SECRETARY LEON E. PANETTA: Good evening. You doing all right? OK. You guys all set?
What I'll do is just make a brief opening statement and then just open it up to your questions. You know my compadres here: General Dempsey, on my right, Chairman of the Joint Chiefs of Staff; and General Thurman, who is commander of our forces here in Republic of Korea.
This has been a good trip, having a chance to meet with my Republic of Korea counterparts. I've had -- I've had some very good meetings. As I've mentioned before, this is my first time in Seoul as secretary of defense, but I've had the opportunity to visit here a number of times in other capacities.
I'd like to thank General Dempsey and General Thurman for the advice and counsel that they provide me with regards to our military readiness here in this part of the world and for the leadership that they've shown in dealing with the issues here.
We've just concluded a pretty productive set of discussions with Defense Minister Kim, Foreign Minister Kim and President Lee. In each of those discussions, I emphasized that the United States is and will remain a power in the Asia-Pacific region. The United States and the Republic of Korea have a strong alliance that goes back 60 years. We're here to stay, and we're here to stay as long as it takes to protect the Republic of Korea.
(Inaudible) -- that the United States remains fully committed to the security of the republic. We're committed to strengthening the alliance and will continue to provide the forces and the military capabilities needed to maintain security on the peninsula. (Inaudible) -- that the alliance is a strong and effective deterrence and provides a strong deterrence posture, including the United States nuclear umbrella, so that North Korea never misjudges our will and capacity to respond decisively to aggression.
It's important to send a signal, because North Korea remains a serious threat. Pyongyang has repeatedly demonstrated its willingness to conduct provocations that target innocent lives. And North Korea also continues to defy the international community as it pursues nuclear weapons and develops advanced missile capabilities.
Despite the provocations, we will -- we have and will continue to reach out diplomatically, but in the words of Teddy Roosevelt, we will speak softly but carry a big stick. North Korea can behave, as we all know, in very unpredictable ways. In talking with my Korean counterparts, they mentioned that there are currently 200 North Korean citizens who are stuck in Libya because Pyongyang refuses to allow them to return home, because they believe that the word of Gadhafi's demise and news of what's happening throughout the Arab world might reach the North Korea people -- which is just a further example of North Korea's extreme behavior. In light of that, it is very important that the United States and the Republic of Korea continue to maintain a strong alliance to defend the nation.
In my discussions today, I expressed my deep personal appreciation and that of all Americans for the Republic of Korea's contributions to our efforts in Afghanistan, where South Koreans are serving with honor and distinction.
I also expressed our desire to have them increase their participation in nonproliferation efforts, as well as interdiction exercises. We also discussed their contribution to the United Nations Mission in South Sudan.
I also highlighted our bilateral efforts to relocate U.S. elements from Yongsan and the need to work closely to ensure that we complete that move on schedule.
In conclusion, as secretary of defense, I'm personally committed to further elevating and strengthening this important alliance so that it remains a hallmark of stability, openness and prosperity in Asia -- in Asia -- in the Asia-Pacific region.
I've mentioned, when I was talking to the defense minister, that 60 years ago, as a boy -- as a young boy, I remember being at home riding my bicycle when the news came across the radio that the United States was entering the war in Korea. And I can remember the concern that my parents had, and I myself felt that -- coming out of World War II, that the United States was now entering into another war here. And the minister commented that he was a baby who -- his mother -- at the time of the invasion, his mother had an umbrella -- as a plane flew over, put an umbrella up to try to protect -- to protect him from that as they were escaping to -- going to a cave. And here both of us now are secretaries of defense, with the responsibility to maintain the strong alliance between the United States and the Republic of Korea, to ensure that -- hopefully that that kind of war will never happen again.
So it was an interesting sharing of our own experiences.
With that, I'll open it up to questions.
STAFF: First question, Bob.
Q: Mr. Secretary, on North Korea, what can you point to on North Korea, either in their recent behavior or in their past history, that argues against the idea that they're just playing -- that they're alternating between being accommodating and being provocative and then -- and all the while they're developing their nuclear -- (inaudible)?
SEC. PANETTA: There's no question that that remains a concern and that we always -- we always has -- have to be vigilant in the way we approach North Korea because there is a history here of accommodation and provocation. And there are periods when we're hopeful that we might be able to achieve some diplomatic progress in eliminating their nuclearization program and then, for whatever reason, we're not successful, and suddenly we enter a period of provocation in which, you know, they take steps that -- you know, that threaten not only the security of Korea but threaten the security of the United States.
