SEC. GATES: I'd like to address two subjects today.
First, I would like to make an announcement regarding the department's policy toward media coverage of the return of our fallen heroes at Dover Air Force Base. As you know, the president asked me to review this policy. After receiving input from a number of sources, including all of the military services and organizations representing military families, I have decided that the decision regarding media coverage of the dignified transfer process at Dover should be made by those most directly affected: on an individual basis by the families of the fallen. We ought not presume to make that decision in their place.
I've tasked a working group to quickly come up with a plan to implement this new policy. Further, I've tasked the working group to examine ways in which we might further assist the families of those who have made the supreme sacrifice for our country.
Second, earlier today, the White House unveiled the federal government's fiscal year 2010 base budget for the Department of Defense, the remaining FY 2009 supplemental figure, and the fiscal year 2010 war costs budget. The remaining '09 supplemental of $75.5 billion will allow us to continue to support operations in Iraq and Afghanistan, including the ongoing shift of forces in both countries.
The 2010 war cost estimate of ($)130 billion is our best estimate at this point for the next fiscal year. The FY 2010 base budget of almost $534 billion represents a 4 percent increase over the FY 2009 appropriated level of $513 billion. This figure resulted from a productive series of discussions with the Office of Management and Budget. I'm confident that this funding level will allow the department to meet its long term institutional priorities of taking care of the troops and their families, rebalancing our capabilities for conventional and irregular warfare, completing the growth of the Army and Marine Corps, and preserving essential modernization programs.
Over the past few months, different figures for the department's base budget top line have been the subject of speculation and debate, including a draft budget of more than $580 billion. That last figure represented a notional effort I authorized to begin shifting war costs in a significant way from the supplementals to the base budget, additional procurement, and anticipated real costs in terms of health care benefits and pay. That proposal was not formally submitted anywhere outside this building. The number that matters is the one announced by the president today, and it represents an increase of more than $20 billion over last year's Defense appropriation. In our country's current economic circumstances, I believe that represents a strong commitment to our security.
The president's budget also provides placeholder figures over a 10-year horizon, both for war funding and base budgets. These estimates will no doubt change over time, based on evolving strategy and force levels in Iraq and Afghanistan. The base budget projections may also be modified in accordance with the Quadrennial Defense Review.
Having settled on a top-line figure, we are now engaged in determining the detail of the FY 2010 defense base budget. This process includes efforts to realize cost efficiencies, reassess all weapons programs -- especially those with serious execution issues, and rebalance investments between current and future capabilities.
In the days to come, any information you may receive about budget or program decisions will undoubtedly be wrong because I intend to wait until the end of our review process before making any decisions. Putting together a budget package this large, complex and interrelated requires a coherent and holistic process -- a process that would be undermined if decisions about particular programs are made piecemeal or before the assessment is complete.
As I told the Congress last month, we will be making tough choices to ensure that this department's budget priorities best position our military to deal with the most pressing threats and security challenges facing America today and tomorrow.
Q Mr. Secretary, I understand you haven't made any decisions on specific programs, but have you decided, or is it inevitable, that your procurement budget -- your investment accounts must drop because personnel costs rise every year? Is it fair to surmise that there will be less money for that this year?
SEC. GATES: Well, I wouldn't -- I wouldn't want to make that assumption, but it is a -- it is an accurate statement that our personnel costs are rising every year and consume a larger percentage of the budget. This is particularly true of health care, where the percentage of the budget is increasing at what I would call almost an alarming rate in terms of the future. So that obviously is a consideration we have to take into account.
Q Thank you. Earlier -- last month, you told the Congress that the spigot of defense spending that opened on 9/11 is closing. Does this budget represent the first closing of the spigot?
SEC. GATES: I think so. But I would tell you that I think that -- I mean, it does put some pressures on us, but the reality is, as I -- I think Admiral Mullen will testify, late last summer, just because of the economic circumstances facing the country -- and they were a lot better then than they are now -- I believed that if we could get the '09 budget plus inflation we would be doing very well. We've done somewhat better than that.
So I think we've been given a little more space than I anticipated, and I'm grateful for that. But I think we are still going to have to make some hard choices.
Q One follow-up. Can you tell me how much in the base budget represents shifts from the supplemental, money that was going to be in a sup shifted to the base? Is it about 8 (billion dollars) to $9 billion?
SEC. GATES: I don't know a figure. I know that -- I'll give you three examples of things that, under the new rules, have been -- have been shifted that we had covered in supplementals before. One would be the cost of building the end strength in the Army and Marine Corps. Another would be new programs for taking care of the wounded and their families. And a third would be JIEDDO, elements of the IED organization.
