,orking, and currently congress held understanding. it is difficult to have a portfolio approach with high-risk technology when you know you are going to be sorely punished for any failure, even if it was a conscious choice to take risk. as the secretary looks to models in silicon valley, you cannot assume that every investment is going to pay off. if that is your assumption is that is your planning basis, you're not being ambitious enough. mike has something he wants to add? mr. mccord: we have had challenging discussions as well on areas like health care over the years. i would say, on your first point about agility as well, that seeing that two of my do havesors, we

operational agility that requires financial community to respond. our organization has always worked with combatant commanders to respond to the challenge. we are talking about the planning program and budgeting, execution. we do not talk about execution that much, but we do have to respond to the here and now contingency. appreciate and i do the reason why the flex ability in our operating account, and the way we are allowed to use them with the commander-in-chief are now negotiated with the legislative branch on a day-to-day basis. and are not negotiated with the legislative branch on a day-to-day basis. upre are avenues that come that are more enduring priorities, like the rebalanced. the most amount example of that

was the ebola response that was incredible. having the ability to do that, working with our committees on congress is important as well to do a different type of agility of an operational agility and strategic agility. out a call for questions on twitter, and i have some good ones. i will ask one. in many years, we see the military pay raise as proposed by the administration as an across-the-board pay raise. one of the challenges with that of course is that over time, if you have across-the-board pay raises, it widens the gap and paste for the higher income lower ranks, because they grow at a faster amount because you are starting from a higher base. time, there are

certain parts of the pay scale based on recruiting and retention needs. is that something that the department has looked at this year, and you think it is time to look at that again? i think this year we have to focus, the mental focus has been on monetary things i have described. that consumed a lot of bandwidth. there is a variety of aspects for that. also, fundamental change in the retirement system is something we need to work through. i was just out at indianapolis with my defense financing accounting people, and we were talking about everything we would have to do to get ready for the questions that come in. it, i doeen looking at

not know if nontraditional is the best way to describe it, but in terms of childcare, maternity, paternity leave, we will have changes in retirement as well. every year there is a discussion of health care, ways to make it better. ideally, improving both the value and the delivery in the health care system. i think the pay raise is an .mportant part the preacher -- virtue of it is a can be changed if we see something is wrong. there is not a case that i have aware of to go across-the-board at this time. but it is something we can do we or a future administration decided best changes needed to be made at the margin. there are some pockets where you have the opposite problem. but expression

-- a compression. mr. harrison: i want to open up for questions from the audience. microphone to coming to you now. >> good morning. i am an independent consultant, and i do not think anybody envies job you have, trying to put together invented when there are so many floating variables and changes of priorities and so forth. i do most of my visits around the world, so i taken out of you community,n out of different with different ministries and cultures and so forth. as you try to look the navy budget, all the service chiefs have a common denominator is the lack of an additional group. workedef of staff there

with this. as you look forward, and i realize you do not know if you're going to be able to raise are based on july and so forth, as you mentioned earlier. but is there a sense that maybe we need to add another carrier, and then there is a domino effect with that. is there any sense of that? >> the department is on a path to again have 11 carriers operational. we were in a short-term gap where the delay is building the new character. already, i am not sure if your argument is to go still for aher beyond that, which is pretty big undertaking, given that the nature of the carrier industrial base.

the navy is working hard, and has been for a few years identify the right ways to optimize the deployment and employment of the fleet in order to produce maximum carrier presence. we made some conscious choices a few years back in the face of some geopolitical situations, to search the carrier force staffed and provide enhanced presence for about a year. understanding that the code be we were differing some maintenance, which meant that we would have more carriers in dock and waiting for dock that we would otherwise have for a short time frame, which we are now just about to start coming out of. you are seeing a little bit of the regret associated with the

past decision to surge. but it was very much a conscious decision made by the rick perry defense they saw the world situation. mr. harrison: thank you. thank you. i have a cyber related question for each of you. the f-117 budget calls for about $35 billion worth of investments in cyber. can you give us a breakdown, at least in general breakdown of what this money would be going towards. one of the key capabilities you're trying to push forward in that budget, and what are the top policy issues that you are wrestling with when it comes to using cyber weapons in armed conflict, or in scenarios that they do not rise to the level of armed conflict which requires response?

i think we're still struggling for metrics in the cyber area that are commiserated with some of the ways we talk about other programs. categorization is defense of our own network is the secretary's top priority, and an elegant offense, we look at the cyber embedded in a hole larger efforts that are clu does a great job of leading us. the last couple of years we have done a better job of elevating his role, so we talk about cyber in the context of other issues. one thing that has been on my plate a lot is the response to the opm hack as it was called, which affected dod people. needs, andh our own our own efforts, needing to

respond to the challenges that come to us from the outside. , i think jimmyt could talk about some of the particular choices we have made. there are some that are unclassified, some that are not. mr. morin: i would emphasize we are continuing to grow the overall capacity and capability that is resident in u.s. cyber communications. it is resident in the very service components for it. focused understandably first on the priority of securing the network as like said. we know that the way the u.s. operates in peace time, and clearly the way it would operate in the case of a major war would be deeply dependent on the flow of information to we know that that is a contested environment. we certainly have seen it contested in the commercials where we have major companies face debilitating hacks. we know that these are destined by local governments and

agencies. based on that, we have this idea of defending the network first. we are growing teams that are dedicated to active defense, and to testing ourselves. we are building a series of scorecards and metrics that will hold individual sub , sinceations to account cyber security is in larger respect a disciplined process in a distributed organization like the department of defense. we are finding ways to ensure that commanders at all levels are cognizant of how choices that they are making can affect cyber security. we are also looking at the global environment, and asking hard questions about what does it mean to maintain deterrence in a world where cyber can be weaponized? those of the trickiest questions that have heaviest policy

overtones. i will use that to toss it to my distinguished colleague. >> thank you. as much as we have done in cyber, i begin is fair to say there is still more, as we think about integrating this domain into the way we think about conflict, obviously first is absolute protection of our own networks. from the planning perspective we havego through, do to ask different questions and figure out how we can use this as an effective tool, both from a deterrent and a protection perspective? and we also have to look at do we have cyber reactions to cyber actions, or do we look at figuring out how to integrate cyber into how we think about things at large. it is still very sensitive as tightly controlled, as it should be, given the repercussions that could come back on society at large.

