Transcript

 

Pfaltzgraff: It's my pleasure this afternoon to introduce the Secretary of the Army, the honorable Louis Caldera, 17th Secretary of the Army. He became so on the 2nd of July, 1998. Mr. Caldera previously served as the Managing Director and Chief Operating Officer for the Corporation of National Service. Before the Secretary came to Washington, D.C., he served for five years in the California state legislature where he represented the nearly 400,000 residents of the 46th Assembly District. Please join me in welcoming Secretary Caldera.

Caldera: Good afternoon, General Shinseki, leaders of our Defense Department, general officers, distinguished guests, ladies and gentlemen. This afternoon I have the high honor of introducing my boss, our nation's 20th Secretary of Defense, the Honorable Bill Cohen. Secretary Cohen is a three-term veteran of both the House of Representatives and the United States Senate and has served as our Secretary of Defense since January of 1997.

I have had the distinct privilege of working for Secretary Cohen the past 16 months. And in that time, I have seen firsthand the tremendous wisdom that he has accumulated in over 25 years of public service, including 18 years on the Senate Armed Services Committee and 11 years on the Senate Select Committee on Intelligence. He was one of the principal drafters of the 1986 Goldwater-Nichols legislation and its reforms of the Department of Defense and he continues to be one of the leading architects of our nation's foreign and defense policies.

Secretary Cohen truly understands the promise and the potency of the ideals of the United States within the community of nations and the leadership role that our nation must play as we approach the 21st century. I have had the opportunity to travel with Secretary Cohen to visit our soldiers and have seen firsthand his commitment, not just to their readiness and to their training, but to the welfare and well being of our soldiers and their families. Working to bring about the creative solutions that provide our armed forces the predictability and the stability that they deserve.

I've seen him employed for the benefit of our service members and our nation. The trust and the respect that he clearly enjoys among his former colleagues and within the administration. His strong leadership and steady hand have earned this department the trust of the American people in our ability to take care of America's sons and daughters and to safeguard the high ideals and the precious freedoms that make our nation unique among all others. We have all seen and benefited from the fruits of Secretary Cohen's boundless energy as he travels the globe representing America, reassuring our friends and allies, ensuring that our security interests are well metnot only for today, but far into the future.

Secretary Cohen has compiled a remarkable record of accomplishments as Secretary of Defense. Winning the first defense budget increase in a decade. Including the largest increase in military pay and an increase in retirement benefits that let our brave men and women in uniform know that our nation honors and respects their service and their sacrifice. Guiding our nation's armed forces and national security team with steely resolve during Operation Allied Force and making the Revolution in Business Affairs and the Revolution in Military Affairs a reality.

He has set a course for change within the Department of Defense to meet the new challenges and the new threats of a changing world. Within the Army, that course for change is reflected in the vision that General Shinseki and I recently chartered. To transform our Army into a lighter, leaner, more versatile, more lethal, more agile force, able to contribute to the work of our nation at all points across the spectrum and setting a goal to be the leaders in developing joint operation concepts.

As our Army is called to do the boots on the ground work that only land force components are capable of, across that full spectrum of operations from humanitarian assistance to peacekeeping to engagement with other nations to high intensity conflict, we know and our soldiers know they can count on Secretary Cohen for the compassionate, principled, and intelligent leadership they so richly deserve. Ladies and gentlemen, it's my honor to introduce to you our 20th Secretary of Defense, the Honorable William Cohen.

Cohen: Secretary Caldera, thank you for that stirring introduction. I was almost anticipating that you were going to call me a compassionate moderate. But I do want to thank you for the kind introduction and the leadership you have brought to the Army over the past year and a half. I know it's been a very demanding time, not only for the Army but for the entire department, and we really do appreciate your dedication and the vision that you have brought to both. So thank you very much.

General Shinseki, I can still see you under the klieg lights up here. But I want to thank you also for all that you've done in pulling so many together for this conference and your energetic start since becoming Chief of Staff of the Army, and also in your determination to truly transform America's Army. And I want to pay tribute to your efforts here today.

Distinguished guests. I believe Senator Rudman, if he's not here now, will be here later. I want to thank him for his ongoing contributions to the department and to analyzing the kind of changes that we are likely to encounter in terms of threats, and also some of the recommendations that he and others on the National Security Study Group will recommend.

Dr. Pfaltzgraff, we appreciate your effort also to make this conference such a success. Officers, members of the Armed Forces, past and present, ladies and gentlemen.

Today has been sort of typical for me. I began the morning by meeting with the Atlanta Hawks. And they were looking, I guess, for some word of inspiration from me, and I was looking up to them, explaining that as a young boy I had aspirations of becoming a professional basketball player, or alternatively, a Latin professor. And, of course, my colleagues in the Senate, maybe Joe Lieberman was one of them, remarked that I achieved both of my ambitions. I continued to dribble while speaking a dead language.

But it was truly inspiring to see those young men, who were barely getting under the ceiling in my office, and to talk about teamwork, to talk about discipline, to talk about self-sacrifice, and to see how those skills or talents or disciplines that I thought I had developed as a young student, both in high school and college, served me well over the years, and how the same kind of principles apply to them on the basketball court.

