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Under Secretary Chu Meeting with Reporters Hosted by the Defense Writers Group

Presenters: Dr. David Chu, Under Secretary of Defense (Personnel & Readiness)
May 30, 2002

(Meeting with reporters hosted by the Defense Writers Group)

Moderator: Welcome to Dr. David Chu. He's the Under Secretary for Personnel and Readiness. Years ago before that, the PA&E Director at the Pentagon.

We're on the record as we always are.

We were talking when you came in about the question of end strength and the apparent desire on the part of all the services to get more of it. I guess that's being analyzed at this point. You're involved in that, as to whether it's necessary and practical. I wonder if you could take a few minutes and talk to us about that subject and how you're going at that, how the services are going at that to prove that they need the extra end strength. And if the determination is that the services need an additional one percent or two percent or whatever it turns out to be end strength, how difficult will that be to achieve in the current recruiting environment?

Chu: Let me first say it's a delight to be with you.

To this question of end strength, the Secretary reflecting, I think also is the President, recognizes as the first principle that our people are really the heart of the organization. I think that's something the country saw demonstrated ten years or more ago in the Persian Gulf War where both sides had quite excellent equipment but I think in many people's judgment the decisive advantage of the United States was that our people were so much better trained, motivated, led, and could exploit the advantages of the equipment. So ultimately it's the quality of our people and their preparation that I think is the key to long-term military success.

So the Secretary's approach to people issues from the beginning has been to emphasize that they are his and the President's first priority. You saw that in the decision the President made to set aside additional monies in fiscal 2001 for a targeted pay raise. He did it again this year, or requested it again for fiscal 2003, and the Congress I think is going to vote that.

At the same time the Secretary is a prudent businessman and his standard is that while you may need additional people in some areas, and that's certainly the case, force protection people like to call it, i.e., the new security arrangements that are so much on people's minds since September 11th, intelligence is another area that has a big increase in personnel demands. The Secretary's challenge to the military departments is where are the low priority areas that perhaps don't rank so high? This is not just an open checkbook. We've got to do the right thing by our people. One of the ways that we preserve our ability to do so, have the funds to fix the housing, pay for the child care, be sure that composition packages are competitive with what they might enjoy in the civil sector, is to be prudent about how many people we have and how we use them.

The department in some areas still has, I would have to confess, a bit of a draft-era mentality. You go to a military post -- as one of you I think noted, the Secretary said we have to be careful about how we use people, then you go out afterwards and see the GIs cutting the grass. That's not something the Secretary is sanctioning. We can hire someone else to cut the grass. That's the challenge the Secretary is issuing to the military functions, the department as a whole.

We are therefore looking at a whole series of steps, recognizing in some areas the military departments need more people -- i.e. in certain skill areas we do have added demands. The issue is in other areas could we reduce either the explicit demands of people or the implicit demands? So we're looking at issues like our overseas commitments across the board. The Secretary's poster child example, as you all know in this context is the Sinai battalion. He's very caustic about the fact that the United States some time ago agreed to provide the support for the entire Sinai operation. So his [shorthand] is, you know, we've got 300 cooks. That's not quite true, but we do provide 700 personnel as part of the total to support everybody else.

Obviously when the Sinai battalion first went there there was a real need. I've never been, but as I understand it -- maybe some of you have seen the physical layout -- you kind of look down from the observation post and this used to be all desert. Now there's a high-class luxury resort, a beach down there with people swimming and so forth, and the Secretary's question is why are we still here? Just to illustrate the manpower demands that creates, a battalion of the 101st Airborne was scheduled to go to the Sinai pre-September 11th. Obviously after September 11th that was considered to be not perhaps the right wise allocation of resources, so we mobilized a battalion of the Arkansas National Guard, which is doing just fine, playing this role. I have to praise the willingness of the individuals to suddenly change their life plans and report for duty to the Sinai. I'm sure it's not something anyone who had signed up for the Arkansas National Guard really thought he or she was going to do.

So we're looking at overseas commitments. We're looking at whether there are billets that are currently filled by military personnel that could be filled by civilians or by contractors. We've had various inventories, as you know, of commercial activities in the department. There are over 50,000 billets involved that are coded as feasible to be filled by non-uniformed personnel.

We're looking at issues of whether all the missions that we once thought were high priority for the military are still the best use of the nation's resources. Some missions fall in priority over the years and perhaps we should revisit whether we need as many units in that particular area as we once had.

We're looking at issues like streamlining the headquarters. The Secretary is intent on meeting the Congress' challenge that we cut management headquarters as that term is defined in the statute now, by 15 percent. That's a total, that's close to 60,000 people. So if you succeed in getting 15 percent out, we've got about five or six percentage points out thus far. That's against the base at the end of fiscal 1999, which is all defined in the statute that directs this, that's 9,000 billets, which covers a fair amount of people. And so on down the line.

