(MODERATOR): The gentleman I'm introducing needs no introduction, but I feel it's important that -- to say a few words -- (inaudible).
Talk a lot to you about where we live, the big picture, how we fit into that, our location here at Incirlik and our mission here. I can think of no one better to sit here and bring that into focus and talk to you about that a little bit today.
Again, the man standing here in front of you has a career of life-long service to our country. In addition to time spent serving as a congressman from his state of California, on to position chief of staff to the President of the United States, serving as the director of the Central Intelligence Agency, and now currently as the secretary of defense.
It gives me great -- (inaudible) -- he's a true American -- (inaudible) -- the Honorable Leon Panetta.
SECRETARY OF DEFENSE LEON E. PANETTA: Thank you.
Thank you. Thank you.
Colonel, my honor to have a chance to be here at Incirlik to wish all of you the best of holidays, a Merry Christmas and Happy New Year.
I can't tell you how proud I am of the service of all the men and women in uniform that serve our country. It is, for me, one of the -- the great things about this job: the opportunity to be able to see all of you and all the men and women that I saw in Afghanistan, at the various bases that I went to, men and women that I saw in Kuwait before that, and the men and women in uniform that I see around the world who are willing to put their lives on the line, who are willing to give something back to their country.
This is, you know, the holiday season. I know some of you are able to have your families with you, and many of you do not have your families with you. And it's a tough time not to be with your families. But I -- I want you to know that your nation is truly grateful for all that you do.
I'm a big believer in public service and in giving something back to the country.
As some of you may know, my -- my parents were immigrants to the United States from Italy. And, like millions of other immigrants, they came to America with little money in their pocket, few language skills, did not have any abilities or skills. But they came because they were searching for a better world.
I often used to ask my father, "Why would you travel all of that distance to come to the United States?" Although they came from a poor area in Italy, they at least had the comfort of family.
And my father would say the reason they did it is because he and my mother truly believed they could give their children a better life.
And that is the American dream. It's what we want for our children, it's what you want for your children, and hopefully it's what your children will want for their children: the ability to ensure that our children have a better life.
And in many ways, that's the fundamental mission that all of us are involved with. When you give something back to your country, when you do the things that you're doing in serving the United States of America, you do it because we want to make sure that our children have that better life, a more secure life for the future, so that they can enjoy the great opportunities that are available in our great country.
So I thank you for your service, and I thank you for our willingness to give something back to your country.
This is a particularly critical base here in Turkey. What you're doing here -- and I can't begin to tell you how important it is to this region and to the overall security of this area.
This is a critical time. I don't have to tell you. You're 60 miles from Turkey -- from Syria, and all of you know the turmoil that's going on in Syria. The fact that you're here in Turkey, a great ally -- it's a country that has always provided this base, and it's always worked with us to try to deal with the challenges in this region.
They are -- they are a good ally. And we are working with them now to deal with the challenges coming out of Syria.
There are three -- three areas we're involved in in dealing with the Syrian situation.
The first is trying to deal with the whole threat of CBW. We were always concerned about the sites that were located there. We wanted to make sure that they were being secured. We wanted to make sure that none of that stuff was being used, none of that would fall into the wrong hands. And we've been working with Turkey, with Jordan, with Israel, to try to make sure that we monitor what's happening there.
As you all know, we were very concerned about some intelligence that we received recently that they had, in fact, moved to begin to arm weapons that would involve chemical and biological -- the use of chemical and biological material.
And that was the reason that the president of the United States, myself, the secretary of state made very clear to the Syrian regime that they must not, under any circumstances, use chemical warfare against their own people; that there would be serious consequences if they crossed that line. And we've continued to make very clear to them that that would be the case.
Secondly, we're involved, obviously, in humanitarian relief. We've got humanitarian needs here in Turkey, because of refugees that have moved into Turkey here. We've got refugees moving into Jordan, so we're working very closely with them to try to provide humanitarian relief to those refugees, who are in great need.
