submit a

budget request for fiscal year 2015. the military will still face significant readiness challenges. to close these gaps, the president will offer an opportunity growth and security initiative that will detail a proposal that is part of the president's budget submission and will provide an additional $26 billion for the defense department in 2016. the additional funds will be paid for with a balanced package of spending and tax reforms and would allow us to upgrade aircraft and weapon systems and make needed repairs to our facilities. it brings unit readiness and equipment closer. i strongly support the proposal. the president's proposal for 2015 contains a five-year defense budget plan.

over five years, this plan has one hundred $15 billion more in defense spending and sequestration levels. the reason we are requesting this is because the president and i would never recommend a budget that compromises our national security. continued sequestration cuts copper mines how national security or the short and long-term. sequestration requires cuts so abrupt that we cannot shrink the size of our military back enough. in the short term, the only way to admit sequestration is to sharply reduce spending on readiness and modernization.

that would certainly result in a hollow force and one that is not ready and capable of fulfilling missions. after trimming the military enough to restore readiness and modernization, the resulting force will be too small to fully execute the president's strategies. the 2015 budget offers a more deliberate and responsible approach that protects readiness and modernization while maintaining a force large enough to fulfill our defense strategy. this plan balances the need to protect our national security with the need to be realistic about these reductions. dod has completed a detailed plan on sequestration levels for 2016 and beyond. the reality of reduced resources and a challenging and changing strategic environment requires us to prioritize and make difficult choices. some of those choices, we must make them now.

other choices, particularly those that require the ultimate sacrifice of our armed forces are decision point in our budget and we will make these decisions when we have clarity on future spending levels. our budget has flexibility based on different fiscal outcomes. before we recommend any changes in the military capabilities, we focus on and lamenting management reforms and reducing the overhead and operating costs will stop last summer, i announced a 20% cut in the dod major headquarters operations budgets. is expected to save in the operating costs over the next five years. these efforts began in the office of the secretary of defense and the joint staff. we are paring back contracts pending and making targeted cuts and civilian personnel and financial information.

we are taking other steps to become more efficient and are lamenting $200 billion in the last 300 -- last three budget proposals. we have overhead reduction and we are not cutting costly infrastructure. dod will ask congress for another round of base closures in 2017. i am mindful that congress did not agree to back those requests in the last two years. if congress intended to block these requests, even as they slashed the budget, will have to consider every school in our disposal to further reduce infrastructure and dod as already reduced infrastructure where we can.

authority is not needed and we have reduce our infrastructure and the european consolidation review is this bring. dod will pursue it. reducing overhead will continue to be important and the potential savings will not be enough to meet the targets under the president's budget. to meet the reductions of the skill required, we had to carefully examine the military structure. our structure and modernization proposal has three realities. after iraq and afghanistan, we are no longer doing long stability operations. we must remain with the technological edge over adversaries. the military must be capable to respond to all contingencies and decisively defeat any opponent. accordingly, our recommendations are for a smaller and more capable force and a rapidly-deployable one against advanced adversaries.

we reserve all three legs of the nuclear triad. we want a say, securable, and affective nuclear force. we can project power over great distances and carry out a reality more relevant to the president's strategy. we are building hardship capacity and the feeding asymmetric threats. we are sustaining security commitments and our engagement. our recommendations seek to protect capabilities that are uniquely suited to the most likely missions of the future, most notably the special operations forces and the crisis response.