So there are a series of groups working away, I don't want to be naive and pretend that all these proposals of how we do this are popular necessarily, but the Secretary is bringing a very hard-nosed approach to this and challenging people to identify the low priority things we could give up so that there are sufficient funds to ensure that we do right by the people we have, and also sufficient funds so you can carry out all the other responsibilities in the department including transformation.

We all recognize that much of the department of course would always like a larger budget but there are limits to what the President's budget is going to be. If we consume our resources imprudently in manpower that is not really essential not only do we demoralize people, because no one likes to do a task that isn't a high priority to the organization, but we also are being wasteful of the taxpayers' money and not spending it in the way it needs to be spent in the years ahead.

So that's a behind the end strength issue. It's by, as you've all seen, and this is public drama now, there's some good-natured grousing by the military departments about why can't we have our end strength increases. The Secretary is holding people, quite properly, to a high standard. We'll talk about increases once you've shown me that you've really done your due diligence, done your homework, on how you can give up things that are low priority. Of course our objective in the best of all possible worlds is to find enough savings that net, at least in the long term - there may be a transition period where it comes up and then comes down - net, we come out zero in the long term.

Moderator: Is the presumption then that if the services do demonstrate due diligence and they do show that they have prepared to peel away the low priority items and they still have a requirement, is the presumption that the end strength will increase?

Chu: The goal is to see if we can identify enough low priority stages --

Moderator: I'm saying that if it doesn't happen, then is the answer yes?

Chu: I think it would be a bad incentive in terms of these reviews to start off by saying if you don't do your homework you get a pass. The right way to do it is to say no, no --

Moderator: But there's a presumption here.

Chu: There's a limit here, guys.

Moderator: You stated a presumption that there is an offset. What if they go through all of this and there is not an offset. Then is the answer yes?

Chu: I'm going to avoid saying that. I want to emphasize this.

I think you can see that we are always attentive to the first priority which is - do we have the resources, the organizational [operations] to carry out whatever the President and the nation direct. You see then the fact that we have mobilized over 80,000 Reserve personnel. As of this morning about 75,000 so-called involuntary mobilization orders, about 10,000 of what people call volunteers and we have about 2,500 - 2,700 left in the airports. Then there's the Border Patrol, INS, a little over a thousand.

So if we need more manpower obviously the department will request it, but the way to get to the kind of outcome, and this is a particular number as a net figure the Secretary probably is aiming at, is to insist that we really are going to try to make it come out to be a net of zero. In other words the onus is on you, the various components of the department, to think through where using manpower, where you perhaps don't need some people.

Let me give some good examples. The Navy, in fact the Service Times just this week had a nice article on this on the amphibious ship that is looking at roughly a ten percent lower manning level as an objective. For some years now the Navy has been looking at crew size. Can it get by with smaller crews? A lot of the crew size at the margins, people here know, is determined by damage control practices. Could we do things differently? Would modern, with the substitution of capital for labor, design the ship differently, and so forth, which is of course an issue with new ship design, allow us to have smaller crews that we had before. The Navy is trying to bring crew size down and I think that's another kind of changes that we can make in the department.

It does take the institution a long time to change its culture. This isn't an institution which like in the draft era did view, especially junior unskilled people as free. You could always draft a large number, you didn't pay them very much, and in budgetary terms it didn't cost you much. That ended 30 years ago, but the practices, Richard Danzig, the last Administration's final Navy Secretary, was very eloquent on this point. The practices that are inherent in that set of rules of the game die-hard. Chipping paint. That was Richard's favorite example. Why are we chipping paint? Why can't we get paint that doesn't need chipping? [Laughter] I'm not chemist, I'm not a chipper, or to hire contractors --

That's the nature of the --

Q: I wanted to ask you on the anthrax vaccination policy. I know the final product hasn't been announced but I was hoping you'd give us some idea of, the outlines of how it will be arranged, maybe perhaps starting with if the goal fell to eventually vaccinate everybody on active duty [inaudible]?

Chu: I think, as you know well, we need to start with where we are now as opposed to where we were four or five years ago when the policy was everyone will get vaccinated.

The events last fall were really a wakeup call to the country about the possibility of biological agents being used as a weapon of mass destruction and therefore this is no longer just a military personnel problem, this is also a national problem. While we are still debating the details here, I think what you will see in the end is that we will set aside a major part of what vaccine is available to be sure that we can protect the civil population of the United States.

I don't want to start a rumor here, we're not going to vaccinate the whole population, but as you know, for those of you who have not had the need to look at the details of this -- I'm no physician so I'm just repeating my tutorial here. What the tragic events of last fall demonstrated is that antibiotics in combination with post exposure use of the vaccine does have a very good therapeutic result. So some important part of the stockpile that we have, I anticipate, is going to be set aside to protect the civil population.

