>> rose: welcome to the program. >> rose: welcome to the program. tonight, secretary of defense ash carter analyzes america's defense posture and threats against america from i.s.i.s. to russia and china, north korea and iran. >> we're going to defeat i.s.i.l. the united states is going to lead the winning side. so everybody in that region who is looking around and wondering, when it's all over, and they're all asking themselves this question, charlie, when -- what's the chess board going to look like when the i.s.i.l piece is gone? and they all need to understand that we'll remember then, because we're going to be on the winning side, we'll remember who contributed and who didn't. >> rose: the secretary of defense for the hour, next. funding for charlie rose is

provided by the >> rose: funding for "charlie rose" has been provided by: >> rose: additional funding provided by: >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: ash carter has spent more than three decades steeped in the worlds of defense and technology. the secretary of defense is now the public face against the campaign against i.s.i.s. in iraq and sir. i can't u.s. policy in both countries has come under scrutiny and carter has had to defend it. i sat down with the secretary at the pentagon earlier today for a wide-ranging conversation. we talked about u.s. strategy, the role of technology, his

goals before leaving office and more. here is the one-hour conversation with the secretary of defense. mr. secretary, you said in a speech recently the u.s. faces a dramatically different security environment than in any point in the last 25 years and that it argued for an increase in military spending to confront an array of threats like the islamic state and russia, and you were no longer able to focus on one threat at a time. i would like to walk through those threats, if we may. >> sure. >> rose: what's the biggest threat to the united states today? >> well, all five of them are large, all five of them have to be countered, so we don't have the luxury of deciding one has the highest priority over the other. they also call for different kinds of capabilities. the counter-i.s.i.l fight calls on counterterrorism and

counterinsurgency capabilities right now. as we look ahead to longer-term competitive situations with other countries where we don't expect to have a war, certainly ving to deter them by showingare that any war that they do get in with the united states they will regret. that's china, russia, and in somewhat lesser capability way iran. in those cases, we have to plan for an enemy that is much more high-tech than i.s.i.l and for a much more longer period of time than we expect. for i.s.i.l we have to and will defeat in a short time. we expect to be in a relationship with china, with russia for the very long term. so we have to do it all, and that's why a budget of almost $600 billion, which is what the president requested on behalf to have the department of defense, it's a lot of money, i realize that, but it's what the country needs to defend itself and leave a better world for our children.

>> rose: we'll talk about the budget and i.s.i.l and china. but what's happening on the ground in syria at this moment. >> against i.s.i.l now in syria, we are working with forces in the north and eastern part and also in the southern part of syria who have the objective, as we have, of fighting i.s.i.l. our principal objective in eastern syria is to take the city o of rack cay. it's the city to have the caliphate. it's -- it's the city of the caliphate. it's important we capture that

city. in iraq, a key objective would be the city of mosul. i.s.i.l's second largest city. so if you're thinking in terms of the old world war ii news reels with arrows on the map. if you think of iraq and syria where is where you have to start in the defeat against i.s.i.l which is where the parent tumor was, in iraq and syria we need to destroyed i.s.i.l around the world and defeat it, but we need to defeat it in iraq and syria and in terms of arrows on the map, that means the two biggest cities operated by i.s.i.l. we're going to separate them and capture both of them. >> rose: do you believe you can do that in the term remaining for the obama administration. >> we're going to do it as soon as possible. i would very much like that. we're aiming to accelerate the campaign in i've which possible way. >> rose: do you think you can. i'm going to be very

reluctant to predict the course of a war, but certainly as soon as possible is our objective, and i would very much like to get it done, and i also know that president obama very much wants to have this behind us by the time he leaves office, so we're working towards that objective poet in iraq and in -- both in iraq and syria. and we have now a plan, an operational military campaign plan to do just that. >> rose: i want to talk about that plan. but first what's happened in the last three weeks in aleppo? there are a lot of people who are looking at what's happening in syria today and saying the russians have done everything they said they wanted to do. they came in, provided air support for bashar al-assad. he's now on the verge of retaking aleppo. and what does that say about the russians and what does that say about assad and what does that

