For many years, one of my favorite sayings has been "Make no little plans." That was also a favorite saying of that great man from Missouri, Harry Truman, and elaborating on that, he once said, "I, myself, don't believe in little plans. I believe in plans big enough to meet a situation which we cannot possibly foresee, now."
If he were alive today, I believe Truman would've been proud of the people and leaders of St. Louis. Because of the big plans you have made to rebuild the economy of this region, with hard work, great ideas and the unfailing spirit of St. Louis, you have not only survived the defense downsizing, you are bouncing back stronger.
America will continue to count on St. Louis for the world's best defense systems and technology. But there are new jobs, new skills and new companies -- high-tech start-ups and dual-use companies -- that will continue fueling the St. Louis economy. From the looks of things, St. Louis -- like Truman -- is ready for a situation which we cannot now possibly foresee.
As the secretary of defense, my job is to ensure our military forces are ready for situations which we cannot now possibly foresee. We, too, have plans for the future, and because we're still counting on St. Louis -- on the spirit of St. Louis -- to help us ensure a strong defense, I want to share some of these plans with you today.
Let me start with the good news. Next year, the defense drawdown, which began about eight years ago, will essentially be over. I don't need to remind you that this has been a significant drawdown. Over the past eight years, the defense budget has been reduced in real terms about 40 percent. And this is the third time in my lifetime that we've had a defense drawdown of this magnitude.
After the post-World War II drawdown, our forces were nearly run off the Korean Peninsula. After the post-Vietnam drawdown, we wound up with a hollow army. This time, in this drawdown, we got it right. Today, at the end of this third drawdown, our forces are well-trained, well-equipped and at high readiness and high morale. If you have any doubt, just look at their performance over the past year: They restored democracy to Haiti; they deterred a second conflict in the Persian Gulf; and they joined with NATO to stop the shelling of Sarajevo.
In each case, the performance of our military was a cause of pride for America. How do we do this drawdown without creating a hollow force? Well, first, we've done it by reducing the size of the force by about one-third. The dissolution of the Warsaw Pact, the dissolution of the Soviet Union, allowed us to withdraw about 200,000 troops from Europe and to make major reductions in the size of our nuclear forces. So that was the first phase of getting the resources that we needed, even in the face of a drawdown.
And this is extremely important: by making readiness our first priority. That is, we resolved that at whatever size our military forces were, they would be well-equipped and well-trained, person for person and unit for unit. And we put the money behind that priority by fully funding those activities that are the key to readiness -- training, spare parts and maintenance.
But, of course, there was a billpayer for all of this, and that billpayer was the defense modernization account. That is, the money that we spend on new equipment. And as a result, we have had a five-year slowdown in modernization. Indeed, next year, our modernization account will be the lowest it has been in 10 years, about one-third of what it was in fiscal year '86. But at the same time, our fielded equipment has not gotten any older. And that seems like it is not possible. This is because as we drew down the size of the forces, we selectively decommissioned the older equipment, thus maintaining a low average age of what we kept.
But now that the drawdown is nearly over, our modernization reprieve from aging is nearly over, too. So next year, we have to start a ramp-up in the modernization. That's absolutely critical to the readiness of the forces -- not this year or next year, but the readiness of our forces by the end of the century.
I have a responsibility as secretary of defense not only to accommodate readiness today -- this year -- but to leave a legacy so that my successor as the secretary of defense will be able to provide readiness for his forces on into the next century.
By the year 2000, we plan for a modernization account to go up to $67 billion in current dollars -- almost twice of what it was in the fiscal '96 budget. And this modernization plan will focus on building a ready, flexible, responsive force for the changing security environment in which we live.
This means that we will continue to maintain a technological superiority on the battlefield, especially by seizing on breathtaking advances in information technology: advanced semiconductors, computers, software and communication systems. But we will also put a greater emphasis on the mundane: airlift, sealift, groundlift, trucks, tactical communications gear. These items rarely make the headlines, but they are critically important to the warfighting commanders in the field.
