SECRETARY OF DEFENSE CHUCK HAGEL: I've seen these guys before.
So, good afternoon. Thank you for giving me some time. Since these traveling partners have been hearing what I've been saying, let me take just a minute to address all of you but in particular you on this side of the table to first let you know that I'm here today as a result of the three-day trip I'm taking. Visiting bases, stations here on -- on the Southeastern part of the United States.
I'm doing that for two reasons. One to just get a sense of what our people are thinking, how they're feeling. This is a difficult time that we're going through. It's difficult for our people. I wanted to listen to them, and I wanted them to have an opportunity to see me directly and hear from me, ask me questions. And I've always thought that any of us who have the privilege of serving in leadership positions always have a primary responsibility to deal directly with the people we lead no matter how big the problem is or how difficult it is. So they deserve that. They need to see me and hear from me.
Third, it's always very helpful for me or I think anyone who serves in any of these jobs to get better informed on what the issues are, what we're doing, how we're doing it, what the problems are for our people. I will never, ever know enough about this job. But I'm trying to learn everything I can about this job. And when I can arrange it to break out of Washington to come visit our people and see our facilities and understand better what they're doing, I do it. It's very helpful for me to get a better sense of this.
I was in Colorado a couple of weeks ago, visiting our bases out there and NORAD, NORTHCOM, Fort Carson. Was in Omaha three weeks before that for a day. And I'll continue to make these trips around the country. We'll have more planned this summer.
So that's why I'm here. Glad to be here. I've always liked Jacksonville for a lot of reasons. It reminds me much of Omaha. Not that Omaha has as much water, but we are on the Missouri River. But it's a community that clearly reflects years and years of very good, solid, effective community leadership, political leadership, military leadership, business leadership, educational leadership, union leadership, religious leadership. Every component that makes a successful community successful. You've done it here in Jacksonville, and it shows. And that's why it's always reminded me of Omaha. The same components, same kind of fabric.
I had some time with your mayor this morning. Spent some time with him. And then an opportunity a couple of hours ago to see three of your congressmen who represent this area. Spent a little time with them. And then had a chance to see Jesse Jackson this morning as an additional part of the meeting and addressed one of the groups that was having a convention there at the -- transportation group at the hotel.
So that's what I'm doing, why I'm here. And be glad to respond to questions. What I'll do, I guess, since I'm the ringmaster, just go back and forth. Is that the way to do it?
SEC. HAGEL: OK, we'll start with Associated Press and then come back and forth.
Q: Thanks. You talked a lot about priorities today. We've heard from some people who are very anxious about their job situation. Can you explain the thinking behind the Air Force's decision that was announced yesterday to reshuffle some of the funding to allow some of the combat jets to start flying? It seems like they got around some of the sequestration intent in doing that.
And also, you discussed today a 20 percent personnel cut that your office and General Dempsey's office is taking. Is that already in place, and how much money do you expect to save?
SEC. HAGEL: Well, let's start with the second question. We will be rolling out and announcing more formally the specifics of these reductions that came as a result of the review that I had directed. It will -- the component that I referenced this morning in answer to a question would represent a 20 percent cut in the office of the secretary of defense, 20 percent of the joint staff, and a 20 percent cut in the service chief's headquarters' staff. And we'll roll that out and give you more specifics.
It would be for the 2015-2019 period. As you know, the next budget that we will present is the 2015 budget. That is essentially what we'll be doing.
On your first question, the Air Force's decisions, those were -- and I haven't seen all of the specifics. I knew that they were going to make that decision. These are, I understand, readiness training missions. All of the -- all the cancellations of air shows and Blue Angels and all that, that all stays in place. These are readiness training missions.
And I wouldn't describe it as getting around sequestration. It's -- I mean, you heard me say readiness is something that was a priority for all of us as we were going through this process, to protect readiness in every way we could. As you know, we've had 16 squadrons stand down. So, the Air Force is taking a pretty big hit on standing down a lot of their squadrons here. So as we adjust the numbers and get more familiar with what we have here as we close out 2013 -- we're two-and-a-half months away from 2013 -- then the services have the flexibility, which I have noted in previous conversations this morning and other places. I want them to have their own flexibility to use those funds to focus first always on readiness. And that's part of the Air Force decision, as well.