accordingly, our special operations forces will grow from 66,000 today. let me describe key recommendations for each of the military services. for the air force, an emphasis on capability overcapacity mean we protect the key modernization including the new bomber, the joint strike fighter and the new refueling tanker. we also recommended investing $1 billion in a next generation jet technology which we expect to produce cost-saving to produce fuel consumption. this new funding will help ensure our robust industrial base. a strong and important base

itself, a national strategic place. to fund these, the air force will reduce the members including the entire fleet. retiring the a-10 fleet saves $10 billion. it will call for replacing the a-10's with f-35's. the war talk is a venerable platform. it was a tough decision. it is a 40-year-old single-purpose airplane originally designed to kill enemy tanks and cold war battlefields. it cannot survive or operate

effectively where there are more advanced aircraft for defenses. and as we saw in iraq and afghanistan, the advent means that many more types of aircraft can now provide even active support from b-1 bombers to remotely piloted aircraft. these aircraft can execute more than one mission. the a-10 is also making it more difficult and costly to maintain. significant savings are only possible to eliminate the entire fleet because of the fixed cost of maintaining support apparatuses associated with that aircraft. keeping a small number of a 10's would delay the trade-offs. in addition, the air force will retire the 50-year-old u2 in favor of the unmanned. this decision was a close call as the dod had recommended retaining the u2 over the hog over cause issues. dod has been able to reduce the operating cost with is greater range and endurance, the global

hawk has a higher attitude reconnaissance a form for the future. the arsenal of unmanned systems that while effective against insurgents and terrorists cannot operate in the face of enemy aircraft in modern air defense. instead of increasing around-the-clock air patrols of predator and reaper, the air force will go to 55. still a significant increase given the continued drawdown in afghanistan, this coverage will be sufficient to meet our requirements and we will still be able to serve 71 combat areas of. the dod will buy the more capable reapers until we have an all reaper fleet.

these sequestration levels are returned in 2016 and beyond. the air force would have to make more significant cuts. the air force would have to retire 80 more aircraft including the entire kc-10 and global hawk. as well as slow down purchases of joint strikers resulting in -- through 2019. and combat air patrol and it would have to take a return to readiness. next, the navy. under the budget plan, the navy will lunch and aggressive and ambitious plan to reduce cost and maximize resources available to buy available ships. this will enable our inventory to continue to grow over the next five years to support global demand. the spinet levels propose under the budget would enable the navy

to maintain 11 carrier strikes. however, we would have to make a final decision in the future on the george washington aircraft in the 2016 budget. if sequestration levels remain in place for fiscal year 2016, she would need to be retired before her scheduled nuclear refueling and that would leave the navy with 10 carrier strike groups. keeping the george washington and the fleet will cost $6 billion. we would have no other choice than to retire due to sequestration levels be reimposed. at the president's budget a level, we would pay for the overhaul and maintain 11 carrier's. in order to keep the inventory ready and modern under the president's plan, half of the

cruiser fleets or ships would be laid up and reduced while they are modernized and eventually returned to service with greater capability and a longer lifespan. this approach enables us over the long term to sustain the modernize of our fleets of cruisers which are the most capable ships. overall, the navy's fleet would be modernize under our plan which continues buying two destroyers and two attack submarines per year as well as one additional floating base. we preserve the fleet's modernization program and provide for increased in inventory over the next five years.

regarding the combat ship, i am concerned the navy is relying too heavily to achieve its long-term goals for ship numbers. therefore, no new hundred negotiations beyond 32 ships will go forward. with this decision, the line will continue beyond our five-year budget plan with no interruptions. it was designed to perform certain missions such as mine sweeping. in a relatively permissive environment. we need to closely examine whether the system has a protection and firepower to operate and survive against the more advanced adversaries and emerging new technologies especially in the asia-pacific. if we were to build out of the program to 52 ships as previously planned, it would represent 1/6 of our future 300 ship navy a given fiscal restraints, we must direct shipbuilding resources to a platform that can operate in every region and along the full spectrum.

additionally, the navy will submit alternative programs for lethal small surface combatants generally consistent with the capabilities. i've directed the navy to consider a new design of ship design and a modified lcs. these proposals are due to meet later this year and time to inform the budget. if sequestration spending levels return in 2016 and beyond, will be forced into much tougher decisions on the navy surface fleet. six additional ships would have to be laid out and we would have to slow the rate in which we by destroyers. the net result of sequestration level cuts would be 10 fewer large service combatant ships in the navy operational by 2023. spending levels, the navy would hold procurement of impairment for two years.