Our five-year modernization plan reflects these priorities. But I must be candid with you. We are making critical assumptions about where we will get the money to make this plan work. And the first of these assumptions is that the defense budget top line will stop declining next year and begin to go back up, again, as we have projected. This will depend ultimately on actions taken by Congresses three and four years from now. So right now, I'm optimistic that the Congress will support this plan.
The second assumption is that we will receive significant savings by closing bases. Initially, closing a base is a cost. It's a drain on the defense budget. The savings don't come in until three or four years after you close the base.
In the fiscal '96 budget, now being considered by the Congress, we have a $4 billion cost associated ... with closing the base down. But in the fiscal '99 budget, we have a $6 billion in savings projected on base closing. So in four years, the effects of base closing on the budget will go from a minus $4 billion to a plus $6 billion, which is a swing of $10 billion, all of which we plan to devote to modernization. But we have to succeed in our plans for closing the bases.
Closing bases is tough, and nobody knows that better than the people in St. Louis. St. Louis is setting a fine example in your response to the closing of the Army Aviation Troop Command.
All of our experience in closing bases indicates that when a community comes together to develop an agreed reuse plan to close bases, they are in a much better position to quickly create new jobs and new revenues. And the Defense Department is committed to helping those communities effect that reuse once they come together and agree on a reuse plan.
The third big assumption in our defense planning is that we will get significant savings by overhauling our defense acquisition system. By now, everybody knows that the way the Pentagon used to buy its systems, services and supplies just doesn't work well -- that it gave us horror stories about out-of-control programs and that it added massive overhead costs. It also gave us a lot of frustrated people in the department who had to work with rules and regulations that make no sense and that simply slowed down our purchases.
So over the past year, the department has seized the initiative to overhaul the acquisition system. The first change we made was to stop required use of military specifications -- those reams of documents that spelled out in meticulous detail how contractors must design and produce a system of supplies and services. Instead, we are going to be using commercial and performance standards which call for the highest quality standards available in the commercial market or, if there is no commercial standard, describe how we want our equipment to perform and then challenge the supplier to meet that performance standard.
We have effectively turned our procurement system on its head. A program manager in the past had to get a waiver in order to use commercial and performance specifications. Now the reverse is true. If a program manager wants to use military specifications, then he has to get a waiver in order to justify the extra cost entailed in military specifications. That one change will have a profound impact on the system.
The second major change in our acquisition system will begin three days from today, Oct. 1, when we publish the new federal acquisition streamlining regulations. These regulations, in effect, will allow the Defense Department to buy at the commercial market price and to use commercial procurement procedures. The new regulations, combined with the milspec [military specification] overhaul, truly represent the most revolutionary change in the defense acquisition system in the past 50 years. But the fruit of those changes are still a year or two or three ahead. Let me give you some examples of how these changes will play out.
First, instead of forcing our managers to operate under rigid guidelines, we're giving them the flexibility to work with contractors to find innovative solutions and the authority to weigh the risk vs. rewards of those innovations. Our contractors will be encouraged to integrate the design, the development and the production of our systems by forming product design teams. This means fewer documents and fewer conflicts between the engineering and production sides of an operation since all of them will be working together.
This teamwork concept was borrowed from private industry. More than five years ago, the Boeing Co. committed to a paperless development on its 777 transport aircraft. They recognized they could do this only if they brought together the people who used to communicate on paper conceptual design, detail design, product engineering and manufacturing.
Using this product design team concept on such a major program was a huge gamble for Boeing -- what industry calls a "bet your company" decision. They made that bet and they won. And the result was a dramatically shorter development time in costs, dramatically less rework in the production and, therefore, a lower cost production. I believe, but only time will confirm, it will also produce a better airplane.
This same use of product design team and paperless documentation is now being used in the development of modern fighter aircraft, including the F-22 and the F-18E/F, right here in St. Louis.