say about the future of the conflict if assad is much stronger than he was before the russians came in. >> certainly what it says about the russians is they didn't come in to syria to fight i.s.i.l as they said they were going to do. that's not what they have been doing. they have been supporting assad, as you indicate, and thereby fueling the civil war. remember, it's a civil war that on the syrian side gave birth to extremism -- i.s.i.l, al-nusra, and so forth. so the russians are headed in just exactly the wrong direction from the point of view of fighting i.s.i.l and protecting their own interests because they're threatened by i.s.i.l. from a humanitarian point of view, they're being very clumsy here because their actions also have the effect of displacing a lot of people which is one of the reasons why secretary kerry has been so intent on getting humanitarian aid and the flow of humanitarian aid restored to

that area. but the russians who should be working with us to defeat i.s.i.l and, by the way, we would welcome that, just like i have brought in many countries from around the world to join in the campaign against i.s.i.l, most recently saudi arabia who rejoined the air campaign over the weekend. it would be fine if the russians -- but that's not what they were doing. they're doing the opposite of what they said they were going to do. >> rose: won't it make it much more difficult to find a transition, a john kerry-negotiated transition government if assad is much stronger because the russians have enabled him to make some many military advances? >> well, their support for bashar al-assad rather than trying to make a political settlement to end the civil war is prolonging the civil war, no doubt about it, and that's a serious mistake on the part of the russians. what the russians ought to do is

turn around the influence they have with bashar al-assad, get him to move aside because, remember, the outcome that the syrian people need and we also need and that region needs is this -- it's one in which bashar al-assad himself steps aside. the structures of the syrian state remain because we don't want complete chaos there. and those parts of the regime that have not been associated with assad as a person, and the moderate opposition, come together and create a government for syria that can give its people a decent future that they need. russia could be part of creating that political future. >> rose: has the united states failed to create a strong vigorous anti-assad force? have we failed to find and support that kind of military on the ground? >> we have supported moderate

opposition forces, but we have not set out to conduct a war on syrian territory against the syrian regime. our approach has been a political one. that is the one that secretary kerry is supporting. so we have not joined the civil war there. we are operating on the ground in syria and in the air in syria in order to protect our interests, principally to defeat i.s.i.l. we are active in that regard. our approach to the civil war in syria is that it should be ended ipolitically, and that's what secretary kerry has been working on and i think he's been doing that very skillfully and we'll see if there is success there but the russians could contribute to that success and instead they're doing just the opposite. >> rose: how serious is the conflict between russia and turkey? >> again, turkey is a very old and valued ally of ours. >> rose: member of n.a.t.o. they're a member of n.a.t.o.,

they participate with us in the coalition to defeat i.s.i.l. they and the russians have a number of disputes. we strongly stand with n.a.t.o. in the defense of its own territory. we've done that. we would, here as in other things, prefer that the russians were working with the turks and, therefore, with us against i.s.i.l rather than starting fights with the turks. but it's just another way in which the russians are off track. now, for the turks, they're good regard, buturs and they're in -- >> rose: in terms of what they're doing, are they only hitting anti-assad forces, rebel forces rather than i.s.i.s. forces? >> well, every once in a while they strike i.s.i.l forces but

it's been very, very rare. the great majority of russian strikes have not been against i.s.i.l. yet that's why they said they would come in. so it's the big lie at work, saying they're going to do one thing. we saw this in ukraine. and doing something complete different. they also, by the way, are not using precision bombs. >> rose: they are not. very few. >> rose: there is collateral damage. >> very few of them and, of course, that's not the way we do business at all. >> rose: were we unwilling or unable to stop them when they came into syria at the request of bashar al-assad to help him? >> what they said they were going to do, to be clear, at that time, is they said they were going to come in and fight i.s.i.l, that they had the same concerns about i.s.i.l as we did, that's what vladimir putin said. but that's not what they did. what they did was join the civil war on the side of assad.

