All of us in the Department of Defense, as you know, appreciate the strong and continuous support that's been provided by the Air Force Association over nearly 50 years now.
We have just seen once again, as you would expect, a stellar performance by the United States Air Force. When President Clinton and Secretary [of Defense William] Perry called on our pilots -- Air Force, Navy and Marines -- in Bosnia to deliver, they sure delivered.
One of the stories that's not yet come out adequately from this recent engagement in Bosnia is how incredibly powerful and accurate this campaign has been. You have seen the major results that we have achieved in terms of the cease-fire and having the Serbs come to meet our demands, and we're hoping that will continue. The decision was made to suspend the bombing, and, of course, now we've extended it for 72 hours to continue working on the peace process.
But there's another part of the story that's incredibly important as well. That is the bravery, professionalism and performance of our pilots. We have used nothing but precision munitions, and the accuracy has been phenomenal.
I wish I could bring some of the pictures to show you. You wouldn't see many holes in the ground; the holes are in the targets. The accuracy is so great that we're beyond selecting targets -- they are now selecting aim points within targets. We've taken down their communications and done a number of other important things that I won't go into except to say that it's really been quite a remarkable campaign.
And, of course, we can continue to count on the Air Force leadership -- Secretary [Sheila] Widnall, Gen. [Ronald] Fogleman [chief of staff] and all the senior officers and civilians in the Air Force.
I want to particularly commend Gen. Fogleman for his leadership and for the new video on leadership which he has provided and required for all Air Force officers, senior NCOs [noncommissioned officers] and senior civilians. It is terrific. It has a terrific message: the high standards to which we all hold our military officers and they continue to hold themselves. So I think this is a very, very important message. It's a best seller in the Pentagon, and I'm hoping you will see it as well.
When I came to this position, the secretary asked me to take on three major priorities. First is readiness. Right now, the forces are ready around the world. We all pay a lot of attention to readiness, making sure we're ready and making sure we're measuring it accurately and making sure we have everything we need to be ready.
Secondly, quality of life. We cannot have the forces we need if we do not attend to the quality of those forces -- their training, of course; their equipment; but also their compensation. We're working to make sure that we get and support every pay raise allowed in the law.
Their housing: We have initiatives now on the Hill we'll be able to get passed on housing. We have the Marsh Panel, which is looking at ways to improve quality of life, and you'll hear a report from [former Army Secretary John O.] Jack [Marsh] and his colleagues very soon, and we're eager to hear that.
Also, we want to protect what people deserve. The president and the secretary and I have strongly opposed the proposal on the Hill to change the way you calculate retirement for active duty people and reduce the retirement of people already on active duty. We think that's breaking faith, we think it's wrong, and I think we will prevail and will not have to deal further with that issue in the near term. It is critically important that we put that to bed once and for all.
Let me turn now to the topic I want to spend some time on with you this afternoon, and that is modernization.
If you step back, you recognize, of course, that as a society we are going through an enormous debate about our institutions -- the institutions that have provided us with good capability over the last many years, that were conceived of in the '50s and '60s and some into the '70s. Many of them have outlived their usefulness because the situation has changed, the world has changed. Hence, we have debates on health care and on welfare reform and on international trade and on the international monetary system and a whole set of other such issues. This is important because it reflects that society is changing. The answers to these questions are not easy, but it is very clear that we do need change.
The Department of Defense has to be thought of in that context as well. We are in a situation where we need to change, where the threat has changed, where the world has changed -- high rates of innovation, a global economy, changes in priorities on the part of our citizens. So we as an institution have to take up that challenge and also find ways to change. It won't be easy. It's easy enough to know you have to change, but the critical issue, of course, is to find out where it is you want to go and how you want to change.
I'm reminded of the time [U.S. Supreme Court] Justice [Oliver Wendell] Holmes got on a train and discovered he had lost his ticket. Fortunately, the conductor recognized him and said, "Oh, don't worry, Mr. Justice, I'm sure when you find your ticket you will send it in to us." He said, "The issue, Mr. Conductor, is not the ticket. It's where am I going."