We know that these kind of changes will save time, money and headaches. And the challenge now is to implement these changes quickly. Our effort to cut red tape must not itself get tied up in red tape. So acquisition reform is a major undertaking because we are attempting to do something no less than change the culture of the acquisition system, getting our acquisition work force to think about their jobs in an entirely new way and developing an entirely new way of cooperating with industry.
So acquisition reform is very difficult, but it is also very important because it will save money that we need to pay for our modernization program in the future. But also it is important because of a new phenomena which we are observing in the Pentagon known as "technology pull," which is a result of our experience in Desert Storm.
Before Desert Storm, many of our military commanders were skeptical of advanced technology. It was very hard to sell them on the idea of what we called in the late '70s and '80s "the reconnaissance strike force."
This reconnaissance strike force was a combination of stealth aircraft, precision-guided munitions and advanced surveillance technology. This was developed and deployed in the '70s and '80s at the time to offset the superior numbers of the then-Soviet forces.
At the time, many commanders were worried that such advanced technology was too fragile or that it would not work in the "fog of war," that it was strictly a laboratory curiosity. But in Desert Storm, this very reconnaissance strike force essentially dismembered the vaunted Iraqi military force with very low losses to the U.S.
Skeptics became believers. They have seen the power of advanced technology, and they are now spreading it to new sectors. It's not just smart weapons now. It is also smart logistics, smart intelligent systems and smart communications. Our commanders are revising their doctrine and tactics to take advantage of this new technology, and they want to pool it faster into their war planning.
The technology underlying these revolutionary new military capabilities is being developed at a breathtaking pace, but not by the Defense Department. This new information technology is being developed by computer companies, by telecommunication companies, by software companies, by dual-use technology firms, by small high-tech businesses and by universities.
We cannot draw from these sources without reforming our acquisition system, because the current system limits our access to these sources -- either directly by throwing up regulatory barriers or indirectly by slowing our ability to purchase and employ new generations of technology in a timely way. We need to do more business more like commercial industry and do more business with commercial industry. The most advanced technology is coming from commercial industry and driven by the commercial market.
So acquisition reform is not just about saving money. It is the only way to get the technology our military commanders need and the technology that will give us a decisive edge on the battlefield; the kind of technology that's coming out of high-tech companies in San Francisco, Seattle and Boston and, yes, in St. Louis.
In a speech to a naval banquet at the turn of this century, Willard Duncan Vandiver said, "I come from a state that raises corn, cotton, cockleburs and Democrats, and frothy elegance neither convinces nor satisfies me. I am from Missouri. You have got to show me."
Today, a century later, Missouri is a state that raises new technology and new companies and new hope for a better future. The Show Me State is showing the nation how a region can pull together, roll up its sleeves and put its talents and resources to work for a strong defense and for a strong economy.
As I flew into St. Louis this morning, it seemed to me that the Gateway Arch is shining brighter than I've ever seen it before. Thank you.
Q. Is defense procurement headed toward fighting the smaller, or regional, conflict -- the so-called low-intensity conflicts -- that many planners expect? Have procurement rules and procedures been changed with that in mind?
A. During the Cold War, we planned our forces, our R&D [research and development], our force structure, around deterring a nuclear war with the Soviet Union and around fighting and winning, if we had to, a conventional blitzkrieg in Central Europe. All other potentials of conflict, regional conflicts, for example, were considered lesser included cases. That was during the Cold War.
Today, we no longer envision a nuclear holocaust, and ... we have reduced 80 percent of the nuclear forces that we had deployed, leaving a small 20 percent for a hedge. And we no longer envision having to fight a major conventional war in Central Europe. That's why we're able to take 200,000 of our military forces out of Europe.
And so that's no longer driving our planning. Our force structure, our R&D, all of our planning today is based on a different assumption, which is that we would have to fight a major regional conflict. In fact, our planning is based on having sufficient forces to fight two nearly simultaneous major regional conflicts.
What is a major regional conflict? A Korean War -- repeated years later -- would be a major regional conflict. Desert Storm was a major regional conflict. We don't imagine you would have to fight two at once. The reason we plan our force structures around two is if we get involved in one, we want to be strong enough still so no one would be tempted to take advantage on the belief that we had tied up all of our resources fighting that first war.