Then I had to leave that meeting, which was really joyous to me, to be able to talk about my exploits as a basketball player. I'll tell you one quick story. I was substituting for Boston Celtics guard and later head coach K.C. Jones at an exhibition game one time and Celtics player Satch Sandersfor those of you who are old enough to remember Satch Sandershe threw a bullet pass down the court. I went up to catch it, and it carried me right into the crowd.

After the game was overI was wearing Celtics player Don Nelson's practice uniform because I was the mayor of Bangor, Maine, at that time, and I was setting up an exhibition game. They were one player short and they said, "We want you to play." So he gave me his uniform and the shirt was down over my elbows. He gave me his shorts, and they were down over my knees. I needed a haircut badly at the time, and I was wearing horn-rimmed glasses. And so when I went into the locker room after the game, one of the young kids came in looking for autographs. And he was going around to each and every one of them, he said, "You guys were great, but what was that Woody Allen act out there?" Such was the crushing blow of a young child to an aspiring basketball player.

Before I begin, also, I want to pay tribute to someone special here and that's former Deputy Secretary of Defense John White. John, you made the transition for me, coming from the Senate to Secretary of Defense, truly easy. And you helped to organize the office in a way that has served me well for the balance of my term, and I want to thank you publicly for it, and I'm glad to see you here today.

I will pass over everybody else in the audience that I see, some of whom I've had just great relations with over the years and want to continue that, but perhaps more about that later.

I'd like to talk a little bit about what General Omar Bradley once said. He said, "The most important element in the business of defense is the human relationship," and that's why I think these conferences are so terribly important, because you have an exchange of ideas. We have military, civilian, we have the Services, we have government agencies, we have academia, and occasionally even, exchanges between wildcat reformers and the lions of the old guard. We are able to exchange this kind of information to the benefit of all of us.

I want to commend the Army and also the Fletcher School for making this event possible, because it does, in fact, enrich the dialogue and it helps all of us to examine exactly where we are and where we are going in transforming our military; transforming it through the Revolution in Military Affairs and the Revolution in Business Affairs. It's critically important to the success of our military in the future.

It was 10 years ago this week that there was one small change in a very simple, drab piece of architecture that vividly transformed the world as we knew it. The Berlin Wall crumbled 10 years ago, and in the following hours and days there were thousands of people who poured through Checkpoint Charlie. Students and young people, they were dancing on top of those graffiti-covered walls. The older people in East and West Berlin, they were weeping with joy and with utter disbelief.

But even more, I think, in that one instant the way that we perceived the fault line between East and West was reduced to rubble, and with it the strategic and geopolitical assumptions that had defined a generation. Because for the world at large, that day in November was a bright moment in which the enormity of change in favor of freedom, in favor of democracy, was on dramatic display. But for those who were involved in national security issues and defense issues, I think the implications of that change possibly were viewed through a dark glass darkly, but at least through an opaque glass.

And I recall very vividly when Czech President Vaclav Havel came to a joint session of Congress. I will not forget that moment when he stood up before both houses and he said, "The world is changing so rapidly I have little time to be astonished." And indeed, if you think about what has taken place in just a very short period of time, less than a decade, it's astonishing. But we don't have time to simply think about being astonished. We have to calculate exactly what we are going to do with this rapid change that's taking place.

At that time, I think we could make an informed guess with respect to some quantitative measures about where the Armed Forces were heading. We had spent decades on building and preparing for a massive force-on-force conflict between forward-deployed forces. That was headed for a change. We knew that. During the 1980s, we had some of the biggest peacetime military budgets in history. That too was headed for a change.

But what did the future really hold in terms of qualitative changesthe character, the shape, the focus of our forces and the Defense Department as a whole? That was a lot more difficult to predict.

And rather than spending a peace dividend, we faced a costly and divisive peace. We saw regional disputes and ethnic tensions and asymmetric warfare. We saw the spread of cheaper weapons of mass destruction. All of that sharply increased. And within a very short period of time, we had more people involved in more deployments, on longer duration, of a greater variety, involving a large proportion of Guardsmen and Reservists than ever before.

And indeed, rather than going from a marathon to a sprint, we went from a marathon to a decathlon. Not only did we have to reevaluate the emerging threats while taking on more and more deployments, we had to redesign our force structure while transforming the department itself and its ability to keep up with the very pace of change. And meanwhile, we had to retain the very best men and women that we could to handle all of these challenges.

And so in many respects, the departments and the Services spent roughly a decade adjusting to the sweep and the acceleration, the sheer acceleration, of these changes. We went through the Quadrennial Defense Review, the Joint Vision 2010 and other reappraisals. We laid the groundwork for a new consensus on how to face the future. And it's a force that's smaller. It's faster, more agile, more precise, network-centric. It's a force that's better protected, smaller in footprint and more lethal in strike capability. In short, it's a force that has all the elements for full-spectrum dominance. And to support it, we had to have a department to operate with full-spectrum excellence.

