SECRETARY OF DEFENSE LEON E. PANETTA: Thank you very much (inaudible).
(inaudible) to achieve, which is an Afghanistan that ultimately can secure and govern itself. And we've made tremendous progress. 2011, as far as I'm concerned, was a real turning point. We've seen levels of violence go down. We've seen the fact that the Taliban has found it almost impossible to regain any of the territory that they've lost during that period.
We've seen the Afghan army be able to assume more and more operations and be able to -- as a matter of fact, 85 percent of the operations in this country are conducted by -- by the Afghan army. That's moving it in the right direction. They're taking over more and more of the responsibility, which has to happen if we're eventually going to have an Afghanistan that can secure and govern itself.
And in addition to that, we've made a lot of transition. We've now transitioned to Afghan governance and security about 75 percent of the population. Three tranches have already been transitioned. We've got two more to go in 2013.
As you know, General Allen's plan is to continue to stay on track, continue these last tranches in 2013; be able to transition 100 percent of the responsibility ultimately to the Afghans -- the Afghan army; and then begin to draw-down towards the end of 2014. And at that time, what we'll do is maintain an enduring presence here. We'll have a presence here that will continue to work with the Afghans, work on counterterrorism, do training and assistance, continue in an advisory capacity to try to assist them, and to give them the support they need in order to accomplish the mission.
This is a long-term commitment, but the fact is that, you know, we have -- we spilled a lot of blood here. All of you spilled a lot of blood here. We've got almost over 2,000 who've been killed in action here in Afghanistan; about 18,000 that have been wounded. ISAF has had a large number of both killed in action and wounded as well. And the Afghans have lost a lot of their own.
But the bottom line is that those sacrifices -- all of those sacrifices are not in vain. We have made good progress in achieving the mission that we're embarked on, and it's because of all of you. And that's -- that's why I'm here is to say thank you for all of your service and for your sacrifice. Thank you for giving back -- giving back in duty the kind of service that is at the heart of our strength.
Military strength, as far as I'm concerned, and I've got a hell of a lot of great weapons as secretary of defense -- great planes, great tanks, great technology, great capabilities -- but none of that -- none of that would be worth a damn without the men and women in uniform who serve this country. You are the real strength of our military power.
And that's why I wanted to personally thank you and wish you the best for the holidays. We've got to stick to it. We've got -- obviously, we're facing not only the effort to try to complete this campaign, but I think a lot of the countries here, as well as the United States, are facing budget constrictions and that's requiring that we take a look at overall strategy.
In the United States, we've done that. I was handed a number by the Congress to reduce the defense budget by $487 billion, almost a half-trillion dollars, over the next 10 years. The way we did that was to come together, not just cut that across the board. But our decision was: How can we develop a strategy that will, first of all, maintain the United States as the strongest military power in the world?
Number two, not hollow out the force. In the past, when there have been cuts, we've cut across the board, weakened everything, and hollowed out our military. We're not going to repeat that mistake.
And thirdly, I wanted to maintain faith with the men and women who have served this country. You've been deployed time and time and time again, and our responsibility is to make sure that the benefits that were promised to you are maintained for you and for your families, for our wounded warriors. We're going to do that.
And so we developed a strategy that looks not just at the present, but at the future. For the United States, look, we're going to be smaller. We'll be a leaner force. We're going to be -- obviously, we just ended the war in Iraq. We'll be drawing down here in Afghanistan. But we've got to be agile. We've got to be deployable. We've got to be able to move fast. We've got to be on the cutting edge of technology.
Secondly, we're going to have to have force projection in those areas where we confront the biggest problems. So we'll continue to maintain force projection in the Pacific and in the Middle East -- in the Pacific to deal with threats from North Korea, to deal with rising powers like China; and in the Middle East to deal with the threats we face from Iran and from the turmoil that we're seeing in the Middle East today.
Thirdly, we've got to maintain a presence elsewhere -- in Latin America and Africa, in Europe. We want to do that through rotational presence, where we can go in, do exercises, do training, build up the alliances, the partnership that are reflected here, so that other countries can develop their capabilities to provide security for the world.