Q: But nothing has changed in terms of current events or other things that might require this --
SEC. HAGEL: Oh, oh, you mean some world event or something with --
SEC. HAGEL: No, no, no, not at all. Unless you know something that I don't know. (Laughter.)
Q: You talked (inaudible) town hall meeting. We've talked to these people. Same thing that goes that may force (inaudible). These people seem very worried about their future. Not just sequestration, but there's other stuff. What do you tell these people that eventually it's going to get better?
SEC. HAGEL: Well, I don't know if you were there. You were there -- some of you, I think, were there this morning. I don't know if you were.
To answer your question, one of the things I led with is uncertainty. And uncertainty is a tremendous enemy for all of us for obvious reasons. And when people are living in a state of uncertainty, when these young professionals with families are not sure about their future, that impacts their concentration. That impacts their job. That impacts everything. And what will then follow, if they aren't sure about their future and whether they'll have a job and what kind of a job.
Then the next step there is for people to start looking for other work and other options. And I addressed this yesterday, and I addressed it this morning that I'm very concerned about that. That will produce a loss of skill sets that are vital to our national security and our readiness. I know that. I understand that.
What could I tell them? Well, I always lead by saying I'm going to tell you the truth. I'm not going to give you any false hope, and I was very honest with them. We're going to have the furlough, as everybody knows, situation until the end of 2013. 2013 is over. 2014 begins October 1. If sequestration continues, which as you all know is the law of the land, that probably we'd see that kick in January 1, that $52 billion cut for the rest of 2014.
So yes, there's uncertainty. Yes there's anxiety. Yes, there are legitimate questions. And that's part of the overall problem that we're dealing with. Do I think it's going to get better? As I said, I have to lead this institution not based on what I think, what I hope, what I believe, may be. I've got to prepare this institution and our people for the facts of life and the reality as it is and the law that is now in place. Would something change to change that? Maybe. Hopefully. But I'm not going to mislead any of our people and give them any false hope here that that's going to happen.
Q: We've had a number of conversations (inaudible). I was wondering if you could tell us anything about the nature of the (inaudible) or is there (inaudible) things will get worse? I'm just trying to understand the nature of (inaudible). And, if you have anything on North Korea.
SEC. HAGEL: On North Korea, I don't have anything further than probably what you all have. Essentially what you have is what I have. I've seen your reports this morning; I got your reports an hour ago on this. I don't have anything really further to tell you. The Panamanians did the right thing. We appreciate the action they took. It's now being investigated and sorting out really what was going on and where cargo -- I've not seen verification of that cargo, but where the cargo -- whatever it was was headed and those kinds of questions. And we'll get those facts. But I don't have anything beyond that.
As to my conversations with Minister al-Sisi, yes, I've had probably 10 conversations with him in the last week. Spoke as recently as Friday night. You all know that I can't talk about those private conversations. Not just me, but in all of our governments' leaders conversations, we have encouraged publicly and privately the leaders of Egypt, including the interim president, interim vice president, prime minister in particular, to be inclusive, to bring all political parties in, to allow them to participate in the writing of the constitution and the elections. It's the only way it will work. We've been very clear on that; not just privately but publicly.
As you all know, Secretary Kerry's going to be in Jordan, I think, within hours to meet with Middle Eastern leaders. And also as you know, Deputy Secretary Burns was just there. I think he's left now, but he met with Minister al-Sisi as well as other leaders.
It's a dangerous situation, and we're encouraging the leadership there to do everything it can to stop the violence on all sides, to be inclusive as they proceed. And I think that's about all I can tell you. Thank you.
Q: Have you seen any loss of productivity or efficiency in your tours of civilian operations? And have you heard from any of those civilians saying, "I can't take this and the future that's coming? I'm going private now?"
SEC. HAGEL: Well, I've not heard any civilian say it as directly as you just said it to me. They may have said it to others and certainly I suspect that there are many thoughts in that direction.