So we have to decide where it is we're going. But I will assure you that if I were to tell you today where we want to be in 20 years, there's only one thing you would know, and that is that I would be wrong.
So we have to build in a force that, in fact, has enhanced combat capability, that operates efficiently and most importantly, is innovative so it is flexible and able to meet new requirements.
Let me talk about each of these. First of all, we need new combat capability. We need a force which is flexible and responsive and reliable; a force that can deal with unknown situations, that can respond to change.
That means, as we look at our modernization program, for example, we have to buy C-17s to replace C-141s and to ensure that we have the lift we need in a newly configured force, which is largely based in the continental United States. We need F-22s, for their stealthiness and maneuverability, in order to assure our air dominance.
Beyond that, we are going to need the joint advanced strike technologies, which will provide us with common platforms. I'm told we're getting as much as 80 to 85 percent commonality across the services, and we'll rely heavily on new manufacturing techniques, computer-aided design, new composites, alloys and so on. So we have to look to advanced technologies to provide us what we need.
And we need to modernize our ground forces. Modernizing the ground forces is important because we want to make sure we equip our people so that when they have to fight, they are able to fight well and then come home. This is homely stuff -- tactical communications gear, trucks, ammunition, armored personnel carriers and so on. The warfighting CinCs [commanders in chief] were in town a couple of weeks ago, and the principal message they left with us was, "Don't forget the small procurements. Don't forget the things that make a difference in combat capability."
Frankly, we need these kinds of capabilities more than we need additional B-2s. I and the secretary would love to have more B-2s, but given the budgets that we have, we want to make sure that the forces we have are well rounded and fully capable. We can't afford more B-2s.
That's also true in our major shipbuilding program. It will stress both new submarines and new surface combatants. All of this new capability has to be joint, because we will be operating in joint operations in the future in almost every case. So as we ask the services to take on new responsibilities and as they come forward and develop superb new systems such as the F-22, we want to continually remind them that we want these systems to operate in a joint environment.
Jointness takes a lot of training, and it takes a lot of cooperation and a lot of trust among the services. That's not easy, but it is critically important. Because modernization doesn't just mean new weapons. It means joint vision. It means joint doctrine. It means joint planning. It means joint training.
Also, we need to make sure that the systems that we provide work together. If you had the privilege, as I have had, to sit through the two-hour briefing by the investigative team of the [Air Force Capt.] Scott O'Grady shootdown, there are a couple of things that come to mind. First and foremost, of course, the enormous bravery of that young pilot and all the people who rescued him, and the superb training they had had, so that when the time came, they could be successful.
The second thing that jumps out at you is we only missed getting Scott O'Grady out of there before he was shot down by a minute. The problem is we have too many systems that aren't integrated. They aren't fused in the context in which they ought to be fused, so that we're delivering to the individual on the battlefield, whether he's the battalion commander or the fighter pilot, what they need in a timely way. Our intel [intelligence] organizations are, unfortunately, still too "stovepiped," and we need to work on that.
Finally, in terms of combat capability, there's one last criterion I want to mention. That is making sure that we are dealing with the real threat out there. Some of those threats, as you know, will be unknown. We're going to have to define them as we go forward. But we want to be very careful that we simply don't look at mirror images of ourselves.
The secretary asked the Defense Science Board, in their summer study, to take on the following question: If you were an enemy of the United States in the next century, what would you do? As you would expect, they do not buy TACAIR [tactical air] because they can't compete with us on TACAIR or with stealthy submarines or stealthy aircraft.
What do they buy? They buy information for information warfare. They buy weapons of mass destruction. They buy the capability so they can hide much of what they have. They look to psychological warfare, and they look to drones, and they look to advanced business practices that they can adapt and innovate in their own system.
So the challenge to us from this very interesting study is that we need to keep looking at who's out there, what it is that potential threat is going to be, and making sure that we're not mesmerized by our own capabilities, but rather in a situation where, in point of fact, we will be responsive to the needs of the future.