So the issue of what we do about the military personnel has to be set in the larger homeland security context. What can we do to protect the whole country? We only have, we have a quite significant stock of vaccine. The sole producer in the country has passed his re-licensing with the FDA, which is an important milestone, and is producing at this very moment.

My anticipation is that in terms of who in the military indeed is vaccinated, that we will continue with what is the implicit policy at the moment, which is it's a risk-based set of decisions. As you know, what we did in the department as the vaccine supplies shrank was to commensurately shrink the vaccination policy to those at the highest risk. So that includes people who actually handle, potentially, anthrax agents or laboratory personnel, special forces personnel, so on and so forth. And my suspicion is that while the specifics of who that affects and where you're going to draw the risk line is going to be a function of what you think the threat problem is and what you think your supply situation is. That principle will continue as we go forward.

What that implies is that I don't think we're going to see any early return to just vaccinating everybody. That's not a very prudent policy in these circumstances. Again, because the first principle, we've got to protect the entire nation; and the debate about what the specific requirements in that regard might be is still ongoing, my forecast is a significant part of the total stockpile is going to be set aside to protect the civil population of the United States. There will still be a substantial amount for the military. My anticipation is that we will use a risk-based approach as we're now doing. So this is not a change, it's a continuation of the current policy effectively. It becomes therefore a matter of degree. Who do you think is the highest risk? How do you decide that? And I recognize judgment is going to differ in that regard.

We're very pleased, as you know there's been a long debate about the safety aspect of this vaccine. The Institute of Medicine did a big report very recently that reviewed the literature; some of the nation's best experts gave the vaccine a very high endorsement in terms of its safety and efficacy. At the same time this is an older vaccine design, on the order of 30 years old or so in terms of its science. There have been advances in terms of what we can do. The Department's working energetically on a new generation of anthrax vaccine that would specifically require fewer doses. This is a vaccine that requires a number of injections in order to be fully effective.

There are also, under the rubric of CDC's leadership, tests going on to determine if the present vaccine, which theoretically might give substantial protection with fewer than the full six doses now required over a long period of time, whether fewer would give substantial protection. We'll have the results of that experiment in another year or two, which is another important ingredient in terms of what is your overall policy. If it turns out that let's say three injections given at time zero, two weeks, four weeks, which is the first three in the current series that requires six at the moment, does indeed give the measured protection that the theoretical calculations suggest it might, then, affect what your long term policy is.

So what we do now is merely just one more step along the journey here. In the intermediate term we have this issue of how many shots are enough. On the long term the issue is can we indeed succeed at making a better vaccine. The department's been working on that for some years. Most estimates are that we are taking into account the testing regime we put this through. A big part of the total time elapsed, we're probably three to five years away from a new vaccine.

Q: A quick follow-up, have you, you referred to drawing the line. In the shorter term, let's say, where do you draw the line between who has the biggest risk? Have you determined in any sense who those people are? For example, people who are deployed in certain geographic areas?

Chu: I think until the decision is made I don't think I'd want to comment on how we're going to do it. It would be premature on my part.

Q: All the studies the Administration did when it first came in, you looked at the overall personnel management of things, there were questions of whether [inaudible], a longer period in billets, particularly on commanders and that sort of thing. It's been a year plus. Where are we? Is any of that stuff going to materialize? Have you decided it's not workable?

Chu: I think the short answer is yes. Indeed, over the longer term, let's say the next several years and beyond, what those studies really point to, I would argue, is the department needs to take a strategic view, basically, of its human resources -- both civil and military. We have actually been in the process and I hope that by the time we get through testimony next year we can sort of unveil, as it were, creating a set of strategic human resource plans. One for the military, a different one for the civilians.

On the military side it incorporates a review of all the issues that you mentioned, and let me come back to that in just a second. On the civil side, quite candidly, we are starting at a much lower level of knowledge. Civilian personnel management in the federal government for a long time has been very reactive in character, largely decentralized so you have a set of rules for the game, you give them to local managers, you hand them a pot of money and say you go out and hire the people you need. We have decentralized shops that classify jobs, and so on and so forth.

We don't have for the civilians even the most basic knowledge, what's the supply of people to federal service look like? If I changed federal pay schedules how many more people of the qualities I want would sign up? That's something we've now studied on the military side for 30 years. We have all sorts of estimates. I don't know how good they are, but we've also said what's going to happen if I change pay policy, if I do X versus Y. On the civilian side we don't have any of that material.

We're just beginning to do basic analytic work that includes answers to questions about what's the probability that if you're eligible to retire next year you actually will do so? That's critical for workforce planning. The bottom line is, until now the federal government on the civilian side hasn't done workforce planning. We have sort of satisficing, let me borrow that term from the organizational behavior literature approach to how we manage our civilians.

The conclusion is that is not satisfactory, for a variety of reasons, including the quite practical fact, as many of you have reported, that within five years half the DoD and half the federal workforce as a whole is eligible to retire. We have a very imbalanced age structure in our civil workforce, so we need to get our arms around that problem. We need to go over what we want to do, and that starts with deciding what do we want.

