Thanks very much Michael for that kind introduction.
It's a pleasure to be in L.A. tonight with the World Affairs Council.
They don't let me out of the Pentagon much.
Either Secretary Gates or I have to be in Washington at all times. We have a very active Secretary who likes to get out and see the troops. That means that I'm generally in Washington rather than out. So I'm particularly happy to come to L.A.
The city plays an important role in our national defense, particularly through the contributions of the defense industry. L.A. is the home of many of our biggest and best defense contractors and aerospace firms. Together they form a critical part of your regional economy. As I understand the numbers, if you separated L.A. County out as a nation, it would have the 15th largest economy in the world. So it's clearly a substantial part of the nation's economic infrastructure.
Industry is a vital part of what DOD does. Our military might depends in great part on the ingenuity of our defense firms, which help ensure our troops have the very best equipment at all times. I was just down at Camp Pendleton yesterday and I got to see an important example of what that defense industry-Defense Department partnership can bring.
I saw something called the infantry simulation trainer. It trains troops at the squad level to understand what they're going to face in Iraq and Afghanistan. It is a squad level simulation. It has all the smells. It has actors playing the roles of Iraqi or Afghan villagers. It's wired so it has simulations for RPGs, for IEDs, for firing. It was the brainchild of General Jim Mattis, who is now the commander of our Joint Forces Command.
Mattis had the inspiration that if we can use simulators to train pilots to learn how to fly 747s or F-15s or F-16s, why can't we use simulation to help train infantry squads. Why is that important? Because today, as is in almost all past wars, we suffer about 85 percent of our casualties at the ground force level.
Not only do 85 percent of the casualties come from ground troops, but the highest proportion comes in the first few weeks that they are in theatre. Until they get used to the rhythm that they're facing, until they understand what kinds of pulls and pressures they're going to have, they are at most risk. This simulation system helps them understand that before they're at risk and, therefore, is helping to reduce casualties.
The need for this training indicates something I want to talk to you about tonight. The changing nature of warfare. We need to adjust to several dynamics and security threats that have really started to move the tectonic plate of our national security environment.
Each of these changes has implications for how we design our defense programs. Each of them, if not carefully managed, could greatly undermine our security. I would like to go through these changes and talk about what we are doing to respond to them—how we are planning to shift the strategy.
The first and most prominent change in the global strategic environment has to do with lethality. Previously when you looked at the range of threats that we faced, the more capable the potential adversary, the higher level of lethality that they possessed. Large nation states had nuclear weapons and sophisticated conventional capabilities. Rogue states, terrorists, and insurgents did not.
In the world we live in now, this is no longer the case. Terrorist organizations and rogue states seek weapons of mass destruction. Insurgents are armed with improvised explosive devices that can penetrate even our most sophisticated armored vehicles. We even see criminals who have world class cyber capabilities.
In short, lethality no longer tracks closely along the threat spectrum. Today, lethality at the low end of the spectrum can be equal to that at the high end. To respond to this, our military forces must achieve greater agility. They need to be as proficient at waging a counterinsurgency campaign as they are confronting a large, sophisticated adversary.
The second change in the global security environment is the increasing duration of conflict. Since the Cold War ended, most war planning has revolved around fighting two major conflicts nearly simultaneously. There have been different iterations of that scheme or paradigm over the past 20 years. But in every instance, fighting two major conflicts has been at the core of our planning assumptions.
And what our planning always anticipated was that while a conflict might be very intense, it would be relatively short. Desert Storm was the classic example of this type of conflict. But the construct no longer fits our current reality. We are already fighting two wars and it was not the intensity of the initial combat phase that proved the most challenging in Iraq and Afghanistan.
Rather, after eight years in those two conflicts, we are finding that it is the duration of the conflicts that places the most stress on our military. These wars have now lasted longer than the United States' participation in World War I and World War II combined. Sending forces back for second, third, and fourth deployments comes at a very high cost.
It imposes a tremendous burden on our war fighters, on their families, and ultimately on the nation. So as we look out at potential scenarios, the possible duration of a conflict becomes as important a driver as its intensity.
The third change in the global security environment is that the practice of war has moved more and more toward asymmetric threats. Battlegrounds used to be a meeting of like on like forces, cavalry on cavalry, armor on armor in World War II. In the Cold War, nuclear versus nuclear.