So I must tell you, this transition has been anything but easy. I was in an interview recently with a distinguished member of the press. He said, "Well, your critics say you haven't really quite moved fast enough." But, in fact, we're taking a tremendous institution, and we have to reshape it and we have to reshape it in a way that's going to make sense for the future. And the changes may not be visible all at once, but they are taking place below the surface.

We knew that this was going to be the case from the very outset. I think it was the philosopher Thomas Kuhn who came up with the very idea of rapid paradigm shifts. He said that it took him 15 years between the initial insight that he had and the clear formulation of his ideas. He said, "I sweated blood and blood and blood," and he said, "finally I had a breakthrough." And I can look out into this audience and tell that many of you have sweated blood over the years since the end of the Cold War, and certainly in the past few years, to get the ideas right, to get the implementation right.

And it's been gratifying to me, certainly as a Senator, now as the Secretary of Defense, to work on achieving some of these changes. Some of these started when I was a member of the Senate, and we were just debating them. And many were regarded at that time as being too radical certainly to raise even as questions, not to mention as solutions. In the first part of this decade, we were moving from questions towards consensus. And since then, I believe we have moved rather significantly from consensus to concrete action, to actually implementing the changes with bipartisan cooperation from the Senate and the House.

That really is the reasonI think, the principal reasonthat President Clinton asked me to serve in this position. He could have picked anyone. He certainly could have picked a Democrat to do that. But he asked a Republican. And I believe it may be the first time in the history of our country where an elected official from another party was asked to serve in a Cabinet position. And I think his motivation was made very clear to me: "I want you to help me develop a bipartisan consensus on national security issues." And I think by and large, we have done that.

The military on the flight lines and the front lines todayin terms of its capabilities, the fundamental character, the capacity for changeI think resembles the mobile, rapidly deployable force that's called for in Joint Vision 2010 far more so than the massive forward-deployed forces of 1989. You just take a look around at what we're doing today and you'll see we are moving very rapidly toward 2010. We have crossed the threshold between the force of the last century and the force of the next. And every American, especially those who are in the military and leadership here today, should be very proud of that.

At the "tip of the spear," as we say, on the issues that ultimately matter most to those on the front lines in an operation or a deployment, each of the Services has made rather dramatic changes.

The Navy, through its Fleet Battle experiments, is dramatically improving the capabilities of its ship and aircraft, increasing the striking power by tying them together for network-centric warfare.

The Air Force, as you know, is transforming itself into an expeditionary force. It's going to better integrate our air and space operations with some predictability and put that back into the lives of our men and women who are serving.

The Marines are continuing to revolutionize their capabilities by honing their skills in urban warfare and by achieving better mobility through technologies like the tilt-rotor aircraft, the V-22.

In the past few weeks, Secretary of the Army Caldera, General Shinseki, they've embarked on a path of reform that's going to profoundly enhance the speed, mobility, and the lethality of our soldiers. And to complement all of these efforts, our new budget devotes substantial resources to integrating the Active and Reserve forces.

Behind the tip of the spear, which we are now sharpening, where the Services rely on the logistics, the infrastructure, the doctrine of the department as a whole, we've also made some pretty significant strides.

Not so long ago, there was no lead agency for experimentation and development of joint training and doctrines. Now we have one. We are strongly investing in the Joint Forces Command. We created it last year. We stood it up formally just a couple of weeks ago.

We wanted to redouble our efforts to reduce the costs of our acquisition process and to accelerate the development of new weapons and to eliminate redundancy. Well, today we have the Defense Reform Initiative. We are dramatically shortening and strengthening the link between our warfighters and the acquisition and logistics workforce. We have, for example, laid the cornerstone for on-line purchasing. We created a Joint Electronic Commerce Program Office to promote and standardize innovative approaches. We've made jointness one of the key criteria in evaluating new weapons and platforms.

It wasn't very long ago that we lacked a focal point for issues on homeland defense and the spread of weapons of mass destruction. Today we have a Joint Task Force for Civil Support which is working to maximize our effectiveness when we support federal, state and local authorities during a domestic WMD incident. Today we have the Defense Threat Reduction Agency, which is pulling together all of our counter-proliferation efforts.

So these things are all taking shape now. They are going to be institutionalized. We are going to set in motion a process and a dynamic that is going to accelerate as we move into the next century.

Not too long ago we were beginning to grapple with the challenges of cyber-warfare. Today we have an integrated approach through our joint task forces and resources that we have consolidated at Space Command. And we're bringing some of thatand we did bring some of thatknow-how together and to bear during Operation Allied Force.

Again, it wasn't too long ago that we were questioning the decline of America's defense spending and our commitment to improving the force's quality of life and readiness. Well, as Secretary Caldera has indicated, we have just succeeded in reversing that decline. We now have the largest increase in some 15 years in pay and benefits and programs.

So we are taking charge to really revolutionize the way we do business, but also take care for the people who matter most, and that's the men and women in uniform. Because if I can talk about all these new systems we are going to acquire, I can talk about the fact that we are going to hit the $60 billion mark for procurement. We are on line to hit that by 2001, in our next budget. It's something that a few years ago when I was in the Senate, it looked as if it would never arrive. We were hovering down around $41, $42, $43 billion and I recall former Chairman of the Joint Chiefs of Staff, General Shalikashvili coming up and John White and others and former Secretary of Defense Bill Perry and say, "That's the goal." Well, we are on the mark to hit that goal. So all of this has given us some breathing room to work on further transformation.

