Randall [Yim, Acting Deputy Under Secretary of Defense for Installations], thank you very much. I must say that you really summed up much of what I'm going to talk about here today in just a few moments. Randall, thank you, and community leaders and members of the armed services who are here today, and ladies and gentlemen.
I've been told that you have had a very productive morning, and this session has indeed been beneficial to all of you. I'd like to talk just a little bit from my perspective, where we are today and where we need to be tomorrow.
At the dawn of the Second World War as the shadow of evil was lengthening over Europe and the distant rattle of weapons echoed across the Pacific, President Roosevelt knew that America was going to have to unleash its industrial might if it was going to realize its military might. At the time, the nation was producing roughly 5,000 aircraft a year. FDR's advisors urged him to call for the production of some 10,000. But with his eternal optimism and his keen knowledge of the challenges that he was going to face on the horizon, President Roosevelt shocked both his aides and the nation. He announced a goal of 50,000 aircraft per year.
There were many in Congress who were astounded at this request. They thought it was impossible. Quite a few of them responded with derision and despair. Thomas Dewey called it outright "demagoguery." But thanks to the inspiration of the President, the ingenuity of American business, and the industry of millions of the American people, the United States exceeded even FDR's goal, producing almost 100,000 planes per year. And in so doing, he provided the resources necessary for us to prevail.
There is today, I would suggest, a similar story about purpose and perseverance; about complex and dangerous threats that face us across the globe; of resources that are needed for America's armed forces; of economic changes that are going to be required to provide those resources; and of leaders who are facing this daunting task that is necessary to bring forth these kinds of changes.
Once again it's my judgment that through the great creativity and energy and hard work, those leaders -- and I'm looking at many of them right here in this room -- have achieved what many once derided as being impossible. You brought forth new life to your communities, and in the process you have provided billions of dollars of savings that have been funneled into our national security interest to provide for our men and women in uniform.
And just as those heroic days a half a century ago, the engine of America's military is fueled by local action on the home front. And it's an unavoidable, mathematical fact that we simply cannot afford the military that we require without your ingenuity and your dedication. In short, you make base closure work and the funds from base closure allow our military to work.
Your efforts have become even more critical as our men and women in uniform face a landscape of different and diverse challenges, very different than what we faced back during World War II and subsequently. While we've won the Cold War, I think everyone in this room would agree we have something of an uneasy peace, to say the least.
I didn't come here today to talk about Kosovo, but that certainly is just one item on the agenda that we'll have to address in the coming days. The future is rushing at us in the form of new dangers that threaten to boil over and to jeopardize our national security interests and stability and prosperity that we currently enjoy. You can look around and you can see the prevalence of rogue regimes, of ethnic hatreds, of brutal terrorists, proliferation of weapons of mass destruction. These are all the fiery realities of our time.
So our national strategy for meeting these types of challenges is summed up in three words and we repeat it almost like a mantra in the Pentagon today. It's called shape, respond, and prepare. That sums up our entire strategy, which we believe is not only relevant for today, it's going to be relevant for well into the 21st Century.
We are using our military to shape world events, actions and attitudes on the part of others in ways that are favorable to our interests and to our ideals. That's why we are forward deployed all across the globe. By being forward deployed we're able to influence people's attitudes above us to take a look at our military. They see how good they are. They see how professional they are. How capable they are. How well led they are. How disciplined. And they look at that military and say, "There's a country who's side I want to be on." The same is true for our potential enemies and adversaries. They look at the same people and say, "This is not a country I want to take on." So we shape events by being forward deployed in ways that are favorable to our interests.
Secondly, we have to be able to respond to everything; all the way to rescuing people in non-combatant situations, humanitarian missions, peacekeeping missions, all the way up to facing down Saddam Hussein or even having to go to war in Kosovo to protect the people from being slaughtered over there. We have to have all of that flexibility in order to carry out our national security interests.
A third part is preparing for the future. We have to prepare for the future by investing not only in new weapons, but also in our warriors. That's why President Clinton has proposed for the first time in 15 years a sustained increase in defense spending. This additional funding over the next six years is going to give our men and women not only a much needed pay raise, it also changes the way in which we compensate for retirement benefits. It's going to include a major investment in the next generation of weapons and technology.
I want you to know that by the President signing on and endorsing in very strong terms the need to increase our defense budget, this does not in any way eliminate or obviate the need for us to reduce unnecessary spending, and that's what I wanted to talk to you about today.
We have to change the way in which we do business at the Pentagon, and we're doing that. We're trying to emulate the best business practices that we can find. We are reengineering our processes. We're trying to find out what the best business practices are and follow them, to implement them in our daily business dealings as well, and we're doing that.