to these issues is important, from a theoretical perspective. but frankly that has to be coupled with what you can and cannot do to understand how you want to look at it in theory. we have a lot of questions. yes, in the back? vision of weour have to be able to do it all square with the looming next administration in 2021 when they have to start planning for next year? roughly, will, the next administration have to to payarting in 2021 ramp-up,,grades, the how do you square those goals of we have to do it all again we have to manager manage this coming? >> a great question.

just one clarification for the group, this year's future years defense plan is the first one in which the real bulk of that nuclear waste is within a planning horizon. this represents the target procurement data for the first of the navy's ohio replacement submarine. are looking at a substantial ramp up, and i do not know we still have slides at hisf you look closely final slide, what we call spaghetti charge, you will see that last year the future defense plan that was shown up here for this cycle, the 2017 budget and the defense plan shows a pick in the defense topline in fy 21.

that was the product of a very serious and deliberate discussion between the leadership of the department of defense and the senior staff at the white house all the way up to the president about this upcoming nuclear monetization. specifically, substantial build not with regard to the ohio replacement, funding for the first ship procurement, and then also some significant cost for both the icbm replacement and the bomber, all those grew less year-over-year than the submarine. so we had a very serious dialogue about that, and in response the president gave the department fiscal planning targets that were greater than those that were projected the previous cycle. it does not represent the whole of the wave you're talking about, that will grow significantly particularly by

the time we get to 2020, and the late 20 20's when the ohio replacement summary is in cereal production. 12ht now we are building years of gap, and we are incrementally funding the submarine over those three years. you can't envision one a year that is going to be a very substantial increase. of $12n the order billion to eight being billion dollars above where we were over this last decade, which was a time of very low investment. investment for the department and the nuclear enterprise the cyclical. the nuclear weapons establishment in the united states was created in post-world war ii, was modernized and updated under eisenhower was modernized and updated under reagan, and while the programs crest and trough based on the cyclical modernizations, we're coming up on another time of

growth. each of those modernizations in history has been allied with a. of increasing topline for the department of defense. increasing topline for the department of defense. this is everything back up. that will be decision the new initiation will have to make and maybe even the administration after the next administration i don't know how many future elections will come before we get to the accident deal with these. question, you and ithow do you square, is the same word for what person or many. the dod specific aspect of trade within the defense budget is a larger national question of how much are we willing to pay for defense we get to that era.

it is something that cannot be limited to just us, which is why we start the conversation with the white house and also the american people as well. are we willing to make that investment? nuclearhat absent the discussion last fall. our request was a here, we did not get it all, people will not willing to pay to the full extent that we thought, and that's a discussion will be had with more importance and more at stake when you get to this point. >> let me add one more quick point, which is we conducted a strategic portfolio review as well. what we did with that, among other things, as we looked very carefully at what were the departments options to pay for nuclear modernization within the stringent forces, within the budget. it very quickly became apparent that unless the department was willing to divest the summary triad, which we are not, there

was no way to pay for that monetization with the budget, because the way you are talking about, because it is an and and flow kind of thing is doubly what we need to spend on the -- nuclear. thehave to look beyond portfolio, even if you chose to do radical things. it would not come close to pay for that whole bill. this is for mr. corey. the administration has said that the defense budget you presented matches the two-year budget deal from last year. republicans in congress are constantly saying we are $17 billion short of what we are allowed under the budget deal. the numbers do not seem to match up here could you show us where you are matching this or where you are not? >> thank you.

yes. in my view we did match the deal. number inudget and a it from the base budget that includes other entities like the nuclear as well. withusly it is not track the target, but it is obvious we are about 95% of that. on the other side, which is where the discussion has been, there is a number in the deal, anders language in the deal. it is the same number and the same language in both. we treated it the same way the congress treated last year. we submitted a budget to that budget number this year. i am well aware at some point there was dressed of that language that has wording about it being passed by the congress or signed by the president. is clear.hink it

i will point out when the secretary appeared in his first here -- hearing, it was not raised by any member of congress that i can recall. i do not think it is that much of a dispute, or that it should be unclear. number in thedget is how we, and that viewed it, and how the ministration view this number. >> let's go over here. >> hello. the discussionn to the practice of the services something unfunded priorities list to congress. these have been readily linked up to capitol hill. the secretary is not provided input yes. -- yet. do the three of you see value in

continuing this, because it essentially sidesteps civilian oversight of the budget process. >> this process began sometime in my career, at least 20 years now we have had this, and it has had its good and it's bad points. it is disappointing that these lists get out so soon before the secretary has had time to review them. they do have some value in the -- ins in eliminating illuminating the margin of where the pressure might be. the problem in this particular instance, as we just had in the previous western, there is an agreed to topline. a service at random, if there was something you took off of the navy list, it would happen at the expense of somebody else. have already had well-thought-out discussions about what priorities are, and

what was already sent. having some unusual changes in the budget situation is less helpful this time than usual. mr. morin: every individual decision is useful to itself. but if you cannot balance it to where you are expecting risk, then that is not as useful. that is what we spend a number of months doing, trying to look at allocating risk across the portfolio and the best way to the secretary thinks. changing one off decisions really does change that whole risk calculation and balanced portfolio. >> we understand that they are asked this question, and they are going to come as they have for over two decades, not response to the question. >> right now the secretary is awaiting the chairman of the

joint chiefs recommendation associated with the lists that the individual service chiefs have sent to the chairman. >> i just want to preface, the congressional role is a part of civilian oversight, and congress asked for the list, just for the record. the answer to the budget for the last five years that you have wrestled with, that is not going to stop anytime soon. so you have to think about budgetary agility, like when you are back here in the end of november, when you said that sacrificing force structure to accommodate, it takes too long to reverse if you get lucky on the money, and so you do not want to do that. what about the high-end of current readiness? of -- theyd

suggested you take a serious look at tier readiness, and the pullback was ferocious. nobody wants to be on the team, blah, blah, blah. the uncertainty of the last few years, and looking forward, have you seen any effort by the services, in a phrase that sam used, train the forced to get ready to get ready. you have the a team ready to go, mr. mccord--

us mccord: you do not see walk away to accommodate the left fall. on the readiness sided, the primary difference between the is ayou described and now heavy degree of contingency operations that are ongoing and multiple theaters. i think that has necessarily consumed the attention of the readiness computing -- community, service providers, and the commanders. differentobably a problem, a more compelling problem in the readiness phase of maintaining as much readiness as you can you give an amount of

manpower and logistics we have had to devote to iraq, afghanistan, and operations like that in recent years. i think if we all looked at this program and this budget, and i will ask jamie to comment here, most of us, most of the leadership of the department itself, if there's anything we idealized, we did not take any more risk than we already war. mr. morin: i would add two points that are very important, thinking about this issue. first, and in a background sense, the large parts of the force are by their nature here in readiness. the navy of course it out and then back, and we need to give people a little time with their families. --y go through an added flow and and and flow.