we think joining a syrian civil war and fueling it is not the approach they should take. they should take a political approach and use the influence they had with assad to help end the civil war but that's not the approach the russians took and is a mistake on their part. >> rose: are their aircrafts hitting forces we are supporting in syria? >> yes, they have hit forces we support that we think are moderate opposition to bashar al-assad, not radical opposition. moderate opposition that, when the civil war ends, can come together with the part of the syrian state that are not bashar al-assad and create a government for syria that will heel that country -- heal that country. so those are groups that are part of the future. they are mo moderates, they shouldn't be being bombed by russia. >> rose: it's benefiting bashar al-assad who is their

client. >> because they're not going to protect themselves against islamic extreme nism that way. they're not going to end the syrian civil war. they're only going to fuel the syrian civil war. so none of the objectives they have or say they have is going to be achieved in this way, so it's not a strategy you can commend at all. it's wrong-headed. >> rose: but haven't they become the indispensable element in finding a solution to the syria -- >> they've always had a lot of influence over bashar al-assad and been virtually his only friend other than the iranians, and the russians could use that influence, an that's what they said they were going to do at first, to get him to step aside and get a political end to the civil war. that's not what they've done. we'll even see whether they do what they said they've done this week which is humanitarian move. >> rose: do you think the secession of fighting in order to allow the deliverance of aid

will take place? >> we'll have to see. >> rose: this could end -- i hope it does because people depend on humanitarian aid. an agreement is called for and there's a time line to specify and this as in all other kinds of agreements, you have to watch and see whether things are implemented in the way that, in this case, the russians and others around the world said they would be. but the russians sometimes have said one thing and done another. that's for sure. we'll have to see. >> rose: everybody believes the pentagon and you and the chairman of the joint chiefs want to see a stepped-up activity against i.s.i.s. in syria. what are the strategies you have

outland. >> we want to get this done and accelerate the campaign. we've proposed a number of ways of accelerating. i'll come to them in a moment. i just want to point out, every time general dunnford and i have come to the president with a request to do more to accelerate the defeat of i.s.i.l, he said yes. >> rose: the president has not been reluctant to increase our effort against i.s.i.s. at all. he has been fully supportive of everything you and general dun dunnford have recommended. >> i ide go further around say he is encouraging us to look for opportunities to do more because our strategy and the right strategy is -- let me take iraq first -- is to enable the iraqi security forms. so that is a process that involves training them, it involves equipping them.

and then when they go into battle, helping to make them successful as we did in ray made. that's our overall strategic approach. why is that the strategic approach? because it takes capable, motivated, local forces. we know from long experience in iraq and afghanistan to take territory, hold territory and govern territory and prevent the reemergence -- >> rose: and it only comes from locals that can provide in maintaining and keeping the territory. >> we can't substitute for them. but we can enable them. we can help them. that's our overall strategic approach, and we're constantly looking for ways to do that. just in the last few months, to give you an indication, we have introduced some additional strike forces in the region. we have -- >> rose: what does that mean, strike forces? >> some special forces capable of doing raids and strikes and

assisting the iraqi counterterrorism forces in striking i.s.i.l targets there. >> rose: these are special forces used on offensive missions to strike i.s.i.l. >> we announced a month and a half ago they're striking there. that's an example. >> rose: there are boots on the ground. >> there are 3700 boots on the ground in iraq. there is all the talk about boots on the ground. we have boots on the ground in iraq. what are they doing? they are training iraqi forces. they are assisting iraqi forces. they're helping train, by the way, sunni, which is very important. they're helping train police because, after a city is cleared, the police have to -- there have to be police to secure the city, keep the order. they're helping the iraqis with all kinds of things that may not sound interesting but are

critically important like bridges, helping them with their air force. >> rose: but they're also engaged in search and destroy. >> they are. they absolutely are. >> rose: is there a limit in terms of how many forces -- if we have 3,700 now, is it 4,500 would be a ceiling? >> we don't she that way. we're looking -- we don't think that way. we're looking for opportunities to do more. every time we see a way to accelerate -- in this case, the movement of the iraqi forces with our help northward from bermadi and to eventually take mosul, every time we have an opportunity to do that, we'll ask the president if it makes sense, the president will say yes, which is what he's done consistently, and we'll lor the opportunities. we're doing more and more in cyber in iraq and syria. >> rose: is it your

understanding i.s.i.l would like to do more overseas attacks like the kind that took place in paris? >> sure, they say that and we take them at their word. that's the reason we can't delay and need to find every opportunity we can to hasten the lasting defeat of i.s.i.l, and i'm confident we'll do that, but we're looking for ways to accelerate. >> rose: are you saying to me what happened in paris simply accelerated the notion that we have to do everything we can to stop i.s.i.l now, when you recognize part of their blueprint was to extend their own force beyond the middle east? >> for us -- i think, for us, the urgency of defeating i.s.i.l has been evident. it certainly has been to me, to general dunnford and i know from my conversations to president obama back well before paris. what i think paris did do which is important is galvanize especially european opinion, and that's important because the