Fourthly, we've got to be able to defeat more than one enemy at a time. If we fight a war in Korea and the Straits of Hormuz are closed, we've got to be able to confront both of those perils.
And lastly, we've got to invest in the future -- invest in space, invest in unmanned systems, invest in cyber, invest in the ability of special forces to do the kind of things they're doing. We've got to be able to invest in new technologies for the future as well.
Those are the strategies we're going to be putting in place. And I feel very confident that we can build a budget based on those strategies. The biggest concern I have right now is that the Congress doesn't take us off a fiscal cliff and doesn't implement something called "sequester," which could cut everything across the board even deeper. And that's what I'm fighting right now in Washington is to make sure that doesn't happen. And that's what the president obviously is fighting as well.
Our hope is that the leadership there is willing to come together and make the tough decisions that have to be made in order to keep us on the right path for the future.
But in the end, they understand, and I think the American people understand that success is dependent on people that are willing to serve their country. That's what you do.
God bless you and God bless the United States of America. Thanks very much. (Applause.)
You've got the secretary of defense. You can ask him some questions if you want. Go ahead. Whatever you've got. Go ahead.
SEC. PANETTA: You know, I've -- I spent 40 years of my life in public service in different capacities. I started as a lieutenant in the Army in the intelligence branch during the Vietnam era. And from there, did a lot of other things, served as a legislative assistance, served as director of the Office for Civil Rights, was a member of Congress, and then chief -- served as director of the Office of Management and Budget in the Clinton administration and then chief-of-staff for the president.
And then went back to California, started an institute for public policy, and then came back into service in government as the director of the CIA, and now as secretary of defense.
You know, obviously, every one of those positions has been, you know, has involved challenges that have been very special to me. In the Congress, I worked on budgets and, frankly, at that time we had the courage to make some tough decisions and eventually balance the federal budget. And then it all went to shit after that.
And, you know, as -- as director of the CIA, I had the opportunity to work on the operation that got bin Laden, and that was something that was very special for me and very special, I think, for both military and intelligence agencies that I worked with. To eventually get that done sent a real signal, a real message that nobody attacks the United States and gets away with it. (Applause.)
And in this job, you know, the ability to develop a new defense strategy and to try to focus on where we need to go in the future. But most importantly, frankly, the biggest -- the biggest treat I've had is the ability to meet people like you -- men and women in service that are willing to put their lives on the line in order to protect the country.
And that, you know, I -- my toughest job is to write notes to the families of those that have lost loved ones in battle. And -- that's the toughest thing I've had to do in this job. And I always struggle to find the right words, but in the end what I say is that, you know, your loved one loved -- loved you, loved your family, loved the United States of America, and gave their live for everything they loved. And that makes them a hero.
And as far as I'm concerned, all of you are heroes and patriots, and I thank you. I guess that means that probably the greatest joy I have in all the positions I've been in is the opportunity to be able to work with people like you to help protect our country. We've kept America safe and that's what counts.
SEC. PANETTA: Yeah?
SEC. PANETTA: The question is, you know, what's my proudest achievement as secretary of defense. I think, you know, the proudest thing I've had the opportunity to do is not only, you know, develop this defense strategy, working with the chairman of the Joint Chiefs and all the military leaders to kind of say, "This is the strategy we need for the United States to remain strong in the future." That's been, you know, it's been very rewarding for me to do that.
But more importantly, the opportunity to open up service in the military to everybody that wants to serve. We've tried to open up more opportunities for minorities; tried to open more opportunities for women. We've obviously got rid of "don't ask-don't tell" and gave that -- those individuals the opportunity to serve as well.
I think that when it comes to serving the United States of America, you know, I think anybody who wants to serve this country ought to have the opportunity to do it. That's important for the future. And the ability to kind of open that up and give people the opportunity to serve their country is probably the proudest thing that I've been able to do.
SEC. PANETTA: You now, that's -- that's a damn good question, which is, you know, once we're through with Iraq and Afghanistan, what are future deployments going to look like? And it's always -- always tough, you know, to be able to give you an answer because we have to respond to whatever crisis occurs in the world. And you never -- you never know necessarily what the next crisis is going to be.