Q Mr. Secretary, back to your opening statement. What was your personal thinking behind the decision to lift the outright ban on media coverage of the Dover (inaudible)?
SEC. GATES: Well, I would have to -- I would have to tell you that where I've come out is where I went in in terms of my personal feelings about it. I just -- I think that the thing we always have to keep at the forefront of our minds -- and I invite Admiral Mullen to comment on this because it involves our men and women in uniform and their families -- but I think that foremost in our thinking about issues like this should be the families and giving them choices, not just on this but on a lot of other things.
ADM. MULLEN: That's -- for me, Jim, that really has been the driver as well. We've seen so many families go through so much, and in that, they have been extraordinarily strong. And meeting their needs, their requests in the most dignified, respectful, focused way we can was very much a driver for me in supporting this change.
Q And do you agree or disagree with critics who say that the ban was originally intended as a political statement to avoid the kind of reaction that the public might have -- erode public support for any kind of armed conflict once the images of the returning war dead are seen publicly?
SEC. GATES: As you all have pointed out, this policy was first put in place, I think, in 1991 or at least during the first Bush administration. As far as I'm concerned, that's ancient history, and I'm not going to try and figure out the motive.
Q On Dover, will the families themselves be allowed to be there when the coffins come home? And will you provide transportation or chaplains or services if they're there when they see the coffins?
SEC. GATES: All those are the issues that the working group has to work through. And we'll see how it works --
Q Secretary Gates, the president's budget also calls for more military aid to Pakistan and, of course, Pakistani officials are here this week. And some of them have suggested -- they've asked for drone aircraft from the United States. Do you think that's a good idea?
SEC. GATES: Well, I think one of the themes that, certainly, in my meetings with Pakistanis -- and I invite Admiral Mullen to comment -- has been, how can we work more closely together? How can we help them be effective? How can we help ourselves by helping them?
Clearly, more intelligence is an important aspect of that. In terms of the drones specifically, that hasn't come up in our -- in my talks, but figuring out ways to help them have better intelligence to guide their operations, I think, is a positive thing and we ought to do as much as we can.
ADM. MULLEN: I would only add to that comment that we've -- I think it's very important that we help resource them and develop this comprehensive strategy with Pakistan over a number of years. And I'm delighted to see that kind of support in the '10 budget.
In addition, that -- the kind of capabilities -- not just drones but other military capabilities support more precision, faster reaction, better operations, which is one of the things we focus on to try to assist the Pakistani military for a long time -- certainly, newer -- new capabilities, as we learn lessons.
They do ask for those kinds of things, and I think we need to be mindful of that in trying to help them get better.
Q What kind of capabilities are you looking at?
ADM. MULLEN: Well, it's -- in this case, it's the full spectrum of intelligence, surveillance, reconnaissance, but it's what we've learned and used and how can we best, in the future, assist them in their operations with those kinds of capabilities.
Q Admiral Mullen, I wanted to ask you -- this week, CIA Director Leon Panetta said he's starting to give the president a daily briefing on economic intelligence issues. And you've spoken about this in the past. In your mind, specifically what are the security concerns that you see about the world financial and economic crisis?
And I would also ask, people are noting that, just on our own border, the Mexican drug cartel violence certainly is on the rise as well, in part.
ADM. MULLEN: Sure.
Q And the people of Mexico are suffering from this. Could you talk about your concerns?
ADM. MULLEN: Well, the broad concerns are with the financial -- global financial crisis. It will certainly put governments in much weaker positions, and in a way -- not in a way; I'm concerned about that, those positions essentially creating increased security across a broad range of possibilities.
So, focusing on parts of the world that are really going to struggle, I think from -- an intelligence standpoint with respect to those struggles is going to be very important. I'm not trying to be specifically predictive here. I'm more concerned about the increase over time. And it -- I don't necessarily think it's next week or next month, but, you know, I -- that in the crisis, and depending how long it lasts, that there's great potential here.
And we need to pay attention to it, as resources dry up, and the impact on populations, security, borders, those kinds of things and how they're resourced and how government's taking care of them, how we -- and how we do this together with other countries.
So I've had a specific focus on this for a number of months and want to keep an eye on it as time goes on here in this crisis.
Q Do you think Mexico is possibly becoming more of a concern because of the rising violence now?
ADM. MULLEN: Mexico is certainly more of a concern to me. In fact, I'm -- I take a trip next week to Latin America and end up in Mexico specifically. And I -- certainly, with the deaths, the drug issues, the kinds of things that we've seen grow dramatically over the last year and -- I know that we're looking for ways to assist them in terms of addressing this kind of threat.