Have we completed it yet? The answer is clearly no. Does it mean we can afford to ease up on reform? The answer again, pretty clear. We can't afford to stop closing bases. We can't afford to stop pressing Congress to achieve these savings. We can't afford to stop trying to achieve the efficiencies that we are going to achieve through the Defense Reform Initiative. There's a staggering amount of work that we still have to do.

So I'd like to pose just a couple of questions, because you're going to ask me a few when I finish. Our over-arching strategy has become a mantra. You've heard me repeat it many times before: Shape, Respond, Preparethe three words that sum up our entire strategy. We want to shape world events in our favor; we want to respond to threats and crises; and prepare our forces for the future.

So I think the first question should be: how do we continue to balance shaping and responding against preparing? Every administration that comes in is faced with this challenge. How do you achieve a balance between the shape, respond, and prepare? We found if you put too much on shaping and you don't have enough on the responding and you don't have enough on the preparing, you've got an imbalance. And sometimes you put more in terms of readiness and procurement will suffer. Other times you put more money into procurement, readiness will suffer. So how do we do that?

The temptation, as we begin to refine the structure of the military that will dominate the next century, is to proceed by rushing towards modernization. That is, we want it all right now. And it calls to my mind, at least, the observation that instant gratification is good, it's just not soon enough.

On this question, the lessons of Kosovo, I think, are instructive. We have examined, we're going to continue to examine, where we were at the end of Operation Allied Force. But I think it's equally important that we remember where we stood at the beginning of that crisis, when we did not have the luxury of choosing whether to prepare for a force-on-force or asymmetric conflict; offensive or defense operations; large scale or small scale operations; military or humanitarian operations. And along with our allies, it became clear we had to do all of that. And by and large, we were prepared to do all of that.

When the time came we were able to handle the challenges, not only serially, but nearly simultaneously, and I think it's testimony to NATO's flexibility that we were able to rapidly transform the operation as the mission evolved from warfighting to humanitarian operations to peacekeeping.

The Department in 1999 was ready because good decisions were made on that balance between modernization and readiness along the way, back in 1990, '93, '95. And so I believe it's fair to ask those who focus only on the out-years, 2010 or 2020, whether the path they envision handles the readiness of 2001, 2002. These are the questions that we always have to balance.

In the years ahead, I think we have to ask some additional questions. Do we have a realistic strategy for ensuring interoperability across Services? Do we have a realistic strategy for ensuring interoperability across national boundaries with our allies and friends who join us in the coalitions of the willing? I mean, that's the reason why we put so much emphasis on the Cooperative Defense Initiative. I just spent a couple of hours with Saudi Arabian Minister of Defense Prince Sultan. Just a couple of weeks ago, I was over in the Persian Gulf, talking to every single Gulf country about the Cooperative Defense Initiative.

We have learned from the Kosovo experience that we had assets in the United States that others didn't have. We had secure communications that others didn't have. We had precision-guided munitions that others didn't have. We have to have greater interoperability, and that's what the Defense Capabilities Initiative launched at the NATO summit really was about. It's why I issued much stronger guidance to our combatant commanders, and why they have authority to work closer with our friends and allies across a whole array of activities, and try to avoid simply developing these on an ad hoc basis.

I'll give you another example. Just last week I was in Egypt witnessing the Bright Star Operation. It was truly impressive. I watched an Italian ship offload a British troop transport craft with American air cover overhead, for a mock invasion that included Egyptian, Greek, Dutch and Jordanian forces. That was an amazing sight to see, and it was carried offI only saw the amphibious assault operationbut it was carried off without a hitch. To see the kind of reaction from the observersand there were 26 observer nations, I believe, who were in attendanceto see their reaction of how is this possible just within a decade. All of these countries who might have looked at each other through the opposite end of a telescope or a gun barrel suddenly were now all working together with a common vision, a common strategy, some commonality, at least, of weaponry, but working together to build a bond that will serve all of us well in the future. So the reality of the 21st century is the United States will not sustain a more cohesive overwhelming force if we're not improving these coalition operations.

So we have to keep asking whether we're giving our people the organizational tools they need to excel in innovation, and whether we have created environments that reward rather than discourage change. And this is really a vital part of what has made us preeminent, as President Eisenhower said, "Men and women who dare to dissent." And so I see it at least as a very important part of my challenge to make sure that as we look through this transformation process that we don't stifle creative ideas, that we allow them to surface and indeed to flourish, if they can. And we want to encourage that kind of creative type of dissent.

Let me try to conclude this so we can get on to the questions and perhaps a few answers. I'd like to conclude it with a quote taken from William Manchester's biography of Churchill. He said, "Among the perceptive observations and the shrewd conclusions of leaders such as Churchill were the clutters of other reports and forecasts completely at odds with one another. All of it, the prescient and the cockeyed, always arrives in a rush. And most men in power sorting through it believe what they want to believe, accepting whatever justifies their policies and their convictions, while taking out insurance wherever possible against the truth which may, in fact, line their wastebaskets."

