SECRETARY LEON E. PANETTA: Good afternoon. As you know, it's now been one year since I was sworn in as secretary of defense. It truly has been an honor for me to lead the men and women of this department, and to do so during a very historic time for the United States military and for the country.
And I've been very fortunate to have an outstanding partner in the chairman, the vice chairman, all of the chiefs, the service secretaries and the combatant commanders, and all of my civilian leadership.
Let me, if I can, recognize some of the highlights from the past year.
Thanks to the leadership of the president, the commanders in the field, the Iraq war ended with the safe return of United States troops. We began a responsible drawdown of the U.S. military forces in Afghanistan, and we're making a transition to Afghan security lead, which is ongoing.
We concluded the NATO mission in Libya with the fall of Gadhafi. We've maintained a relentless focus on decimating Al Qaida's leadership.
We developed a new defense strategy, which reshapes the force to meet the challenges of the 21st century, with a focus on investing in new capabilities and rebalancing towards Asia-Pacific and the Middle East.
We've put forward a budget that implements the strategy and achieves mandated savings of $487 billion over the next 10 years. We continue to focus on saving taxpayer money here and improving business practices at the Pentagon. We've eliminated another $60 billion in overhead spending over the next five years, and are accelerating by two years the time to obtain auditable statements of budgetary resources.
We've affirmed our commitment to those who serve, maintained faith with them by protecting pay and benefits for active duty and reserve troops, and by improving employment opportunities for veterans and military spouses.
And we implemented the repeal of Don't Ask, Don't Tell. We've also opened up 14,000 military positions to women, and we've put in place enhanced measures to prevent sexual assault.
This has clearly been a historic year for the department and for the country. In the past two weeks in particular, I've been focusing on the overall health of our all-volunteer force. I visited wounded warriors at Brooke Army Medical Center in San Antonio this week, sharpening our focus on the stresses that lead to suicide and PTSD. And we've been reaching out to those who work with our military families and have continued to work on ways to try to boost veterans hiring.
There is a very strong commitment by military leaders, by community groups and by families to ensure that servicemembers have everything they need. After visiting these men and women who have come home, there's still a great deal that they need and will continue to need in the years to come.
But let me be frank: The biggest risk to everything I've talked about -- to the health of our force, to the well-being of our servicemembers and their families -- is the threat of this sequester.
The biggest risk to everything I've talked about -- to the health of our force, to the well being of our servicemembers and their families -- is the threat this sequester.
The sequester will cut another $500 billion across the board from our national security budget, and do it in a way that threatens to hollow out our national defense.
I've seen extraordinary examples of courage and sacrifice over the past year in the men and women I've met in the war zones, in the wounded warriors that I've met here at home. They are willing to put their lives on the line in order to protect our country. They deserve better than the threat of sequestration.
Too often today the nation's problems are held hostage to the unwillingness to find consensus and compromise. And in the face of that gridlock, artificial devices like sequester are resorted to in order to somehow force action.
But in the absence of action, sequester could very well threaten the very programs critical to our national security, both defense and domestic.
Let's not forget that sequester would also involve drastic cuts in domestic programs, as much as 12 percent across the board on vital programs that Americans rely on.
Congress can't keep kicking the can down the road or avoid dealing with the debt and deficit problems that we face. The men and women of this department and their families need to know with certainty that we will meet our commitments to them and to their families.
Our partners in the defense industry and their employees need to know that we are going to have the resources to implement the strategy that we've put forward, and that they are not going to face the threat of layoff notices.
Ultimately, the success of all we do to try to protect America, the success of any defense strategy that we try to put in place, the success of any effort to try to support the men and women in uniform and their families depends on a political system prepared to make the decisions and the compromises necessary to govern the nation and protect our national security.
This next week we celebrate the birth of our nation. It is a time for our leaders and for every American to recognize that the blessings of freedom are not free. They come from a legacy of sacrifice, of courage and of leadership.
