A collectors item. Thank you and welcome to panel six, assessing the rebuild. Will we have the strategy and resources to rebuild the military in fiscal year 2019 . Strategy and resources to rebuild the military in fiscal year 2019 . On this panel, we will evaluate president trumps desire to rebuild the military and we will look at the problems facing it. I would like to introduce our distinguished panel. Honorable eric aleman at the end, former undersecretary of defense for policy from 2005 to 2009. The formeragon, ambassador to turkey. President and ceo of Lockheed Martin. She joins walking 30 years ago as an engineer in rows away to 2016. P in Fortune Magazine identified mr. Houston as number three out of the 50 most powerful women in business around the world. Kathleen hicks, director of International Security program for csis. She was appointed by the president. She is a former principal undersecretary of policy at the pentagon. And we have general robert geller, the 37th, bottom of the marine corps commissioned in 1975. He went to uva and i just learned roots for michigan state. [laughter] he is from east lansing. He served the commanding general of the drain force and iraqi freedom. And the senator of new hampshire. She is the first woman in u. S. History to be elected both governor and u. S. Senator. She has been in the senate since 2009, on the Armed Services committee, Foreign Relations committee and appropriations. She just flew in from a very important vote in congress. She is particularly you have a particular interest in new hampshires ports and Naval Shipyard and Peace International guard base,. With that, i would like to start with reading a few quotes about the current day of the u. S. Military that got my attention. There are a few statistics i think you all find somewhat alarming. Senator john mccain said recently perhaps the greatest harm to our National Security and military is selfinflicted. We are killing more of our own people in training than our enemies are in combat. Recently,mattis said no enemy in the field has done more to harm the combat readiness of our military than sequestration. Referring to the budget cuts that have been in place since 2013. If you listen to the vice chief general of the army, dan allen said recently this army is out ranged, outgunned, and outdated. The army has only five out of 58 brigade combat teams that are ready to fight tonight. T eight years, reduce the size of the army by 90,000 soldiers and eliminated brigade teams. There are 180,000 troops right now currently deployed in 40 countries. The navy is said to be treading water in an effort to keep up with the operational deployments. Collisions ofcent the uss mccain and fitzgerald were found to be avoidable. They were finding that sailors were working 100 hour weeks, less than half of the navys aircraft can fly. Hee marines, of course, t navy is not alone. The marines have aviation issues. Because of the f18s, only half of those can fly right now. They are taking parts off of Museum Aircraft in order to get some of those planes airborne. 80 of Marine Aviation units lacked the number of aviation ready aircraft. Heather wilson, the secretary of the air force, says we are stretching it to the limit and we are needing to turn the corner on readiness. Squadronsrce had 134 and now there are just 51. They do not have enough interceptors according to heather wilson. She has said recently we are running out of bombs. There were 20,000 bombs dropped on isis in iraq and syria in the last year. That, i would like to start at the end with ambassador aleman and go down the line. I would like to ask you, hearing those numbers, is this a crisis, and what you see is the biggest readiness issue . Jenniffer, thank you great it is great to be here again at the Reagan National defense for a minute is in a credible privilege to be on this panel. My former colleague and , whonment in government is now my colleague again. And senator shaheen, whom i have testifyingor of testimon in front of many times. [laughter] it was a privilege. Even though he is not here, george, who has been an honorary tonight and is in attendance. I served as his special assistant from 1982101984. There is a saying that no man is his hero to his ballot valet and that is not true. George schulz is still my hero and he is living proof that the secretary of state with confidence of the president and a commitment to the National Security policy can draw the very best out of the United States arms service to come push great ends for the country along the lines that general mcmaster just outlined in his speech. Because this is the fifth time i have been here in five years, i am told that i am starting to feel like cato the elder, who ended all his speeches that carthage must be destroyed that is what i feel like here. That time i come and say it must be repealed. Here i am the fifth year and saying it again. I think it is important to kind of put this in a larger context. All of the statistics you described in all of the shortfalls you outlined were foreseeable and, in fact, we have foreseen this coming. Back in 2010, the congress appointed an independent panel to review and we said then and this was before the bca that given the cost of keeping soldiers, sailors, airmen, and greens in the field, given the budget trajectory that we foresaw, and also what the did, we saw ae train wreck coming. That is what we used in the 2000 10 report. In 2014, we said the train wreck was here. And then on thursday, dave at rand testified before the Armed Services committee and they said is based on it lots of classified work but it was an unclassified thing. He raised the potential that were we to find ourselves in a highand conflict with russia or china, we could lose. Has been are tendency to think that the United States role the reasons people said earlier today, we remain a very