the marine corps inherent agility and crisis response capabilities and maritime focus makes it well-suited to carry out many priority missions under the president's defense strategy. if the presidents levels are sustained in the next five years, it would avoid reduction and beyond those already planned. today, the marines number 190,000 and they would drawdown to 1 82,000. if sequestration level cuts are reimposed in 2016 and beyond, the marines would have to shrink to 175,000. under any scenario, we would devote 900 more marines for enhancement around the world. finally, the army. we seek a highly ready and capable army. able to dominate any opponent across the whole spectrum of operation. to achieve this, the army must accelerate the pace and increases scale. today, there are about 520,000 active-duty soldiers which the

army had planned to reduce to 490,000. the strategic choices in management review and the qdr determined since we are no longer holding stability operations, an army of this size is larger than required to meet the demand of our defense strategy. given reduced budgets, it is also larger than we can afford to modernize and keep ready. will decided to further reduce active strength to a range of 440-450 soldiers. i've accepted the army's recommendation to terminate the current ground combat vehicle row graham and redirect the funds to developing the next generation.

i've asked the leadership of the army and the marine corps to deliver new realistic vision for a vehicle modernization by the end of this fiscal year. the changes would result in a smaller army, but would help ensure the army remains well trained and clearly superior in arms and equipment. while the smaller capacity and tells additional risks, if we simultaneously had ground operations emma our analysis showed this force would be capable to defeat aggression and one of major combat theater as it must be supporting air and naval forces engaged in another theater against an adversary. if cuts are reimposed in 2016, the active-duty army would have to drawdown to 120,000 soldiers.

the army national guard and reserves will also drawdown in order to maintain a balanced force. today, the number is about 355,000 soldiers in the reserves about 250,000 soldiers. by 2017, under our recommendations, it would be 335,000 soldiers in the army national guard and 195,000 in the reserves. if sequestration returns, the army national guard would continue drawing down further to 315,000. army reserves to 185,000. where protected the national guard and reserves from cuts to the extent possible, but in order to maintain and be ready and capable force and time of fiscal constraints, no component of dod can be entirely exempted from reduction.

this 5% recommendation and guards and soldiers is smaller than the 13% reduction in active-duty soldiers. and mindful that many in the community and congress have argued that the reserve component should be protected from cuts because they provide more troops at a lower cost. if our priority was having the largest possible force in the event of a large-scale prolonged war, that would be reasonable. however, our defense strategy calls for more than that. capacity is just one factor. as we must prioritize readiness, capability, and agility. while it is true that reserve units are less expensive when not mobilized, our analysis shows in the reserve unit is roughly the same cost as an active-duty unit would mobilize

-- would mobilize. they perform well in afghanistan and iraq and we cannot have achieved what we did without them. express shows the specialties require greater collective training to combat. issue reside -- it should reside in a full-time force where the capabilities will be more ready and available to commanders. what best serves our national security is when the guard and reserve units complement the active forceful stop that is why we recommend apache be given to active duty. the active army will transfer black hawk helicopters to the national guard. they will bolster the needed capabilities in areas like disaster relief and emergency response.

these changes to the guard helicopter fleet are part of a broader realignment of aviation designed to modernize the fleet and make it highly capable and affordable. the fourth will retire its jet ranger used. the active army overall fleet would decrease by 25%. it would be significantly modernize under the president's budget plan. the fleet of helicopters would decline by 8%. it would gain new blackhawks and light utility. if sequestration is reimposed, the army would have to cut 50 of these helicopters from the guards. while any reduction has risk, a future guard force would still serve as an important operational and strategic complement well equipped for requirements for homeland

defense. and support to civil authorities. in making these difficult decisions on the guard and reserves, we affirm the value of a highly capable reserve component while keeping the focus on how our military can fast meet future demand. we made choices based on strategic priorities, clear fact, unbiased analysis, and fiscal realities. with the bottom-line focus on how best we can defend the united states. beyond modernization, there's the challenge of dod's personnel cost. it makes up half. dod has complied with congressional direction to reduce our civilian personnel numbers and work to reshape our civilian workforce so that it has the skills needed for the future.