We're cutting our headquarters staff. We're moving responsibilities out into the field. We are competing hundreds of thousands of government jobs with the private sector. We will compete some 229,000 jobs and we expect to save some $11 billion in the process of doing that.
We're replacing costly paper contracts with on-line purchasing catalogs that include everything from antibiotics to combat boots, and we're switching to much less expensive and more flexible commercial technology in our weapon systems. We're taking those small microchips that you might find in these small computers and putting them into our F-15 jets. So we are reforming the way in which we do business because we need to save that kind of money in order to put it into our military.
As you all know, one of the most important ways in which you can save money is to have additional base closures. That's what we've been talking about for some time now, and the reason for it is pretty clear.
Since the height of the Cold War we have reduced our defense budget by nearly 40 percent. We have reduced our forces by some 36 percent. When you hear people claiming that we still have a Cold War mentality or military, don't believe it. We have dramatically reduced the size of our forces and we've reduced the amount that we spend on our forces. We've reduced procurement by almost 70 percent from the height of the Cold War. So we are a much smaller force doing many more things. And we're facing the point where we're starting to wear out our equipment and we're wearing out people. So there are a lot of changes we have to make if we're going to sustain the finest military in the world.
So the forces have been reduced by 36 percent, but our infrastructure has come down, even after the four rounds of BRAC, by only 21 percent. So the mathematics are pretty clear here. We're carrying a lot of excess capacity, a lot of overhead. The vast sums that we are spending on unneeded facilities is robbing our people of needed training, of weapons modernization and quality of life. So in our effort to prepare for the future we need to match our military infrastructure to the realities of the world that we're confronting, and also match it to our force structure so that we can successfully contend and even dominate those challenges for the future.
I mentioned before that we're revolutionizing our business practices, but the point is that while we are retaining this footprint of a Cold War boot, it no longer fits the nimble foot that we need in terms of the force we're creating for the missions of a new century. I'd like to mix metaphors just a bit. We're like a business that has shifted many of our sales onto the Internet, but we're still paying the rent on all of our storefronts. That's the problem we're facing today and we can no longer afford to do that.
I have asked our Department to be a much more efficient steward of the tax dollars, and you would expect no less of me. We've been moving very aggressively to do just that. But the single most effective way that we can save money to become more efficient is to reduce excess infrastructure. Only a formal BRAC process as approved by Congress can achieve that. And only a formal BRAC process can unlock those savings that we need for the full modernization program.
We have saved a lot of money through BRAC. Randall mentioned that I've been on the receiving end of some of those BRAC proceedings; Dow Air Force Base. I was a city counselor in the third largest city in Maine, going way back in the late '60s; population 38,000, the third largest city in Maine. So you can see even a small city like Bangor, Maine, had enormous problems to contend with.
What happens when you have a strategic base that suddenly says we're closing down and here are the keys to the base? We couldn't even afford at that time to plow the runways. How do we contend with something like that? What happens to the revenue that's coming into the community? We didn't have all of those programs that we have now to try to help with the economic adjustment. We didn't have many government agencies rushing in to say how can we help this transfer, how can we deal with the environmental cleanup? How do we do all of that to be of help to you so you can transition to a productive economy?
Then I was also a Senator when they closed Loring Air Force Base. That was a major blow to that facility in northern Maine. We had potatoes and we had Loring Air Force Base. And next to the potatoes we had the Canadian border, so you can imagine the kind of competition that we had known and have known all of these years. But Loring Air Force Base was key to the economic vitality. Yet what we found out, what we had to do is that we had to make these changes. We had to work together. The communities had to energize their community leaders in working with various agencies, and they have survived. We have done very well in overcoming those obstacles. But it took a lot of work, it took a lot of commitment, and it took a lot of leadership at the local level.
But as a result of those four BRAC rounds, we have saved some $3.5 billion to date; we will save over $25 billion by the year 2003; and the reason that we need two more rounds of BRAC is that we expect to save some cumulative $20 billion total, and then $3.5 billion roughly, or $3 billion a year thereafter.
Now that's $20 billion that can be used not only to go for additional pay, additional weaponry, but also into the families. The military families who desperately need additional assistance. They go pretty much taken for granted. Most Americans are not aware of the sacrifices our military families have to make and that they do so with surprisingly little complaint. This is something that I think more and more people have to become aware of; the total commitment. It's not simply the men and women in uniform, it's their families as well.
So we have a chance, we have a tradeoff. We can continue to carry all of the excess infrastructure or we can have the savings and put it into the kind of equipment that will keep us the most powerful nation in the world.