europeans have a big role to play here in two ways. first, they can help us in iraq and syria. let me give you an example, charlie. the italians do a lot of training overiraqi police. that may sound like a prosaic thing to you, but it's really important because the police are the ones who will keep those cities orderly after i.s.i.l is expelled from them. so we need the europeans. and remember, you know, america is willing to lead, and we will lead, but it is important -- and i've said this very bluntly to our overseas partners -- there can't be any free riders here. everybody needs to get in the game against i.s.i.l. >> rose: and are they prepared to get in the game after your conversations with them, some of them, in brussels and all the phone calls you make to the secretaries of defense and defense ministers in all the countries? >> last week, as a result of me,

yes, maybe pestering them, but again also result of their own sad experience in places like paris and their long experience of american leadership, 90% of the members of the coalition who have been militarily active have agreed to do more, and a number who haven't done anything at all. >> rose: and that means money and training, but does it also mean troops on the ground? >> all of them. >> rose: the emirates promised they will put troops into syria? >> the emirates, particularly all three of the things you just named, they will work with us in our special forms in both iraq and syria. they will contribute air power, and they will contribute -- you mentioned money. money is not insignificant. somebody is going to have to rebuild the city of ramadi. >> rose: and the saudis and the emirates are prepared to do that. >> and others around the world

can make that kind of contribution. what i did when i sat down with them is said this is everything that is in the campaign plan. there is plenty to do here. you need to find -- i'm going to help you find the things that your country can do. >> rose: john brennan gave an interview to "60 minutes" to scott pelley over the weekend and he, in response to a question from scott, said that i.s.i.l may have chemical weapons, the capacity to make them and the capacity to use them. can you tell me more? >> i can't tell you a lot more, but just think about this for -- i don't want to get into intelligence matters -- i.s.i.l occupies a considerable part of iraqi territory and, therefore, there are people there and there are industrial facilities there that could contribute to -- you

mentioned question chemical weae but chemistry that could be used for harmful purposes there. we have seen evidence of that from time to time. we've struck, actually, wherever we've seen that kind of -- >> rose: the use of some kind of chemical -- >> no, no, not use. any indication of interest. >> rose: we haven't seen them use it yet. >> no. >> rose: but we think they may have the capability? >> no, i wouldn't go that far either. i'll let the director speak of intelligence matters. i'm just telling you it's something we watch very closely and it's something we take action against. but remember, i.s.i.l does lots of really n.s.a.y nasty, brutins and this is a group we have to defeat and quickly for all these reasons. >> rose: what do you expect you might find in mosul if, in

fact, you're able to retake the city soon? what will we find in terms of what it's like to live under i.s.i.l's rule? >> well, what people -- the people who escape, the people who get information out say it's a very brutal and dysfunctional form of government. they don't keep the place running very well, and the way they keep control over it is with extreme brutality. so i think we'll find a population in mosul eager to be governed in a different way. now, what's going to be important as we approach mosul is to try to have within the city as well as we envelop the city to have some -- a form of internal resistance there -- that's a city four times the

size of ramadi. >> rose: a crucial element in the war in iraq against i.s.i.l are sunni tribes. are they coming over to the battle against i.s.i.s. or are they still staying on the sidelines? >> more and more, they're coming over to the fight. we're doing significant training, both of sunni army members and also sunni policemen. but remember it's important that it happen because what the bane of iraq has been sectarianism. >> rose: civil war between sunni and shia. >> and kurds, for that matter. there are three components to iraq. we vastly prefer a multi-sectarian, iraqi state to any form of disintegration because we know where that leads. sectarianism leads to the kind of thing that i.s.i.l

represents. but for that to work in iraq, the sunnis have to be represented and have to be part of the fight to take back their own territory. so we are working with them a lot. >> rose: and does the iraqi government recognize that and are they agreeing to that and do they understand that the previous prime minister drove them away? >> i think we certainly understand the previous prime minister, speaking of maliki, used sectarianism and thereby contributed to the birth of i.s.i.l. the current prime minister abadi does govern in a multi-sectarian way. he says that, he tells us that, he take him at his word and, now, he halls challenges governing in baghdad because there are these three factions, but we work with him to work with all three of those factions. that's the way to go in iraq