given steps taken to reduce civilian personnel costs including three-year pay freeze, no realistic effort to find further significant savings can avoid dealing with compensation. that includes pay and benefits for active and retired troops, both direct and in-kind. primary way to reduce overall payroll spending has already been discussed, reducing the total number of people in uniform by breaking down the military core structure. since too small a force at it too much risk to our national security interest, we must address pay and benefits for service members which since 2001 has risen about 40% more than the growth in the private sector. one of the reasons is that congress has boosted pay increases above the levels requested by dod and budget submission.

new benefits and increases in pay went beyond what expected or had been promised when joined the military. as a united states senator, i support these proposals, it was the right thing to do at the time. given the burden on our service members, the recruiting and retaining challenges, and the fact we had few constraints on spending. but today, dod faces a vastly different fiscal situation at all of the service continued to meet recruiting and retention goals. this year, where concluding combat operations in america's long to war. a war that lasted 13 years. we must consider fair and responsible justice to our conversation package. for 2015, we will recommend a one percent raise in basic pay for personnel with the exception

of general and flight officers hold pay will be frozen for one year. basic pay raises beyond fiscal year 2015 will be restrained and races will continue. we are also recommending a number of changes. will slow the growth of tax-free housing which currently cover 100% of housing expenses until it covers an average of 95% of housing expenses with a 5% out of pocket contribution. in comparison, the average out of pocket was a two percent in the late 1990's. we will no longer reimburse for renters insurance. we will reduce by $1 billion to annual subsidy provided to military which totals $1.4 billion. we are not shutting down, series. all commissary's will get free

rent and pay no taxes and can provide a good deal to service members and retirees just like our post exchanges. which do not receive direct subsidies. oversees and a remote locations will continue to receive direct subsidies. we will simplify and modernize our health insurance plan by consolidating plant and adjusting deductibles and co-pays in ways that encourage members to use the most affordable means of care such as military treatment facilities, preferred providers, and generic prescriptions. what as retirees and some active family members to pay a little more in their deductibles and co-pays but their benefits will remain affordable and generous as they should. to protect the most vulnerable

under this plan, medically retired service members and families and the survivors of members who died in active-duty would not pay the annual participation fees charged to other retirees and would pay a smaller share of the cost for health care. our proposals do not include any recommended changes to retirement benefits for those now serving in the armed forces. we are awaiting the results of the compensation or retirement commission which is expected to present its report in february 2015. we will await the commission's report before pursuing reforms in this area. the dod continues to support the principle of grandfathering for any changes in the future. the adjustments to compensation presented in this year's budget plan would allow them to invest more critically important

modernization and readiness while allowing them to recruit and work can -- and retain generous, competitive, and sustainable benefits. the savings will enable us to have a well-trained and ready, agile, and motivated and technologically superior force. although these recommendations do not cut anybody' as pay, i realize they will be controversial. congress has taken important steps to control the growth of compensation spending but we must do more. a holistic and comprehensive of approach must be taken to compensation changes. continuing piecemeal changes will magnify uncertainty and magnify doubts about our service members and with our service members about whether promised benefits will be there in the future. instead, we must keep faith to our men and women in uniform and fulfill the promises that we have made to them. america has an obligation to make sure service members and

their families are fairly and appropriately compensated and care for. we must also have a responsibility to provide our troops with the finest training and equipment possible. so the whenever america calls upon them, they are prepared with every advantage we can give them so they will return home safely to their families. the president's budget fulfills both of these promises. our proposals would carefully crafted. -- our proposal were carefully crafted and we recognize nobody serving our nation in uniform today is overpaid for what they do for our country.