But this is less and less the case today. U.S. conventional dominance in almost all instances has led potential adversaries to seek asymmetric tactics. Rather than fighting us head to head, they use IEDs to counter our mechanized advantage, or guerrilla tactics to avoid direct combat. Some countries with ambitions in their regions are also investing in asymmetric weapons that could deny our access to the global commons.
These weapons include surface-to-surface missiles, cyber capabilities, and anti-satellite technologies. They can be used to block our use of the air, the sea, the space, and the cyberspace domains. Asymmetric tactics are designed to force us further from the battlefield and to prevent us from using all of our capabilities. To maintain our ability to project military power, we must address these efforts to negate our conventional superiority. This is a critical element in the new strategy we're developing.
The fourth and final trend in the global security environment is what brings me to California today—the cyber threat to our national security and to our economic security. This afternoon I spoke with a group of CEOs here in L.A. about the cyber threat. I just spent a half hour with high school students, and most of their questions revolved around the cyber threat.
Tomorrow I'm going up to Silicon Valley to spend time with some of the firms up there, to understand what their perspective is on the threats we face. But there's no exaggerating our nation's dependence on information networks. This is especially true in the Department of Defense.
For command and control of our forces, intelligence and logistics, for weapons and technologies that we field, they all depend on computer systems and networks. The Internet is magical in its ability to connect us to others. But it's also a two-way street. And over the past 10 years, the frequency and sophistication of cyber intrusions has increased exponentially.
Our networks are under threat every hour of every day. They are probed thousands of times a day. They are scanned millions of times a day, and we have not always been as successful as we need to be in stopping those intrusions or even in determining where they came from.
We know more than 100 foreign intelligence organizations are trying to hack into U.S. systems. We know foreign military are developing offensive cyber capabilities. And we know some governments already have the capacity to disrupt elements of the U.S. information infrastructure. As I said, we even see criminals who have world-class cyber capabilities.
Not even our President has been spared. During the presidential campaign in 2008, hackers gained access to the campaign files of Barack Obama. Policy papers, travel plans, and sensitive e-mails were all compromised. The intrusion was eventually detected and repelled, but not before some sensitive information was taken.
For all of these reasons, the President has called the cyber threat one of the "most serious economic and national security challenges we face as a nation." So the cyber threat is a very real one to our military but also to our critical infrastructure and to our economy.
To meet this new range of threats, Secretary Gates and I have proposed several strategic adjustments in the Department of Defense. First, we need the capability to respond to both high-end and low-end threats. Our military must have what Secretary Gates has called “a portfolio of military capabilities with maximum possible versatility across the widest spectrum of conflict.” We are not going to be able to predict with certainty where we're going to fight next, what the nature of the adversary is, or what their specific capabilities will be. So to address unforeseen circumstances, we need agility and flexibility in our forces.
Second, we need to shift some resources from longer-range scenarios, looking out a decade or more, to the fights that we face right now, today. Secretary Gates has done that by deploying mine-resistant vehicles to Iraq and Afghanistan, by deploying more intelligence and surveillance support for our troops, and by deploying more rotary lift to move those troops around the theatres.
We have aggressively supported tools for the war fighters that are directly applicable to Iraq and Afghanistan. But in a broader sense we are working to institutionalize our ability to wage irregular warfare, a core mission that has been neglected for too long. At the same time, we need to address the asymmetric threats I described by developing a range of new capabilities. This includes our ability to track and neutralize weapons of mass destruction, our ability to offer security assistance to weak and fragile states, and our ability to defend our computer networks against intrusion and attacks.
Third, the longer duration of conflict has implications for our force planning and how we support our troops and their families. We must plan for a range of plausible conflicts that include both high-end confrontations, as well as major overlapping campaigns in distant theatres. But we also must take account of engagements that may be of lower intensity but longer duration.
Given these pressures, we are moving to reduce the stress on our force. To address the broader set of missions our forces are taking on, we have halted reductions in the Navy and in the Air Force and we have increased the size of the Army and the Marine Corps ahead of schedule. This will enable us to reduce deployment tempos and increase dwell times, which are key goals of both the Secretary and the President.
We have also made large investments in programs to support military families, and to support wounded warriors. Our people are the greatest strategic resource we have, and we especially need to help them cope with the stress of multiple deployments and combat injuries.