I mean, one of the problems we face is even as, you know, the budget constricts and we're at this turning point after 10-and-a-half, almost 11 years of war, the fact is that we are still facing a lot of threats in the world. We're still fighting a war here in Afghanistan. We're still confronting terrorism, even though we've significantly weakened their leadership. I've got to confront terrorism not just in the FATA, but in Somalia, in Yemen, and in North Africa because there are still terrorist that want to attack the United States of America.
Thirdly, I'm still dealing with a very unpredictable regime in North Korea. They just -- they launched a missile yesterday. And they continue to provoke the United States. They continue to provoke South Korea. And that remains a real threat -- (inaudible).
We're continuing to see threats from the Iran, and the kind of instability that they continue to promote in that part of the world. We see turmoil in the Middle East. We've seen the turmoil in Syria. We've seen turmoil in other countries in the Middle East. And in some way, you know, we've got to be prepared to respond to any contingency in that part of the world as well.
We see the whole threat from cyber and we're now -- we're now living in a world where cyber attacks can be a real threat. You can use cyber technology to cripple a country; to bring down our power grid; to bring down our financial system; bring down our government systems. So we've got to be prepared to respond to that kind of attack as well.
So, that's why what we need is agility. We need the ability to quickly deploy, to be agile enough to move against whatever threat is out there.
So, it's tough for me to say, you know, there's going to be one particular kind of deployment that's going to happen. The fact is in the world in which we're dealing with a myriad of threats, -- (inaudible) -- to respond to any of those threats. It may be that we could have a land war in Korea in the future. We've got to have the ability to fight a land war. But at the same time, we may have to deal with terrorism and, as I said, in Somalia and Yemen, which means we've got to have great special forces capability.
So, we have just got to be prepared -- fully prepared to deal with any of those contingencies. That's the future.
One more question?
SEC. PANETTA: I think that -- his question was -- (inaudible) -- going to a -- (inaudible) -- force, what's going to look like -- what's our force structure going to look like.
Right now, -- (inaudible) -- take it back a little further. In looking at the overall budgets for the Defense Department, in order to make sure I don't hollow it out -- (inaudible) -- across the board, we looked at every area of the defense budget. In fact -- (inaudible) -- better efficiencies. I've got -- (inaudible) -- to the -- (inaudible) -- people. It's a big bureaucracy -- (inaudible). We've got to take -- (inaudible). We can do that, frankly, -- (inaudible).
Secondly, we can save money in the procurement business. You know, in the past we'd procure weapons -- procure a weapons system, people have come up with new ideas -- (inaudible) -- and -- (inaudible) -- technology is old. And we paid a hell of a lot of money for it.
We need -- (inaudible) -- reform that -- (inaudible) -- get a weapons system, this is the price we're going to pay and that's what we're going to stick to. So -- (inaudible) -- those kind of changes in place as well.
Thirdly, we've got to look at force structure -- (inaudible) -- at -- (inaudible) -- looking at is -- (inaudible) -- over five years -- (inaudible).
The bottom line is -- (inaudible) -- a lot of manpower to be able to do what we have to do -- (inaudible).
The last area is -- (inaudible) -- compensation is growing by -- (inaudible). And my commitment is people who served, who have been deployed, who are on active duty, we have to maintain the benefits that were promised -- (inaudible) -- benefits that you receive now, that your families receive, healthcare benefits, retirement benefits -- those are going to be maintained.
But I've got to look to the future to try to achieve some savings. I've got a -- I've got a healthcare bill at the Defense Department that's $50 billion. I've got to find ways to try to control those costs -- (inaudible). So we're looking at ways to try to do that. It's going to impact probably -- (inaudible). That's another area where we're going to have to find savings.
That gives you a -- (inaudible) -- on the areas that I'm going to look at in order to be able to meet our budget requirements, and at the same time maintain the strongest -- (inaudible).
Okay, guys. Thank you very much. God bless you. (Applause.)