but if we continue on the current course without making these modest adjustments now, the choices will only grow more difficult and more painful down the road. we will inevitably have to cut into compensation even more deeply and abruptly or deprive our men and women of the training that they need to succeed in battle. but either way, we would be breaking faith with our people. and the president and i will not allow that to happen. the recommendations i have described will help bring us into balance over the next decade and position us for strategic and fiscal uncertainty. it will log the military to protect our country and fulfill the strategy. but, with some increased levels of risk. we should be clear about these risks. over the near-term because of budget limitations even under the budget ax, the military will continue to have gaps in training and a mad dash and maintenance diminishing -- and maintenance even as we sustain a heightened posture in areas like the middle east and africa.

$26 billion provided to dod by the president's fund would allow us to continue to restore readiness and help mitigate the risk. we also face the risk of uncertainty in a dynamic and dangerous security environment. budget reductions in everett will he reduce the margin of error in dealing with these risks. as other powers are continuing to modernize their weapon portfolios to include anti-ship systems and anti-air and a smaller force strained our risk to respond to contingencies. with the president's budget, our military will still be able to go against any aggressor. we can manage these anticipated risks under the budget plan. they would grow significantly if

sequestration level cuts return in 2016. if our reforms are not accepted, or uncertainty levels over budget cuts continue. as i have made clear, the scale and timeline of continued sequestration level cuts would require greater reductions in the military's size, reach, and margin of technological superiority. under sequestration spending levels, we would be gambling that our military would not be able to respond to multiple contingencies at the same time. that is why our recommendations beyond fiscal year 2015 provide a realistic alternative to sequestration level cuts, sustaining readiness and modernization most relevant to strategic priorities. but this can only be achieved by strategic balance and reforms and reductions that the president and i will present to the congress next week. this require congress --

-- congress -- to partner with the department of defense in making politically difficult choices, which i will address more specifically when i testify before congress. as i waive these recommendations, i have, as i often do, look to the pages of american history for guidance. in doing so, and admonition by henry stimpson stood out. writing after world war ii, roosevelt secretary of war during that time said that americans must act in the world as it is and not in the world as we wish it were. stimpson knew that america's security at home dependent on sustaining our commitment abroad and investing in strong national defense. he was a realist. this is a time for reality.

this is a budget that recognizes the reality of the magnitude of our fiscal challenges, the dangerous world we live in, and the american military's unique and indispensable role in the security of this country and in today's volatile world. there are difficult decisions ahead. that is the reality we are living with. but with this reality comes opportunity. the opportunity to reshape our defense enterprise to be better prepared, positioned, and equipped to secure america's interests in the years ahead. all of the dod leaders, these men and women sitting here today, and i have every confidence that this will be accomplished. thank you. >> as the secretary has laid out in detail, this budget proposal represents a response, and more important, a realistic way forward.

in my view, it represents both sound national security and fiscal responsibility. it provides the tools for today's force to accomplish the missions we have been assigned, rebuilding readiness in areas that were, by necessity, deemphasized in the past decade. it modernizes the joint force for tomorrow, ensuring that we are globally networked and can deliver options for the nations. and it reflects in real terms how we are reducing our cost, the cost of doing business, and working to ensure that the force is in the right balance. in short, this budget helps us to remain in the world's finest military, modern, capable, and ready, even while transitioning to a smaller, more affordable

force over time. the chiefs and i will never end our campaign to find every way to become more effective. we will do things smarter and more efficiently, more in line with the sorts of security challenges that we face, and in line with fiscal reality. we will seek innovative approaches not just in technology, but also in how we develop leaders, aggregate our formations, and work with our partners. we will improve how we buy weapons and goods and services, streamline our headquarters, and with the support of our elected leaders, shed excess into structure and weapons systems at we no longer need and simply can no longer afford. at the same time, this budget recognizes the imperative of getting our personnel costs in balance. otherwise, we will be forced into disproportionate cuts to readiness and modernization. i know this weighs heavily on the minds of our men and women in uniform, and on their families. our force is extraordinarily accepting of change. they are less understanding of piecemeal approaches. they want and deserve predict ability. the chiefs and i also continue to strongly recommend grandfathering any future changes to military retirement, and we will continue to place a premium on efforts that support wounded warriors and those who