today's army, where it is a rotational army out in the world, even -- either in combat zone, or rotational support of our day to day activity in korea and elsewhere, is now increasingly in the same sound of numbers of get on the step, go forward, then come home and take a breather. what we used to call the army force generation cycle. both of those are about managing the force through the added flow of activity, and the readiness associated with it. the air force has been the most reluctant to accept any sort of cycle like that, although in operational tempo, and the fact that they had been forward more than they must just much prefer has driven them to a little bit of that. world, a reality in the and it is different than the garrison force that the senator was looking at 25 years ago. point isd important

that if you are an individua service member, you progress through a career of a and you have a succession of experience as to that career. infantryu are an army company commander, you will be in that command a couple of years. if your unit happens to be in a tiered readiness states, in the way that people advocate for, if you happen to be in this, you atl not have experiences that point in your career that you will never be able to make up later in your career, but you will have progressed on. we have a native of a couple of -- we are anity bunch of individual human beings which are shaking up as a consequence of that. we saw that in the sequestration. i was the acting under secretary of the air force at the time we had to stand down operations, because we were out of money.

the men and women in the men and women in those units that were scheduled to have that experience, didn't. we have to be extraordinarily autious. administrations has put a high priority on protecting readiness funding. what you see secretary carter is trying to shift that balance back more toward capability. recognizing that our foundation of deterrence rests on capability, capacity, and readiness. the focus on "ready

for what," is important. the fact that we have to deal with great our adversaries means we have to make sure we have that full-spectrum focus. when we were ready and putting forces into afghanistan and iraq, they were ready for those missions, but arguably not ready against a full near. adversary -- near peer adversary. that is another piece of why you are not seeing money being taken out of full spectrum readiness training. >> unfortunately, we are out of time. i promised i would get these gentlemen out by 10:30. you can save them for the next panel. please join me in thanking these three distinguished panelists. [applause]

bear with us for a second weather gets a more shares set up on the stage -- some more chairs set up on the stage here. [chatter]

>> while we are getting settled, everyone please start to take your seats for the discussion. i want to add a note, we have a new survey that has just gone up on the csi s website. we are doing a survey opening up to the public on defense reforms. comeer kind of people who to these events and watch them online may have strong insights and opinions. please take our survey and we will release the results a week from today.

ahead.ill go i think we are already. i will briefly introduce each of our panelists here. brimley, heis shawn is the executive vice president at the center for new american securities. he formally served on the national security council and is the undersecretary for policy. next on the line is roger zack .ime -- roger zakheim i' he was the deputy staff director and general counsel in the house armed services committee. he has the hill experience to bring to the discussion. in the middle is andrew hunter who is a senior fellow here in the international security program at csis and the director

of the senior fellow initiatives group. he has also worked in the pentagon and on the hill. and he has also been chief of staff to ask carter and frank kendall while they were at atn dell. &l.at a him is mark and see in ark cancian. at the other end of the panel is tina jonas. she had michael mccord's job. she was dod comptroller in the bush administration and since then she has been the president of united health care and is still very active in defense issues.

we have a lot of ideas and insights. we can go down the road here. i will start with shawn. i ask each of our panelists to give five minutes of opening remarks. todd asked me to give a few comments about the budget program so let me focus straight on that. it is a complex question. the issue has been relatively vague. know if we have done the best job in clarifying exactly what this means today. but we are seeing this become more clear overtime. it is important for the remainder of this administration and the next to state clearly the essence of the challenge.

for me, it is attempting to answer a basic question. how does the joint force operate in a world of ubiquitous rescission mission -- precision missions. it is challenging. the challenge for joint force in the current operating environment and how it will involve -- evolve. it is important to remember that the first was about nuclear weapons in the early cold war. we were trying to find a way to respond to the soviet union's quantitative advantages. opset strategy was trying to reestablish a is thetive advantage soviet union cut up to us. both of those strategies focused on developing unique and responses to the

soviet union's qualitative advantage. so the third strategy is trying to reestablish america's military dominance as all of our adversaries will be able to deploy precision munitions against us if they choose to. that is important. -- opsetd upset strap strategy is somewhat more challenging. it needs to be about finding ways to compete on the quantitative battlefield as well. part of the application of having actors like china, russia , iran, and north korea investing in precision munitions quickly takes us to the salvo competition. each actor's munitions are

highly precise. we need to defend against them and make sure we have enough munitions and delivery vehicles of our own depose a deterrent and protection if we have to. so i think we need to invest in new capabilities and new ways to quantitiesss and that can be quickly filled with munitions. there are two main operational paradigms. the first is what i call the problem of the first 1000 nautical miles. how do weon there is project and sustained military power beyond and inside adversary denial zones. an important part of this is the last 100 yards. infantry and close combat. the question is, how do we

ensure they can close with and district -- close width and destroy an enemy with these munitions? i tend to look at it as an investment portfolio and the conference of operation through the lens of these. e. questions. the early indicators of the opset strategy are offensive. on the question of the first 1000 nautical miles we are seeing things like the new carrier base, the aerial which promisesm to help extend the range of air wings which is a fundamentally important proposition for the department.