As to have I seen any downturn in efficiency effectiveness at our plants, where I would start in answering that, when you're furloughing people one day a week, that's going to have an impact. It can't but help have an impact. I do know, because I've been told this by a number of our civilian employees -- because I have both uniform leadership and civilian leadership -- that the main concern that has been registered by many of our civilians who are being furloughed is their concern about the quality of their work and the job in which you just mentioned.
Of course, they're concerned about their pay, and of course they're concerned about what this is doing to their families. So we do know that this is going to have an impact. I've said it, others have said it on every component.
Q: Because as soon as the handwriting on the wall occurred in the newspaper business, we started laying off people. Others started leaving on their own to find a more secure future.
SEC. HAGEL: Mm-hmm. Well, you're right.
Q: Mr. Secretary, last week in your letter to Senator Levin, you encouraged lawmakers to, among other things, lift the restrictions that have forced the Pentagon to slow the reduction of the Army and the Marine Corps, the end strength numbers. I'm wondering at this point in your assessment of the situation, do you think it's inevitable that active duty force levels are going to go below the current targets? And specifically, if you could talk about your strategic review that's been on your desk for a couple of weeks? What do those scenarios -- what kind of impact will those scenarios have on active duty force levels?
SEC. HAGEL: Well, you all know that reductions that are now in place on active duty -- I mentioned a couple of them this morning Marines and Army. And the chiefs, all of our uniformed leaders are in the process of moving those down, hit those targets in 2017, 2019 and so on. If sequestrations continues and we go into 2014, we're subject to a $52 billion cut, this is, as I have said, it's going to affect everything. There's no component of our force structure or civilians, any part of our defense department that will not be affected.
So, your question about do you envision coming down, for example, in the Army below 490,000, these are realities that we may be faced with. But again, I would say the uncertainty of not knowing puts us in a position, and part of the review -- the major objective was to prepare for these eventual not just possibilities but probabilities.
When I asked in that review to look at scenarios for a continuation of sequestration, we know what the 2014 budget planning is because we prepared that. We presented that. We planned for that. And then something in between, if there would be a new budget agreement somewhere between sequestration and where the president's 2014 budget comes out.
SEC. HAGEL: Yes --
Q: -- $37 billion in sequestration level cuts between March and September of this year, (inaudible).
SEC. HAGEL: Yes. I think we did -- that number got early (inaudible) 42 billion thrown out. But I think the real number now that we're living this is 37.
Q: (inaudible) reaction because you've been, you know, going over the speech with different civilian (inaudible) for the last couple of days. Can you describe how you feel when you’re standing up there talking about this? The other part I want to know your conversations with the president about these upcoming , the $52 billion. Describe those conversations.
SEC. HAGEL: Yes.
Q: -- compensation and (inaudible) talking about (inaudible)?
SEC. HAGEL: Well, as I think I noted -- and it's been out in the press -- that the deputy secretary of defense, Ash Carter and General Dempsey, who I asked to lead the review, and I and the comptroller, Bob Hale, and essentially the technician of the effort that was made, Christine Fox, the five of us -- and also the vice chief, Admiral Winnefeld, we briefed the president last week in that meeting where his OMB director, his national security adviser, his chief of staff and other senior members.
We got into a very specific presentation, conversation, give-and-take with the president. And it was a sobering meeting and we had been -- Chairman Dempsey and I, over the last few weeks, talking to the president every week about progress and giving him some sense of this.
Prior to that briefing, the new national security adviser, Ambassador Rice, came over to the Pentagon, spent some time with me on this. And then she spent the next day some time with Chairman Dempsey and his people on this, getting familiar with numbers and the broader sense of impact.
Then the next day, she spent some time with Ash Carter and Christine Fox and Bob Hale going into more of the specific numbers. The chief of staff to the president, Denis McDonough, came to the Pentagon a couple of weeks ago, and we gave him about an hour briefing.
So I tell you this because it gives you some sense that the president and his senior staff have been informed as we go along, the OMB director has been given reports on this by Ash Carter almost every other day.
And so the president wasn't receiving something he wasn't prepared for. He had gotten read-ahead material as well.
So that's how it all occurred, the specifics of it were, as you would expect, we gave him not just top-line numbers, but also consequences and options.