And thirdly, we are working with the opposition, providing nonlethal assistance, trying to make sure that they have training, trying to make sure that we identify those leaders of the opposition who hopefully can provide the leadership necessary for the transfer in political institutions that's gonna take place.
I mean, it's a matter of time before the Assad regime comes down. And our hope is that there's an opposition -- the leadership in the opposition that can provide for a smooth transition, to allow the Syrian people the rights and the freedoms and the liberties that they deserve.
So this is a challenging time. It's a challenging time. It's a critical time.
We just announced -- I just announced this morning that we are deploying two Patriot batteries here to Turkey, along with the troops that are necessary to man those batteries, so that we can help Turkey have the kind of missile defense it may very well need in dealing with threats that come out of Syria.
So you are in a critical place, doing a critical job, at a critical time in our history. In many ways, look, we're at a turning point. We have been at war -- the United States -- for over 10 and a half years. Almost 11 years of constant war. The longest period of war that the United States has been engaged in, between Iraq and Afghanistan.
And in many ways it's a turning point for us. After 10 years of war, we've ended the war in Iraq.
I just came from Afghanistan, where General Allen has put into place a campaign plan that will transition more and more to the provinces there to -- Afghan security and governance and control. We hope to continue that process and transition next year, and we'll gradually draw down in Afghanistan by the end of 2014. We'll maintain an enduring presence there in order to ensure that they continue on the right path.
But we're beginning the process of drawing down in Afghanistan as well.
We completed an -- an important mission with NATO. You're here with a NATO partner in Turkey. The mission that we completed in Libya was a very complicated mission, involving a lot of countries. But the end result was that we brought down Gadhafi and allowed the Libyan people to control Libya.
And, lastly, we have taken on terrorism. 9/11 was the result of an attack on our country by al-Qaeda, and the United States has taken some very significant steps to weaken al-Qaeda. We've gone after their leadership. We've gone after bin Laden. We've gone after some of their key leaders. We have made it very difficult for them to have the command and control in order to put together another attack similar to 9/11 on the United States.
We have made the United States safer by virtue of going after those terrorists who attacked our country, and made very clear to them the message that nobody attacks the United States and gets away with it.
And, at a time when we've been able to have those achievements, we are now facing the constrictions of -- of the budget in the United States. I mean, for the last 10 and a half years, we virtually had a blank check in the Defense budget.
The problem now is that our country, as all of you know, has a very huge debt, running deficits of almost a trillion dollars plus. And so, the result of that is that, you know, we're being asked -- I was asked by the Congress in the Budget Control Act to reduce the Defense budget by $487 billion, almost a half a trillion dollars, over 10 years.
In looking at that, having worked on budgets in my career in Congress, I said, "The last thing we're going to do is just cut everything across the board. We are not going to do that."
And the guidance I provided to everybody at the Defense Department was the following.
Number one, I want to maintain the strongest military in the world. We are the strongest military power in the world, and we have to remain that.
Secondly, I don't want to hollow out the force. I don't want to cut across the board and weaken everything in Defense. That's what we did coming out of World War II. We did that out of Korea. We did that out of Vietnam. We did that out of the Cold War.
When the cutbacks were made, we cut Defense across the board, and we weakened Defense, we hollowed out the force. We are not going to repeat that mistake.
So that means we've got to look at all areas of the budget.
And lastly, I said, we have to maintain faith with the men and women in uniform that serve this country, you. You've been deployed time and time and time again. You put your lives on the line. We've made commitments to you about the benefits that we would pay you and your families, benefits we pay wounded warriors and their families. We're going to stick to the promises that are made.
So, recognizing that, how do we take on this challenge of reducing the budget by almost a half a trillion dollars?
What we did, working with the chairman of the Joint Chiefs, the service chiefs, the civilian leadership of the Pentagon, we said, "All right, let's develop a defense strategy, not just for today, but for the future. What do we need in terms of defense strategy, recognizing the challenges that we face, recognizing the budget constraints we're facing?"