SEC. GATES: I would just add one thing on the first part of your question. And that is, a robust, healthy American economy on the -- over the long term is a prerequisite for sustaining our national security capabilities. It's just as simple as that.
Q Secretary, your -- your --
Q In the ($)130 billion figure for FY '10, what is the assumption in terms of when U.S. troops will be withdrawn, combat troops? And how many troops will be left there?
SEC. GATES: The part of the -- of that estimate that covers Afghanistan, I think, is -- basically includes only the forces that the president has approved be sent at this stage.
Q And Iraq?
SEC. GATES: In Iraq, it -- in Iraq, I'll wait until the president makes a speech tomorrow.
Q Could I just ask you to expand on that a bit? A hundred and thirty billion (dollars), you said, is your best estimate. It isn't particularly wildly different than this year's spending of 140 (billion dollars). So I mean --
SEC. GATES: Yeah, it would be -- in this year, '09, if we get what we -- what the president will ask for, it will be about 144 (billion dollars).
Q But -- Okay. The president is going to lay out his plan tomorrow. And assuming that involves a decrease in combat forces in Iraq, I think a lot of people are going to wonder how come we're spending nearly as much one year over the next when there will be fewer fighting forces there.
SEC. GATES: Well, the truth of the matter is, you're still going to have a fairly robust presence, fairly significant presence in Iraq, regardless of what the president's decisions are, at least through FY '10, or part of FY '10.
And at the same time, we will be funding an increase in Afghanistan. And in contrast to Iraq, where there is a better infrastructure and where we have access to surrounding countries with infrastructure, we are essentially having to build that infrastructure for our forces in Afghanistan. So there are additional costs with that.
Finally, the point that I would make and I think is important for folks to remember as they think about forces coming down in Iraq, withdrawing those forces is going to involve an added cost of its own, because, for the last while -- I don't know the exact time, but the last several years -- the forces -- the soldiers and Marines we have sent to Iraq have basically fallen in on equipment that has been left there.
Now we're talking about pulling them out, not only the troops, but the equipment as well. And so there's an added cost associated with that as well.
Q Sir -- (off mike) --
SEC. GATES: I'm sorry. (Chuckles.) Lost my place.
Q A number of key jobs remain unfilled in the Pentagon. I wonder if you could talk a little bit about the challenge of filling those jobs. And as you -- as the building tries to get its collective head around this budget, how much does it hamstring you as you to try to go forward?
SEC. GATES: Well, I think, first of all, the pace of the naming has begun to pick up this week, so I'm obviously pleased about that. But I mean, the question you ask is precisely the reason why I asked for the authority to allow people to remain in place until their successors were named or confirmed, depending on whether confirmation was required.
And I would say, by way of comparison, we're doing pretty well, compared to a number of other departments in the government.
But a lot of people have been willing to stay on. And that has provided us the kind of continuity necessary to keep things going and to do things like this very detailed budget process we're going through right now. We would be in serious -- have serious issues, I think, if a lot of those folks hadn't stayed on.
Q Do you have a sense of when you're going to get this next rung filled, this next layer?
SEC. GATES: Well, once they're named, then the confirmation process begins. And that always holds uncertainties.
Q The president's proposed budget calls for a 2.9 percent pay increase for troops. For this fiscal year, the pay increase was 3.9 percent. Can you talk why it's less for this upcoming fiscal year?
SEC. GATES: Well, we're just -- again we're dealing with a more constrained economic environment. Inflation is a factor in terms of how that's calculated. I would say that the history of this has been, at least since I've been here, is that two years ago, we went to the Hill with about the same request. It was 3 percent. And last year, we went with a request for 3.5 percent. In both cases, the Congress added to it. But it's not all that different from what we submitted in the past.
Q Mr. Secretary, can I ask you about this, more clarity in the timing of when the president asked you to review the Dover policy? And how much time do you envision before this working groups comes up with its recommendations or guidelines for the families to choose?
And Admiral, if I could ask you, sir, what was your thinking on this policy? Has it evolved over time?
SEC. GATES: I had asked about changing the policy in Dover over a year ago. And although I -- when I got the response that I did, which recommended no change, I accepted that at the time. I must say, I was never comfortable with it.
When I heard the president express his concern and desire to have it reviewed, I started the process the next morning. The working group -- I used the words quickly in my opening remarks. I am a firm believer in getting things done promptly. Short deadlines are critical. I have a deadline in my head. And I expect them to meet it.
ADM. MULLEN: I mean, my views have evolved in the sense that I have been to Dover several times. I've seen the ceremony there. And it is an extraordinarily well-run, dignified, respectful ceremony.