On the military side, again, we have a set of views as to the number, quality of people we want, what training they should go through in order to prepare them for their jobs. On the civil side training is well, if you want to go to training you go find a program, you largely pay for it yourself. We offer some tuition assistance, but if you want to get a graduate degree program so this department, and I suspect other cabinet departments aren't much better, aren't terribly friendly toward that objective. It reflects an old view of how you should staff the civilian arm of the federal government.

The third leg of this stool, so to speak, is a recognition on our part that how we treat our personnel is more than just a matter of what we pay them explicitly. There's a whole set of understandings that you reach with the people who are part of your organization, what you might call the social compact. Although I grant that's a term the military services don't particularly care for.

But I think it's a useful phrase because it captures the notion that when you sign up to be a part of the military or to be a civilian employee of the Department of Defense it comes with a variety of explicit and implicit agreements as to what the conditions of your life are going to be like. So for the military side, for example, it means you're going to agree to let us move you around a great deal, often on short notice.

Now we need to offer something that deals with that situation just for the problems it raises. One of the problems it raises for military families is your child is disadvantaged in most school districts because he or she never shows up for the athletic tryouts or the cheerleader tryouts or the band tryouts at the right time of the year. Worse, each school system has a different set of prerequisite requirements for graduation. So some kids wind up taking the same stuff twice, other kids are forced suddenly to learn about the history of State X, having already learned the history of States Y and Z because that's that particular state's requirements for graduation from high school. It's a big problem. We're just beginning to get our arms around how we deal with that problem.

The same thing is true on the civilian side including issues of is it okay to telecommute and so on and so forth. So we have a part of this strategic effort started to address what should those understandings be between us as an institution and the people, both civil and military part of it, and how should we handle these issues?

This is an ambitious set of undertakings, we'd acknowledge. That's one reason you haven't seen results, because I think we're trying to take the view that these individual decisions are all part of a larger system. The reason we have careers of the length we now have, as you know, derives historically from the decision the American military made after World War II on the lessons of the 1939, 1940 Army that emphasized up or out as a paradigm for promotion, for personnel management, especially of the officer corps; and that it wanted a relatively useful vigorous set of people in its ranks. It did not wish to repeat the story in the history books of the kind of situation that General Marshall confronted in 1941 when he called the flag officer whom he wanted to take charge of the western defense of the United States on December 8th, and the officer, according to the legend anyway, says I'll be delighted. I'll be ready in about three months. It will take my wife that long to get all our things together. And Marshall says take your time, you have all the time in the world. You're retiring. The wrong kind of mindset for the problems and issues facing them. So the pendulum swung to one in the extremes of how we do things.

I think some of the challenges Mr. Rumsfeld is offering is whether all the circumstances of that period still apply. First of all, people are a lot healthier than they were in 1946. The health status of the country has improved. People live to much older ages in much better physical shape. They take better care of themselves than they did in that period of time so it's quite physically possible to live longer. We're also a much more technological organization so we have many posts that emphasize what you know and what you've experienced, not just are you still able to run a mile in under six minutes.

At the same time we have a compensation system that is tuned to the early post World War II paradigm. All our incentives, promotion rates, pay amounts, are structured, aimed at getting people to stay 20 years and a few more, but not a lot more. So if, as pointed out by the Secretary, some people stay a lot longer, there are going to be some people who stay a shorter period of time. Again, there are so many man-years a person is going to have in the organization. So you can't just -- You could just change one element of the system and see what happens. That would obviously not be a very good way to manage the organization so you're going to need to bring all these things together. The same thing is true with tour length. Why do we have the tour lengths we do? Well, a variety of reasons. One is we've got a lot of overseas commitments, still high relative to the total size of the armed forces. Most people don't want to spend their entire lives overseas, and it's probably also not wise in terms of people starting to forget the large organization of which they're a part. So if we say well you're only going overseas for, let's take Korea, which is an unaccompanied tour for one year, that immediately creates turbulence in the system that you have to deal with.

Some of it's because of our personnel practices in terms of how we manage schooling, how long schooling is, the fact that it's all done in the classroom, very little by distance learning on the web. A coming set of technologies in the civil sector. Some of it's because of the way our base structure looks.

The Army, for example, typically has the major schools at Post A and the major force units at Post B. If you would like the non-commissioned officers to serve in both posts, both types of positions which you probably do for larger, valid reasons, you immediately engender a certain amount of movement turbulence in the system. You've got to move the sergeant from Fort Knox to Fort Hood and vice versa, in order to be sure that he or she have served both at the school post and taught people as well as served in the troop unit. Changing all that is not something that you do overnight. You want to do it in a thoughtful way and there are probably other parameters that come into it.