Part of the problem I'm dealing with is, this is not like coming out of World War II. It's not like coming out of Korea. It's not like the enemy that we confronted has gone away.
We're still a country that faces a number of threats. We've still got a war in -- in Afghanistan. And having just come from there, you know, recognizing that our troops are still out there, you know, facing an enemy, getting killed by IEDs, we're in a war. And we'll be fighting -- you know, the likelihood is we'll be fighting for -- for another year or more.
Secondly, we still are confronting terrorism. Even though we, you know, gotten rid of bin Laden, we've gotten rid of the key leadership there, the fact is al-Qaeda still represents a threat. They're a threat in Yemen. They're a threat in Somalia. They're a threat in Mali, in North Africa. And our commitment is, we are going to go after them so that they have no place to hide.
We still have the problem of North Korea and the unpredictability of North Korea. We just saw that happen this last week, when they launched another missile, in violation of all international requirements and rules. That represents a threat, a threat to the United States.
We've got the problem of Iran here, another unpredictable regime, whose sole goal is to destabilize other countries and destabilize this region, and try to develop a nuclear capability. We are not going to let that happen. It represents a threat.
The turmoil here in the Middle East, Syria, other countries that are going through tremendous internal turmoil.
The whole threat of cyber-attacks. We're living in a world now where part and parcel of a military attack is going to involve cyber. Cyber can be used to cripple a country. It can take down a power grid system. You can take down your financial system. You can take down our government systems. It can cripple a country. So, we've got to be prepared to deal with that.
So, I'm facing a lot of threats. And the United States has to be strong enough to confront every one of those threats. So, the strategy we developed, very briefly, involves five key elements.
One, we are going to be smaller. We're going to be leaner. That's a reality, coming out of these wars. But we have to be agile, we've got to be deployable, we've got to be flexible, we've got to be able to move quickly, we've got to be on the cutting edge of technology.
Secondly, we've got to have force projection in those areas where we face the worst problems.
So, we are going to have force projection in the Pacific, in order to confront North Korea, in order to deal with the challenges we face in that Asia-Pacific region, which is so important to our economy and to our future.
And we're going to have force projection here in the Middle East, where you're at. The fact is, we have a large force projection right now in the Middle East. I've got 50,000 troops located in the Middle East. I've got almost 30-plus ships that are located in this region. I've got bombers. I've got fighter planes. I've got airlift. Because we have to be prepared to deal with the contingencies in this region as well.
Thirdly, we've got to have a presence elsewhere in the world. We can't just walk away from the rest of the world. So, how do we deal with that in Latin America, in Africa, in Europe?
What we've recommended is a rotational presence, where we send units into those countries to exercise, to train, to develop their capabilities, to develop new alliances, new partnerships, so that we're engaged in the rest of the world as well. We're doing that through special forces. We do it through the Marines. We're going to do it through the Army. We're going to do it through other elements of the services.
Fourthly, we got to defeat more than one enemy at a time. If we're in a land war in Korea and the Straits of Hormuz are closed, we've got to deal with both of those kinds of challenges. And we can do that.
And, lastly, we can't just cut. We've got to invest: invest in the future, invest in space, invest in unmanned systems, invest in special forces, invest in cyber, invest in the ability to mobilize quickly, invest in maintaining an industrial base so that if we do go to war, we will have the industries we need in order to make sure that we're fully ready to go to war. I don't want to contract out to -- our defense systems to other countries.
So, those are some of the key elements of our defense strategy. And we feel very good about the fact that it meets our needs. And we've built our budget around those elements.
Look, the -- the greatest national security threat I face right now, it's not in the military. I got the finest men and women in uniform that -- that are -- that fight for the United States, that do what you're doing. It's not our weapons systems. It's not our technology. It's not all of the things that make us -- are the strongest military power in the world.