because the alternative which is sectarian division, we know where that leads. >> rose: while we're in that region, let's talk about the iranians. what is their goal in iraq and syria and how much of a participation are shia militia and iranian militia participating in the war in iraq and hezbollah supported by iran participating in syria? >> well, iran seeks to expand its regional influence in all kinds of ways -- iraq, syria you've seen them in yemen, you've seen them in lebanon -- and that's a serious concern to us. it's one of the other major commitments we have in the middle east in addition to the defeat of i.s.i.l is to check iranian maligne influence there. you ask about militias in iraq.

this is why it's so important it be the iraqi army, not militias. >> rose: but militias have played a role. >> yes, and that's why it's so important that not they but the iraqi army retook ramadi, and we're supporting the iraqi army. >> rose: have you noticed any change in iranian behavior since the nuclear deal with iran was accomplished? >> well, we've certainly noticed their behavior with respect to -- >> rose: otherwise -- -- carrying out the terms of the nuclear deal. >> rose: although behavior was not part of it, there are those, and i think secretary kerry was probably one of them, hoped there would be, because of the relationship, some change in their behavior. >> well, it was an arrangement that was good for the united states because it took care of one very serious concern we had with iran, namely their nuclear

weapons program. provided they abide by it and we'll see, because we'll be able to verify whether they are. >> rose: so far they are. so far they are, but that doesn't take care of all the concerns we have. >> rose: do we have any influence with respect to their behavior? do we have anything that we are doing to combat their support of terrorism, their support -- >> well, there is a lot to do to check their bhairvetion their activities in the persian gulf. we support our friends and allies, especially and importantly israel in the region to deter iranian aggression. we have tens of thousands of u.s. forces in the region. they're there not just for the defeat of i.s.i.l which we'll accomplish but also for deterrents and to check iranian maligne influence. so there is a lot we do. just remember the iran nuclear agreement places no limits on the united states, certainly doesn't place any limit on us in

the department of defense, so we're full speed ahead on what we're doing in the gulf to deter aggression or -- >> rose: is there any cooperation with iranians with respect to the battle against i.s.i.l? >> the iranians are a little bit like the russian where, in principle, if they would actually take on i.s.i.l and not uel sectarianism or civil war, i guess in some hypothetical sense, you would think that an enemy like i.s.i.l -- because i.s.i.l is certainly against them, but they would be against -- but they don't seem to be behaving that way. their principal occupation seems to be fueling sectarianism in iraq which is going to fail, but to the extent that they promote it, it makes it harder and slower for us to defeat i.s.i.l. look, we're going to be on the

winning side here. we're going to defeat i.s.i.l, and the united states is going to lead th the winning side. so everybody in that region who's looking around and wondering, when it's all over -- and they're all asking themselves this question, charlie -- what's the chess board going to look like when the i.s.i.l piece is gone? and they all need to understand that we'll remember -- because we're going to be on the winning side -- we'll remember who contributed and who didn't. and we aren't out to do people favors here and we're not asking for anybody to do us favors either, but people need to act in their own long-term interests. >> rose: so you were saying to whom what? >> that anybody's on the sidelines who needs to get in the game you need to get in the game. that's what i was doing in brussels and overwhelmingly people came on behind that.

and to the russians and the iranians who are not contributing and actually are causing more problems in the region, that's going to come back and get them. remember, the russians themselves have a very nasty experience in afghanistan and in chechnya with that kind of extremism. >> rose: everybody looks to russia as if they had -- this has been a win-win for them in syria. they're a player, they have supported assad. assad is in a much better position. he may be -- he may retake aleppo, which could block some of the transmission from within syria to outside. i mean, people look at what putin has done and said, he's been a master strategist in the way he's played a weak hand. >> well, where does that strategy lead? it's leading to the prolongation of the civil war in syria, which is not in russia's interest. it's not -- >> rose: it is, if information

he makes assad stronger so they can negotiate something from a better position and create -- >> well, what the russians should have done from the very beginning is use whatever influence they have with bash bar t --influence they have witr al-assad to get him to step aside. maybe they will do that sometime in the future, but that is not the way they have behaved so far. the russians have been way off track since the very beginning. they have not done what they said they were going to do and they're not doing what is in their interest to do in terms of fighting i.s.i.l. >> rose: but there must be some real communication with them to avoid a real catastrophe where russians hit americans. >> kerry's been in touch with the russians every single day. >> rose: i'm not talking about secretary kerry and diplomacy. i'm talking about ash carter and the defense minister with in charge of russian military so