My belief is you will start to see in what we send to the Congress next year the first outlines of how might we deal with these problems strategically. I think the real import of all those studies was this is a strategic set of problems. That is, by the way, not a new conclusion. The Defense Science Board some years ago urged the department to develop a set of strategic human resource plans and that's really the task to which we have set ourselves.

Q: Just briefly, is there any consideration of letting the services differ somewhat, the Navy and Marine Corps because of the rotational policies sometimes gear themselves differently than the Air Force and the Army. Are you thinking of a universal --

Chu: No, absolutely. I think there's a lot of merit in allowing, within reason, variations across the service, even within a service. Within the Navy you've got the submarine community, you've got the surface warfare community and so on and so forth. One size does not fit all. And moreover, it is a lousy way to find out what might really work. In many of these areas I think we have to be realistic about the limitations of our predictive capabilities. We may think that X is a great policy. It may turn out not to be so great upon our closer examination. We are advantaged, I think, if we allow service differences to occur because then you have some actual experiments. You have people trying out different policies, you can see which one is actually the most effective. And the result eventually may be exactly as you suggest, that Policy A fits the Army well but does not fit the Navy and it should be allowed to have some differences.

Q: It's fairly well documented the stresses within certain career fields in the Defense Department in the last four or five years -- pilots, air traffic controllers, computer workers, etc. Where are the stresses in the system right now that concern you right now and are there some that are not particularly well known, perhaps, that you're paying attention to?

Chu: First I would want to emphasize how well our people are doing under often very challenging circumstances, frequently doing things that they didn't expect to be doing a year ago at a pace they didn't expect, and I think it's remarkable, using your material as my sort of litmus test, how few complaints are heard about what people have to put up with post September 11th. That's not just people working longer hours. They've often suddenly been sent some place else, Central Asia. Often they and their families suffer significant inconvenience. All the force protection measures around the bases. There were long lines at many base entrances for a period of time until we got that better managed. And perhaps most, to your specific question what's the most difficult problem, I think the most difficult problem to manage is uncertainty. The fact that we can't predict exactly what's going to happen, who is going to have to go where, do what, etc. The degree to which the military personnel individually and their families generally are coping well with this I think is worthy of considerable praise. And many of you have written excellent stories about how people have dealt with this, including most especially the reservists called up, often at significant financial sacrifice.

I think it was the Post that had a story just this week about the family in the Midwest who just had quadruplets and the wife had to therefore quit her job and the husband is a master sergeant in the Army Reserve, I believe, and has been called to active duty. So they have a rather difficult situation on their hands. They're not maybe the standard deviation case.

I don't think it's fair to offer invidious comparisons of one group versus another or say that one group is somehow having a harder time of it. There are many dimensions to this.

It certainly is the case that the people who have to provide security are working much longer hours than they did before. That's one reason we've mobilized so many reservists in this area. It's one of the reasons the services are demanding additional people, to relieve some of that pressure.

I think one of the less sung about heroes, if I can encourage stories in your choice set, is people who provide the air bridge. One of the great stories in the United States is the ability to reach out and touch people and that depends critically on air transport. It's not just the air cargo aircraft, but also tanker aircraft.

You look at some of these operations, they are an extraordinary ballet of coordination to get our people and materiel from the United States to Central Asia. It's a long distance. You look at how many refuelers it takes for example, we sent A-10s to Central Asia. Do you know how many refuelings it takes to get an A-10 to Central Asia? It's both a challenge for the A-10 pilot as well as a challenge for all the tankers to show up at the right place, the right time, so on and so forth. Granted, it's not as [inaudible] as dropping a bomb on the bad guys but it's essential in terms of how we function. It's part of the operation that is not going to let up a lot. Just because we have fewer headlines about operations in Afghanistan, it's part of the operation that is going to go on at a high pace. I think in terms of groups that deserve a little attention, I would nominate all the people involved in the air bridge. That includes both active and reservists.

The reservists have been very important in our ability to keep that bridge strong. The pilots, the crews, etc. who have done that. That is not a task that is going to end suddenly, even though we will bring the number of reservists I expect on active duty slowly down over the next six to 12 months.

Q: Be as specific as you can be. There's been a lot of talk about "stretched thin." We'd be stretched thin in the event of another major regional contingency. When you were at PA&E the commanders openly talked about in the event of two MRCs we'd be stretched thin. As you say, tankers, F-117s, radar jamming equipment, airlift, sealift, intelligence assets. Are those the things that would be stretched thin in the event if there were an MRC today at the same time that we're in Afghanistan?

Chu: I have long objected to this stretched thin paradigm as a way of thinking about the problem because it's not the reality of both how the department plans and how in my judgment, at least, the military commanders approach their responsibilities both now and historically.

Let me take an old phrase that the Army used to use as an illustration and that is ammunition discipline. You go into a fight, you only have so much ammunition. You could say that I was stretched thin on my ammunition, but you can only bring so much forward at any one time.