have mental health issues. it is important to note that the services will be able to reinvest the money saved by slowing compensation growth, and to closing some of the dire nest -- dyer readiness gaps and other needs for the future. i have said before that we must be clear about what the joint chiefs -- the joint force can achieve, and how quickly, and for how long and at what risk. to be clear, we do assume higher risks in some areas under the fiscal year 15 budget and we will have to manage those risks. however, the sequestration level cuts return in 2016, then the risks grow and the options we can provide the nation dramatically shrink. we are willing to take risks, but none of us are willing to take a gamble. at the end of the day, it is our soldiers, sailors, airmen, marines, coast guard men, america's sons and daughters who

will face tomorrows challenges with the strategies and structure and resources we develop today. our most sacred obligation is to make sure they are never sent into a fair fight them a which is to say that they must be the best led, the best trained, and the best equipped force in the world. thank you. >> mr. secretary, what would you say to critics that say this budget cannot provide contact with congress, and that allies may be fearful that these proposed cuts and those that could come in 2016 suggest a military in decline? that it is not a desire, but and ambition? >> let me answer your question this way. i framed in my remarks the realities of the kind of world that we live in. i also noted in my remarks what we, collectively -- the

leadership at the department of defense -- believe is going to be required to deal with these threats and challenges that the real world prevents to america, and our allies and our partners. as i have said, we believe we will present a budget that can fulfill the commitments that we have to this nation, our people, to keep them safe and secure. and also, the commitments that we have to our allies and partners around the world. there are differences of opinion on how we do that. at the same time, we owe it to the american people and our congress, those individuals who represent the american people, the risks involved and further cuts to our budget. we have tried to present a budget based on the balance of those realities. we have done it in a collaborative, pragmatic way, that we think we can defend. and i understand there are many audiences to hear.

but i believe, as i said in my closing remarks, that this country should be assured that we will retain the capability to defend our country and our interests around the world. i believe that our allies, as well as our adversaries, will understand that. there is no military in the world that is anywhere near as capable as the american military.

by any metric applied, whether it is the quality of the people, the institution, the technological edge, the resources we apply. i have confidence in this budget and i have confidence that we can defend the interests. >> i have a question about the 26 billion dollar opportunity fund. could you clarify a little bit? because it implies that this is a done deal, that you are going to get the money automatically. what has to happen in domestic discretionary spending and in tax revenue increases in order for you to see any of that money? >> well, i think as i said, and in your pre-briefing that you received, that we will present the $26 billion in the budget that will be presented to congress next week. omb is working the issue as part of the total $58 billion package on behalf of the entire administration. the dod part of that is $26 billion. i hope i did not reference any point about guaranteeing anything. no budget is guaranteed. but this is $26 billion that we collectively believe needs to be put back in, to get us back up to a standard of readiness, and

buy back much of the operational shrinkage that we have had over the last two years. and we'll get us back on a track that we have fallen back from over the last two years of these cuts. that is what it is about. the mechanics of that will be presented in the budgets and through omb enter the president's larger budget. >> capability question. a lot of your critics will ask why wasn't the f 35 the largest program in the history touched in -- why wasn't the f-35, the largest program in history, touched in this budget? why wasn't it touched their? >> did you just say i have critics out there? [laughter] look, this was all about trying to balance capability, both today's capability and future capabilities based on emerging

threats. you are well aware of what the f-35 brings as a fifth-generation fighter, with capacity, size, and readiness. and in that equation and with the collaboration of the service chiefs, we managed it. and it wasn't managed exactly the same by each service, by the way. but this has been a year-long process. >> mr. secretary, on pay and benefits, you and other secretaries have headed down this road before with slowing growth and pay and benefits. congress has rejected most of this. what makes you think you will be any luckier this time? i know you were with the veteran services administration this morning to lay this out. how tense with that meeting and did you make the sale? >> you have to ask them.