And so let me say to all of you who are here, we can never know the future. We can't predict with any kind of certainty the profile of our next adversary. We can't prophesize the order of battle. But we do know this: that the best way to prevail is to ensure that when that decisive moment arrives, our men and women in uniform have a decisive edge. They deserve that edge. They expect that edge. And the way which we give it to them is by allowing our creativity and our genius and our ability to think freely and to have these kinds of exchanges, to look into the future, to examine it, to fashion programs and policies that will serve them well. So when that time comes, they will be up to the task, as they have been in each and every past conflict.

Ladies and gentlemen, thank you for your patience. And I'll now entertain any questions you might have. Thank you.

Pfaltzgraff: The opportunity for questions for Secretary Cohen. Who would like to pose the first question? Please.

Rosen: I'm Mark Rosen. Booz, Allen, and Hamilton. I'd like to pose a question I posed to Senator Lieberman today. Framed slightly differently.

Cohen: Will you tell me how he answered it before?

Rosen: Skillfully. Simply, we know we need to make some tough choices and find bill-payers for transformation and it's oftentimes the case that we find solutions through force structure change. And I think there's wide consensus we need to do the tough change in force structure. But modernization, the other big pool of resources out there, is often ignored. And I'm talking about the big-ticket items. I'm overstating a little bit. But how do we develop the capability to make the tough choices to build joint capabilities, to make the tough choices of modernization? And is there some merit to joint modernization and acquisition?

Cohen: Let me try to put that in the context of perhaps tactical air as an example. One of the criticisms that I continually receive is, well, you didn't cut out any tac air procurement. I said, "That's right, I didn't." I came in immediately in 1997, the QDR was underwaybeen underway for a couple of months. We had maybe two and a half months to complete it, as I recall. John, we were going to complete it on time. And I looked at the question of modernization. The Navy had embarked on producing the F-18 E&F model. And they could make a very persuasive case that this was a significant upgrade and capability over what they had with the prior models. It gave it longer legs. I could go through all of the positive aspects of it. Didn't give it stealth capability, but it gave it the capacity to grow. I looked at that and said, okay, how do I weigh that against the Joint Strike Fighter which the Marines had signed onto, the Navy had signed onto, the Air Force had signed onto. How do I weigh that? And I looked at it and I said what I want to do is cut down the number of F-18 E&Fs almost in half. And I'm going to keep the line going. Why? I'm going to keep the line going because I need some kind of leverage to deal with the Joint Strike Fighter.

Joint Strike Fighter at that point was still in the design phase. We don't know exactly what the challenges are going to be for the Joint Strike Fighter in terms of price or in terms of what may be required in the event you don't have the F-22 to carry in terms of its characteristics and capabilities. So I lowered the number of purchases on the F-18 to give me leverage to deal or my successor leverage to deal with the Joint Strike Fighter. Because the costs might go up to the sky and we may impose greater burdens upon it. I can't predict that.

And I looked at the F-22 and I said we need a replacement for the F-18. We need a real air-to-air replacement for the next century. This one has served us well, but we need greater capability. I cut one wing out of the F-22 and I said this gives me some kind of balance. I'm hedging. There were some who said, well, just cut now and invest that money into research and development for the future. But the problem is I've got to deal with the present. And that's what I meant about how do you prepare for 2010, 2020, while still making sure you've got to deal with the challenges of 2001, 2005.

And so it's always a balance. There are many advocates who can say just cut now and put that into much more advanced research and development. You could cut out a manned air force, for example. Just go to unmanned aerial vehicles. That will happen at some point. We're not there yet. But in the meantime, you have to balance present against the future and that's what I've tried to do in the QDR.

Are there some systems I would like to cut out? The answer is sure. But you have to understand that I am basically the CEO of the largest corporation maybe in the world if you think about it. And I have 535 board of directors. And that's the reality. I mean, that's the reality. I'm not knocking it. I've been on the other side as well. But you have 535 members of the board of directors. And I have found myself in a situation where I wanted to move a couple of hundred people from one base. I immediately had a resolution introduced in the House saying you can't do it. So it's one thing.

You've got a lot of things to balance. You have to balance what you need in terms of capability. You also have to take into account that this is a big democracy and a vocal one and one that is, you know, a challenge to manage. And so no other corporation of this size would have such a situation. You'd have a CEO, CFO, etc., COO, and then you've got a board of directors and make a decision and carry it out. You cannot do that in a system like ours. So you have to take into account the political realities as well as the challenges that you will face from a strictly military point of view.

I think we're striking that balance. We are now achieving the $60 billion mark as far as procurement. We are taking care of readiness. We're going up and getting the supplementals to take care of some of the peacekeeping missions, which are very expensive. Be it in Bosnia or Kosovo or elsewhere, they're very expensive. And we've had the support of the Congress. And so we've gone through this period of people looking for a peace dividend to find that we've got a much more dangerous world in the sense that it's less predictable, there's more conflict, more ethnic strife, more types of missions that we're constantly being called upon to respond to.