Your responsibility as a commander is to decide how am I going to use that ammunition most effectively? I may only have so many rounds of the best type; I may have a larger stockpile of rounds of a lesser quality. Obviously I want to use my best material against the highest priority targets.

I think this stretched thin paradigm is the wrong way to think about the problem. There are assets that are in high demand no matter what we do. You identified some of them, especially those involving tanking. The department's responsibility, the Secretary's responsibility, the commanders of the major unified and specialized command's responsibility, is to decide how to use those assets most effectively. To be sure that they are not being frittered away on low priority tasks, even though those may be traditional usage and even though, and this comes back to the kind of Sinai battalion challenge the Secretary is issuing, even though various parties are upset if we change their current allocation.

So I think the way I would answer your question is, if it comes to another major operation, what's going to happen is that assets will be redeployed in a manner that's consistent with the priorities at that moment. That's true for the United States in every conflict the country's ever fought in. We all know the history of World War II and the strategic decision Roosevelt made that Europe would get first priority; the Pacific theater and its commanders, MacArthur especially, complained bitterly throughout that conflict that they were shortchanged. Well, that's the other side of that coin.

But I think the way to think about this issue is all assets in some degree are in short supply. The issue constantly is how are we going to employ the assets we have against the objectives that the nation has set. It does mean that not everything's going to be done at once. That's not realistic. It does mean that you will do the most important things first and you will move on to other tasks. I think you see that in the way things are unfolding.

Q: Let's go back a little bit to the mobilization in Guard and Reserve forces. I think last week it edged up to around 84,000 and we see every few weeks, another increase of 1,000, - 2,000.

I'm wondering if you can give us a sense of do you see that continuing for the coming months or maybe in the next year? And you talked about the significant financial costs of some of these folks. Any sense when you start drawing down on the number?

Chu: If you plot the numbers, we actually keep track of this on a daily basis. You plot the numbers on let's say a weekly basis or a monthly basis. What you see is a curve, from your perspective, that looks something like this, where the origin over here is September 11th or 12th and the flat part up here is the present day. We've been flat as an approximate matter for about two months. It does go up and down. Part of the reason it goes up and down -- and the bottom line answer to your question is I don't expect to see, unless there's some other big event in the near term, not now foreseen, I don't expect to see any great increase in the number of people, the gross number of people mobilized.

We are in fact trying to honor what we said in September of last year which is although we have a legal right to call reservists for two years under the partial mobilization order the President signed, that we will typically call people for one year at most, and that was specifically to deal with disruption to their lives. There will be some people who will be called for a longer period of time, particularly for example in the airport security police community and a few other areas where we have such a high demand for personnel. But typically we want to honor the commitment that it is one year, we're going to send you home at that point.

So part of what you see going on in terms of the reported figures, and certainly the sense out there in the community is we are sending some people home as we are also mobilizing others. One of the difficulties in terms of looking at the daily numbers which is probably not the best gauge of what's going on. It would be more useful, the weekly and monthly totals, plotting on a weekly and monthly basis. The military services, understandably, would like some overlap. So if they are going to demobilize you, they'd like your replacement to come on active duty just a little early before you leave and to hand off to you, so to speak, or you to hand off to them whatever responsibility you're discharging.

So you will see some blip-up as that overlap process continues, but I actually don't expect to see any significant net increase. Now gross, since we're about to send, we're reaching the one year point for many people in the next few months. We're about to send a lot of people home. Gross, you will see a lot of people given orders to come on active duty.

We would, if the military circumstances permit, we would like to see the total number come down, and I think there is a reasonable chance of some modest diminution in terms of total number of people on active duty from the reserve community.

Q: The bottom line is most of those people will be going home around the anniversary time of --

Chu: Right. And then other things equal, you'll be mobilizing a replacement set of people to fill in. That sort of has already happened.

Q: One last thing. Are you hearing any griping from employers, small, thin fire departments, police departments --

Chu: Surprisingly little. I would have to praise both the individual reservists and the employers in this mobilization. We have had an extraordinary outpouring of support, understanding, willingness to put up with difficulties, accepting the glitches. We often are not good, I would have to acknowledge, about how far in advance we give out the orders, how much notice people get. We're trying to begin setting some standards for that sort of thing so it's fair to all concerned. While there certainly are some who have complained, it really is an extraordinary national effort.

Q: I apologize if I come across as kind of rambling. I've been trying to think about the best way to articulate this question.

But going back to the very beginning of your talk about how you felt that strategically the important goal now is to try and develop these plans to better manage personnel, I know that people in the Navy, I remember Richard Danzig talking about this very well, about the chipping paint business, the lawn mowing stuff, all these garrison duties that they ask soldiers and sailors to do when they're not fighting or when they're not drilling and training. But historically it seems like there was a good reason for some of that, because it gave sailors during the long dull crossing of the ocean something to do. It gave soldiers employment when there wasn't anything going on or they weren't assigned to a particular school. I mean it might seem sort of wasteful, but there was a point to some of those tasks.