i was not there to make a sale on that particular meeting. it is the fourth time i have met with all of them. it wasn't a sales job. it was, first of all, to explain to them how we came at the decisions and choices. and what we used as reference points. and to give them a clear understanding of that. then i wanted to hear from them. i wanted to get their opinions. and we listen to them not just four times a year, but all the time. these organizations represent active, inactive, -- this is the whole universe of the people who do so much for our country, and have done so much. i wanted to hear from them. i wanted to get their feedback on what is possible, not possible. they know this better than almost anyone that there are tough choices out there. and i want to assure them that i want their input. i need their input.

we all do. the we are going to proceed, as i have used the term a number of times in my speech, on a fair basis, and appropriate basis, a basis that we can sustain. something that the chairman said is really important, and that is, -- and i mentioned this briefly -- whatever decisions will ultimately be made on pay compensation and retirement, it needs to be done once so that our men and women in uniform and their families, those who have served and those thinking about serving, do not constantly live under this cloud of uncertainty and threat. what will they do to us next year? will they take this back next year? i don't want that and we cannot have that. we will not let that happen. it was a number of things that we talked to them about. as to your initial question, the

only thing i can say in answer to past secretaries, this secretaries effort -- the secretary, efforts that have been made before, i said this in a speech and everybody knows this. this is a different time. we have not seen this time in our budget -- the threats in the world, what is going on in the world. certainly, every year is different, but this is the first time in 13 years we will be presenting a budget to the congress of the united states that is not a war funding budget. you might say, so what. but that is a defining budget, because it starts to reset, reshape. to marty's comments, rebalance, redefine, our enterprise for the future. what we have is the reality of what we have. it is a different situation.

it doesn't mean that we are going to a, which everything that we have proposed and that congress will accept the recommendation. it is a different time. and it means we are required to deal with that different time in a very responsible way. >> secretary hagel, you mentioned we need to be clear about what is involved in this. in 2016, if sechrist ration continues, the army might go down to 420 -- if sequestration continues, the army might go down to 425,000 soldiers. does that mean there'll be difficulty in a prevailing conflict? >> what the risk is, and the chairman noted this in his comments, and i have motivated -- noted it in mind. anytime you bring a force structure down and capability down and resources down, that will add to the risk of the dimension of the missions that you are expected to carry out. you have fewer troops, fewer ships, fewer planes.

readiness is not the same standard. of course, there will be risks. there are risks across the whole horizon of response abilities. that is what we are talking about. it cannot be any other way if you're going to fulfill the president defense strategy -- the president's defense strategy guidance and the commitments we have around the world not only for our own security, but to our allies and partners. >> i need to add something to that, though. because there is always this tendency when you look at what is happening to the budget to look at what is happening to each individual service. but don't forget we are a joint force. let me just say, four exam, you mentioned the army's end strength and what effect it would -- for example, you mentioned the army's end strength and what effect it would have on the army. the army provides a lot of logistics enablers, a lot of kinetic control, signals, things

that the other services fall in on that the army provides. and by the way, the army falls in on things that the other services provide. this will have an effect on all of the services if we go to all the way to sequestration levels. and the human dimension of this -- for example, inside a structure of about 420 thousand, about one third of it is consumed by support to other services, the institutional support to itself, whether it is schoolhouses or medical programs, you know, all the things that make a service a service. it really begins to limit in some significant ways that which is available to deploy into combat.