they can infiltrate the maritime zones and hold the assets at perpetual risk. your sing a lot of advancement it will bring -- you are seeing a lot of advancement -- it will bring -- these are huge investments that get to the quantitative problem, not just the qualitative problem. on the question of pushing munitions down to the ground infantry units is a lot less clear. though i am seeing positive movements and some of the dod labs. there are some emerging pipeilities, such as the guided munition pushing them down to the squad level. the strategy is real, but before the end of this administration,

i would encourage people to be more precise about what exactly the challenges are the opsec is trying to address. but the strategy is not about point solutions, silver ts, or advancing technologies. it is getting the opsec to react to the huge environment before it is too late. i think that the next administration will and herod -- inherit a defense portfolio that is more satisfying. shawn.k you, roger. give us another perspective.

mr. zakheim: i hear this a lot now, the terminology of "spoiler alert." years, the administration would send over a bunch of requests and it was congress's job to throw cold water on. we are seeing that now. i want to give a little perspective with the budget that came over recently and tie it in to what we can expect to see when we have a new administration in place. andreality is, the fights the environment on the hill have not changed at all. the first 1 -- if you look at the house of representatives, they are struggling to pass a budget. debates a $30 billion between the fiscal hawks and the

defense hawks. not even the defense hawks. between speaker ryan and the defense hawks. there is an estimate that is roughly $23 billion higher than the presidents request. we haven't seen a house of representatives, particularly to state -- debate between the freedom caucus, and republicans go beyond this annual fight of who can fight to get a little bit more than $20 billion in cuts. what that means is, despite having a majority in the house, they will struggle to put in a budget that even meets the administration's budget request. the senateg, announced they will not even have a hearing, because they are waiting on the house. discussion ofreat

the architecture of the fy 17 budget request. this will essentially be a cr. we will probably not have the appropriation bill go through the defense line. with the election coming into place, that dis-incentivizes anybody to move. thatpeople would agree administration's last budget is strung to shape and set the table for the next administration -- is trying to shape and set the table for the next administration. at the same time, they are not trying to jettison or abandon their strategies or priorities that they work toward for their administration. that theithout saying, next meditation -- i will reserve trump for a second --

that the next administration -- i will reserve trump for a second, but there will be tweaks going up. the most notable thing that has happened in the context of these theary fights has been evolution of senator cruz's thinking. i don't mean to make an attack. i am affiliated with the rubio campaign, but it is relevant to this discussion. senator cruz came out not long ago saying in the first year he would seek to spend 4.1% gdp. mike record was here -- michael saidd was here earlier and -- what that reflects his there is a consensus among republicans at the top line needs relief. that much has sunk in across

republican candidates. expect tomost people be at the same are doing more on the top line than the current administration. it does reflect that something needs to be done here and now registering with the policy people in campaigns. the interesting piece is, even with the migration of senator cruz's views it has not infiltrated the mindset of the freedom caucus for any stakeholders in the congress. the question is, why not? you look at rubio or cruise they were brought in -- review or in --they were brought

despite the fact that their fearless leader is now recognizing the wisdom of perhaps doing more on that end. i think you will see an embrace or even an increase. in terms of what goes on in the budget, here i will just take a couple of minutes on strategy and a little bit about what this going on within the defense committees, basically has embraced reform. it as abecause they see means of spending less on defense for more so because they

see it as the primary means to grow the defense budget. there is a recognition that you can be mindful of andrew hunter's work on acquisition reform. the budget has been cannibalizing it your after year. more needs to be done in o&m. these other areas outside acquisition reform is where we will see some relief. point goes to n yoko. is the maning to me

of time it took for the threat environment to get to our competitors. saidcame out earlier and russia is number one threat seven years after we had a russia reset policy is shocking. one of them is general policy in a world with cannot control but the top see the declining, how quickly others step in. days of a forced planning construct that means all things to all people. you said we can fend off one theater and deal in another theater without a real excavation of which theaters -- without a real explanation of which theaters where we need to be present. we have to deal with russia. we have operate and respond to the challenge proposed by the

chinese. and the middle east that somehow it is a thing of the past. it is not reality. sayingqtr's and others we do not need a ground force. even though we don't want to have to deal with them, that is in the rearview mirror. your sing consensus from president clinton or even president cruz or someone else who will have to adjust that strategy. it is tied into a more realistic view of the world. let me pause there and pass it on to you. mr. hunter: he set me up nicely. talk aboutsible to this year's modernization request without history, some of which has been discussed on the

first panel. the gist of it is that modernization suffers tremendously in the era of sequestration. they did a big hit on modernization and it came down to a greater extent to the budget as a whole. when we analyzed this in a report we put out in january, we assessed that there is a five year trough. the pipeline you would normally expect to see for major weapons -- that may bes a necessary response to a defense drawdown. certainly every drawdown would have had has shown decreases in modernizations. it also came at a different time. when we had a drawdown after the reagan buildup, we had a reagan buildup.

the air force had been modernized in the 80's and certainly the navy was very large. that is not so true today. it isrtain services untrue. army wasment for the designed for the entire army and the full spectrum missions but was not substantially modernized .uring the last buildup it also means that we arrive at a point today where the modernization budget has a very old force. they have to fight with. that is a problem. and theng to last year fy 16 budget. finally there were glimmerings of pink light on the horizon of

the rescue for modernization, modernization funding was a $25ntially higher. billion increase that he provided a good portion of that went into the modernization account. that was a necessary and good thing. but the chart did not quite go into detail. you could see the increase really didn't carry over. the way the department's budget is structured, leveling out is not the way it naturally functions. pay increases happen in the pay accounts have to go up. if there is a leveling of the top line, modernization once again is in trouble.

with that background, the fy 17 budget is down. dig into the detail, you find out that almost all of that reduction is in aircraft. there are two points i want to make about that. one of the services has been driving -- buying a large number of aircraft. the army also has been doing recapitalization of its aviation fleet. those cycles are coming to their logical conclusions. for the army it was a conscious choice to slow down the rate at which their programs were proceeding. the airport is starting to spool up. it took a little bit of a reduction as a trade-off.

one of the things i should know about that is that the f-35 is an interesting case study because the reduction is really coming down from a level that had been increased by congress. compared to what the administration had requested, the air force request is an increase. generous, that this year's budget comes as a decrease. thatsuggests potentially the department of defense understands the priorities and may have budgeted a strategic accounts. think there is a word for that called "gold watching."