And those men and women who do this at Dover know that, execute it and are very proud of what they do. And I am comfortable. Any American who saw that would be very proud of how that is executed there.
In terms of evolution on whether we should have done -- you know, done this or not -- had a policy, as it was for many years. It really -- this review, you know, gave me an opportunity to certainly make my views known. And I believe -- I believe in the outcome that the secretary has described very strongly. And again, because it is family-centric here, more than anything else, I'm very, very supportive.
Q But Mr. Secretary, why do you personally think the policy should be changed?
SEC. GATES: Well, I think I -- I think I answered that. I think these kinds of decisions should be up to the families.
Q Mr. Secretary, you were the secretary of Defense in the old administration. Who told you you couldn’t change the policy?
SEC. GATES: Nobody. And --
Q The answer came back from -- (off mike)?
SEC. GATES: No, the answer came back from within this building. I'm sorry. I asked for a review of it a little over a year ago, and got a different answer than I got a few days ago. And I was much happier with the answer I got this year.
Q Mr. Secretary, we were told the other day that you were going -- you left some folks in the building on this issue, but you were going to talk with some family members or family groups subsequently. Have you had those meetings in the last couple of days?
SEC. GATES: I have not done it personally, but -- but the folks that handle family matters in Personnel and Readiness reached out to them and talked to them. And I got a report back on those conversations.
Q Is that report something that ultimately changed your mind to lift the outright ban?
SEC. GATES: I would say that the reaction we got from the organizations associated with the families strongly reinforced the decision of where I was heading.
Q Mr. Secretary, back to Iraq, reports are that a residual force of some 50,000 troops will remain in Iraq after major draw-downs occur. Some comments -- Democrats are already pushing back on this, saying that's too large a force. That said, what's the purpose of the residual force? And can it be effective if it's less than 50,000?
SEC. GATES: Well, I'm not going to get into the numbers, because I'm not going to preempt the president's announcement. What I will say is that the thinking all along had been that -- that any force left after we stopped combat operations would be focused on the counterterrorism mission, on training, advising, assistance and that sort of thing. So it's a very different mission than -- than we have now.
I would say that whatever number the president approves, as of the date he approves, is a way station, because if there is no new agreement, under the SOFA, that number has to be zero at the end of 2011.
So I think that -- I think it needs to be seen as a -- as I say, as a way station rather than as a steady state.
Q But for some time you're going to need a force there, before the end of 2011. What are you recommending that number be?
SEC. GATES: I'll tell you after I've -- after the president's made his decision.
Q How concerned are you about the agreement in the Swat Valley and how that influences or not the situation in Afghanistan?
SEC. GATES: (To Admiral Mullen) Why don't you take that? (Laughter.)
ADM. MULLEN: Actually, General Kayani is here this week, who is the head of the Pakistan army. And he's visiting -- actually, he's on a counterpart visit with General Casey, his counterpart, but I've spent some time with him. And there's been a lot of discussion and, obviously, stories about the Swat agreement.
The one thing that -- that actually -- it has been characterized as a peace agreement. That's not necessarily accurately stated from the Pakistani perspective. And one of the things that I take away from this is a continued need to try to understand each other, listen to each other and understand each other.
Clearly, there's a history here -- actually, there's a history here that goes back a couple -- more than a couple of decades in Swat that I think we need to pay some attention to and understand. It'll be very evident, I think, in the near future whether this is a peace agreement with the terrorists or with the Taliban and -- and what its outcome could be.
So where I am on this is to wait; you know, to watch it clearly, pay attention to it, and to see where it evolves. This is a sovereign country that gets to make decisions like this.
But I haven't -- I don't believe everything I read, and I don't understand everything I need to understand about what's going on in Swat or in that part of Pakistan. So it encourages me to dig a little deeper and to -- and to watch it closely.
SEC. GATES: And I would say that's exactly where I am.
Q Secretary Gates, I'm still a little bit confused about your -- your call one year ago. You're looking into the Dover decision one year ago. Who opposed it here in the building? And couldn't you have made it happen anyway? And did you get any feedback or was there any communication at the -- with the White House?
SEC. GATES: There was no communication with the White House at the time. It was a product of my own -- my own concern.
I think that there was a feeling that -- what I got back was -- from personnel and readiness was basically an expression of the complications potentially for the families and a concern for the privacy of the families. And -- and I demurred, on receiving that advice.
I reached out more broadly this time. I talked directly with the senior leadership of the services and solicited their views. And I would say -- I'll be perfectly honest about it. There was a division in the building. And I thought that the -- and I sided with those who thought that the issue ought to be up to the families.
Q And so what changed? Is there not still a division?