i'm telling you 420,000 is too low. >> [inaudible] >> those are all details that will come out as we discussed this budget, i think. >> thanks, everybody. >> thank you. [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] >> in the past there have been disagreements about ending some programs. do you think we will see the same conference with this new round of cuts? rex absolutely. we are seeing suggested cuts here that congress has objected to. it would expect to see the same sort of battles appear. benefits, military even some equipment they suggested cutting. congress has made it clear that they are not fond of it so dod has their work cut out to convince them that is what we need. >> he mentioned cutting some specific programs like the a-10 aircraft and the u2 spy plane. wasast year the a-10

suggested. there was language to make sure that no money was used to and the program. i would expect to see the same fight there. i do not know how much fight there has been on the hill about that but we are seeing this and a lot of the programs, some of the tri-care cuts and some of the pay raises they suggested. the deity keeps coming back and saying these are sa removes and congress says they are not things that we prefer. >> why is that, why do they want to keep these programs that deity says we cannot want rest of our crack some of it is parochial. having to fight to keep them. there is a lot of old veterans who support these and to talk to their congressmen and want to keep them as well. sometimes it is election politics. no one wants to be seen as cutting benefits to veterans or two troops or -- we have seen

whatever pay raise the dod has come up with. the folks at the pentagon have had to do a real sales pitch to tell them we cannot afford to keep giving a little bit higher pay raises. we have to keep this under control. >> are there certain regions of the country it would be more affected than others i've proposed cuts? rex from what we have seen there are a few pieces that would be is harder as some equipment moved from guard units to active-duty units. thehe army and some of other services. right now we are seeing the real topline big picture sort of items. the biggest thing that are jumping out to us are the pay and benefits issues that would affect everyone across the force . >> the ap reports secretary hagel wants to decrease the size of the military from hundred 22,000 to about 400 50,000

soldiers. any opposition from congress? frome have heard a lot defense hawks and that for 50 number is the one that scares them. that is not enough staffing and not enough people if we get into a major conflict. the pentagon has countered they need -- people cost money and they cannot afford to keep that nine--- ae on on a non-wartime footing. some talking about significant cuts to the marine corps. we will see fights on just about everything as he gets up to the hill. >> have we seen plans similar to this before like with donald rumsfeld prior to 9/11? rex i am not sure about that and what was being proposed. 9/11 changed everything overnight. we did see secretary gates and secretary panetta push these specific proposals with tri-care fees with some of the benefit rollbacks.

they were met with mixed success. it is very easy for congress to give out extra money when it looks like they are being magnanimous when it comes time to pay for it and it becomes tougher for everyone. >> what happens with the budget proposal from here, the proposal from secretary hagel, where it is a go now? rex next monday we will see the rollout of the federal budget proposals. said -- gaveel some of the themes and you will see people attacking the nitty-gritty specifics. it will head up to the hill and there are some authorization bills. mckeon said that he has committed this year to making sure that his committee's work on the defense authorization bill get done by october 1. it would be the second time in

the last decade they have been able to get the budget bill done on time. we will see. there is usually plenty of fights not just tween dod and congress but the house in the senate. >> you can read his work it armytimes.com. thanks for the insight. >> thanks for a much. eric holder will address attorney generals from around the country at their annual winter meeting tomorrow. he is expected to touch a number of topics including recent settlements with the mortgage loan industry, human trafficking, and mandatory minimum sentences in drug cases. live coverage at 10 a.m. eastern. later in the day, the house and senate veterans affairs committee will hold a joint hearing on disabled military veterans. we will have live coverage at 2 a.m. -- 2 p.m. eastern. told as students and as a nation in terms of popular imagination is there is

all kinds of citizens in marches and demonstrations that occur but they are done by these famous iconic people. so tired that was she refused to get up from the bus in montgomery, alabama and sparked the bus boycott and a theg preacher who even president referred to during the election as this young preacher from georgia who is dr. martin luther king, junior who leads the masses of african americans from racial oppression. this notion that rosa sat and martin could do this stuff and jesse could run and barack can fly, all these things, they they simplify a much more complicated history. that history involves so many african-americans, women and men who proactively dismantled racial segregation including rosa parks. she was an activist.

she did not just refuse to give up her seat by accident. there was a concerted, strategic effort to transform democratic institutions.