MR. LYNN: Thanks very much, Nancy.
Nancy had a way of working with Senator Kennedy. As you know, he had an unforgettable speaking style. Face reddened and fist pounding—that Boston Brahmin accent. You might think that all came naturally, and usually it did. But occasionally, on one topic or another, he might lag a bit.
And Nancy would anticipate that. You have to remember, on the Senate floor, there's nobody there, so there's no excitement. So she'd put a little sticky on the key point that needed to be made. She would write, "Look up and get mad." (Laughter.) That actually worked. You'd see Senator Kennedy look up, get mad, and make his point. (Laughter.)
So I think it's really appropriate that Nancy's here working with the Connect U.S. Fund and helping you all to look up and get mad -- only when it's appropriate, of course -- to advocate your points with conviction.
And it is with conviction that President Obama has laid out his vision for America, and the new direction he thinks we need to move in on many of the issues very close to you all. And what I'd like to do is talk about a few of those today. What I'd like to discuss is efforts on military reform, efforts on the change in Guantanamo and the changes in interrogation policy. I'd like to talk about climate change. And I would like to talk about arms control.
The first subject that I want to talk about is the reform agenda in the Department of Defense, where we're going and what accomplishments we think we have in these early days. Now, some of the changes we've made have been widely discussed. Others have gone almost unnoticed. But collectively we're a very different department than when the President took office, and that's largely because we got off to a running start.
For the first time in history, a President of one party kept the Secretary of Defense from his predecessor who was of another party. This has allowed us to, as I said, get a running start and has led to an unprecedented early exercise of leadership in the department.
With two years of experience, Secretary Gates had already distilled what his views were of where he wanted to take the department in terms of both programs and budgets. So he was able to meet the President's direction to break out of conventional thinking and still to keep pace with the threats that we face.
In particular, he was able to do what I think no incoming administration had been able to do before, which is avoid a treading-water budget in the first couple of months. The normal process -- and I experienced it directly in 1993 with Secretary Aspin -- is you have to produce a budget within six or eight weeks of when you take office. What that means is you take the prior administration's program, you make a few changes at the top, and you submit it to Congress and you say you're doing this very long and thorough review and you'll get back to them with what your real changes are.
Secretary Gates didn't do that. He started off with the premise that we were going to refocus our efforts on the wars that we're fighting today, that we would focus first on the immediate capabilities that the troops in the field in Iraq and Afghanistan needed. And at the same time, we would focus on maintaining the very substantial conventional margin that we already have against almost any set of potential enemies.
So we boosted our capabilities in helicopter lift, and in intelligence, surveillance, and reconnaissance, particularly with unmanned aircraft. To ease the burden on our forces and our families, we increased the size of the Army and the Marine Corps, and we halted reductions in the Navy and the Air Force.
The totality of these efforts were to institutionalize our capability to fight irregular wars and to address other unconventional threats, particularly dealing with weapons of mass destruction. They put the Pentagon truly on a war footing, in direct support of our troops. We also increased troop pay, support for military families, and medical care for service members and their families.
Our military health-care system is now better-equipped to treat the unseen wounds in our warriors returning from Iraq and Afghanistan, including particularly traumatic brain injury and post-traumatic stress disorder.
In the second priority of the FY '10 budget, we made a significant down payment on acquisition reform. What we need is an acquisition system that is as flexible and effective as the force itself. Now, this is especially important in a time with record deficits, when we face constrained resources.
To increase our in-house expertise in program management, systems engineering and cost estimation, we're growing the acquisition workforce. We're adding 9,000 new employees and we're converting 11,000 contractors to government employees. Now, this marks a reversal of the direction we took in the 1990s where we were seeking to outsource everything.
Outsourcing is the right solution in some circumstances, but not all. And what we've found is without the kind of expertise that I mentioned in systems engineering, cost-estimating, program management, we were simply not smart buyers. So we're trying to reduce the risk of cost overruns by relying more on independent cost-estimating, which Congress has directed in their recent legislation. We're also making greater use of fixed-price contracts where we share the risk more equally between the government and the contractor.
Finally, acquisition reform, in the end, requires discipline. It requires the discipline to reshape and cancel failing or misdirected programs. As everyone knows, doing that is not easy. But we have a Secretary who's committed to making those hard choices.
In the FY '10 budget, we have three categories where we made those kinds of modifications. The first consists of those programs that we were performing poorly -- either over-budget, behind schedule, delivering less capability than was promised, or, in the case of the VH-71, all three. And the VH-71 is the presidential helicopter, and we canceled that.