That legacy is now our responsibility to fulfill, so that hopefully our children can enjoy a better life in the future.
GENERAL MARTIN E. DEMPSEY: Thanks, Mr. Secretary.
Good afternoon, everybody.
I share the secretary's perspective on the remarkable achievements of our men and women in uniform over -- over this past year.
I was with some of them this week. As some of you know, I just returned from a trip to Offutt Air Force Base visiting our Strategic Command, where my wife, Deanie, and I participated in a town hall meeting -- although I prefer to call them family meetings -- with members of our joint military family at U.S. STRATCOM [Strategic Command].
And like the secretary, we also traveled to Grapevine, Texas, to chat with military kids and educators, and then we wrapped up our trip yesterday discussing leadership with soldiers and family members at Fort Hood.
And at every stop, it won't surprise you to know, I was struck by their tremendous sense of pride and commitment. They're courageous, they're selfless, they're smart, they're dedicated, they're irrepressible. They'll do anything to take care of this country.
And I was also struck by the degree to which the budget concerns them. I find it encouraging on the one hand that our military family is informed and interested.
But it's unfortunate that it weighs so heavily on their minds. Frankly, they have enough to worry about. They have faith in us. They expect us to figure that out.
So as the secretary has made clear, we simply have to come together to prevent this across-the-board, unbalanced cut that could jeopardize our ability to deal with the very real and serious threats that we face.
The chiefs and I have no issue with military budgets being held accountable in these challenging times, or with the need to make tough program decisions as we move ahead. That's why our strategy and the budget that supports it constitute a carefully balanced set of choices. These choices make sure we have the right talent and the right tools to keep our country immune from coercion.
A balanced approach is what the secretary and the Joints Chiefs and I seek, and a sensible way forward is what we expect. That's the only way we can honor our commitment to our military family and to the American people.
We have to remember, too, that the force of the future -- that is, America's sons and daughters who may be out there contemplating a military career -- are also watching.
I'm also pleased to announce the President Obama has nominated Lieutenant General Frank Grass, Army National Guard, for appointment to general officer and chief of the National Guard Bureau. Lieutenant General Grass is currently the deputy commander of U.S. Northern Command.
General Craig McKinley, his predecessor, has done an outstanding job as the chief of the National Guard Bureau, helping to make sure our National Guard is tightly integrated with active duty personnel, and he is the first Guard chief, as you know, to have become a member of the Joint Chiefs of Staff.
So I'd like to congratulate both of them.
Thank you, and I look forward to your questions.
Q: We have a story out this afternoon that says the U.S. is considering transferring several Taliban detainees from Gitmo to Afghanistan to be held in Afghan control. Could you comment on that?
And also, may I ask you a question about Jim Miller's visit to Israel this week? Was it confirmed to him during the visit that the missile defense exercise that had been postponed earlier this year has been rescheduled and will now be held in October -- the U.S.-Israeli exercise?
GEN. DEMPSEY: Austere Challenge.
OK, I can take that one.
SEC. PANETTA: Why don't you take that.
GEN. DEMPSEY: Yeah, Austere Challenge, you're right, it was scheduled for the spring of the year and collaboratively with the Israelis. We rescheduled it for October-November timeframe. And Dr. Miller's not back yet. So I -- I really don't know what the final decision was, but it is our expectation that that's when the -- the event will occur.
SEC. PANETTA: And, you know, with regards to reconciliation, there continue to be discussions with regards to reconciliation. There -- there are no specific commitments that have been made with regards to prisoner exchanges at this point.
One thing I will assure you is that any prisoner exchanges that I have to certify are going to abide by the law, and require that those individuals do not return back into the battle.
Q: Can you say whether it's being considered at this point?
SEC. PANETTA: I -- I think the discussions are going on generally, but I haven't seen any specific proposal.
Q: Thank you, Secretary.