we did not get a chance to put them up here on the truth machine to ask them that question, but that is a possibility. i did want to make one other comment about the unfunded priorities list. in the position our last panel was at, would have given the same position they did. background,y hill you can say when congress is done with the budget, there will be things that have changed. fact of life changes. inflation patterns, foreign-currency fluctuations, pay executes differently than we expect. there is always a few billion dollars of free play in the budget. things that you thought you needed when you put it together, you realize at the endgame that you did not need all that money. it is within the top line.

a true statement about what michael mccord said. but it doesn't mean that congress is taking way some critical party that was in the budget. it's a great signal about when facts change and where that next dollar will go. i will not get in to whether they should have been shared in the way that they were, but they still have utility as a construct. few thoughtsrize a for going forward, i mentioned this trough in the major weapons pipeline. the fy 16 budget did not fix that. overlying problem is addressed, that problem with not be solved. the early f&t that drives your future modernization is fairly well preserved, but we will

still need help when and if there is a larger budget deal. if there is not, then i am concerned that the increases of will be something of a false dawn. congress and the president working together to make sure that is not the case. to talk very briefly about what challenges the next acquisition will face. the second one i want to focus on briefly is this question of adaptability. when threats and the security environment are in a state of great flux, when we are seeing challenges we did not anticipate, and i'm confident there will be challenges next her and the year after we did not anticipate -- next year and

the year after we did not anticipate. there will undoubtedly in my mind be additional challenges that will arise. acquisition system that is agile and adaptable. those are not phrases one normally hears. it has done it at times. the rapid acquisition experience demonstrated that. upguncent decision to strikers with a more capable gun. and sometimes the decision to modify the way the sm6 is employed. they proven they can adapt pretty rapidly, but that will remain a central challenge for the next administration. in some ways, there is some irony in the way this whole

budget development has been between osd and the navy. and many ways -- in many ways, the navy has pioneered the questions about adaptability and leveraging the platforms you have with small investments to get a better return and new capability. it may be one of those cases where like minds argue more. two bigthose are the challenges for the next administration. mr. cancian: i will talk a little bit about forces. i will talk about one over arching theme and then look at individual issues for the particular services. the overarching theme that you will here is whether there is a gap between the strategy and to the size of the forces planned. the current force sizing was

done in 2013. that was before we saw a very aggressive china in the south china sea. before you have russian aggression in the ukraine and threats to the baltics. rse.in syria, of cou plus in the background, iran and north korea. one of the arguments is that the world has changed. the administration's force plans have not changed, so that gap has opened up. sometimes you hear this discussion in codewords. posture versus presence. capacity versus capability. you heard that a little this morning with our panelists, and i think you hurt some of the tension there. the administration initially took the position they would emphasize posture rather than presence. better stuff rather than more stuff. they got a lot of pushback.

richardsono, admiral express that, this was a major change and was maybe leaving some of our allies uncovered, he backtracked. he saw in the panel. ccord it was thm emphasizing posture rather than present but when bob shcscher talked he said we are emphasizing both. we can start with the army. this tension plays out in the army. the previous chief had been outspoken in his concerns that the already was -- that the army was too small. you can see this on the hill to stop the army's draw down.

490 down tofrom 430, then 470 this year, and ultimately 450. enacted, but it indicates concern on the hill and in congress. the other thing you will see played out in the army is maybe some easing of the civil war within the army and its components. the army has both the guard and the reserved, as well as the regular forces. tension there since the beginning of the republic. george washington would complain about the militia. fact there is tension now is nothing new.

they were suggesting that there could be some cutbacks there that the guard was very politically connected and pushed back. there was this commission on the future of the army and they made a number of recommendations to include the components better. many of those would cost money, but if there were more money available, that might help. money can be a great lubricant and ease a lot of tension. if congress steps in, that may ease the civil war. if you look at the navy, they got a lot of attention when the secretary sent them a memo. that really captured these concerns about posture versus presence. have moredesigned to

fighting capability, but it is fair to say that has been a disappointment. it would give you a lot of presence. shipng an $800 million instead of a $2 billion destroyer. the secretary asked them to cut back on that over concerns the for was becoming too small all of the places that the navy needs to be. they were going to deactivate some cruisers, but congress has forbidden them from doing that. we talked a little about this u-class. the unmanned aircraft the navy has designed. they decided not to produce it as a production aircraft, but to turn it into a tanker.

it was called sea barge. it was also called stingray. whatever we're calling it this month, it will be interesting to see how it relates to the carrier. incredibly useful in day-to-day operations and contingency operations. a lot of question about their usefulness and conflict with it your competitor. theon the eastern edge of asian mainland. i think you'll see that played out because an unmanned aircraft would give the carrier much greater range. right now the air wing is very short-legged. back at used to have a range of is down00 miles, now it to 500 miles. might have bridged that gap.

the navy decided they could not by both and decided to go with the short ranged f-35. looking at the air force, you are seeing this played out again. center dot round the a 10 -- centered around the a-10. if you want to penetrate sophisticated air defenses, the a-10 cannot do that for you. you need to move to the f-35. if you want to drop bombs on and surgeons, or -- on insurgents, or environments with less sophisticated air defense, the a-10 can do that for you. the air force wanted to retire the fleet, congress has said to keep them active. you will see the dynamics of

capability played out there. things you are seeing with the marine corps, a lot of innovation in the way that they use ships and organize themselves. traditionally, the marine corps had put units on ships and deployed those around the globe. now they are using non- amphibious ships. created these ps, not-purpose shi necessarily tied to amphibious ships. the marine corps boat tries to maintain a strong amphibious ship. also to ticket package of some of these other -- also, take

advantage of some of these other needs. with that, i will turn it over to tina. ms. jonas: thank you. you have heard many of these topics and i will add my. mine.- and mdd absolutely, you are already seeing a lot of conversation on capitol hill. recently i was asked what would it take, and the price tag is $30 billion-$50 billion. more to come if we are living under a cr this year. incoming administration, that will get relitigated. shipr naval forces, the count is always an issue. i think a lot of concern around

the 280 right now. we had some discussion about the additional carrier. those are all huge items. big-ticket items. we touched on the nuclear modernization. we have not touched on space. add last year on space. that is an area of future consideration depending on how our consolations hold up. i completely agree with the panel. i will add that andrew is right on with the gamesmanship that goes on.