The greatest threat I face right now is whether or not our democracy and the leaders we elect are going to have the guts and the courage to make the decisions that they have to make in order to resolve the issues that face our country.
The biggest concern I have right now doesn't involve you, doesn't involve the enemies that we confront. I mean, I -- I worry about that. We're prepared to meet with it.
Biggest concern I have right now is whether the Congress is going to have the ability to avoid this fiscal cliff and prevent the sequester mechanism from going in.
If sequester happens, we're going to cut defense by another $500 billion across the board, meat axe approach to cutting defense. It'll weaken defense. It'll weaken our country. We can't allow that to happen.
I haven't talked to a member of Congress that wants that to happen. But my point is, damn it, if you -- if that's what you think, then do something about it.
And so, my hope is that over these next few days -- and now we're down to the wire here -- in these next few days, that they'll ultimately make the right decision, to be able to avoid that kind of fiscal disaster that awaits us if they don't do the right thing.
So, we are -- we are the most powerful military force on Earth. And the main reason we are is, as I -- as I said, is not because of all the technology. It's because of you. You are our strength. And I can't tell you how much I appreciate and respect all you do.
The toughest job I have -- it really is just the toughest job I have -- is to write notes to the families of those that have lost loved ones in battle. And I struggle to find the right words, because you know how much those families hurt.
I -- I'm the father of three sons, one of whom served in Afghanistan, so I know the depth of pain that a family feels when you lose somebody that's dear to you.
And what I say to them is that, "Look, I can't find the words to be able to comfort you. But I know that your loved one loved you, loved the United States of America, and gave their life for all they loved. That makes them a hero, and that makes them a patriot.
And, frankly, that's what I consider all of you. You're heroes and patriots for -- for serving your country, and making sure that we fulfill that dream that brought my parents here, the dream of giving our children a better life.
So, again, best wishes for the holidays. God bless you. And God bless America. Thank you.
Okay, you have the secretary of defense here for a while. And if you've got any questions, please ask them.
Yeah, back here?
Q: (off mic.) -- what would be the response of the U.S., and specifically the (inaudible?)
SEC. PANETTA: What did he say?
(MODERARTOR): (off mic)
SEC. PANETTA: Okay.
I think the question was specifically what would we do in the -- in the event that they use chemical and biological weapons.
The president made clear that -- you know, that there would be serious consequences. And with the Defense Department, the job we have to do is to develop options to be able to confront that kind of threat. And so, we have a number of options that we can deploy if we have to, when the president makes that decision, to be able to act.
I can't -- I'm not going to go into specifics. But I can tell you that -- you know, that the United States, when we decide we're going to do something, we damned well are going to do it.
It's not easy. Not easy. You know, I mean, you guys know that when you're dealing with this kind of stuff, you know, it's not just -- you can't just simply go in and blow it up, because you create, you know, the kind of plumes that then create the -- exactly the kind of damage that the use of those weapons will -- will do on their own.
So, you -- you got to be able to find other ways to try to ensure that that doesn't happen.
And we have drawn up plans to be able to present to the President of the United States the options as to what should be done, what he decides should be done, should we get, you know, the intelligence that indicates that that's what they intend to do.
And, you know, look, I don't know. You can't imagine -- I -- you can't imagine anybody would wanna do that to their own people, but history is replete with those leaders who made those kinds of decisions -- terrible decisions to kill people. So, we -- we have to be ready.
I guess the greatest concern I have is that if the regime feels it's in trouble and it's going to collapse -- and, frankly, the opposition is gaining every day, and if the opposition suddenly moves on Damascus and there's a real threat to the regime, I think that creates a situation probably of the greatest concern.
So, we're going to watch it closely. And we're going to make sure that -- that we take steps, not only to protect this from happening, but hopefully to make sure that people like you, who I'm sure worry about that kind of event, are protected as well.
Q: (inaudible) -- I was just wondering if...
SEC. PANETTA: I got to get closer. My ears are all plugged up.
Q: I was just wondering if you -- (inaudible).