Programs that offer important capabilities but too high a price or in too small of a niche area or simply were too exotic or exquisite in their capabilities are also ripe for reshaping. So in the FY '10 budget, we canceled the transformational satellite program.
Finally, the third category where we've made changes to show that kind of discipline are programs that provide capabilities we already have enough of. The F-22 fits into that category. People have the impression that we canceled the F-22. That's actually not true. We simply accepted the F-22 program that Secretary Rumsfeld and President Bush had designed -- 187 aircraft. We're stopping there.
Our air superiority is not in doubt. Between the F-22 and the Joint Strike Fighter, we will have numerical and qualitative dominance in fifth-generation fighters for decades. Additional F-22s would simply not make a meaningful enough addition to that capability to justify the cost. The resources could be better spent elsewhere.
So we've made an important start to changing how we buy weapon systems and equip our troops in FY '10. We're going to keep making those same hard decisions each year. And in FY '11, you will see another series of hard choices when we present the budget on February 1st.
As you know, the changes we've initiated go far beyond the budget. This February we will release the Quadrennial Defense Review. The QDR is, for the first time, linked with a similar State Department effort. I'm sure you've been talking about the QDDR, the Quadrennial Diplomacy and Development Review. We're also linked to a similar effort the Homeland Security Department.
These documents will help set the course for how the Obama administration approaches national security—an integrated, interagency, cross-governmental approach. The critical message is we're devising a new approach that integrates defense, development, diplomacy and homeland security. We're seeking to employ all dimensions of national power, to avoid military action where possible, and to ensure its success where necessary.
You all play an important role in that. Nongovernmental organizations have an essential role in delivering humanitarian relief and developmental assistance in peacetime and in war. We expect the QDR and the QDDR to foster a closer and more effective partnership in the future, one that makes full use of the unique skills NGOs bring to conflict environments.
As part of our QDR, we have formally consulted NGOs and think tanks. We're following up on the lessons we have learned in Iraq and Afghanistan. The guidelines devised two years ago for managing the relationships between NGOs and U.S. military in conflict environment are now part of DOD joint doctrine. And our Office of Partnership Strategy continues to work with NGOs in Afghanistan to assess the guidelines in theater and as they're used in practice.
Our approach to NGOs is part of a wider commitment to working with allies, to working through international institutions and organizations and to upholding the norms that they foster. Changing our policies in interrogation and detention is part of this effort. I know that many of you have long advocated on these issues. I know that you continue to closely follow developments in detention policy.
As President Obama stated in his Oslo speech: “Even as we confront a vicious adversary that abides by no rules, I believe that the United States of America must remain a standard-bearer in the conduct of war. That is what makes us different from those whom we fight. That is a source of our strength.” That's why the President, on his first day in office, banned torture and ordered the closure of Guantanamo.
Achieving a resolution to the set of issues surrounding Guantanamo has proven among the hardest things we've faced in our first year in office. But as we move towards the closure of Guantanamo in 2010, legal and political challenges remain. We must achieve an approach that balances prosecution of detainees in Article III courts, where feasible, and utilizes reformed military commissions where appropriate for those individuals who have committed violations of the laws of war. We also need to continue our efforts to transfer approved detainees over to third countries, with appropriate assurances of security and humanitarian treatment.
Finally, as the President laid out in his speech at the National Archives, we seek a fair, legitimate and constitutionally valid framework for detainees who pose a clear and continuing threat to the American people but who, for various reasons, can't be prosecuted in either federal courts or military commissions. These are the people that the President said, in effect, remain at war with the United States. We will seek to transfer those detainees to a U.S.-based maximum-security prison.
Turning to climate change, the department is also focusing its attention on how national resources contribute to conflict. This includes classic issues of resource scarcity, especially related to hydrocarbon fuels, but it also includes population growth and climate change.
For the first time, DOD has evaluated these issues as part of the Quadrennial Defense Review. We know that climate change will exacerbate food and water shortages, increase the spread of disease, and may contribute to migration both within and across state borders.
Increased poverty, environmental degradation, even social unrest and possible weakening of governments are potential consequences. Developing countries who have the least resources to cope will be among those hit hardest. Although climate change itself will not directly cause conflict, it has the potential to exacerbate tensions that already exist. It serves, in the vocabulary of conflict analysis, as an instability accelerant.
Solutions for addressing climate change require broad international cooperation. The President travels on Friday to Copenhagen, where he will reiterate the administration's commitment to curbing greenhouse-gas emissions. In fact, DOD is already trying to do its part by increasing the energy efficiency of our forces, both in theater and at fixed installations.
