MIKE RHODES: Good afternoon. My name is Mike Rhodes, and I have the honor of serving as the director of administration and management for the Department of Defense. Welcome. Welcome to all of you here from so many organizations across the department housed here at the Mark Center, and also welcome to the many across the globe who are observing today's event online or on television through the Pentagon Channel. Thank you for your service to the nation, and thank you for your attendance today.
I've spent my entire career -- nearly 30 years -- with the Department of Defense. And I join each of you in having the greatest pride in our collective mission of national security and national defense. The past seven -- little over seven years, I've had the honor of serving at the Office of the Secretary of Defense. As a civil service career member of the secretary's staff, I feel that I've had a unique opportunity to observe our recent secretaries.
During that time, I've observed Secretary Hagel. I've observed him as he's focused on critical issues of the department, and I note that he has always done so with a keen interest in the impact on our people, our military and civilian personnel.
While I'm personally not surprised by it, I greatly respect his desire to come down here today to meet with us in person to discuss the difficult decisions regarding furloughs. It speaks volumes of who he is. I know that we all understand that the secretary can't explain the individual impacts and implications associated with these decisions, and in the days ahead, we're going to have to meet with our respective supervisors and talk with the human resources professionals to figure out some of those details. However, the secretary is here today to share his macro views and considerations.
He's going to take a few minutes after his remarks to answer some questions, and those will be fielded from the -- by the microphones that are set up in the aisle. So now it's my privilege to introduce our secretary.
Now, having served as a noncommissioned officer in the Army myself, I have to -- have to make sure and recognize the fact -- of the significant fact that Secretary Hagel is the first enlisted combat veteran to lead this department. In addition, he brings experience both from the private and the public sectors. He served in the Veterans Administration. He served in Congress. And he served with the United Services Organization, just to name a few.
Ladies and gentlemen, please join me in welcoming our 24th secretary of defense, the Honorable Chuck Hagel. (Applause.)
SECRETARY OF DEFENSE CHUCK HAGEL: Mike, thank you. Thank you very much. Good afternoon. Hi. Thank you. Thank you. Thank you very much.
Mike, I'm grateful for the introduction, and I'm grateful for what you do, and I'm grateful to all of you for what you each do individually and what you do together as a team to enhance this department, but more to the point, assure the security of this country. That's why I suspect you do this. You all have a lot of options in your lives. You will continue to have many options. But yet you -- you prefer to do this job.
There comes with this job, as you all note -- and I have always admired long before I had the privilege of serving with you as part of your team -- the purposefulness of your job. You're leading purposeful lives. We all, I think, strive to do that with our lives, in whatever abilities God has given each of us and how we develop those.
But to make a difference in the world is about as good as it can get. And in the end, when we inventory what we did with our lives, that's a -- that's a pretty significant question to ask yourself, because you ask yourselves and I ask myself every day, does it matter what we do? Does it matter what I'm doing, what each of us is doing? And it does.
I say that in the way of, first, thanking you and also recognizing that I know as secretary of defense what you do. I don't know every detail of everything you do every day. I don't need to. I know enough. And you don't often get recognized for that. So, thank you.
We're living at a difficult time. I was saying last night at a dinner off-the-record with a number of journalists, I don't know of a time in our history, especially in our lifetimes, when it has been more difficult to govern. I don't know when it has been more difficult to lead.
For all the reasons you know, the pressures that we have in our society, in the world, the threats, the complications, technology, it has really had an impact on everything. And in many ways, we are seeing institutions and, consequently, individuals come loose of their moorings. We're a transient society. When I was growing up in a little town -- little towns in Nebraska, I mean, you stayed in one place. I mean, your parents worked in the same state or maybe you moved to some different towns, but you were anchored to something. You didn't have technology in how you communicate. You communicated with each other. You talked to each other. You socialized with each other. You didn't have Facebook, and you didn't have Internet, and you didn't have the clippie little one-sentence deals that -- well, I'll e-mail you, which is, we're not going to go backward and I'm not -- my children may disagree -- I'm not a dinosaur.