SEC. PANETTA: The question was whether Syria would respond negatively to what we're doing to help Turkey.
I don't -- frankly, I don't think they have the damn time to worry about what the hell's happening in Turkey.
They're -- you know, they're fighting right now to see whether they're going to survive.
So, you know, I -- I -- I think they know -- we've made very clear to them that, you know, we're -- we're going to protect countries in this region.
And the result is -- I mean, particularly for allies like Turkey, we want to make sure that, you know -- for -- for what they do here, for what they provide the United States, the fact that they are a member of the NATO alliance, and they have made tremendous contributions -- I mean, in Afghanistan, Turkey is right there, along with a number of other countries, that are helping us in Afghanistan. So, in return, our -- our view was we have to do everything we can to try to help them be able to protect themselves.
So, main point is, you know, we -- we -- we have to act to do what we have to do to make sure that we defend ourselves and that Turkey can defend itself against that. And you can't spend a lot of time worrying about whether that pisses off Syria.
I hope that -- I hope that the Assad regime and that Assad will ultimately come down, and that the opposition -- we've just recognized an opposition group, where we've identified leaders in the opposition that we think can provide the leadership for a peaceful transformation there. And our hope is that that can ultimately happen. I think it's just a matter of time before that happens.
SEC. PANETTA: All right. The question was, you know, this is a strategic base. Is it likely that it'll plus up, you know, as we deal with humanitarian relief and other contingencies?
I think -- I think you always have to be ready for that -- that possibility.
I mean, I -- I -- I didn't expect, frankly, as we were developing our strategy, that I would suddenly have the responsibility not only to maintain a force in the Pacific, but then to develop a pretty significant force presence in the Middle East as well.
But because of the threats from Iran, because of the turmoil in this region, because of the need that we had to respond to contingencies in this region, we have -- we've developed a very significant presence here. And the reality is that, you know, as we -- as we see what happens with Syria, as we see what happens with Iran, as we see what happens with other countries, we -- we always have to have the capability of being able to ramp up quickly, and being able to respond.
And I can assure you, this is one of the bases that obviously would be very important to any kind of mobilization in this area.
Q: (Inaudible) -- budget cuts. And you recently (inaudible).
SEC. PANETTA: The question was on -- on the budget cuts. You know, do -- are we likely to -- to get more budget cuts as we go on?
We, as I said, you know, we were handed a number of $487 billion. It's -- having worked on budgets in the past, that's the largest Defense cut that we have faced in the military for a long time.
And our approach to it was to -- you know, it was over 10 years. So, we have transitioned those cuts over that period of time.
And essentially, as I said, we didn't want to hollow out the force. So we've looked at the key areas in the Defense budget.
The first was just efficiencies. I mean, I -- the Pentagon and Defense Department is a -- it's a big bureaucracy. It's -- I've got three million people at the Defense Department. There's a lot of duplication. There's a lot of -- you know, of -- of areas where we can improve the way we do it, you know, and -- and save dollars. That's a reality. So, a large chunk of our savings comes out of those kinds of efficiencies.
Secondly, force structure. As I said, we are going to be trimming our down force structure as a result of coming out of these wars. For example, in the Army, the Army is -- I think now has a force structure of about 5 -- 560,000. Over five years they'll be transitioning down to 490,000, which is more than we had prior to 9/11. So it's a -- still a very significant force, but we are going to be trimming down that force structure.
And in addition, there'll be some -- some of that force structure reduction in the Marines as well, although they'll still maintain a pretty good presence as well.
So there'll be some force structure reductions.
The third area is with regards to procurement, and trying to ensure that we have procurement reforms. We -- we buy a lot of these babies. We buy a lot of weapons. We buy a lot of ships. And the problem, as you know, is that too often when we go out and try to develop something new, ideas comes in, cost overruns take place, delays take place. By the time you get the damned thing, you know, the technology has moved on. We can't allow that to happen.