This is not academic. Last year, we were challenged on two different occasions, both by ... North Korea and by Saddam Hussein again -- in North Korea in June of last year and Saddam Hussein in October. In each case, we were able to deter any military activities from occurring, but only because we had the forces sufficient to do that and the political will to deploy them quickly and show a clear sign of resolve that we were prepared to use them if necessary.
So our planning then -- to give a simple answer to the question -- our force structure and our R&D planning, the budgeting today is planned to deal with two major regional conflicts, and that the other activities -- the peacekeeping activities, the humanitarian operations -- are now the lesser included cases. Anything we can do, as long as we're capable of dealing with the two major regional conflicts, we almost automatically have the force capability we need to do that.
We have directed some of our exercises -- we have directed some of our training -- to prepare for peacekeeping operations. But our force structure and our planning and our R&D and our equipment is to deal with two major regional conflicts. Indeed, when we went into Haiti, and if we go into Bosnia, we'll be going in with forces capable of fighting and winning a war if we have to.
If we go into Bosnia, which could well happen if there is a peace settlement there, and we go in as a peace implementation force, we will go in with about a division of very first-rate, highly ready, highly trained, well-equipped combat forces with rules of engagement that enable them to fight if they have to fight. In short, we will go in so that we will be the meanest and toughest kid on the block so that nobody will want to start a fight with this. We don't go in with a feather in our hat, we will go in looking like a real military operation, even in a peacekeeping operation.
Q. Mr. Secretary, you've been talking about defense drawdowns - an interesting question. Why is Congress appropriating more money for defense than the Pentagon has actually requested? And are you upset over that?
A. I was upset over the version of the defense appropriations bill which had originally come out of the House Appropriations Committee and the Senate Appropriations Committee. I expressed my concern clearly, and I hope forcibly, to those committees in a long, detailed letter and in meetings with the committees, and in the conference that they had a little more than a week ago, they made substantial changes and basically accommodated most of the concerns that I had.
So I think that there are many good things about this defense appropriations bill in its present form. It does have $6.6 billion more than we requested, and that's a problem, of course, not for defense, but is a problem for all the other appropriations bills, because that comes out ... of those other appropriations bills. And the president is rightly concerned about not having the right balance in the appropriations bill.
I will say this, though, for that $6.6 billion, with the exception of the B-2, which was put in against my explicit advice and request. But with the exception of the B-2, which was about a half a billion dollars, all the rest of that money were programs which we had requested in our five-year plan. They simply moved them up to procure them at an earlier date. And in addition to that, they put in money -- something over $600 million -- to accommodate contingency operations already under way that were going to be extended into the next year, but not funded in the budget.
So there are many positive aspects to the defense appropriations bill. And the issue of whether that bill gets approved in its present form relates not so much to the content of that bill, but how it relates to the other items in the appropriations bill.
Q. We have a pair of questions on this, both concerning what someone called the Son of Star Wars, where many in Congress want the missile defense system restarted again. What's your position on that? Do you think it's necessary? Do you think the Pentagon needs to spend the money on something like that -- on R&D and on deployment or something like that?
A. I have been, for years, opposed to the program which was called "Star Wars." I announced my opposition to that the week after President Reagan announced it in 1983, so there's no mystery about what my position on that is.
Now the reason I'm opposed to it -- then, and would still be opposed to it today -- is the original objective of that program, which was to be able to defeat ... thousands of warheads and tens of thousands of decoys attacking the United States, was beyond the technology, as I understand the technology, and would have cost hundreds of billions of dollars even for an imperfect system. So for those reasons, which I said I've fiercely and loudly sometimes expressed through the years, I was opposed to Star Wars.