It's all impacting on all of us in every way. And so we are living at a very difficult time. But yet it's a defining time. It's a time when we are truly building a new world order. And that's pretty significant. Not many generations, not many people ever have an opportunity in their -- in their careers, in their lifetimes to say they lived at such a time. We are living at such a time.
What comes out, I don't know. But I do know this: It will -- it will come out based on what we do. We have control of our own destiny. We can define our future. Yes, there are more uncontrollables today than ever before. Yes, there are more complications. Yes, there are more sophisticated threats.
But still, there isn't a country in the world like America. There is not a country in the world that's in our universe. It doesn't mean we're right. It doesn't mean we're better. It doesn't mean we're perfect. Not at all. But we have an amazing system for many reasons. If for no other, it is a system that allows us to self-correct. Just like each of us as individuals, we all know when we're maybe veering a little bit too far in different directions. And you self-correct. We have a system that allows us to self-correct.
Now, with all that said, I wanted to -- before I get into some of the comments I want to make and address specifically here, I wanted to make the overall point that what you're doing is important, it will continue to be important. Many, many people in the country recognize that, not just me. I'm just a passing steward on the stage. But as long as I'm here, I've got a responsibility, and that is not to let our country down, not to let you down. And you have the same responsibility to the country, not to me, not to me, but to the country, to that purposeful life that you have.
So I want to talk about something that I wish I didn't have to talk about today, and that is a decision I've made, which I suspect everybody's heard about it already and it's been coming, and that is the decision on furloughs.
Let me, before I get into specifics of that, make a couple of frame-up points. You know what the budget is about. You're all dealing with it every day. March 1st, we went into what as you all know as sequestration. That has produced a situation for us, Department of Defense, our budget, where we have found ourselves through sequestration about $30 billion short in our operations and maintenance account, the overall accounts. And there's another probably $7 billion to $8 billion in additional deficits in some of our other accounts. We're going to have to deal with that. We don't have any choice.
Over the last two-and-a-half months -- and that's how long I've been in this job -- I have worked every day with our comptroller, who's here today -- and he and his people deserve a tremendous amount of credit for working on this, because this has been a very difficult process. How do we minimize the pain for our people? That's the first -- the first priority, as well as why we're all here, and that is our core missions, readiness and protect this country. And I don't think anybody argues with that.
Now, how do we balance that and assure the security of this country and protecting our core missions and doing what's right, doing what's fair for our people? Because it doesn't make any difference how good equipment you have or how sophisticated or what the process is. Without people, it doesn't work. People are the most important asset any institution has.
So when we started this process when I got here two-and-a-half months ago, there was a very real -- more than possibility, but probability we were going to most likely have to look at a 22-day furlough decision. Through a lot of hard work by our leaders at every level in every service, both uniformed and civilian, and through a reprogramming effort that we got through, so -- that Bob Hale and his people could move money around in different accounts, we got that down to where we thought -- we were at 14. Then, we kept going back, and, finally, we got to a point where I could not responsibly go any deeper into -- into cutting or jeopardizing our core missions on readiness and training, and I just couldn't do any more.
That means that I've made a decision that we'll go forward with furloughs starting July 8th of 11 days. If we can -- if we can do better, as we get through the front end of this over the next few months, then -- then we might be in a position to be able to -- to knock that back. I can't promise that; I won't promise that. You deserve fair, honest, direct conversation about this. And I'm not going to be cute with you at all. This is -- this is where we are.
We'll continue to look at it. We're going to continue to do everything we can. We have cut maintenance. We have cut training. You probably know, because you're all involved in some capacity of this, of our Army training is done for the fiscal year. We've had to bring wings down. We've had to idle ships. There will be exceptions to this. The exceptions will be based on law, will be based on readiness and essential components to the civilian workforce, and we've gone through all of that. We've gone through all that many times over. We'll follow OPM guidelines.