East Timor is a classic case. We no sooner finished our effort in Kosovo than we had the situation in East Timor and we had our Australian friends say you've got to help us. And we want to be helpful to the Australians. They've been very helpful to us over the years. But how do we balance that? We've got to take care of Bosnia, we've got to take care of Kosovo. And so we ended up in a support position for the Australians and that's working. It's working. But everything requires some balance. Politically, militarily as well.

Pfaltzgraff: We should take a question from over here. Please, all the way in the back.

Krauss: Mr. Secretary, I'm Mike Krauss. I represent the Army Science Board and, in doing so, a member of civilian industry. I, too, posed a question of Senator Lieberman earlier, but this will be a different question. And the question relates to really a transformation strategy for logistics. Here the mantra of civilian industry can make itself felt most importantly in the kind of transportation, the kind of logistics infrastructure, and the kind of delivery systems that commercial industry brings to you. How are you thinking about that? How are you leveraging it? You've mentioned on-line ordering. One of the mantras I have is using the web-based capabilities in logistics and in transportation. What are your thoughts, sir?

Cohen: We are turning to the private sector, as a matter of fact. We have a number of commissions or committees or boards, from which we draw upon the talents of the key people in the private sector. We are moving from the notion of having enough just in case to have it just in time. We are looking to the logistics techniques of Federal Express. I like to promote L.L. Bean by way of example. But nonetheless, that's what we're moving to. To get rid of the warehousing and to make sure that we call upon the private sector and emulate what they're able to do as far as their logistics infrastructure.

And we now are meeting with the private sector on a regular basis with the key people. And I'll add your name to the list if you'd like. But to take advantage of the kind of insights that you have brought to bear in the private sector, we want to emulate that for the military. And that's what we're doing, we're in the process of doing that now.

Pfaltzgraff: There was another question here before we moved back to the other side. Please.

Liston: Good afternoon, Mr. Secretary. Tim Liston, the Rand Corporation. You brought up the point about Kosovo and the glaring insufficiencies of the allies. You're also right to point out in your remarks to Congress and such that they did contribute, but their contribution was limited. I would like to know how you plan, besides going to the Defense Capabilities Initiative (DCI), the groups that you and Dr. Hamre set-up regarding interoperability with our allies. How do you get from talking about it to actually getting work done? And I specifically am talking about the procurement budgets, the decreasing defense budgets of our European allies. How are you going to act upon that and try to convince them that this is indeed what they need to deal with the problems and challenges we're going to face in the 21st century?

Cohen: That's a great question. What I tried to do prior to Kosovo was to talk about the DCI, Defense Capabilities Initiative. And what Kosovo revealed were precisely those deficiencies. And we had a great success story to tell, but we also saw in the lessons that we have learned to date where all the shortfalls were. It's interesting to see how the allies have reacted to that. I think that most now feel that, the deficiencies having been exposed, they have to respond. We will keep this pressure on by demonstrating what the United States is doing.

I never fail to point out at any of the NATO meetings, this is what I am doinggoing up to Capitol Hill requesting substantial increases in budgets. I look across the Atlantic and I don't see a comparable commitment. What I see is reshaping your forces, which is fine, downsizing. We've gone through that as well. But I also see a decrease in defense spending. And I don't believe that you can achieve through efficiencies the kind of investment that's going to be necessary for the other members of the NATO countries to be able to have what we have. And I point out that I believe that ultimately can have some grave political consequences.

To the extent that I or any successor goes up to Capitol Hill to say we need to tax ourselves more to build a better force for the future, members of Congress are going to look across the Atlantic and say, well, what are our allies doing? And if they fail to see at least some kind of a comparable effort to modernize their forces, to make them interoperable with our own, to give them the kind of PGMs, precision guided munitions, to give them the command and control, communications that are secure, to do all that's necessary. If they find that's not being done, I think down the line, not today, not tomorrow, but somewhere down the line that's going to have a political consequence where members will say if they're not interested in reforming their militaries as we are, why are we expected to carry the load? Especially as we did in the first phases, I would say, of the Kosovo operation. We carried a much heavier load in the first phases by virtue of the stealth technology, the jamming capability, the PGMs, and other capabilities that we have that they didn't have to a certain degree. So I think they're aware of it. You now have a new Secretary General of NATO who I'm going to meet, George Robertson, later this afternoon. And we're going to lay it out again.

We have a meeting coming up in December. We just finished a meeting in Toronto about a month or so ago in which I again raised the issue. Here's what we're doing. What are you doing? And to constantly draw the comparison of where we are and the kind of commitment we're making. Acquiring more C-17s, acquiring more virile(?) vessels, etc. So what I have to do is to remind and also to be very, very clear on this concept called ESDIEuropean Security Defense Identity. Have you talked about that today? The Europeans are here and I see some of my friends here. Klaus. Good to see you, Klaus Naumann. The ESDI is something that the Europeans now are promoting quite actively. We're supporting it. Provided. Provided ESDI, that the European members of NATO don't wrap themselves around the rhetoric of a European security and defense identity and they acquire systems which are not compatible with the DCI, Defense Capabilities Initiative. In other words, we want to make sure whatever they invest in will work with our system, with NATO. Because otherwise we're going to have a situation where they are talking about a European Security Defense Initiative in which they acquire things which do not really narrow the gap between where we are and where we all need to be.