So if you take that away, if you contract all that stuff out and then you don't make any dramatic cuts in the personnel to offset the fact that those jobs are now being done elsewhere, then don't you create a situation where instead of facilitating transformation in the materiel or the con-ops or the doctrinal sense or the policy sense of the department, you necessitate it because you have to get new things, new ways of doing business, new types of tasks injected into the mix to give these soldiers or sailors or airmen something to do when they're not drilling, when they're not training, when they're not fighting. How do you deal with that?

Chu: That paradigm disappeared, the paradigm in which you could argue effectually that the typical person in the ranks had a lot of dead time on his or her hands disappeared a long time ago, if it was ever there.

This is a highly technological institution now. It takes typically one or two years before you can reach journeyman status in your skill, sometimes longer. So the Air Force right now is suffering from a shortage of what it calls five level mechanics. People have several years of experience before they know what they're doing. So there's no shortage of things to do that are productive and that are focused on your military tasks.

Using military personnel to cut the grass or peel potatoes and so on might have made sense in the draft era. It does not makes sense any longer when you have a full plate of things for them to do to learn their skill and to learn it well and to learn how to employ it in the context of their unit, not just that they know how to turn the wrench correctly but that they know how to take an airplane that's arrived damaged from a mission and put it back in the air within a matter of hours. Working with a team of many other specialists to get that aircraft back in useable shape.

Moreover, from a strict economic perspective, military personnel are more expensive than civilians for a variety of reasons. So even if they didn't already have enough to do, it would not pay us, we should think about what military task we want them to perform, not have them, and you didn't quite say it this way but if I may characterize, use up their perceived dead time in tasks that we can hire someone else at a much lower salary without all the conditions of service for the military in order to perform. It's a huge waste of resources.

I think on average, while there are still those stories out there as one of you noted as the Secretary left the press conference, that people, soldiers were cutting the grass outside. [Laughter] [Inaudible] But it's one of the reasons that the American military is as good as it is, because it does concentrate its military personnel on military tasks. I think it's the explanation why so many other countries have come to school on how the United States runs the volunteer military in which we actually view, that's the big cultural change. The draft era, having served in that period of time, we tended to view I fear a young enlisted person's time as free and we had the sort of "busy hands are happy hands" kind of attitude. Let him cut the grass. We had people lining stones up and painting them -- [Laughter] This is all true.

Other people are coming to us now to say gee, this is a terrific, this is unbelievable -- Even the Russians, in the end -- the Soviets, while the Cold War was still on, were beginning to admire the American volunteer force paradigm. It is a paradigm that focuses the military person on military tasks, not on some other effort.

Q: I'd like getting your strategic review of sort of the whole personnel issue to talk about what you perceive as specifically how the Army's doing. For a lot of us who've watched it over a matter of time, in the post 1990 world the Navy and the Marine Corps were pretty well set up because they were deployable by their very culture and nature. The Air Force took some time but then went to the AEF forces and have become sort of a deployable force, to try to make the tooth-to-tail not so much when you're doing these constant deployments.

The Army, it's very difficult to see where they've made this transition. So they're sort of struck by frequently very small numbers of people who are deployed, for instance in Afghanistan, rippling through the Army force structure very dramatically because it's not set up to do these kinds of things.

Can you give us your perspective of has the Army sort of lagged, and the reason for that and where it can go --

Chu: I don't think the Army's lagged in that regard. It has lagged in terms of public relations. It does often the weakest job of telling its own story well. And that starts with this term deployed.

One of the interesting public relations battles the Army lost decades ago was having deployed be a naval vessel that sailed in the Mediterranean, but not an Army division that sat on the rock. Even though the personnel burden and personnel management challenge involved was just as great to have that battalion there as it was for the ship in the Mediterranean.

So if you look at Bleckman's book, Force Without War, he doesn't count -- he counts up deployments, but he doesn't count anyone who is stationed. This is an artifact of personnel policy, whether we claim you're deployed versus stationed. You're still out there. As far as you, the individual servicemember are concerned, you're still looking at the enemy. The fact that I code you as a PCS move, permanent change of station move, versus you deployed on a TDY [temporary duty] basis, that's a matter of how I pay you and various other personnel management elements. It doesn't change the military out on the ground, which is I have an American military unit out there confronting the enemy, deterring violence, and so on and so forth.

One of the problems the Army did have in the early post Cold War world is that because it had honed, and the Air Force to a lesser extent, its force structure and its personnel policies for units that went one place and the unit sat there and we changed the people in and out. Rather than the Navy model where we sent the physical machine back and forth so we counted that as a "deployment".

It wasn't as well organized both to carry out and to articulate to its local superiors what the effects would be if I have to move the unit from Point A to Point B.