A second element that I have mentioned in this regard is efficiency. We need efficiency, of course, because we need the money. We need it for our modernization program. We will be nearly doubling our modernization program account from 1996 through 2001 -- from $39 billion to $67 billion.
Some of that, of course, is reflected in a reallocation of funds within the program. But some of that, of course, has to come from savings. It comes from civilian personnel reductions, which will save us about $25 [billion] to $30 billion. It comes from acquisition reform, and at the end of the month, we will be publishing the final rules that implement the Federal Acquisition and Streamlining Act. We can buy from the private sector the way we ought to. And we will continue cutting back on the milspecs [military specifications] and the tons and tons of regulations that we have had in the past.
We will also get savings from base closures -- about $56 billion. We are now finished with so-called BRAC '95 [base realignment and closure] -- the last of the BRACs under the current law. You will not see, in my judgment, another BRAC law in this decade. I anticipate one in the next decade. I hope so, because I think we're going to need it. But we're going to have reap the savings from base closing, and we're already doing that.
But in the context of saving from BRAC, let me raise also a larger issue. It has to do with privatization and outsourcing. We have had a remarkable change in the United States in the last 15 years of so.
Companies large and small have learned that there's a whole set of capabilities that they need to perform, but are not central to their business, not part of their core competency. Whether it's automatic data processing or logistics or whatever it might be, they've learned that a whole new industry has grown up that will provide them with these capabilities, rather than try to duplicate it themselves. You know the list -- the FedExs, the EDSs, the Sprints and all the rest.
So companies have stripped away these functions they used to provide for themselves and turned to these new competitive companies to provide them for them. Why do they do that? First and foremost, because it isn't their business, and they want to concentrate on their business.
Secondly, because of the competitive environment, they know that with a captive institution inside a large company they will not come up with the innovations in the future that other, more focused companies will. By outsourcing these noncore capabilities, not only do companies benefit from the innovations, but both in the short run and in the long run they are going to save money.
I think the Department of Defense ought to do the same thing. We have had for some time now, a proposal in the BRAC commission report -- and in the report by the roles and missions commission, which I chaired -- that stresses moving the department more aggressively towards privatization. We intend to do that. We're going to do it in a great many areas, certainly in terms of some of our maintenance functions, but also in terms of materiel management, in terms of base commercial activities, in terms of housing and education and training -- in terms of a whole array of functions which are important to us, but do not contribute directly to where the senior management ought to focus its attention, and that is delivering capability and support for the joint operations commander, for that warfighter in the field.
So we are standing up a significant new effort in terms of outsourcing, and you will hear more about that in the future. It is consistent with what I've been talking about here in terms of our modernization goals.
A third part of the modernization effort that I want to talk about for a few minutes is innovation. Innovation is critically important if we are going to have a new, reliable and flexible organization that can respond to change.
First of all, we need to build change into the department. By that I mean evolving the department so it's specifically responsive to change and adaptive to change. Let me give you a couple of illustrations.
First, information technology runs through a generation about every three years. We need to adapt it, not fight it. It's driven by the private sector, not by us. So we need to reach out, adapt to what's going on and use it for our own purposes.
We have to face the question of information warfare. It is a major new threat in a vast number of areas inside our domain. We have to figure out how to deal with this threat and to do it both offensively and defensively. The answers will not be easy, and by definition they will need to be innovative. We are moving rapidly to heavy use of simulation for training. We have to understand where it works and where it doesn't work and where we can make real tradeoffs with that simulation in terms of other forms of training which are much more expensive.
Finally, we have to understand better than we do today the outcomes of these new technologies that we have -- for example, stealth and precision. I mentioned Bosnia earlier and what a magnificent job our pilots have done. We focused on precision munitions. They're hitting the targets, it's highly effective, and it has major implications for us as we go forward, and we need to understand those implications. Recognize that this theater is not the desert; this is a cloudy, rainy, forest-covered area where you're seeking out targets in what are far from the best of conditions.