you avoid -- >> we have communications between our two departments. we've had them for a number of months since the russians came in. it's very professional. >> rose: is it working? oh, yes. it's very professional and it makes sure our military actions don't conflict and we don't come into a military conflict with one another as the russians do what they're doing which unfortunately is not connected with our campaign against i.s.i.l. >> rose: has some of this action in syria taken the the pressure off of russia in ukraine? >> it certainly hasn't from the american point of view. the europeans -- i was just in europe last week -- they're all as concerned as they were last year about russian conduct and this is important because you asked me about the budget earlier. you know, for 25 years, charlie, i came up in this business during the cold war and, so, i

remember -- >> rose: you have been dealing with the russian force a long time. >> for a very long time. and after the soviet union ended, there was a long period of time when, in the department of defense, thinking about russia as a competitor was not something that we had to do. and now, since what happened in ukraine a year and a half ago, it's quite clear that at least as long as vladimir putin is running the country and has the intentions he says he has, we are going to have a competitor in russia. that is meant for us in defense and for the europeans and for n.a.t.o. having to create a new play book that we haven't had for a quarter century, which is one of territorial defense, at deterrents against aggression of russia into europe, not just by

traditional means, but also by what is called hybrid warfare, the little green men kind of phenomenon. and i regret -- >> rose: how do we meet the challenge of little green men? >> two ways. first of all, you help the societies to harden themselves, the ones that are particularly affected by it. that means, in terms of their border controls, intelligence sharing, cyber protection, protection of their critical infrastructure and so forth so that they are not as easily subverted as ukraine two years ago, and secondly, it's by stiffening the n.a.t.o. response. we're doing that -- this budget which we're submitting now quadruples our spending on european presence and posture. we're putting in heavy equipment into eastern europe.

we are putting forces in now not on a permanent basis but a persistent, rotational basis. there will be a lot more american troops in europe in coming years than past years. so we're doing a lot. sadly, russian conduct in europe and elsewhere makes that necessary. >> rose: they are bigger and stronger competitor. >> and they're somewhat bigger, somewhat stronger, but most of all have, in recent years, turned more trucculent, more backward looking. that's easy for me to say. i don't call the shots, vladimir putin does, but i don't think that's in the long-term interest of the russian people, but he seems to be headed in a direction of self-isolation where he doesn't care about the economic penalties associated with self-isolation and being

and behaving in a way that isolates him around the world, but that's what he's doing and our approach is a strong one. it's a balanced one. we'll continue to work with russia where we can, but we need to be strong. >> rose: and keep the sanctions. >> right, keep the sanctions. women talk about china. what is their intent and what are we prepared to do if their intent crosses some red line we have? >> well, they're intent is very clear. they have said they have claims to the territorial -- they're not the only ones, there are other countries, philippines, vietnam, asia, who have long-standing claims to this part of the south china sea. what a number have done but china that is hast done by far and away most aggressively is, first of all, take some land

features that weren't really islands and try to create an island and create a de facto presence for themselves. again, the chinese are the only ones that have been doing that. our diplomatic position -- we don't take a legal position in these claims, but we don't think people ought to militarize features, and you're saying what are the effects of the chinese doing it? i would say two major effects. first, they're causing us to react, and we are making big investments in that in the military capabilities that will allow us to continue to be the pivotal military power in that region no matter what the chinese have done. >> rose: we are doing everything necessary to be the pivotal military power in china's neighborhood? >> yes, but, remember, it's not china's neighborhood, it's

everybody's neighborhood. this is where half of humanity lives, half of humanity's economic activity, the great arteries and crossroads open world commerce, we, too, are a pacific power, as is japan, as is south korea. all these are our friends and allies. so you asked what chinese behavior is. it's having an effect on the united states and we will continue to be as we have been for seven years the pivotal military power there. but it's also having the effect of turning everyone who might otherwise be perfectly willing to work with china in security terms, as we would in principle, is turning them against china. now, if you look at that region, in addition to having the predominant military power in the region, we have all the friends and allies there. we have lots of friends and allies and have many more who are wanting to do more.