We -- we understand that the Turkish military has moved some armored units towards the border with Syria in response to the shooting down of that Turkish aircraft. What is your message now to Turkey? Are you concerned about an escalation? It's for both of you, if I could.
SEC. PANETTA: Well, you know, obviously, we continue to be concerned about developments in Syria.
And as you know, Secretary Clinton is -- is engaged in discussions with our allies to determine what the next steps should be.
We -- we are in discussions.
Turkey is one of our allies in that region. We continue to be in close discussions with them with regards to how we best approach the situation in Syria.
They have maintained troops, as I understand it, along the border. And I wouldn't read too much into the movements that have been in the press.
GEN. DEMPSEY: Yeah, I'd only add, I did have a conversation with General Ozel, who's my counterpart. He's the Turkish CHOD, chief of defense. And he's taking a very measured approach to the -- to the incident. He -- so he and I are staying in contact.
Secondly, to the issue of risk of escalation, I mean, any time a nation's -- a nation loses in this case two airmen to a hostile act, it will, of course, increase the risk of escalation.
But as the secretary said, the movement, the internal movement of their ground forces I wouldn't suggest -- I wouldn't read that as provocative in any way. But you'd probably have to ask -- ask the Turks. I've asked them and they are not seeking to be provocative.
Q: Mr. Secretary, you spoke with the CEOs of a number of major defense firms over the past week about the budget and sequestration. What did you take away from their comments and what was your message to them?
SEC. PANETTA: I think -- I think it's fair to say that the CEOs of the companies that I talked to all share the same concern we do with regards to a sequester. They're very concerned about the impact that it will have on their companies and on their employees.
As you know, they face certain legal requirements with regard to when notifying their employees if -- if in fact a sequester should happen.
But, more importantly, I think they're worried about the cloud that sequester has over -- over the Defense Department and over the future of our whole modernization program. And so one thing I -- I can assure you is that we are very much a team. We're both expressing the same concerns to Capitol Hill.
And both the companies as well as the Defense Department are making very clear to Capitol Hill that this is a matter that ought not to be postponed, that it ought to be dealt with soon so that a sequester, A, will not happen and, B, we will have some degree of assurance that we can proceed with the budget as we've outlined as opposed to facing another -- the possibility of another drastic defense cut.
Q: Sir, are you concerned about recent reports that Russian Bear bombers, the Tupolevs, that were Cold War-era planes that are capable of carrying nuclear weapons, had entered the air defense zone near Alaska? Are you seeing any rise in this?
I understand that the last time it did so it was while President Obama was meeting President Putin in Mexico.
Are you concerned about this? And could you describe whether you believe the relationship with Russia has been reset?
SEC. PANETTA: Well, you know, I think we -- we continue to -- to be able to work with the Russians in a number of important areas. P-5-plus-1 is one area where we're continuing to work with them. We work with them on other issues. We maintain military-to-military relations with the Russians.
With regard to the -- the planes that sometimes peruse up in the north, this is not an unusual situation.
We -- we've oftentimes seen their planes come into that area, and I don't think we regard it as anything that is provocative at this point.
GEN. DEMPSEY: Yeah, and I'd add we -- you know, we have a very close relationship with Canada in terms of our -- our security to the north. And so from time to time, we assess whether we see this as in any way a change of some sort of message. And to this point, we haven't concluded that it would be any message of any particular kind.
Q: Thank you.
Earlier this morning, the department made notification to Japan about the Ospreys. Given there's so much accidents and a lot of concerns at this time, why weren't you able to wait another three or four weeks or maybe a month or so when this died down?
SEC. PANETTA: Well, we've had -- we've had very good discussions with our Japanese allies on this issue. And we have -- we have assured them with regards to the safety of the Ospreys.
But the important thing, we felt, was to be able to deploy these planes there, and that we will continue to brief them with regards to the operations of these -- of these planes.