Stealth and precision munitions have succeeded in Bosnia, nonetheless. But the question is, how can we make even better use of our new technologies as threats change? We look to the Joint Requirements Oversight Committee -- chaired by the vice chairman [of the Joint Chiefs of Staff], Adm. [William A.] Owens -- to help us, through the services who sit on his committee, sort out how to use new technologies to deal with new and unexpected threats as they emerge.
Secondly, we really need to look outside DoD for innovations that will help us. I'm reminded of the story about the woman who got a little close to the Grand Canyon and fell over the edge. Fortunately, on the way down she was able to grab onto a tree limb. She started yelling, "Help, Help. Is there anybody up there?" And then a voice said, "Yes. I'm God. I'm up here." She said, "Oh, good. Can you help me?" He said, "Don't worry, just let go." And she said, "Is anybody else up there?"
When it comes to modernization, DoD is not out there all by itself. We're not the dominant buyer in this economy any more. We are not creating new industries as we were in the '50s,'60s and '70s. We're going to have to go out and find out what other people do in the commercial world.
As I travel around and talk to people in the department and they tell me where they have been -- to this aerospace company or that aerospace company, which is very important -- I ask them, have you been to Microsoft? Have you been to Genentech, have you been to Novell?
All too often the answer is, "No, we haven't gotten to that yet." Again, I would submit to you, it is the Microsofts and the Genentechs and the Novells and many others out there who don't do business with us directly, who aren't concerned with our problems, but who are on the cutting edge of innovation and the cutting edge of change. And we need to reach out, find out what they're doing and again, bring that in so we have a truly innovative organization for the future.
Finally, in this regard, we need to innovate our very approach to security itself. We live, as you all know, in a new world, with large numbers of new countries. All over the world people are struggling for democracy but against significant odds with lots of turmoil, lots of civil strife, high rates of inflation and other problems.
We need to work with these countries. We need to understand them. We need to try to make friends, and try to cooperate with them. For example, 10 years ago the nation of Slovenia did not exist. Last night, I talked to the secretary. He was in Slovenia. Why? Because it is a small, struggling nation in an important part of the world for us. We need to work with the Slovenians of the world and develop better military-to-military contacts and exchanges and joint military training exercises, and we are doing that.
We need other kinds of innovations in dealing with the world. The NATO Partnership for Peace is just such an innovation -- working with a great many different countries. We need to continue to pursue a pragmatic relationship with the Russians. We need to work with them on reducing their nuclear stockpile -- believe me, our program is a very good investment. And we need to continue our constructive dialogue with the Chinese in order to encourage them to play a positive role in the region and in the larger world.
Secretary Perry held the first Ministerial of the Americas, in Williamsburg [Va.] earlier this year with 35 democracies in attendance. Out of that came, among other things, a series of pledges and principles about what it is we ought to be doing -- which will encourage democracy, encourage civilian control over the military, encourage civil rights and so on.
He also hosted representatives from 34 Asian-Pacific countries, territories or areas for the V-J Day commemorations in Hawaii. The same principle. These are the kinds of things that we have to do in this new world. We call it defense by other means. It doesn't substitute for traditional defense, but it does add to it -- through cooperation, openness and understanding.
In conclusion, let me say that we are embarked on a major modernization program. It will take several years -- indeed, the budget program goes out into the next century. It will stress new capabilities; it will stress new efficiencies; and most importantly, it will stress innovation. In many ways, the department is already on that task, and that's very good news. We have a force that in the future will be capable and efficient, I think, and innovative and responsive and joint. We want to continue to look for new ways to improve and to make it even better.
It's one of the highest priorities I have as deputy secretary, to make certain that our forces are ready and can be responsive to our changing needs. We know that we can rely on you for your continued support, and we are grateful for that support.
Thank you very much.
Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant to the Secretary of Defense (Public Affairs), Washington, D.C. Parenthetical entries are speaker/author notes; bracketed entries are editorial notes. This material is in the public domain and may be reprinted without permission. Defense Issues is available on the Internet via the World Wide Web at http://www.defenselink.mil/speeches/index.html