The President of the United States can never be surprised. And General Dempsey and I are committed to that, not surprising our commander in chief. That means also that his national security adviser can't be surprised, and his chief of staff can’t be surprised and his national counterterrorism chief cannot be surprised. The OMB director can't be surprised.
So I think we've done a good job of bringing everybody along here on this. I don't want to go beyond that into the conversation I had with the president. But he understands this clearly.
Q: Mr. Secretary, as you're well aware, there's a bit of a internal beltway narrative about the preeminence of strategy and how the budget should not be allowed to drive strategy. You addressed this very forthrightly yesterday at Ft. Bragg. To paraphrase you if I could, you said, yes, strategy's important. But to ignore the budget implications is naïve.
I'm just curious; even if you can't give us the details of your views of the skimmer, is it going to be a tool to force some changes on the Pentagon and the military so that at the end of the day, something is newer and better?
Or is it all just managing downward?
And if so, isn't that kind of a bad job? (Laughter.)
SEC. HAGEL: That's some good question. Let me start with the strategy budget question.
I’ve always believed, Tom, in everything I've ever done, whether it's starting businesses or running businesses or whatever I've done, that you start with a vision of what your company should be or your product should be or what you want to accomplish. And then from that vision has to come a strategy.
How then do you intend to fulfill and accomplish that vision?
And what is it that you want to accomplish?
Connected to that is a budget that allows you the resources to implement. So you can't have any of those pieces without the other. And so it isn't a simple issue of budget versus strategy. Strategy has to come first, obviously. Budget can't come first, because you don't know what you're budgeting. You don't -- you don't know why you need the money.
What are you going to do with it?
So strategy is first. Of course, it is. It's very important. But also budget gives you not only the tools and resources to implement it, but it also sets some boundaries and forces you to prioritize as to how you are going to implement that strategy.
So I don't think they're disconnected.
As to your more fundamental question about what does the skimmer inform, and would the skimmer actually inform a leaner, better, smarter Defense Department?
And my answer to that is wise management always is able to produce something better. And I don't know of an institution that I've ever been associated with that doesn't require constant review and evaluation and accountability of can you do it better. Times change. Markets change. Products change. And this institution in many ways is no different.
Challenges change. Let's just start with challenges. And you heard me talk this morning about cyber and I talked about it at most of our stops. I mean, that's essentially a new kind of challenge, new in the sense of certainly over the last 10 years.
The nuclear threat is still a real threat. It's probably, in many ways, more of a threat because of the renegade countries like North Korea. But cyber represents but one example of what I'm talking about. So we're going to have to frame a strategy. How do we protect our country? Because that is the bottom line. That is the objective. Secure your country, protect your country, protect your interests.
And how we do that with new capabilities, because the world is changing, so I believe that out of the review and what will come as a result of whatever is ahead, we can do things better. We'll have to do things better, more efficiently, more effectively, smarter.
And that is accompanied with pain. I get that. If I as secretary of defense had other options to do this, other than doing it or some of it through being forced by $37 billion and maybe $52 billion cuts, I would offer another option, believe me. And that's just all part of it.
But we don't have any choice here, Tom. Our responsibility is the safety and security of this country. We will do that. We can do that. Will we be doing that with less resources? Yes. We're doing that now with less resources.
But at the same time, we're winding down from two long wars that have committed huge numbers of resources. Huge. We've already wound down from one; we're winding down from the longest we've ever been in.
And so adjustments need to be made. This isn't the first time this has ever happened. In our history, we've had to go through this three or four times since World War II. The difference now is more uncertainty and the reality that we're facing a steeper, deeper, more abrupt cut than probably ever before.
Q: Mr. Secretary, relating to your scope (inaudible) national security as well, local issue, (inaudible) as far as positioning ships along the eastern seaboard. Can you discuss that as far as (inaudible) plan?
SEC. HAGEL: Sure.
SEC. HAGEL: Well, you're going to be doing fine. The carrier is not going to show up next week. But you all know that, but you've got three big amphibious boats coming in here pretty soon and this is a vital part of our national security structure.
And it's going to remain that.