I think we just -- we always have to be very vigilant in dealing with them; that on -- you know, on one hand, you know, we have to engage and we have to try to seek the hope that ultimately they'll do the right thing and join the international family of nations and take steps to try to improve the situation of their own people. But I think we always have to be very cautious that at the same time they're going to continue to develop their nuclear capability, and for that reason we have to always maintain a very strong alliance between the United States and the Republic of Korea, to send them a very clear signal that we're not going to allow them to do anything that would threaten this area.
Yeah, go ahead. (Cross talk.)
Q: Can I ask just a very short follow-up to General Thurman, if I may, on the same subject -- (off mic)? Has the North Korean nuclear program, you know, advanced over the years -- (off mic) -- various cycles of -- that the United States has responded to with either sanctions or diplomatic efforts? Is their nuclear program stronger than it was a couple years ago?
GEN. THURMAN: I would tell you, based on what I have observed, they show a willingness to continue to develop and test capabilities that could be associated with their nuclear program. And this is something that we've got to remain vigilant on on a daily basis, is what I would tell you.
Q: But you have no way of -- (off mic)?
GEN. THURMAN: Well, I think -- as the secretary said, I think the number one thing that we do on a daily basis over here with the Republic of Korea and the ROK military is we are truly a combined force. And we've got a degree of transparency. We're constantly in consultation and maintaining a strong deterrence. And a high degree of readiness is essential to deterring provocations, in my estimate.
Q: Yes, Mr. Secretary, there was a lot of skepticism expressed today in some -- in our meeting with some American military officials here about the talks -- they're not going to lead to much. Would you share that skepticism?
SEC. PANETTA: You know, I haven't been a part of those talks, but I've gotten reports on them. There's an indication that some progress was made but that they haven't arrived at any agreements. And we're not sure where those talks are headed at this point. And so for that reason, I guess -- I guess the word "skepticism" would be in order at this time as to what may or may not happen in those discussions.
Q: About China and its relationship with North Korea, do you believe that there has been a substantial change over the past year or two between the two countries? And if there has been a change, is it one that will lead to greater likelihood that North Korea would come back to the six-party talks or at least -- (off mic)?
SEC. PANETTA: Well, obviously we've been urging that they come back to the party of six discussions, and we have urged China to urge North Korea to do that. I think, you know, China -- China can play a very important role here in urging North Korea to do the right thing, both with regards to entering those talks and to, you know, reducing and ultimately eliminating their nuclear capabilities.
And you know, there are -- there are moments when we think that -- you know, that they are urging and -- North Korea to engage. But frankly, I think that China can do more to try to get North Korea to do the right thing. So I think they are in a position where they can -- they can influence what happens in North Korea. And I know that sometimes they make that effort and sometimes North Korea doesn't pay attention. So the hope is that they'll continue to push North Korea towards trying to do the right things.
Q: What more could China do?
SEC. PANETTA: I think North -- our hope would be that China would just continue to put pressure on North Korea to take steps not only to engage in party of six discussions, but to show that they are serious about eliminating their nuclear program.
STAFF: Any other questions?
Q: (Off mic) -- Mr. Secretary, I understand U.S. commitment to the Asia-Pacific region, but the reality is U.S. defense funds budget will be smaller – but China’s military actually will (inaudible). Would you like Japan or South Korea, as a U.S. ally, to play a bigger role in this region?
SEC. PANETTA: I think it's essential -- under any circumstances, it's essential that this region, through the alliances, through the forums like the group that I met with in Indonesia, ASEAN [Association of Southeast Asian Nations] -- I think the more the nations in the Pacific come together to try to protect those areas that are important to them -- free and open commerce, respect for international law, the ability to reach out and to provide humanitarian assistance and disaster relief, the effort to maintain strong security in this region -- I think that alliance, the alliance between Korea -- the Republic of Korea, Japan and the United States -- all of those alliances in this region can be extremely important, it seems to me, to promoting better security and peace in this area.
Q: Yes, to the generals, yesterday you heard -- (off mic) -- three questions from troops. All three of them focused on the economy, the chance of getting jobs when they go back to the private sector and the budget cuts -- (off mic). These are people serving just a few miles from North Korea, perhaps the most dangerous enemy in the world, and their concern is about money issues. What does that tell you gentlemen about your troops and their morale and what's foremost in their mind that they're -- (off mic)?
GEN. DEMPSEY: Well, I’ll take a shot at this. I think it puts them exactly in line with their fellow citizens around the United States. And you know, I think they're very well-informed. They recognize the issues facing us as a nation economically and wonder -- simply wondering what it's going to mean for them. The secretary and I have been very clear about our advocacy of any changes made to things like retirement would be grandfathered so that these young men and women who have signed up under a certain set of circumstances and commitments -- we'll meet those commitments.