We -- we actually think we've reached a very good compromise here. They had expressed the concerns that you indicate. I think we've -- we've been able to -- to relieve their concerns with what we've presented to them, but we're going to continue to work with them.
The good thing is that our ability to deploy these forces will certainly help us with regards to our whole rebalancing to the Asia-Pacific region.
Q: A question about Iraq. The levels of violence in Iraq in June have risen quite sharply. Neither of you, I don't believe, have been back to Iraq since the withdrawal last year, and there was discussion about a follow-on mission. What's happened to any of that? I mean, has there been any progress toward a follow-on mission? Do either of you plan on visiting Iraq anytime this year?
SEC. PANETTA: There -- there are continuing discussions with the -- with the Iraqis with regards to the threat coming from AQI [Al Qaida in Iraq]. We've seen increased violence, as you've pointed out.
We share the concern of the Iraqis with regards to that increased violence. And I think we're going to continue to work with them to do what we can to improve their ability to be able to deal with those kinds of threats.
This is something we obviously worked in great cooperation on prior to our departure. We've continued to work with their security forces, but we think it's really important now that we try to bring that cooperation even closer together to make sure that these kinds of threats are dealt with directly.
GEN. DEMPSEY: Yeah, and in terms of our engagement with them, the CENTCOM [Central Command] commander had high-level consultative talks in the first part of the calendar year. I think it was late February, March. Minister Dulaimi, the acting minister of defense, was here to meet with the secretary last month, I think.
And what we're doing is charting a way ahead, actually, on, you know, the potential for exercises, the things we talked about at the -- at the closing ceremony, if you will.
And I am going back to Iraq. I'm scheduled to visit Iraq in August. I've chosen August because it's the most miserable month of the year over there. And so I'll go back in August and do a trip into the AOR [area of responsibility].
Q: Mr. Secretary, you mentioned as one of your accomplishments over the past year implementing enhanced measures to -- in an effort to stop sexual assaults in the military. Yet this week we heard from the Air Force, they had 31 cases of alleged sexual assault, even a rape, against young recruits when they're probably at their most vulnerable when they enter the service.
First of all, what was your personal reaction to that? And -- and second, is it time that there be changes made in the way the military pursues and prosecutes sexual assault in the military, as some in Congress have suggested?
SEC. PANETTA: Well, I -- I was very concerned by the reports that came out of the situation involving the Air Force and these allegations of sexual assault.
You know, this is a situation in which these young recruits are very vulnerable at that point. And I think it is -- it's absolutely essential that the leadership make sure that those who are responsible for these recruits don't take advantage of that situation.
For that reason, I've asked that this matter be fully investigated. It is being investigated now, as the Air Force is following through on the allegations that are involved.
I -- I take sexual assault allegations very seriously. We have no place in the military for sexual assault.
We've reached out to bring women into the military. I'm very proud of what we've been able to do. I'm very proud of what women have been able to do in the military.
But we have to maintain strict discipline here to ensure that sexual assault does not happen. For that reason, we put in place a number of steps to try to make sure that we deal with these allegations not at the -- at that level but at a higher level, so that it doesn't involve influence within a unit.
We've taken steps to develop special victims units to try to directly deal with this. We've asked for legislation to try to also help us in this effort.
The command structure, from the chairman on down, have made very clear to the leadership in this department that this is intolerable, and it has to be dealt with; that we have -- we have absolutely no tolerance for any -- any form of sexual assault.
And this matter, I can assure you, is going to be fully investigated.
Q: And, Mr. Secretary, what do you tell the parents of these young women, the families who have turned over their children to the military and expect them to be protected or at least respected?
SEC. PANETTA: You know, what I tell the parents is that as a parent and as secretary of defense I am -- I am very proud of those men and women who volunteer for service in the military.
And I want to make sure that we take every step possible to ensure that good discipline, and that laws are abided by and that we do not have any tolerance for any kind of criminal action.