powerful military. Our folks were terrific. Outhe issue is going finding fixing and killing terrorists, there is no one better in the world than we are at that. In these high end fights, we have not been training people or protruding the systems we need. Taking 22 out of the Defense Budget. The biggest postwar drawdowns of the end of world war ii. Certainly since korea. In, we find yourselves because of the modernization that our potential adversaries have engaged in, we find ourselves potentially in situations where, although we have global match against them, fight a variety of away games and circumstances that are going to be very, very stressful for the u. S. Military. I worry the american public, which is used to very short military engagements, where as several people have said not a fair fight or are not prepared for the level of violence in the amount of casualties our time it may take. It has been a tendency for people to think this is a problem that is maybe 15 years out or 10 years out or five years of. I think it is a today problem. Let me just stop there. Is this a crisis from your point of view . For the off, thank you opportunity to be here today. It is a very distinguished panel. I haveink about this, been here each year and we are often talking about sequestration every time we get up on these stages. I am going to start there, as well. I want to just lay it out for you from an industry perspective. You appear from other folks here about what the impact is. You cited some very important statistics. As we look at the industry today, it is probably more fragile and less flexible than i have seen it. As you have said, i have been in the industry for many years. The reason is because of the budget cuts. I look at what has happened to our supply chain. Besides study commissioned that came out and said 20 . 20 of the small and mediumsized is mrs. Have left the industry because of the environments we are in today and the budget cuts. What has happened is we have always had this challenge of balancing cost versus technical performance versus speed to the war fighter that industry and the department of defense has to deal with. The department of defense, because of the budget cuts, have had to move to where the focus is on cost. Lowest cost. At the expense, in my view, of innovation and of investment that we need so much from the Defense Industry. That we need from a healthy Defense Industry. It is because of the environment that they were faced with that is making tough decisions. We have seen in the industry i will give you an example. Lockheed martin. Were atget cuts, we about 126,000 employees. Today we are at 97,000 employees. Our footprint has shrunk dramatically. We see the small and mediumsized businesses. Some of the critical components we need, there are one or maybe two suppliers in that field where there were more before. We are seeing a constraint environment of suppliers. There. Isa lot of pressure on the supply chain. They are not able to make some of the investments they want to make in the future because everything is about a cost shoot up. Rivestunately, that d behaviors in your industry that are not healthy. It is really a matter of balance and choice. It is not a fault, i dont believe from the Defense Department standpoint. If the panel will talk about rebuilding, then rebuilding has to be about getting that balance back in place, where we have an incentive to invest, where there is an incentive to get a return eing takensk that is b to support the capabilities we will provide. The secretary of defense has been very clear that he wants to increase lethality on speed at getting the capabilities to the men and women in uniform. To do that, you have got to have the incentive for industry to invest, we want to align with what the priorities are of the department of defense and with our customers. To do that, it cannot be about just cost. The only to be as efficient as we possibly can. If everything comes down to if everybodys leveled out in terms of technicals, you will not have a healthy industry. The progrowth tax reform initiatives that focus for advocating focuses on advocating around the world for our expert, is that helps the Defense Industry. And the department with defense of defense. We have heard clearly from our leadership they want to streamline the urography and look at wats tys they want to gt speed and relevance to the war fighter. There are elements like intellectual Property Rights that we hear from firms that are challenging us and there is a lot of policy and things that need to be taken into account. What do you see as the biggest problem . Do think you have to start on the budget side. Those of us know that when we see problems that are visible, we are well into the issue. The fact that we are seeing those effects now mean that we are in the crisis, not on the verge of a crisis. Has become apparent in the two prior points where it is not just readiness. We have the Iron Triangle of painful tradeoff. We have issues with structure , how far the force we need to cover the demands of the environment. We have Readiness Challenges of ndeping that force able a equipped to move quickly and to and wesive in action, have a modernization and investment crisis. That is longerterm and has nearer term implications. The biggest part is longerterm. If you think of readiness in a broader sense, i think if you of thef it as all pieces tribal, were looking at a hard tradeoff to the United States. If we do not increase our resources, we have to have more innovative ways of doing things. We can talk about what some of those could be. I do think we need to think about that gap between what we say it is, what we want the United States military to be able to do, the degree to which we resource them to do that and the degree to which we have other sources of power. If you ask me what i think the greatest