>> rose: are our allies confident we will come to their side if china, in fact, threatens them? >> if they're treaty allies that they absolutely have that written in to our treaties, and we have treaties with a number of countries over there and have affirmed our commitments there, but more important, if they look at our military capabilities and the investments we're making, they'll see our determination to keep that role. now, let me say that, in keeping that role, charlie, china, like russia', is a country i've workd with a lot over the years and i have a lot of friends i respect and friends in the chinese military, and i'm not one of these people who believes conflict with china is inevitable or likely, it's certainly not desirable. but there is a tendency in parts of chinese thinking which says

we need to not only be an important power in the region, we need to dominate the region. that's an impulse that the united states naturally will, at it has in so many ways over the last 70 years, provide a counterweight to because we're the anchor there -- >> rose: but you were saying to the chinese, we will not let you dominate. we will not let you dominate in the region. >> yeah, we don't intend to -- that's not the american approach is not to dominate either. the system that we have promoted for security and also commerce in asia for 70 years is one in which everyone gets to rise and prosper. think about the history there, charlie. think about the history in which japan recovered from world war ii and became a great economic powerhouse, then

south korea, then taiwan, then southeast asia. today china and india. why was that? what was the security anchor underneath all of that? the answer is it has been the pivotal role of the united states, and that's a role we intend to keep, to continue to play. and if chinese actually think about it, they -- and many of them do -- they know that's the environment in which china has gotten to find its own way from poverty and isolation back in mao's day to where they are today. >> rose: you say that to the chinese, the russians. >> to the iranis. >> rose: if you start a war, we'll win. >> i should add the north koreans to that list as well. >> rose: where do we stand with the north koreans. >> to finish that thought, deterrence is a means that

anyone who starts a conflict with you will regret it. our military is a way to right that threat. deterrence is something we have to invest in ever every day. the north koreans, we have an expression in defense, and the slogan, actually, of u.s. forces-korea is "fight tonight." it doesn't mean we want to fight tonight, it means we have to be ready to fight every single night. you've asked me about sire sire- about syria, iraq, russia, all these things are in the headlines, and north korea occasionally gets in the headlines, but for us here in the pentagon, every single day -- and this has been true for decades now -- we stand watch on the d.m.z. and stand alert against north korean aggression. >> rose: but answer this question -- what is their

potential today? do they have missals that can carry a nuclear warhead to the west coast of america? >> they clearly have nuclear warheads. they've tested them. they're working on ballistic missiles. you saw them launched a small satellite into orbit. so they are working to operationalize missiles of various ranges that have nuclear capability. that is why and is precisely because you asked that question that we are beefing up our missile defenses of the united states so that if they get to the point where they're able to operationalize an i.c.b.m. with a nuclear pay load capable of reaching the united states, we will have defensive intercepters capable and numerous enough to intercept them. >> rose: let me ask a couple of questions about technology, one, encryption.

is it a real problem for you that the fact that technology companies in silicon valley so enscript their devices that even if you wanted to have access, you can't? >> well, that is a problem for law enforcement. but you began by saying is it an encryption problem? no. for me as secretary of defense and me as a country as a whole, encryption is a good thing and network security is a good thing. my top priority, we have lots of stuff we're doing in cyber. by the way, that's another way we're increasing our investments in this budget, greatly increasing what we're doing in cyber. but the job one for us in cyber is to defend our own networks in part by encryption. good encryption is good for defense. >> rose: opinion cription of your own networks. what about the fact there are

devices being used by people who wish us no good and, in fact, wish us evil? are they able to encrypt their own devices and law enforcement people tonight have access? can you do anything about that? >> there are some things we can do about it and i'll name two. we're working to be able to, nevertheless, to have access to that kind of information, and we need to do that. >> rose: you're working, but if apple says it's encrypted and we can't help you, what do you say? >> i'm not talking about apple now. within our own intelligence system, other ways of getting that intelligence. with respect to companies, there is a situation, charlie, and you and i have talked about this before, where i am trying to build bridges between us and tech companies. now, i don't expect them to do things to help us compromise their business position or their