They have my assurance, they have the assurance of the military leadership that we are going to do everything possible to make sure that they have the opportunity they deserve to serve without that kind of threat.
Q: I was struck when you read your list of accomplishments about what you said about Afghanistan, and I wanted to ask you, it seems like nobody really talks about winning in Afghanistan. Officials talk about responsible withdrawal, about meeting the national goal of withdrawing from Afghanistan.
For you as secretary of defense -- and, Mr. Chairman -- is that enough? What are your thoughts about what it does to troop morale that you have seen or how the troops view having to go into the war zone now still facing attacks, and for them it's not about winning, it's about achieving the goal of withdrawal?
GEN. DEMPSEY: Let me start, because I'd, you know, recently been to Afghanistan. And I wouldn't characterize it that way. I mean, I think what you're seeing is a recognition, as we've learned the lessons of the last 10 years and of this kind of conflict, is that winning is defined as -- in -- in their terms. In other words, it is the Afghans that have to win this fight.
You've heard many of us say famously, you know, you can't kill your way out of this kind of conflict.
So this is about us empowering and enabling our Afghan security partners, providing the space necessary for governance and economics to catch up.
And that is the definition of winning. It's just -- it's that kind of conflict.
SEC. PANETTA: Yeah, I mean, the mission in Afghanistan is to establish an Afghanistan that can govern and secure itself. That's what this mission is about. And the success of our effort there will be determined by an Afghanistan that can truly secure and govern itself. And that -- that's the path we're on. That's the transition we're making.
We've already got over 50 percent of the population transitioned to Afghan control and security. We're in the process of going to 75 percent of their population in the third tranche that's been announced by President Karzai.
General Allen, I think, makes very clear that we are on the right path toward achieving the goal that this mission is all about.
And, most importantly, let me -- let me just say this. I had a chance -- I was at Brooke Hospital this week, and I saw a lot of wounded warriors. And I asked -- I asked them, I said, you know, "Where were you wounded? What happened? How do you feel about the situation there?" Because they're the ones that probably can speak with a helluva lot more authority about what's -- how things are going there than almost anybody else.
And every one I talked to said, "We're doing better. I feel like security is much better, you know, even though I got wounded. I think our unit was doing a good job. And I see things getting better."
And I said to them, "I think your sacrifice is worthwhile because everything I see when I go there, everything the chairman sees when he goes there, every time we sit down with General Allen and get the report, I think it's clear that we are -- you know, we are in the right direction here."
This is -- this is tough. We've seen a spike in violence.
We've seen an enemy that continues to be resilient. This is still a heavy fight, but we are on the right track. And that, I think, is what keeps me confident that we're going to be able to achieve the mission that Afghanistan is all about.
Q: Can I just follow up and ask you about Brooke?
SEC. PANETTA: Sure.
Q: What is -- when you sit down and talk to the gravely -- the seriously wounded now, what are they asking you? What do they want to know from you? And what are you learning from them?
SEC. PANETTA: Well, I mean, first and foremost, when -- when you walk in these rooms and see these wounded warriors, you -- you cannot help but be inspired by the spirit that they have to fight on. You know, they've got incredible wounds as a result of the IEDs. And -- and yet, they -- they have a smile on their face and they're going to fight on.
And I had a chance to not only go to Brooke, but to go across the street to the Intrepid Center, where they are providing rehab to our wounded warriors. And they're together. They're all going through rehab together. There's tremendous spirit. Tremendous things are being done. I mean, miracles are being produced every day with regards to these kids.
And so what I get from them is a tremendous amount of inspiration with regards to the incredible spirit they have to fight on.
What -- what they say is that, you know, they're -- the other thing is that most of them want to go back. Most of them want to go back. That they were there, they thought they were doing well. They thought they were, you know, that the mission was being performed. They felt very good about their unit; very good about, you know, the -- the quality of colleagues that they're fighting with. And they feel good about the mission that they were involved with.