I said when I first got here on this issue, I knew we would be faced with this. Everybody knew it. But -- and I instructed all of our leaders that we've done it this way, we have to be fair. And I have had various options to look at. I've looked at all of them. I had different recommendations from all the services, all the civilian leaders. But what guided me on this, after the realization that we had to make some tough choices, we've got to be fair. And everybody has to be treated the same here, except for those exceptions where there -- there is an essential role that they play.
We've evaluated that on law. We've evaluated that on readiness. We've evaluated that on core missions. As I said, if we can do better -- and we'll continue to search for ways to do better -- but right now, I can't -- I can't run this institution into the ditch. This will go until the end of the fiscal year.
We've taken it as close to the line as we can. And still capable of protecting this country and this country's interests around the world. We still have a war going on. Unfortunately, we still have casualties. We've got a lot of very dangerous, unpredictable places in the world, and I can't put this country in jeopardy by not factoring that in, in the end, as the overall most significant responsibility, as well as treating our people right, is treating our people fair.
Difficult choice, but we had to make it. And we -- I tried everything. We did everything we could not to get to this -- this day, this way. But that's it. That's where we are. And I think, at this point, let me -- let me end and, again, thank you for everything you do and recognize, as I go to questions next, I know, the leaders of this institution know the hardship this decision puts on everybody and your families. We're not unmindful of that. And that's the most distressing part of this decision. We recognize that. And I'm sorry about that.
But I've got to be honest and deal with the facts. You deserve honesty. You deserve the facts. And I appreciate what you're doing. And I know this is going to be difficult, but we'll get through this. And I said everyone going in, we're going in together, we're coming out together. No one service, no one's going to be protected more than anybody else. Budgets are different, and everybody's budget's a little different, but we're all in this together. And I can't allow this great institution that does so much for our country, with such great tradition and history, with such great people, to get picked apart inside by each other, and I won't -- I won't allow that to happen.
So with that, thank you for giving me an opportunity to come by this afternoon and giving me the opportunity to thank you. I would take questions now. I sure as hell would like some advice. (Laughter.)`
Yes, ma'am? Yes.
SEC. HAGEL: I'm sorry. What is what?
SEC. HAGEL: What's the status of raises? Is...
SEC. HAGEL: Oh.
SEC. HAGEL: Well, I'm going to give you an honest answer. I don't know about any raises going forward. I think we've got to get through this. We've got to get through what we've got right now. And I know that the civilian employees have not had raises in three years, and I know that. That's why it's even more difficult to have to come out here today, and all the people in the Pentagon Channel, around the world, and have to make this announcement.
Recognize you've had three years of sacrifice. I get that. I get that. All I can tell you is, I will do everything I can to try to get us in a position, working with the Congress, trying to help as much as I can to promote, which I do, which our people do, some kind of an agreement between the Congress and the president, so -- so that we can find a new budget center of gravity here that we can eliminate where we are.
That's not my -- that's not my decision. This is a big decision by a lot of people in order to get there. So I'm sorry I can't give you a better answer, but I'm not going to tell you something that's just not true.
Bob Hale, our comptroller, may help me out here. (Laughter.)
UNDERSECRETARY OF DEFENSE ROBERT F. HALE: (OFF-MIC)
SEC. HAGEL: I'll repeat what he said. And I should have said this, but I just assumed you knew this. You know, in the budget proposal, what the president's budget for F.Y. 2014 proposed, what I testified about, and all of our people, we have asked for a 1 percent raise. Now, it's up to the Congress whether that happens or not, but -- thank you, Bob. I should have said that, but I just assumed you knew -- maybe you didn't know that.
But the president has asked for a 1 percent raise in his budget request, and we, of course, supported that, and I testified to that, as well as all of our leadership. That's why he -- that why he's the comptroller. (Laughter.)