international competitive position. but i do want to have enough of a bridge to the tech sector that we can work, where possible, towards common solutions to common problems. that's not going to always be possible, and i don't expect the days of the past, you know, the distant past when i first started out in this area, but i think a healthy relationship between us and the high-tech sector is necessary. >> rose: and are they responding to them? >> they are, and here's the reason -- most people in the technology sector understand that problems of the kind that we have been talking about all the way around the world, that the things that they care about, which is prosperity and freedom, cannot live without security. second, they are people who are difference-makers. they want to do things of consequence, and they know that

protecting our people and creating a better world is something of consequence. so what you can't ask them to do is to compromise their own business. so that's why it's got to be a give and take, and i'm absolutely committed to -- i don't give lectures. i try to engage them and work with them so we can find wherever possible common solutions to common problems. >> rose: with respect to people in the military and people here at the department of defense, you're trying to reform this place. you've extended maternity leave and i assume to, what, 12 weeks now? >> yes. >> rose: whearls are -- what else are you doing to say to americans this is a good place to come and work? >> let me just say in the case of people, we're doing something

right. we have the finest fighting force the world has ever known because we have the best people. now, it's an all-volunteer force, so i have to compete with the rest of the economy for the best americans, and i have to think ahead, how do i compete? how do i make us an attractive place to be? so i need to constantly be looking toward the future. you asked, so why does that take me to something like maternity leave? because we know female service members are leaving our service at the ten-year point where the most proficient of them have shown how good they are and that one of the reasons they're leaving is to start a family. now, if i can retain some of those good people by making changes that are reasonable, that we can afford to make and that don't get in the way of readiness and so forth, so that

i can compete for those people, i want to compete for those people. elsewhere, i have to say, the reform word really does apply, so there are some areas, and acquisition is one where i've battled for a long time to make our acquisition system more efficient. we have areas where we're still too bloated, where we need to trim. so there is some reform to be done, but in the people area, it's a matter of keeping a wonderful strength, which is the all-volunteer force, strong in what is a competitive labor market. >> rose: so when republicans on the campaign industrial say our military has been weakened because we have not budgeted well, which is a congressional responsibility, you say what? do you say that, yes, we have real problems in terms of what our budget has been? do you say our military is as strong as it's ever been?

>> i say two things -- first of all, i'm going to say this, charlie -- i say this again and again and again in this electoral season, you began your question by posing it in terms of the presidential campaign. ash carter, secretary of defense, it's important in this institution it's very important we be apart from the political process. that's our tradition in the united states. so i am not going to participate in any way and nobody in this department will participate in any way in political debate, and i just want to make that clear. >> rose: so that said, your question. >> your journalistic question is fine about the budget. the budget was a product of a bipartisan budget agreement which is something i was calling for for a long time. can we all come together instead of closing down the government every year, threatening sequester every year, having

partisan gridlock, can we have a budget agreement in which democrats, republicans, house, senate, administration, congress, come together, all the parts of budget -- we all know it's not just defense, there are other parts to have the discretionary budget. a discretionary budget is just a piece of the budget. there are the taxes part, there is the mandatory spending or entitlement part, and this year we got a budget deal of that sort, and that is the basis on which i submitted the defense budget. so we did -- we submitted the budget we were given in that deal. you know, i guess bipartisan deals in washington, everybody doesn't get everything they wanted, and we didn't get everything we wanted in that deal. >> rose: did you get everything you needed? >> but we did, yes. we've managed to adjust to where we didn't get everything we needed to change. we continue to do what we need

to do, but the main thing we're doing -- that we need to do, the main determination i have and determination this department has has less to do with the overall size than shape of our military. the military is aimed for the future to deal with the threats of tomorrow and then dealing with the things immediately we have to deal with like defeating i.s.i.l. >> rose: thank you for your time. >> good to be here. >> rose: thank you. for more about this program and earlier episodes, visit us online at pbs.org and charlierose.com.

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this is "nightly business report" with tyler mathisen and sue herera. falling into place. a lot has changed in the past few days. the s&p 500 put together its best two-day rally since august of last year. production freeze. will a pledge by some of the largest oil producers succeed in tackling with global glut of crude. increasing diversity in the nation's fastest growing and highest paying industry while helping girls of color reach their dreams. the first part of a week long series begins tonight on "nightly business report" for tuesday, february 16th. good evening. i'm sharon epperson. >> i'm tyler mathisen.