To your bigger question, Eastern Seaboard ships of course, we've had to look at everything. We've had to look at our planes, our intelligence, our ships, our forward presence, our Army, our Marines, where do you put them, why do you put them, prioritizing our interests, commitment to allies, enabling allies more and more to do more and more, where we can provide a training and assistance so we don't have to do it.
Yes, so all those are components of the larger strategy.
Q: Question on Afghanistan: I want to know, I mean, in the last couple of weeks there's been reports that zero option -- and in the sense that no U.S. troops will be left behind in Afghanistan is a serious option that's being considered by the White House and the president? So in that context, one, in the review you just described, the sobering review that you've ordered, is leaving no troops in Afghanistan a part of that option that you're considered?
And number two, are you and your military commanders, are you comfortable with the idea of the zero option leaving no troops in Afghanistan?
SEC. HAGEL: Let’s start with -- you all know the range of options that were presented to the president early on. That was an option. So that's not new, zero option. That was part of the entire option of 12,000-plus all the way down to zero option.
I said at the NATO ministerial in June, I think, and committed this on behalf of the president, that we were continuing to evaluate the range of options which then Secretary Panetta presented at the NATO ministerial in January, between 9,000 and 12,000.
And that's where we are.
Q: I think that would be 8,000-12,000 U.S. and NATO.
SEC. HAGEL: Yes, of the -- of the total, which is as -- even you look perplexed at that. That's what's been on the table.
Q: To my second question, sir, is that zero option part of the strategy, strategic review that you've just completed?
SEC. HAGEL: No, no. The strategic review was not about strategies or options for Afghanistan.
Yes. Thank you.
Q: And final question.
No, sorry; my apologies (inaudible).
SEC. HAGEL: Yes, TV gets a shot here. (inaudible). George is very biased against all (inaudible).
Q: (inaudible) trouble (inaudible).
Q: Sir, if sequestration remains in effect for 2014, what are possible consequences that NAS Jacksonville and NAS Mayport specifically may face?
SEC. HAGEL: Well, as I said this morning, and I think generally responded here, if we have to take a $52 billion additional reduction next year, it's going to affect every base, every service, every installation. But as I've also just said, this institution, naval air station here and the entire complex is a very significant part of our overall national security structure.
But everybody will be affected, everywhere.
SEC. HAGEL: Now George is OK (inaudible).
Q: (inaudible) today (inaudible) we have 27 right here at our base. And I got an email from one of them, who said that he wasn't invited to be a part of it today. And he’s pretty upset about that.
What do you say them?
SEC. HAGEL: Well, first, as far as I'm concerned, everyone could have been invited, should have been invited.
I don't know who invited people; I don't know if it was a matter of space or what. It doesn't make any difference to me whether there's 100 or 2,700, I say the same things and so I'm sorry about that, that if people didn't get invited and they wanted to be invited, I don't know how people were invited.
I don't think it was a matter of whether they agreed with me or not because I've got some pretty direct questions. So I'm sorry about that.
But I don't know. I don't know if that was a local decision on -- based on space or what it was. I do know that civilian employees who had been furloughed, whether they were there or not there, they're going through the same pain. And I would say the same thing to this person if they were standing where you are as I said this morning. I'm sorry.
Back to the question this gentleman asked that I really didn't answer. I don't like to come out and tell people that they're going to lose 20 percent of their pay. I said this morning and I've said every time -- and I said it the day that we announced the furloughs in Washington, I went out and addressed hundreds of people, civilians, in a facility outside the Pentagon.
And I told them, I -- it's the last thing that I wanted to happen. And I -- and I have some appreciation for the pain. I don't like that. I -- there's nothing good about that. But at the same time, I can't not come out and talk to them and address them and let them ask questions. I know they're upset. I know they're angry. I know they're not happy with me. I made the decision.
But they deserve at least an explanation as to why I made that decision. And I told them I hope we can do better. But I'm in a situation that we're all in and I've got to deal with what I've got to deal with and I'm sorry that they didn't get invited.
STAFF: Thank you, everyone. Appreciate it.
SEC. HAGEL: OK. Thank you.
Q: When was the last time you were here?
SEC. HAGEL: Five years ago. Yes. (inaudible).
Q: (inaudible) book?
SEC. HAGEL: I'm sorry?