Q: Good afternoon. My name is Jennifer Hayes, and I work for WHS HRD. And I know that we have to deal with the situation at hand, like you've said, but going forward, is there any protection for us as federal workers that we won't have to endure something like this again? Or will we have to deal with this again next year? As a federal employee, we have took a great deal of hits in the -- in these past couple of years. So it's a great interest to a lot of us.
SEC. HAGEL: Well, your question's an important question. And I would give you this answer, because it's the best answer I can give you. I can't guarantee you that we're not going to be in some kind of a similar situation next year. I'm not predicting it. I'm not saying that that's going to happen. But what we're doing here is we're just trying to survive and get through this fiscal year.
I would hope -- but you can't run an operation, you can't lead an operation, you can't have so many people dependent and the country dependent on leadership based on hope. I hope that we will be in a better situation all the way around. I've got some confidence that that will occur. But I'm not going to stand here and promise you that it won't.
So we're dealing with what we've got to deal with in front of us right now. We're all trying to get to some high ground for FY 2014, which, as you know, begins October 1st, and then we'll see.
But I know that's not a good answer. No one likes uncertainty. It's a dark cloud that hangs over everybody's lives. I know for your families, I know for every part of your lives, it's not a good answer, but it's an honest answer. We will do everything possible not to -- not to have to be in this situation again, but a good amount of this is out of our control, too. Thank you.
Q: Mr. Secretary, thank you for being here. I'm John Bell with OIG. I know some other large agencies have managed to make cuts without resorting to furloughs by cutting their contracting. For example, the Department of State, I know, has done that, isn't going to be furloughing any employees. Is there any possibility that DOD could use those strategies going forward to reduce the number of days or eliminate them altogether? Thank you.
SEC. HAGEL: Thank you. And it's a question that we -- we went into great detail, great depth, great width on. In fact, there are a number of adjustments on this in that general area of contracts and acquisitions and procurement and other accounts. But we did explore it at every, every level. I asked -- that was one of the first questions I asked, was your question.
So we looked at this in every way we could possibly look at it. Bob Hale and people in all the different agencies in the leadership have spent many weekends -- and still do -- going through this. They would come back to me on a Monday or Tuesday and I'd send them back. I'd say, "Go back. Find it somewhere else."
But I think we are -- not I think -- I have confidence that we are running now right to the edge where I just can't hold back any more. I had to make a decision for the good of the security of this country and for everybody. But believe me, we looked at everything, including your question.
All right. Well, again, I wish I could end on a -- oh, we got -- no. We do have somebody back there. Okay.
SEC. HAGEL: Hi.
Q: Now that we know that we'll have 11 furlough days, will it be two furloughs per pay period? Or will it be one furlough per pay period?
SEC. HAGEL: We're looking at -- and I don't want to get too deep into how we're going to administer it, because all your supervisors should have by now -- or will this afternoon, I think -- get directions and instructions on all these specific questions, yours being one of them.
But I think what they're thinking about -- and, Bob, just -- it's two per pay period, right? So that'd be, what, one per week? Yeah. But I think that's the general guideline, is that right?
But your supervisors, all the leaders of your institutions will have the specific guidelines on this. And I know there's -- there will be questions. I know that. We've tried to think through every possible question, and we've got a lot of pieces to this. We've got unions and we've got different authorities. We're dealing with all of them. We've been today talking with all these different authorities, Capitol Hill, think-tanks, the White House, so that what I'm saying to you today is being rolled out with all these different authorities, all day today.
But to your specific question, I think it's two days per pay period, so that -- one day a week. But -- but you will be able to work those things out with your -- with your supervisors.
All right. Well, again, I'm sorry I have to come to you today on this. But thank you. I'm grateful. Our president's grateful. Our country's grateful. And we'll get in, we'll do what we got to do, we'll get out, we'll get on the other side of this, and we'll get it turned around.
And my -- my thoughts and prayers are with your families. And thank your families for -- for what they do. I've always thought families always take the brunt of everything. And I'm not unaware of that, nor is the president or the leadership of our institution. So God bless your families. Thank you very much. (Applause.)