So that's something that we don't simply talk about. We lay out a program. We will talk about this this afternoon and how we can insist and measure each country's commitment to achieving the Defense Capabilities Initiative and what steps they're taking. But I believe there will be a political penalty to pay somewhere down the line in the event that the technological gap continues to grow. It will carry political consequences. So hopefully all of the NATO members that I deal with understand what they have to do. Now they have to persuade their parliaments and legislatures to support it. But that's a question of leadership on their part and hopefully the lessons of Kosovo, as they examine their lessons derived from Kosovo, will give them additional support.

Pfaltzgraff: I believe we have time for one or two more questions and we'll take this one here and then over there. Please.

Anderson: Good afternoon, sir. James Anderson. I work at the Heritage Foundation as a research fellow. We've spoken a lot this morning on the earlier panel about technology and transformation. It also seems, as you've suggested yourself in your remarks, that transformation is about people. And right now it appears that our military is experiencing some significant problems in terms of the recruiting and the retention dimension of this. For example, the Army missed by several thousand this year its number of recruits. The Navy is forced to deploy ships that are understaffed to the Persian Gulf. The Air Force estimates it will have a 2,000 pilot shortage by the year '01 or '02. Only the Marines, a much smaller Service, seem to be making their quotas. In this context, there has been that pay increase. 4.8 percent across the board. Something I agree with you, certainly that's long overdue. So my question to you, sir, what if it is the case that this pay increase does not make an appreciable dent in the recruiting and retention crisis? Are there other sort of non-financial, non-monetary incentives in terms of personnel policies or programs that would be useful in terms of addressing the recruiting/retention crisis?

Cohen: You're right to point to the problem as we have all acknowledged in terms of the recruitment and retention of the best and the brightest. We're going after a pool of young people who are very much in demand. We can't possibly pay what the private sector is willing to pay and able to pay. And frankly, most of the people who join the military don't do it for the pay. What we have seen however is, as a result of the pay raise, as a result of the changes in the pay table reform, as a result of going back to 50 percent retirement as opposed to 40 percent, that there has been a change in at least the initial reaction on the part of retention.

When I was out on the USS Constellation just a couple of weeks ago, I reenlisted 12 young sailors. I asked each of them what was the reason you decided to reenlist? They said the pay and the retirement benefits. We think that you're listening to what we need and you're responding. And so we've seen in the most recent weeks at least some change in the attitude. Now whether that's going to be sufficient to sustain that remains another question.

There are other items which we have to address. We still hear quite a bit of complaining about the Tri-care system, health care system. If you had to point to perhaps two other areas now that we've looked at pay, you would say housing and health care would be the two major things that we have to focus on. We have tried an innovative program as far as the housing is concerned. Trying to leverage again the private sector, to get the private sector involved in building housing for our men and women, and to do so in a way that can leverage it almost on a six or seven to one basis. Again, we're in the initial stages of that, but that is a key item that we can address ourselves to. And the health care system I think is probably the most dominant one. I would turn to everybody here in uniform and say what's the complaint that you hear most about, it's probably the health care system. And it's something that we have got to come to grips with. How do we make it more efficient? How do we eliminate the long lines? How do we eliminate the lack of satisfaction that people are experiencing? So I would say, in addition to what we've done, those are a few of the things.

In addition to that, I think we've got to make a different kind of an appeal. And you're seeing some of that take place in our advertising. I was concerned last year. I went to New York, my wife and I went to New York, and I kept saying, you know, I don't see much advertising on television except during the Super Bowl. I might see one ad for the Marines or the Army, but absent that, I don't see us really reaching out and touching people through the most powerful medium in the world. And so I wanted to know what was going on. And I found out that we had five-year contracts going to agencies and that's not quite an incentive when you're in that kind of business.

We've changed that. And so we now are also putting a different emphasis. Not simply on the college education because frankly that's not necessarily a big seller today because there are so many programs available from universities and colleges to pay for tuition, that the mere fact that we say this will help pay for your college education. We're competing again in a very tough environment. But we want to go back to [what] the Kassebaum-Baker panel recommended and that's appeal perhaps greater to the patriotic duties of our young people. To give them a sense of what life can and should be like in the military, to make them proud of serving their country, and to really appeal to a deeper emotional ideal.

And so that may not be enough to compensate, but we are trying to focus on those kinds of issues. To remind them and to thank them. You know, one of the greatest rewards that I get, I must tell you, when I go out and I fly all the way out toI'll be in Kuwait or Saudi Arabia and take an hour or 45-minute chopper out to visit one of our carriers. What they really want to hear is for someone to pay attention to them and say thank you. Thanks for the great sacrifice you and your families are making, thank you for the tremendous expertise you have and the dedication and patriotism. How can I help? What can we do to make your lives better? What can we do in the way of quality of life? What is it you're really worried about it? Is it your child back home that you haven't seen who's got a cold? Is he getting good treatment? How can I help you? And the more attention that we can pay from the leadership on down to deal with individual problems and to tell them we really care about their lives and we are really grateful for what they do, I think that makes a big difference.