So, you know, I'm getting very good reports that -- that they feel good about what they were being able to achieve.
I think, you know, the one thing that -- that they want to see is that we don't walk away from this, but that we continue the effort to make sure that this mission is accomplished. I think that's the -- that's the message I get.
GEN. DEMPSEY: Could I add? So you asked whenever we visit these wounded warriors, what do you learn? You learn about the real meaning of courage. I mean, the real meaning of courage.
And if -- and if I'm struck by anything it's the degree to which they trust us, the senior leadership of the armed forces, to take care of them. And that's -- that is both -- that's a great blessing that we have that kind of trust within the ranks, and it's the trust we have to live up to.
Q: Quick question on the Pakistan supply routes. Two weeks ago you told Congress that it's costing $100 million more to transport through the northern route, and the talks seem to have broken off. The U.S. team has left.
Is there a stalemate? Is it -- is it hanging on a question of the U.S. apology?
You also told Congress there were other issues besides apology. Would you talk about what the other issues are?
SEC. PANETTA: There -- there continue to be discussions in this area. We continue to have a line of communications with the Pakistanis to try to see if we can take steps to reopen the GLOCs [ground lines of communication].
And, you know, the good news is that there continue to be those discussions. There still are some tough issues to try to resolve, but, you know, I think -- I think the important thing right now is that both sides in good faith keep working to see if we can resolve this.
Q: May I ask a quick follow-up. So in Kabul you also said that you were running out of patience with Pakistan in terms of their not being about to take action on the Haqqani Network. Is that part of this discussion, as well?
SEC. PANETTA: It is. General Allen met with General Kayani, and they had discussions on the issues we've talked about. And I think, you know, he made clear that we have to -- both the United States and Pakistan have to work together to deal with the threat from the Haqqanis.
And I think he -- he got -- you know, he got a receptivity from General Kayani that he understood the concern. After all, they, too, have been the victim of terrorism. They lost 17 Pakistanis on a patrol to the TTP [Tehrik-e Taliban Pakistan]. And so every day they, too, are the victims of terrorism.
So we -- we have a common enemy. It would make sense if we could work together to confront that common enemy.
STAFF: One more?
Q: Mr. Secretary and Mr. Chairman, the Joint Staff recently put together a lengthy report on lessons from the last decade of war. I wonder if you had a chance to review it, and if so what you thought of it.
And also there are many recommendations in there, everything from the need to create a new ISR strategy to reorganizing the interagency in the national security arena. And I wonder if any -- any steps will be taken to implement those recommendations.
GEN. DEMPSEY: Yeah, I can take that.
The secretary hasn't seen it yet, and I'm just beginning to -- to -- it's just beginning --
SEC. PANETTA: I was going to say that. (Laughter.) I'm glad Marty did. (Laughter.)
GEN. DEMPSEY: The -- you know, what -- what we've discovered is -- I asked when I first came to the Joint Staff to do a survey: What's out there? What studies have been done and what analysis? What findings and what recommendations? And there were approximately 47 significant studies done. And when you add up the findings, approximately 400.
So I said, "Well, that's a little overwhelming for me, you know, Bayonne, New Jersey and all." So I asked the J-7, who now since the disestablishment of JFCOM [Joint Forces Command] is actually the proponent for Joint Lessons Learned, to take this and to, within the staff -- not contracted out, not outsourced -- but within the staff to take a look, given the new strategy that the secretary approved and the president, my strategic guidance to the force, and map those recommendations to those documents so that we have a coherent way ahead and we can decide which of these recommendations are -- are most beneficial and should be pursued. And we're -- and we're working that and I think it's a very positive step, actually.
Q: Do you have an initial gut reaction to what you're reading in those --
GEN. DEMPSEY: Yeah, we -- we did too many studies. That's my initial gut reaction, but that's what we do. (Laughter.)
So now we're going to try to nick it down a little bit.
SEC. PANETTA: OK. Happy Fourth.