SEC. GATES: No, I'd say there still is a division, but not anymore.
Q And Admiral Mullen, are you one of the ones who was opposed, or --
ADM. MULLEN: I'm very supportive of the change.
Q But did you change your position at all?
ADM. MULLEN: Before -- a year ago, I wasn't involved in -- I wasn't personally involved in the review. That doesn't mean my staff had not been. I just -- I honestly don't know that.
I mean, I really think it's the right decision. It focuses on the right piece of this, which are -- the right people, who are the families. And I think, in that regard, it'll serve us all very well.
SEC. GATES: And let me be clear, you know, when I talk about a division or a disagreement within the building, everybody was trying to do what was best -- what they thought was best for the families. And I'm not questioning the motives of those who opposed a change in policy at all. They were doing what they thought best served the families of our fallen. My view -- my conclusion was we should not presume to make the decision for the families. We should actually let them make it.
So that -- I mean, I don't want to impugn anybody's motives here. People were all trying to do what was right by the families. It just seemed to me that we ought to let the families make that decision.
Q Nonetheless, you became more assertive this time, than -- about what you wanted?
ADM. MULLEN: He's pretty assertive normally.
SEC. GATES: (Laughs.) Well, I -- you know, I was very open to what I was going to get in the review. But -- for example, I got a very compelling Army -- memorandum from the Army in favor of this change of policy. And since that involves the largest number of our fallen, that obviously had an impact on me.
Q (Off mike) -- and they before opposed it?
SEC. GATES: I honestly don't know whether they were consulted a year ago.
Q And do you also agree that the nation has the right to grieve and honor for our war dead, such as they do in Great Britain and Canada?
SEC. GATES: I believe that the American people would defer to the wishes of the families of the fallen. I honestly believe that they think that the parents, the husbands, the wives, the next of kin, that the families ought to make that decision. That's where I think -- that's where I would wager a lot of money the overwhelming preponderance of the American people are.
Q Mr. Secretary, back on Pakistan for a minute. Can you say whether there have been also discussions about expanding the U.S. efforts to train the Frontier Corps and whether that is something that the Pakistanis have indeed also asked about, talked about?
ADM. MULLEN: Train what? Sorry.
Q The Frontier Corps.
ADM. MULLEN: That training is now a few months old. We're in our second group. It's gone very well. And the leadership there, and particularly the head of the Frontier Corps, the Pakistani two-star general, is very pleased with what's happened. And we continue to do that.
I think the rate of expansion or level of expansion is not -- I mean, it isn't significantly changing at this particular point in time. But the Pakistani military leadership is very pleased with what they've gotten in a relatively short period of time, given that we just started the training.
Q But have they expressed an interest in having it grow?
ADM. MULLEN: Again, not significantly at this point in time. I think we'll kind of take that, you know, one step at a time over time.
SEC. GATES: Last question?
Q Yeah, on the Dover policy again, I just wanted to follow up on that last point. You know, has there -- as you've been having these discussions and -- have you been focusing on, like, how the new policy will be created in terms of -- is there going to be a restriction that families can them impose to say, you know, "We don't want cameras here"? And when will that take effect? When are you starting --
SEC. GATES: As soon as the working group gets back to me. But the thrust of this is that if the family of one of the fallen says that they do not want media coverage of the return, of the dignified transfer process, then that will be the decision. There will be no media coverage. If they say that's okay with them, then it will be available.
Q And if the families themselves are divided --
SEC. GATES: That's the kind of thing that the working group is looking into.
Q Yes, sir. In the president's budget, it says on acquisition reform that you would not be allowing programs to proceed from one stage of the acquisition cycle to the next until they have achieved the maturity to clearly lower the risk of cost growth and schedule slippage.
In programs where you don't have fully complete technology such as missile defense, airborne laser, Kinetic Energy Interceptor and European missile defense, would that mean that those programs would be frozen until some later year in which technology was fully mature?
SEC. GATES: Well, you have clearly read the president's budget more thoroughly than I have at this point.
What I would say is that one of the things that we have been moving toward in terms of acquisition reform is ensuring that technology was more mature before moving to full-scale production. And there will -- and if we decide to take a risk with technology, it needs to be a conscious decision that we're going it take that risk and that everybody knows we're taking a risk for a specific reason, rather than stumbling into it and getting into production and realizing there were problems with the technology.
I think we just -- there needs to be greater discipline in the process, particularly with respect to the maturity of technology, before we begin full-scale production.
Q (Off mike) -- apply specifically then to any particular program, as far as this general rule is concerned?
SEC. GATES: Not that I'm aware of.
Q Thank you, sir.
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