Everyone here would agree that we have the finest military equipment in the world, bar none. We are not going to continue to have that technology in the future unless we make these kinds of savings. We have the finest men and women in the military of any country in the world, in the history of the world. We're not going to be able to keep them if we can't afford to pay them a decent level of wages; a decent retirement benefit; and money for their infrastructure, their family housing, their education. All of that has to go into their pockets as well. Otherwise, we will see an exodus out of the military and we'll be left with something quite short of what we have today. And what we have today is the best that anyone has ever seen at any time in anyone's history, and we want to keep it precisely that way.
In the coming days I'm going to go up to Capitol Hill once again and ask my former colleagues if they will support two more rounds for BRAC proceedings. It's a difficult task. I know what I'm facing. I was there myself. I had questions. I was concerned about my communities -- what do we do? What kind of help will we get? Does anyone really care what happens once you shut the doors and hand over the keys? How do we attract individual companies to come in? What kind of logistics will we have? All of those questions we will have to contend with, and many of you have.
But I think many of you in this room have also taught us a very good lesson. That is that base closure need not be an economic death knell. It can be, in fact, a starting bell for the future. And that what's good for the national security can indeed be good for the local economy, and I want them to know some of the success stories. They're not all success stories, but I want to point out some of them.
I want them to know about Alameda, California, for example, where we once had Hornets and Tomcats who were shooting through the skies. Now they're shooting films. Now they're incubating startup companies. Now they're protecting natural resources and they're creating new jobs.
I'd like them to know about Ayer, Massachusetts where the Army crew cut at Fort Devons has been replaced by Gillette's close shave; where their jeeps have been traded in for rail cars from the Boston & Maine Railroad; where a military payroll has been replaced by 1,500 civilian jobs.
I'd like them to know about Austin, Texas where they swapped Bergstrom Air Force Base for the new Austin International Airport that's going to create 16,000 new jobs. And what was once a division headquarters for the 12th Air Force will soon be a Hilton Hotel.
These stories have been replicated all across our country. In fact the General Accounting Office recently filed a report that noted that in most post-BRAC communities the incomes are rising faster and unemployment rates are lower than the national average.
So in spite of these success stories I understand that the closure process is still too complicated. There are fundamental questions raised that every community has to go through the prospect of having to file all the paperwork, to organize all of the public relation firms, hire the lawyers; all that expense. We're working hard to streamline the process. We're eliminating some of the hurdles about the cleanup and the disposal of base property that hinder your ability to create new jobs.
So I am announcing today the creation of special reuse teams of senior military and civilian leaders. These teams are going to have the authority to quickly identify and resolve many of the problems that you continue to experience today, as well as propose some structural changes as we try to avoid the problems for tomorrow.
But I must tell you that no matter what we do here in Washington, the real action is going to take place at the local level. It's the local community effort that really makes a difference as to whether you succeed or whether you fail. Because base closures is fundamentally a community-based process.
I recall reading some time ago an essay by Walter Lippmann, and he wrote about a Russian Czar who came out one day and he saw a sentry standing guard over a patch of weeds. He asked the sentry why he was standing there. The sentry said the Captain of the Guard told him to stay there. So he went to the Captain of the Guard and he asked the Captain, "Why has the sentry been ordered to stand there?" The Captain of the Guard said, "Well, I don't know, I guess the regulations have always required it."
He couldn't find a single person who could give him an answer as to why that sentry was still standing guard. He finally went back into the archives and they came across the reason. One hundred years earlier, Catherine the Great had ordered a sentry to stand guard because she had planted a rose bush in that spot and did not want anyone to trample the rose bush. A hundred years had passed, the guard was still standing by a wasteland, in essence.
We can no longer afford to have any of our sentries, any of our military people, standing guard over facilities that no longer serve our national security interests. So it's important that we focus upon this, that we face this, that we try to work together, that we try to energize ourselves, the local community, the various agencies to say what's in the national security interest? How do I reconcile that with the need to help my community? What sort of government agencies' effort will be made to help turn this over into a thriving private entrepreneurial type of success story? That's what has to be done if we're going to have the finest military in the future with the best military weaponry and technology in the future.
Your work and success recalls the words of President Eisenhower. Eisenhower said, "Whatever America hopes to bring to pass in the world must first come to pass in the heart of America." The difficult work that you're doing for America makes possible all that we hope will come to pass in the world, and for that we owe you a great deal of gratitude, a great debt.
So I came here today to simply thank you for what you've done, and indicate to you that we are prepared to do whatever is necessary to help those communities who are still struggling, and to help build a consensus within the local communities to tell our Members of Congress that indeed we can look forward to the future, we can build upon the present, we can make it a better future. But number one, that we have to take care of our national security interests, and with your help we will do precisely that.
Ladies and gentlemen, thank you very much for your patience. And thank you very much for being here today.