Identifying changes in the nature of war is only the first step. We also need to resource the strategic judgments we have made. But because of our nation's challenging fiscal climate, resources are more constrained today than they have been in many years. In his State of the Union address, President Obama announced a spending freeze on all domestic agencies.
At the same time the President made a strategic choice to continue funding real budget growth in our national security agencies. As we fight two wars and as we face new threats, the President believes that budget increases are critical to protect our national security. But even with these increases, some of the costs embedded in our budget are going to grow faster than the budget as a whole. Health care costs, wages and benefits, and some of the most advanced weapons technology are all likely to continue growing faster than our overall budget.
This presents a dilemma. Either the Department, in partnership with our industrial base, can become more efficient. Or else we will eventually be forced to reduce programs and ultimately to diminish capabilities. So we're looking to make a series of lasting reforms that will develop efficiencies and yield cost savings while maintaining performance.
We have identified three areas of potential improvements in the Department that could yield these efficiency gains. The first is the acquisition system. In many cases, we found the Department simply was not a smart buyer. So over the next five years we are increasing our acquisition workforce. We are hiring 9,000 new employees and we're converting 11,000 contractors to federal service.
The point of this effort is to strengthen our in-house expertise in cost estimation, program management, and systems engineering. These are the very disciplines that we were lacking and that prevented us from being the smart buyer we need to be.
We are also exploring how the acquisition process should be geared for different applications. Buying services or technologies on the commercial market presents different acquisition challenges than complex weapons systems that have significant R&D components. Take information technology as an example. On average, it takes the Department 81 months from when an IT program is first funded to when it becomes operational.
If we take into the account the continued growth of computing power, this means that systems are being delivered four to five generations behind the state of the art. By comparison, the iPhone was developed in 24 months. That's less time than it would take us to budget for an iPhone.
Just to prepare, defend, and receive congressional approval for our budget takes about 24 months. This has to change. We need a different approach for the acquisition of information technology and to many of the other technologies and services we buy.
Ensuring our workforce is composed of the right set of skills and is the right size for the task is the second broad way we can achieve efficiencies. We are currently evaluating the appropriate balance of civil servants and private contractors in our workforce. The trend towards contract support over the last two decades has yielded many important gains, but we believe we have over-steered in several areas.
In the past few years the private contractor workforce has surged to about 39 percent of our overall workforce. Over our next five-year period, the goal is to reduce that back to the more traditional level, a steady-state of about 26 percent of the workforce. Cost effectiveness is one of the most important reasons for rolling back the use of contractors, but other criteria matter as well.
Some contracting introduces operational risk or contributes to the de-skilling of the federal workforce. And some activities are best performed by employees with direct responsibility for the public interest. So the Department is in the process of establishing 33,000 positions in various DOD components.
Finally, bringing efficiency to the Department in the end requires the discipline to cancel programs that either aren't working or aren't needed. President Reagan famously said that the closest thing to immortality in this life is a government program.
Secretary Gates has demonstrated that this Washington truism isn't true in every case. In both the FY 2010 budget and the 2011 budget, he has canceled several types of programs. Programs that were performing poorly. Programs that were providing redundant capabilities. And programs that were funding exquisite capabilities that were simply not central to our security challenges. If carried to completion, the programs Secretary Gates canceled would have cost the taxpayer more than $330 billion.
The bottom line is that by exercising program discipline we're able to direct resources to the highest priority programs. In the aggregate, these tough decisions enhance our ability to protect the American people.
The world continues to present dangerous and unpredictable challenges to our national security. I have described some of the trends in the strategic environment that we believe have far-reaching implications. These trends are driven by fundamental changes in the nature of war, changes we already see reflected in the conflicts in Iraq and Afghanistan. We are moving aggressively to adjust our strategy in the underlying programs and posture to meet these challenges.
And we are doing so in an austere fiscal environment that requires us to go beyond merely adding new capabilities. Because our costs are growing faster than our budget, we also must become more efficient at what we do.
Succeeding in these tumultuous times, while prevailing in Afghanistan and Iraq, will not be easy. But I am confident that we have chartered a path that will keep our nation safe.
Our military today is the best equipped, best trained, and best led the world has ever seen. Yesterday at Camp Pendleton, I saw us utilize new techniques in simulation to make this force even better. We can never let up pursuing this kind of excellence in our military. We have to adjust to the changing nature of warfare and we need to utilize our technology to stay ahead of our potential adversaries.
Thank you very much.