What is being proposed today is not Star Wars. It has neither that objective nor does it have that technical limitation. What is being proposed today is a ground-based interceptor system with a space-based surveillance system, which is a reasonable combination of how to perform those two functions whose mission it is to defeat a limited attack -- several dozens of warheads -- against the United States, if sent by a rogue nation or by ... You can imagine the scenarios. I won't articulate them for you. But, in any event, it's several dozen missiles. That mission is quite achievable with present technology, and it's achievable with several tens of billions of dollars, not several hundreds of billions of dollars.
So in the request which we made to the Congress, we had two different elements of ... the missile defense program: what I would call a robust program directed to defend U.S. military forces against tactical ballistic missiles like the Scud or later generations of the Scud missile. And I believed then -- and I believe now -- that that program is important to our security, and I strongly support that.
The second element of the program we had was a ground-based intercept/space-based surveillance system against a limited number of missiles directed against the United States. And that is the area where the Congress has made a several hundred million dollars addition to the program we requested.
The only difference between us and the Congress is an issue of timing. I do not see that threat as on the horizon today, and so I think we'll move the program along systematically. When we see the threat emerge, we can move very quickly to get a deployed system. They want to commit to the deployed system today, and, therefore, they put in extra funds to accelerate the date of deployment.
So, there's not a philosophical or technical difference between us. It's a matter of judgment on the timing of how quickly we have to move to meet this threat. ...
Q. And a final question for you, Mr. Secretary. What do you think the outlook is for any Russian-American cooperative programs in defense?
A. We have already Russian-American cooperative programs in defense. I'll list just a few of them. There's something called the Cooperative Threat Reduction program, also known as the Nunn-Lugar program. About a half a billion dollars a year from our defense budget for the last four or five years has gone to this Nunn-Lugar program.
The purpose of it is for the United States to help Russia, Ukraine, Kazakhstan and Belarus to dismantle the nuclear weapons and the nuclear infrastructure which they formed during the Cold War -- not just nuclear weapons of mass destruction; it also applies to, for example, to chemical weapons.
This program has been very successful. We are dismantling about 2,000 warheads a year. We're helping the Russians dismantle about 2,000 warheads a year. We have dismantled 600 bombers or missile launchers in the last year. All of this has been something which the Russians have agreed to do under a treaty, and we are helping them in accelerating that process because we see it in our security interest to get rid of those weapons.
We have been challenged by some in the Congress as to whether this is an appropriate use for defense funds. And I call it defense by other means. This is the way of dealing with a very real threat to the United States. These 2,000 warheads that we dismantled last year, the previous year, had all been aimed at United States targets. So I thought that this was a pretty good use of money.
In addition to that, we have conducted joint exercises with Russian forces on at least four or five occasions. Now these have not been military exercises designed to perform military missions, but exercises designed to perform peacekeeping and humanitarian operations. The last one occurred in Hawaii, just a little over a month ago. And the Russian and American naval and Marine forces joined in an exercise which simulated a tsunami -- tidal wave disaster -- in Hawaii, and the two forces were joining to provide the humanitarian relief to that. And the year before that, the same Russian and American forces, joined by Canadian forces, did a joint exercise in a search and rescue operation in the North Pacific.
We are scheduled -- and I hope it will occur ... to have a joint exercise with the Russians at Fort Riley, Kan., in just a few weeks. And this will be a joint exercise in a teaming and a peacekeeping operation. So we do have quite a bit of cooperative activity with the Russians.
We also have very substantial differences from the Russians on matters of policy important to both of our countries. The Russians ... agree with our objectives in Bosnia, which is getting to a peace settlement as soon as possible and holding down the carnage in the meantime. They disagree with the use of NATO forces to accomplish that purpose. So we have a clear disagreement about how we should proceed in Bosnia. We are proceeding the way we think is right, but we are getting a lot of objections from the Russians on that.
They also disagree with the move we are making towards a gradual expansion of NATO. They see that as a threat to them. I've done my best to convince Russian leaders that NATO poses no threat to Russia. And, indeed, we have invited and made Russia -- accepted -- to be a member of NATO's Partnership for Peace. And we've urged them to be active and more vigorous participants in that so that they can be a part of this whole security architecture in Europe.
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