i think those are the big-ticket items. areas of reform that are a? current -- that are a question are, will they take on the next big step? will they take the next big step on health care reform? the administration is counting about $3 billion worth of savings for their health care proposals this year. simplify thed to health care tricare structure. there are similar proposals that will be looked at very carefully by both committees. cr,if we end up under a that is something that will get kicked to the next administration.

that is my list of the force of the future. there is a lot of talk about what that actually results in. in terms of savings, mike suggested it would not be much. i know that many of you track the hearings. they have been hit with a particular thud in one senate armed services committee. who knows what will happen on that. the relationship that roger talked about, and about the broader context, are we $30 billion up or are we going to reduce? hawks against the deficit hawks. that is my list. i would say that the acquisition reform proposals last year were good. the question in my mind is, how will the defense department make use of those proposals.

in the last year of an administration, people are tackling many issues and may not get full use. i will defer to andrew. i will go right to questions from the audience. i will bring a microphone to you. we have one here. >> i am a retired sailor but this is not unable question. -- this is not a naval question. we are talking about joint force reform. i have been a joint staff officer twice in my time. where do each of you think this needs to go? specificallyg about whatever savings we might africomm southcom and being reunited as one?

reductionsing crater -- greater reductions in flagged and general officers? where do you think this conversation needs to go? how much dohere, you think you will save? >> that is a great introduction to our panel next week. csis put out some analysis to all the testimony that has been produced on this question. i recommend that you take a look at that. the bottom line is that there is a lot of concern about the agility of the department to make strategic decisions. consensuseally no about how to bring that about.

there are proposals to merge northcom and southcom. there are also proposals to create new co-coms for cyber and space. others that proposed taking the focus off of africom and south com. the same way with the joint staff. proposals to increase its reach, decrease its reach. the bottom line, there is a lot of interest in improving strategy formulation, but no real consensus about how to do that. >> one, we need to have more people to bend the spear. that is one outcome that i know. senator mccain and chairman thornburg are emphasizing.

the agreement of who it is and who is not is quite philosophical. then there is the cost component. gates.ndful of we will just get rid of it. it of the sudden you found hanging out in the joint staff. even secretary gates, when he references the growth of general officers and flag officers. the number commending them have been removed or reduced. saying, maybe it doesn't require four-star. i believe he achieved 10% of his goal. he essentially was not even close. we have rod notions of what we want -- broad notions of what we want to achieve. i haven't seen anybody do it.

>> [inaudible] >> thank you. whate the question is, problem are you trying to solve. i have not quite seen that from anybody thinking about this which is somewhat problematic. they are still trying to figure out what problem exists as they are thinking about marking up legislation in the next two months. it is a pretty sporty dynamic. the initial goldwater legislation was about getting jointness forward. it is fair to say 30 years after the fact that has been achieved. where there is room for debate is how that question has impacted the question of jointness inside the beltway, inside the pentagon services, joint staff, osd. be, hows their ought to

do we make sure that joint affectrward does not what happens inside the pentagon. at 5000 billets. these are orders of magnitude greater than they were 30 years ago. for is an issue are ripe examination. secretary was on the task force in the early years of the obama administration and supporting it. secretary gates has made some progress, but there is so much more to be done. my advice for those on the hill would be to look inside what we call the fourth estate inside the pentagon. there are lots of interesting things to do, but the first opposition ought to be, do no harm.

some of what i am seeing about the role of the chairman and the authorities -- we need to be very careful to really game out the second and third order effects. what i would call galactic changes and what we think about the command structure. there are lots of things we can do that are relatively low hanging fruit. little about this push for rapid legislation that could relativelyat these effective command relationships between the chairman, secretary, and the president. i worry about the things i am hearing and how you could potentially reset some of those relationships to address a problem that i am not sure is shared among the folks. mr. hunter: i would say that my habit is to be the optimist. let me be the pessimist for a moment.

it is not just that the objectives are unclear. it is that people have expressed objectives as if they were couple metairie. -- complementary. efficiency is a worthwhile and valuable objective put forward by many as a possible objective for this goldwater-nichols effort. you also talk about the strategic environment. the need is to be more agile and adaptive. respect in important which those two things are in contention with one another. the first of the goals, improving joint war fighting. it took extra resources to focus on that. you created new structures and the joint staff to achieve that objective. we make new investments.

it probably would not have been as successful as it has if the focus had been, we will do all of that for less money than before. -- of theere is successes that we have had, being agile and adapted, the european reassurance initiative is a case where we were able to respond. we were caught flat-footed, but with respect to how we have responded, we responded by throwing money at the problem. sometimes that is the right answer. as we go through this debate about goldwater-nichols, if it is all about efficiency across the board, some of the problems that have been identified about being more agile, adaptive, and strategically relevant will become second priorities. second bananas. we have to be very clear minded in what the real thrust of this

is. >> next question. >> my name is jim berm. i am a retired journalist who covered issues in all of the federal agencies for many years. i just picked up this morning the current issue of the washington examiner magazine. they have a story here. fixing a national security mccainand then it quotes as saying the military's technological advantage is eroding fast, precisely at the time the world is on fire. then it discusses some of the issues you brought up about how attempt is mccain's to upgrade or modernize the goldwater reforms. a, do you think that

quote from mccain is on the money or extreme? and what is the outlook to get something out of this effort to upgrade? >> who would like to grade mccain's speech? [laughter] >> mccain generally evokes the attention of journalists, and there is a lot of truth to it, though there is some hyperbole there. we are in a vicious cycle. we have the middle east and challenges from the low-end threats continuing to mount tremendous strain on the military. at the same time, you have the stuff that folks were talking about, the investments that russia and china has made.

exploding phone abilities and exposing the fact we have not had modernization since the period when ronald reagan was in office. administration and the previous administration, you could say those problems were not an issue for us. we were not worried about russia, we did not rely on economic issues from the chinese, we could just focus on iraq and afghanistan and we will be ok with less investment. in reality set in. then reality set in. the notion that somehow you needed goldwater-nichols to get there -- there are a number of things we can do first. we need to do a lot to get out of the threat posed by russia and china without even getting

to goldwater. ase of the resource issues, well as just getting after some of the planning, and focus on war fighting, as opposed to managing budget control acts from year to year would go a long way to stabilizing our security. >> thank you, john harper with "national defense magazine." agreement was supposed to bring stability to the budget, but the panel has raised the possibility of having another cr. i wonder if each of you could weigh in on what you think the odds are of the fy 17 budget being passed before the end of fy 16, or whether there will be a cr. >> i think it is safe to say we will start the year on a continuing resolution.