But don't let those questions disguise the fact that they also recognize they're over here to make sure they are as well-prepared as they can be for whatever we might ask them to do. I mean, on the way out here, I stopped at Elmendorf -- Joint Base Elmendorf-Richardson in Alaska, and the very first question was exactly the question you asked. But if you stick around long enough, the questions get around to what it means to be a soldier, a sailor, an airman, a Marine, what's -- how's -- what have we learned over the last 10 years, how will the structure change, all the questions you'd want them to ask.
GEN. THURMAN: I would just follow up. I agree completely with General Dempsey. What I see on a daily basis here -- one, we've got a threat to the north. We have a well-defined mission. And I don't detect anything that degrades any morale and our willingness and readiness to fight. This is a combat-seasoned force, and I couldn't be prouder of these men and women I have the opportunity to have the responsibility of command over. And I think, as General Dempsey said, they're very smart, intelligent, and they're asking, you know, some of the key questions that they see that's on the news.
Q: Mr. Secretary, you talk about the cycle of accommodations and provocation and kind of -- (off mic). Is this something that the United States and its allies just kind of have to sit with and live with, or can the cycle -- (off mic)?
SEC. PANETTA: Well, I think the cycle ultimately has to be broken, that ultimately, there -- you know, there is -- there is either going to be an accommodation where they decide to make the right decisions with regards to their future and join the international family of nations and try to provide better opportunities and basic freedoms for their people, or if they continue these provocations, then obviously, you know, that's going to lead to the possibility of escalation and, you know, confrontation.
So it just seems to me that that game of going between accommodation and provocation and continuing that cycle -- at some point, that's got to end.
Q: But Mr. Secretary, I'd just like to make clear, you said again and again that you will maintain this presence in this region -- (off mic) -- so does this mean that -- so does this mean that this force in Korea -- (off mic) -- reduced in the future?
SEC. PANETTA: No, not at all. I mean, it's just -- it means just exactly the opposite. Our goal here is to not only maintain but to strengthen our presence here, as well as throughout the Pacific. And that's something that I've emphasized in the discussions I've had with the ministers, that the United States has been a strong ally for 60 years and we will remain a strong ally for another 60 years, if necessary.
STAFF: Last question -- right here.
Q: Let's get away from the region. With the defense cuts in government and maintaining a presence in the Pacific, does that mean that the presence in Europe, for example, has to be reduced?
SEC. PANETTA: I think --
Q: Or will be reduced?
SEC. PANETTA: No, I think, you know, as we go through the decisions that have to be made based on the budget reduction numbers that Congress has handed us, as General Dempsey knows, we've been meeting with the service chiefs and looking at all of the areas to determine where those savings can be achieved. And there are, as I've pointed out before -- there -- you know, look, there are four areas that we're going to be considering as we -- as we go through this process.
One is the area of efficiencies and the ability to try to get better efficiencies, try to reduce duplication, try to reduce overhead, try to basically implement some of the recommendations that my predecessor, Bob Gates, began in this area. The second is the area of, you know, looking at compensation and trying to determine what savings, what reforms can be implemented in that arena as well. The third area is the area of modernization of weapons and procurement reform, to try to do what we can to improve the contracting process and to look at the weapons systems that we have in order to make sure that, you know, they are -- they are in keeping with the kind of force that we're going to have. And the fourth area is going to be some force reduction. As a result of what's going on both in Iraq and Afghanistan, you know, we're likely to get some force reduction as well.
All of those -- all of those areas are being looked at and considered, and it doesn't -- you know, at this stage, it doesn't represent a reduction in any area of the world right now. But clearly, we're going to have a smaller force. It's going to have to be more agile. It's going to have to be a lot more flexible. It's going to have to have the capability of being deployed to deal with the -- with the threats that are out there. And I can assure you that at least I'm confident that in working with my -- the service chiefs, that we are going to be making decisions that are going to keep the United States the best military in the world.
STAFF: Thank you, everyone.
Q: Can I just quickly follow up?
STAFF: (Off mic.)
Q: When are you -- when are we going to know where these cuts are?
SEC. PANETTA: (Chuckles.) You and everybody else. (Laughs.)
Q: Is it November with the supercommittee, or is it February -- (off mic)?
SEC. PANETTA: No, I mean, right now, the decisions we're preparing are for the budget that would be presented in February to the country. And it would involve a five-year budget that -- which is normally what we would present. But that would -- that would represent probably somewhere around 250 [billion dollars] or 260 billion [dollars] of the 450 billion [dollars] that, you know, we're required to reduce. So that's where -- that's really -- between now and then, that's the period we've got to make decisions as to the specifics involved, so that the budget can be brought together at that time.
STAFF: All right, thank you, everyone.
SEC. PANETTA: OK.
Thank you. Thank you so much.