crisis is, i do think frankly it is readiness because you have to deal with today. That is always the rational choice. If you manage the problems you have today. We can be smart about how we invest in readiness to were not off ourly cutting ability to invest in these other areas. The other thing i think is really important from the Defense Community is to not just stop at this. Usually to herself, we are in wild agreement about the amount of money needing to be invested in defense. We have to move beyond that to make clear to the political establishment in this country on the left and the right in the center that coming to a fundamental decision and approach, strategy that is stable about revenue and tonding and debt is vital the Defense Community being able to establish what it needs to do for the longterm. Without that bigger picture, i think were going to continue on the track we are on of having our means and our end state being quite disconnected for some time. Is this a crisis for your marine corps . You expect the marines to be the nations force of readiness and i assure you that the forces equipped and trained, we have been at war for 17 years. High School Students we will recruit next year were oneyearold when this started. Adjusted not happen overnight. When it started, if i had told you where china and russia and iran and north korea would be today, if i told you about facebook and smartphones and iphones, you would have thought i was out of my mind. The world has changed. Fighting a terrorist threats and that has not enhanced the capability. In the middle of that, we had a financial crisis. We had bca. We had all these other things. Our military i will not speak for the chairman or chief of staff or army of the air force we have had to maintain our current status and recapitalize our legacy equipment. We have seen this coming. We have seen this coming. We have been watching and we have adjusted our training. We have not been sitting here with our heads in the sand. At the same time, you can consume readiness in your daytoday deployment. We recognize the capabilities of these other nations. We recognize it may not require more brigade combat teams are infantry. It will require different ther it be thewhe capabilities to protect the network, tonight adversary there, to be able to operate safely in space with your commandandcontrol. We have got to worry about another mystery that has an air force and missiles. We need Ballistic Missile defense. Artificiald intelligence. I can go on and on and on. Were looking at that but in the meantime , you have to funds for the readiness to do the current fight. I agree with dr. Hicks. We looking at a strategy where we have to make trades. Trades. To make that is why it is important we have allies and we work hard to maintain our alliances and commitments. That we work as much as we can with them. That we work in operability with. With them. It did not happen overnight and will not get fixed overnight. I think we are in a good place. At the end of the day, the United States is going to get the military they want to pay for. And we will go fight. We will go fight. And we will do the very, very best we can. But we do not want a fair fight. How much money do you want and what is your topline and all this. My view is i really want a budget. I would like a twoyear budget. R would really like a fouryea budget. I just want to know at the number is so we can figure out what we will do and how we will move. I will tell you and everybody knows, the f up here this. We have an all recruited force. We recruit and retain our career force. They are watching. Particularly the ones who have been doing this for 17 years. And they want to know if the nation is going to make a commitment for the ability for their great young men and women. That is one thing we should be proud of. That is one thing we are still able to do. Technology,ot of Companies LikeLockheed Martin and others are going to get us to that advantage. Want an unfair advantage. Whether that number is, there has to be some reliability on the number of we have to plan and operates. Then we will make the trades we need to make to figure out what is the best. Senator shaheen, what is causing this crisis and what do we do to fix it . 12, as everyone here has well, as everyone here has said, we need to repeal the budget control act and repeal sequestration. That is the elephant in the room. I think if you talk to most members of congress, republican and democrat, they would all agree. Has been missing is the commitment to do that and the certainty concerns. I have been in the senate [inaudible] we have been operating for most of that time. Were doing it again. We are going into another year thee we are two months into First Quarter and we are operating on a continuing resolution and from he will through january. Will through january. That will not change unless there is a change in the makeup of congress, because right now there is an Even Division on the senate side. I can speak for someone who voted for the budget control act. I am not sure i would do it again if i have the opportunity. The understanding is we would all be honest at looking at the budget and try to come up with a andtion on the Domestic Defense side of the budget. So far, there has not really been an effort to do that. I think that continues to be a challenge. Having said that, i dont think we can all assume just providing more resources will provide the answers going forward. Ambassador edelman talked about had in the we talked abou Armed Services committee this week. Points thatuple were reinforced by virtually everyone at the meeting. They were talking about the National Defense strategy and what that should do. Strategy is about making choices. It is about saying, we can do something but we cannot do other things. We have to prioritize what we do. I think that is one