there is a long track record. dod, theree at the might have been a couple years. ms. jonas: i think we had a couple regular years, but we had to manage the cash problem as well. >> it may be a foregone conclusion that we start the year on a cr. what is the impact of this year? acquisition programs -- mr. hunter: anything that was new, new starts, all of that is essentially put on hold for the duration of the cr. it depends on the length of the cr. all of those types of things tend not to happen in the first quarter anyway. rolls the the way omb

money down the pipe, it takes weeks or months to get programs tee'd up to get to that next stage. if it is a three month cr, the impacts are real but minor. when you talk about a six-month cr, then it becomes incredibly disruptive. it is almost like, that extra three months is losing most of the year. it puts you so far kind the eight ball -- so far behind the eight ball of getting those contracts started. also particularly hard for the acquisition system because it is a multiyear planning exercise. you have a 30-year plan for how that will roll out. in the early stages, it is a 10 year timeline that you are trying to plan for. when you get these essentially

year-long disruptions at random, it undermines the effectiveness of the system. mr. zakheim: the three months to six months is certainly true, but the opportunity is within the presidential election. we have not had a structural change in the politics that has delivered us the budget control act and sequestration since that was enacted. some thought when republicans controlled the majorities in both the house and the senate, you might see a different outcome. the reason why that did not happen is they did not reach a 60 vote threshold. so what they need is a new political reality. they need a president, which they will get in one form or another, and a shift in the congress. the senate is in play. and depending on the nominee, if

the house is in play. so john boehner left and paul ryan came in and they got the bipartisan budget act. it just became my one year deal, but that conduct will potentially end with a new president in place. we haven't discussed it, but we are in this world and it is 50% discretionary, but 70% of total spending. the forces that have driven us to this are things that happened outside defense. when you question is, have a new administration, will that president have support and congress to say we will not do an overhaul of medicare and social security, entitlement programs, because i am comfortable where the economy is just to lift discretionary spending or in the republican situation, to put their money where their mouth is. >> they have not shown the

ability to even move legislation. that hints what republicans may do in 2017. we would have the same conversation nine months from now. onone of the debates going isthe house budget committee nothing limiting. there is not an enforcement mechanism. >> i agree with you. if you want to add another 18 co, the or so in o problem is in the house republicans committee.

the strategy has been floated that maybe you wait and have an request in the next administration. newwait until a administration and congress take office, then try and find a higher level. what do people think of that? what is the rate of success? >> the trick here is to go back to the cr. what is the risk of the way? -- wait. in, therearty comes is always a. d of time. perio during the bush administration, there was pretty quick action to

increase the defense budget. there is a huge risk. of course, that could be a strategy but the timing on it, --.comes in, though those are all risks. this is a strategy with no chance. they are basically submitting to they want toings, put fidelity to paul ryan. they cannot defeat that means caucus, things are ok. expects the next

administration to come in and tinker with what the previous administration had blessed them -- left them. say, let'sgoing to make it $20 billion higher. punting it down administration, that means they have not done anything. the freedom caucus cannot go ahead and do anything to accentuate their budget priorities. they can only bring down paul ryan. they canion is whether do anything other than stop a budget or will they be able to add resources. we are just talking about a blueprint. nothing will be executed anyway. it helps in the next administration to point to that budget will -- bold print.

-- blueprint. >> i am not going to depart from that position. having said that, it does have a downside. it is not predictable in the future. oco is the answer. you are no better off than you were. that is one point. is not sopoint is, it much about the identity of the next president or even other is the next president, it is not answer anything. the problem is still the cap's -- caps. congress is still struggling to deal with a cap that is agreed upon. what about those caps that nobody likes that are still in place?

it is about non-defense discretionary. that is where the solution will be found. that will eventually see back into the defense account. my omb hat on. [laughter] the first thing is on the cr, keep in mind. you don't have a problem about a big jump. the amounts are not that big a deal. for a short. , it is not a big deal. six months or more, that becomes a big deal. oco, laststion of add $38y propose to

billion and that passed the congress. the administration would not accept it. if they tried to add smaller amounts, that might make it through congress. the administration will not accept it but that might be the marker that they put down. you are nodding. year on what they did last , that might be in approach. >> all right, i want to thank all of our talents for joining us. thank you all for coming. [applause]

[indiscernible] >> now to white house coverage. we are live in detroit. hillary clinton will be speaking here at the charleston right museum of african history. live coverage on c-span.

>> she worked part-time at a center to study children. she volunteered her time. she got a great job at a private law firm. she was 30 years old. she started a nonprofit for families and children in arkansas. . who does that? i am going to's start a nonprofit to change our state. elected, clinton was she could've done anything she wanted. she took on the issues of public .chools she brought children from arkansas from the bottom to the middle. when she got to washington dc

and she was the first lady, what was the first thing she took on? health care. she wanted universal health care. when she went to push it, the republicans criticize her. they called it hillary care. she could not get us all the way there but she passed the children's insurance pro -- program. she laid the groundwork for the affordable care act for antoher 17 million people. every stage, the first thing she did was turn to the powerless, those who were forgotten and give them a voice. that's who she is. tomorrow, we have a voice. , it may seemime

like the odds are stacked. is wheref the year your voice is heard. we all have the same boat. tomorrow, your voice is as big as karl rove's. if you take one friend with you your voice is as big as two koch brothers. out and succeed in michigan and give hillary clinton the opportunity, she is going to spend the next four hass making sure everyone opportunities. the next person on the stage is going to be the next president of the united states when she comes on. give a rousing welcome to secretary hillary clinton!