You know, we've got to buy a weapons system, we have to buy it now. We've got to be able to pay a price for it that we know we're going to have to pay. And we have to get it in a time frame where we know we -- we're going to get it, instead of just having it drag on.
I mean, the MRAPs that we developed, the reality was the Defense Department -- it's one of the first things that they went and said, "We need the damned MRAPs. We need 'em now." And we were able to get 'em out now. That's what we need to do with other systems as well.
So there are savings to be achieved in procurement, and we do that.
The last area involves compensation. Compensation has grown at the Defense Department by almost 80 percent. Now, I've made clear -- all of us have made clear, we aren't going to go after benefits for those that are currently serving in the military. But we are going to have to look at savings in the future.
I mean, for example, on health care, health care -- I've got a bill of $50 billion that I pay for health care at the Defense Department. I've got to be able to find ways to keep those costs down on health care, and we're looking at that and making proposals to try to develop some additional fees, for example, in TRICARE.
So, we're -- you know, we're going to be -- we've put in place a budget that reflects those areas and savings that I just mentioned. We're probably going to have additional savings in the defense budget as time goes on because, as the war costs go -- come down -- for example, you know, we get a lot of our funds through what's called OCO funds to pay for the war. As the wars draw down, we're probably going to have to pay for some of those areas out of our base budget. So, there'll be some additional savings, probably, in those areas.
I think we can do this responsibly. I think we can do this in a way that protects the best defense system in the world, if I -- if I can tie it to a strategy, if I can tie it to areas where we think we can achieve legitimate savings.
But if Congress just throws a number at us, like the sequester number, and says, "You've got to cut across the board," that would be the worst way to do it.
Now, I don't see -- I mean, I would like to say to you, "That's not going to happen." And I -- deep down, I can't imagine that they would let that happen.
But you want to know what -- what keeps me awake at night, is the prospect that somehow they won't -- they won't find a solution, and that occurs. So, that's what I worry about the most.
(MODERATOR): Ladies and gentlemen -- (inaudible).
SEC. PANETTA: We got it? One more question?
Okay, go ahead.
Q: (inaudible) Well sir you’ve almost kind of answered it (inaudible) compensation. I know -- (inaudible) -- next three years. I just don't see how -- (inaudible) -- I know it's expensive, but we still got to take care of them.
SEC. PANETTA: Yeah. No -- I -- but I -- I understand that very well. I mean, the whole -- our whole point was, particularly for men and women who are serving now and deployed now, we just don't -- we think we've got to, you know, be true to the benefits promised to all of you, in terms of, you know, the -- what you receive in terms of -- of pay and benefits and health care benefits and what your families receive. That's important.
But, you know, for -- for example, on TRICARE fees, which haven't been raised in a hell of a long time, particularly for retirees and retirees at upper grades, you know, those are areas where we got to be able to say -- you know, over time it's been, you know, 30 years since we've raised those fees. You know, you've got to at least be able to pay for the cost of health care.
And, you know, I have to tell you, even -- on retirement, when -- we're not going to affect anybody's retirement for those that are on active duty. What's been promised to you in -- in retirement, we're going to stand by.
But for future individuals who come into the military, we've got to look at ways to try to look at, you know, how can we reform retirement so that it can be more flexible and provide, you know, the kind of adjustments and -- and mobility that other retirement systems have. That's something, you know, we're -- we're looking at as well.
So, you know, I -- my point is this: I -- I -- because compensation has grown by 80 percent, because it now represents a big chunk of the Defense budget, if I don't deal with that, then I'm going to have to cut readiness, I'm going to have to cut force structure more, and I'm going to have to deal with the kinds of cuts that really impact on defense. So every area has got to be looked at if I want to do this responsibly, and that's what I'm trying to do.
All right, everybody. Have a happy holiday. And thanks for your service. Appreciate it.
I'm gonna -- we're going to pass out coins to everybody. Those coins aren't worth a hell of a lot, but maybe you can use them to get a drink someplace, okay?