The Defense Department is America's single largest consumer of energy. We consume over 300,000 barrels of oil a day. The Air Force uses about 70 percent of that, about the same quantity as a major international airline. In FY 2008, the department spent about $20 billion on energy. That's a doubling over the last three years. So as a department we have a responsibility to demand greater energy efficiency from ourselves and from those we do business with.
In theater, energy can be a matter of life and death; of mission success or failure. Our operations in Afghanistan and Iraq have a long logistical tail. More than 70 percent of convoys in Afghanistan are used for fuel or water. We haul these supplies on road laced with IEDs and prone to ambush. The greater our fuel and energy needs, the more troops and contractors we put at risk supporting combat operations.
Becoming more energy efficient in theater saves lives as well as resources. In fact, when you take the cost of fuel and add the additional cost of transporting it, delivering it and protecting it, you find that its real cost can be orders of magnitude greater than the cost of the pump.
Given the risk and the costs, it pays to become energy efficient. So we are ensuring that energy efficiency is a part of our acquisition process. Calculating the full cost of fuel is now mandatory as we evaluate potential weapons systems, and we are establishing performance standards that prescribe how often systems should need fuel resupply in theater.
We're also making our fixed installations more energy efficient. Over the past three years we have tripled our investment to energy technology from over 400 billion dollars to about $1.2 billion annually. This investment is yielding results. We have reduced energy consumption at fixed installations by over 10 percent, and nearly 5 percent of electricity at U.S. bases now comes from renewable sources.
So energy really, truly does figure in to what the department does every day. We have an opportunity and, I believe, a responsibility to dramatically transform our energy use. As President Obama noted in his Nobel address last week, "It's not merely scientists and environmental activists who call for swift and forceful action; it's military leaders in my own country and others who understand our common security hangs in the balance."
Finally, let me talk about nuclear proliferation and arms control. In his Prague speech this past April, the President laid out a vision for stopping the spread of nuclear weapons and ultimately for creating conditions that will allow all states to relinquish them.
The President also rejected unilateral disarmament and expressed his commitment to a safe, secure and effective nuclear deterrent so long as nuclear weapons exist. The department's Nuclear Posture Review is devising a strategy to meet this objective in a comprehensive and balanced way.
One of the most important parts of the President's agenda is to reduce the dangers associated with nuclear proliferation and nuclear terrorism. This entails expanding international efforts to rebuild and strengthen the global nuclear non-proliferation regime.
This regime, as we all know, has been weakened by series of setbacks and new challenges. Renewed U.S. leadership is absolutely necessary. The Non-Proliferation Treaty Review Conference next year offers an opportunity to fulfill the President's call to strengthen international inspections. It is also a chance to fashion immediate consequences for countries caught breaking the rules or trying to leave the treaty without cause.
President Obama also made clear his intent to reduce the role of nuclear weapons in U.S. national security strategy and to take concrete steps toward a world without nuclear weapons. Toward that end, we are negotiating, even as we speak, a new strategic arms reduction treaty with Russia to reduce our nuclear stockpiles.
U.S. and Russian negotiators are currently in their eighth session in Geneva. We expect a resolution that will achieve our stated goals. In this interim period of START's expiration earlier in the month, our two countries have agreed to continue observing the spirit of the treaty's terms.
Once these negotiations come to a successful conclusion, we intend to quickly initiate discussion of a follow-on agreement that will bring our stockpiles even lower. The new START is intended to be a stepping stone to achieving strategic stability at still lower numbers in a mutually verifiable way.
It would keep a permanent, verifiable global ban on nuclear testing. The Administration is pursuing ratification and entry into force of the Comprehensive Test Ban Treaty. This treaty embodies an arms control goal that many of you have worked more than a decade to achieve.
The treaty's global monitoring system works. Qualified independent assessments have determined that our nuclear stockpile is sound in the absence of explosive testing. I think you see in the administration's approach to arms control both the realism and idealism that has characterized President Obama's view of the world. We are taking unprecedented steps toward a world free from fear of nuclear weapons, while at the same time responsibly ensuring our own security and that of our allies.
So, one year in the new administration, where do we stand? Under the President's leadership we have strengthened our ability to fight the wars we are in, we have enhanced America's standing in the world, and we have taken substantial steps on arms control.
We have made this progress in no small measure because you have helped to create an environment of public understanding and grassroots support in which the Administration can advance its agenda. But we have a long way to go. If the four-year presidential term were a marathon—and it is—we have not yet reached mile six.
So we're keeping an eye on what we want to achieve along with the mile markers as they go by. And there is often an act of balancing, of wanting to accomplish so much in a defined time, yet having to pace ourselves in order to finish, that is the most difficult to manage.
I want to thank you for listening. I'm happy to take any of your questions. (Applause.)