And so we have leaders, Secretary Caldera, General Shinseki, and others, who are taking that issue and, from the top down, they are really going out and meeting with the soldiers in the field. Airmen, marines, and sailors, I mean, all of them are doing a great job in this respect. We hope to turn it around. It may not be enough and then we'll have to say, well, what else can we do? Is it more pay? Is it more benefit? What else can we do to compete? But I think that we're turning the tide a little bit on this.

As far as the airplanes, our pilots are concerned, the commercial opportunities for pilots are very attractive. And so we really have to work hard as far as filling those slots with our gifted pilots and we have to look at ways in which the Air Force is now reconfiguring itself into this expeditionary Air Force. So that it can put more regularity and predictability into the lives of our airmen and women. And if we can do that, then we have a better chance of at least lowering the operational tempo, the time away from home, the kind of pressure that's put upon them with too great irregularity. So what we're trying to do is reshape the way in which we do business militarily as well to reduce those kind of pressures on the people. Hopefully that will help.

Pfaltzgraff: Final question from over here.

Cohen: I knew I should have cut this off before.

Schemmer: Mr. Secretary, I'm Ben Schemmer from Strategic Review. I'd like to ask you about a threat that has not been addressed today. And that is congressional micro-management. While you were in the Senate, sir, you were in the forefront.

Cohen: I told you I shouldn't have . . .

Schemmer: You were in the forefront of efforts to reform the Pentagon through Goldwater-Nichols and the Nunn-Lugar-Domenici. Now that you're looking through the other end of the telescope, what should the American people expect Congress to do in the way of reforming that institution so that you and your successors can defend our country better?

Cohen: Well, when I was a member of the Senate, I think that we did some positive things in terms of the Goldwater Act. There was a case in which we felt that we needed to reform the way in which the Joint Chiefs were operating as far as consensus was concerned, to give more power to a Chairman, to give greater delegation powers to the secretaries. And I think we made a major change and I would call that macro-management, as opposed to micro-management. General Powell used to come up and I'd say, "What do you think of Goldwater-Nichols?" He said, "I like it." So Congress did something that was positive in that regard.

Congress has done something positive in terms of Nunn-Lugar. Nunn-Lugar-Domenici. So there are big issues that Congress really should deal with. And to build that, I'll tell you what we did on the Goldwater-Nichols bill. We went out to a group of people in the world of academia. Put Andy Goodpaster, other experts in the past who served. Les Aspin was part of it, Sam Nunn was part of it, I was part of it. We worked with CSIS. We tried to take military experts and to build a case saying is this thing working? And let's put these experts together and say what would you do if you wanted to reform it? And so to build a consensus, but do it on the basis of expert advice. And that's what happened in Goldwater-Nichols.

And I think that that kind of an approach, when you have that relationship between academia, retired military, active military working togethersay this thing isn't working, how do we make it better, the Congress can play a very important role in changing it. We had institutional rejection. It came from the Pentagon. The Pentagon was absolutely opposed to any change in the organization of the Joint Chiefs of Staff. And so there is a case that you can make saying, well, Congress has a very important role to play as well.

But I think when you get down to the micro-management, when every time a Secretary of Defense or anyone in the Department wants to achieve, quote, "efficiencies", and you have legislation introduced to block that, then you create a paralytic situation in which nothing gets done and we continue to carry excess overhead, we continue to do business in the good old-fashioned way. And it reminds me of that ad I keep seeing on television where you see a lot of older people who are saying, the heck with the Internet, we do business the old-fashioned way and the guy's head plops down on the table. And that's what we've got to avoid.

So I think that members of Congress, you had Joe Lieberman here, who was earlier today, Dan Coates was part of that group who said you've really got to start focusing more on jointness. You haven't done enough on this. And they put a lot of pressure and positive pressure on us to face up to that and now we're doing that with ACOM having been transformed in this respect. So I think Congress has a positive role to play and it's always a question of balance. You may get people involved in a lot of details in order to protect hometown interests.

And I was there for 24 years and I was just as interested in protecting hometown interests. I wasn't quite as successful at that. The Dow Air Force Base went out of existence when I was in city council in Bangor and then Loring Air Force Base, etc. But that's their job, too. They're there to protect their interest and their state. But, hopefully, you arrive at a point where you get a majority rule, where you say, okay, we understand that you've got an interest that you need to advocate, but in the interest of overall national security, this has to dominate. And it takes a lot of cultivation, it takes a lot of effort, it takes a lot of time, but ultimately it has to be done because that's our system.

And all I can say is the focus ought to be on the big issues, on big reform issues, and stay away from the small issues which can only bottle up efficiencies.

Pfaltzgraff: I now turn the meeting back to Secretary Caldera who will offer concluding comments and thanks to Secretary Cohen.

Cohen: Thanks again, very much.

Caldera: Secretary Cohen, on behalf of the men and women of the United States Army, of all of those gathered here, we want to thank you for sharing your thoughts on the important subjects being discussed in this conference on strategic responsiveness. We thank you for your strong leadership of our Department of Defense and your dedicated service to our nation.

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