♪ on the highway, on a highway ♪ it's alive,arts, it's pumping blood ♪ blood ♪ve, it's pumping the whole wide world is whistling ♪ and it's whistling ♪

it might seem crazy what i'm about to say ♪ i'm a hot air balloon ♪ care ♪e air that i don't because i'm happy ♪ likealong if you feel happiness is the truth clap along if you feel like that's what you're going to do ♪

that ♪ this and give me all you got and don't hold me back, i should probably warn you >> we are live in detroit. hillary clinton will be speaking shortly. one day ahead of the michigan primary set for tomorrow. also a primary in mississippi as well. total,to her delegate including superdelegates. news from the campaign trail this afternoon from michael bloomberg, former mayor of new york. after some speculation as to whether he would enter the race, he has decided not to enter the presidential race. published, hel

said he will not stay silent issues.e offerts candidates to realistic ideas for bridging divides and solving problems. of this statement today from former mayor michael bloomberg. bernie sanders held a rally. we will show that to you. clinton: she said she wanted to talk about the lead in the water. she knew what led did two children. she said when she heard about it she was sick. her immediate instinct was what she could do to make it better.

just don't do an interview about politics. she did and she got the money. our major opponent was just as outraged. his response was that the government -- governor should quit. maybe he will. in the meanwhile, what can i do? she is a what can i do candidate. a change maker. she is the best that i ever saw. [applause] you feel like happiness is the truth ♪ thatalong if you know happiness is you ♪ >> ladies and gentlemen, please welcome to the stage, hillary

clinton! ♪ you're goingpion, to hear me roar , louder than a lion because i am a champion ♪ hello! clinton: thank you. herei am so happy to be and to have this chance to really thank each and every one of you. folks that iew want to acknowledge starting duggins. mayor, mayor thank you for your leadership of this great city. , thanksman john connors

you. congresswoman debbie shingle, thank you. lawrence,man brenda thank you. brenda jones, thank you. the charlesank right museum and the staff for enabling us to be in this glorious space. thank you all! auxiliary we love you -->> hillary we love you. you have opened up your heart to bill and chelsea and me. with your help.

we sure can't do it without you. tell you, both bill and chelsea have had the best time traveling across the whole state meeting wonderful people. it is especially exciting to be here in detroit, a city on the way back. -- way back up. last night, we had the debate in flint. that thelly gratified answer was yes to having it there. i want to shine a bright spotlight to what happened in flint, michigan. [laughter] -- [applause] i've told leaders of flint that

we are going to stick with them. there is a lot of work to be done. the pipes have to be taken out in new pipes put it back deliver clean, safe water to the families of flint. thank you. that some laborers here were part of doing that work. seeing, i see some plumbers here. they have already been helping the people of flint! i thank you for that because we have to pull together to support ,he families and in particular the children. i will stick with them until they do not need help anymore. whether or not i am in public life. tohave made a commitment

help flint recover and make it to be evenr them better after they do so. let's stick with them! president tofor knock down all the barriers that stand in the way of america reaching its potential and of americans reaching hours -- ours. we need to get more good jobs, more rising incomes. we need to put people to work. likeed more manufacturers the factory that i visited the other day. i saw people working around the clock all week and i talked with them and they said they loved their jobs cut is they were not only making things but because

they were being treated with respect. i want to go everywhere and being told exactly the same thing. going to have a renaissance in manufacturing. i am very proud that i voted to rescue the auto industry when i was in the senate. [applause] we are creating more good jobs with clean, renewable energy. we have to take climate change seriously. we are going to help small .usinesses the fastest-growing segment of small business are minority owned and women owned small businesses. ourfacets of all african-american women who are creating small businesses that

-- faster than everybody. i want to be a small business president. we are also going to fight to lift the minimum age -- wage. and finally we are going to get equal pay for women's work. everything i have just said, the republicans disagree with. we have our work cut out for us. that is why it is so important to turn out tomorrow. the sooner i can become your nominee, the more i can begin to turn our attention to the republicans. we also have to build on the affordable care act.

let's get to universal coverage. let's tackle our prescription drug costs and let's make sure that every child in every zip get a first-class education in america. [applause] i don't need to tell you that the detroit public schools under is in worse manager shape than before. you have precious children and moles and filled with rodents. backovernor should turn the control of the school to the people of detroit. have earlylso kidshood education so more

can succeed and schools. we need to make college affordable for everyone again. i have a plan to do that which i have laid out on my website. i hope you will take a look at it. down.o need to get debts the debto refinance that students currently have. that among the barriers we have to tackle our barriers of bigotry and prejudice. let's be honest about that. racism.systemic .e have systemic prejudice we have a lot of people who are ofd back, who are cut out wherement opportunities,

educational opportunities are not available, where the criminal justice system does not work for everyone, where the rate of incarceration is much too high across african-americans. because of the kind of campaign that republicans are running, we who havet of people been attacked. right? you have to say this about him. he is an equal opportunity attacker. he has attacked mexicans, people he hassabilities, women, attacked muslims. he has gone after everyone. a person likead that ever become president of the united states. [applause]

we have got to work together. we need to unify our country, not divided. againstblicans are nearly every right we have ever achieved. i want you to know where i stand. i am for a woman's right to make her own health care decision, i will defend planned parenthood. i will defend marriage equality and try to end discrimination against the lgbt community. i will fight for voting rights which are under attack across our country. i will appoint supreme court --tices who reversed use it reversed citizens united.

speaking of the supreme court, i 100% supported of -- supportive of president obama's ight to nominate a justice. we are also going to fight hard to make sure that we get comprehensive income -- immigration reform with a path to citizenship. we will change what doesn't work in the v.a. because our veterans deserve nothing less than world-class health care. we will not let the republicans privatize the v.a. and we will

not let them privatize social security. i want the young people here to the social know that security trust fund will be there for you when you get to the age where you can draw from it. i will keep working for sensible gun safety measures. i am absolutely amazed at the lobby to work gun to try to protect lives. you can do that in a constitutional manner, make no mistake about it. our country did it for about 200 years. we have to get back to doing it together. about say a quick word andign relations of and --

national security. you are also voting for a commander in chief. point to make a serious about defeating terrorism, particularly at terrorist network like isis. we have to lead an air campaign, we have to support fighters on the ground were willing to go send isis but we will not american combat troops to syria or iraq. i do not believe that is the right approach. wordt to say a particular to all of the muslims that are here. wherever they live.