I think one of the little known phenomenons of the deployment model which people praise -- [inaudible]. You can't send all 12 carriers every place, so that the political understanding between the Navy and the Secretary of Defense and the President, and between the Army and the Secretary and the President are different. The Navy's bargain says you can have four carriers at any one time, Mr. Secretary. Any place you want. But what people don't emphasize is I have four to eight carriers that I can't send any place. In fact I have several that it would be a terrible idea to send any place because they're being overhauled, retrained, etc., etc.

The Army in general for its force structure unit has taken the stand that every division has to be ready to go on short notice. Not just one-third of the division slice.

So I think in terms of this large debate over --

Q: That's the smart way to go --

Chu: That's another issue.

Q: Divisions at readiness that you don't end up using very often.

Chu: In the Cold War period we did use them all, they were all committed.

Q: No, not the Cold War--

Secretary Chu: As I said, but I think we have to understand that there is in the case of the Navy and the Marine Corps a substantial portion of structure that is not available to the President on short notice short of heroic measures to do so; whereas the organizational understanding with the Army is somewhat different, and the Air Force likewise. The major thought, whether it should be all or not is obviously a matter of debate, of its structure, is available for the nation's political leadership for military use on short notice.

What the Army is struggling with is should it change that bargain? Political leadership is also part of that equation. It's got to decide does it want a different bargain with the Army. The debate is not actually taking place in a very tidy way over this question of how you want to do things.

In terms of reaction to the new world we can -- in fact the Army organizationally, as you all know because you've written stories about this, does have one of the most ambitious agendas out there with its effort, Shinseki's transformation agenda which is several years old now. He's been Chief of Staff for two and a half years, he came into office and he said within six months -- this is November of his first year as Chief -- he said so much for tracks. I'm going to do wheels, I'm going to medium weight units, maybe the entire Army. This is a truly extraordinary set of changes. It poses substantial technological challenges including the fact that there's only so big a weapon you can put on a vehicle of 20 tons. There are issues like recoil you've got to deal with here, physics is involved in some of these things.

Q: Do you think he'll also have a personnel component that will match that real deployable force that they're trying to get?

Chu: I think throughout the Department what I would emphasize, and this is back to your question about longer careers, longer term and so on, that we recognize the need for personnel transformation that matches the physical or technological transformations we're trying to put people through which will change many policies often in ways I suspect we don't now anticipate what the effects are going to be.

Let me just mention one, it's not the Army so much, but one specific example in that regard.

One of the biggest challenges for this Department is how we get people in the information technology fields who are up to speed on the latest developments. And one of the issues we're debating is should we -- Our old model is we grow our own. You come in at a junior level, you serve for 20-25 years --

Chu: -- are going to agree to serve in a uniformed capacity but the rest of the time they're working for Microsoft or Oracle or whoever, the cutting edge software and IT firms might be. That's a much better way for us to have people who really know what they're doing in the information technology field.

Now in terms of personnel management the notion that you're a colonel who has only served six years on active duty, this is not something we're yet prepared to [accept] -- [Laughter] Thank you, that's exactly right. In terms of sociology of things. But we recognize we need to think about those alternatives and that it will be quite different.

Q: You mentioned that the Navy's hope or aim is to reduce crew size through increased automation, something that figures into their new ship designs. But given the kind of length of deployments that we've seen since September 11th have you also discussed with the Navy alternative ways of crewing ships, for instance rotating crews, as a way of making these lengthy deployments easier for sailors?

Chu: This issue of alternative paradigms is right back to your question about the Army versus Navy, for how the Navy manages its people assets and its physical assets has been underway even before September 11th. This is something the new Administration, the Navy, and as you know, as one outcome of that debate Admiral Clark has started this Project Sea Swap experiment which I think is a very interesting first step in that regard.

This is not a new idea. The special studies group at Newport Naval War College had some years ago done a report called Project Horizon or something like that which had put forward a similar idea. Of course for a long time in the ballistic missile world we did, in the Navy, we did things differently where we actually had more than one crew per ship which is the way any commercial firm uses a high value asset. You don't have just one crew per asset. The airlines don't have just one crew per airplane, they have many crews per airplane. So you use the physical asset as much as you can.

And to get back to the deployment issue, what you do is physically bring the asset "home", whatever home consists of, and recrew it and send it back out. What you do is you send a crew out to the asset, back to the deployment issue. We counter all the time that the ship was sailing back and forth in the ocean. Even though it wasn't in the Indian Ocean from a military perspective, it's in the Indian Ocean. If it's in Hawaii that's nice, but it doesn't do much for us in Central Asia even though we counted it that way in terms of the way these things are done.

So yes, there's a very energetic debate going on about how should we think about the crewing of these vessels. And it's more than just the strain on the personnel, it's how to use all our resources intelligently. Because obviously all the time the ship is steaming back and forth to the theater of deployment is not necessarily time of high military value. You can make it into that, but often it's not, it's sort of dead time in the system.

Now that does go, you mentioned ship design, that goes to fundamental issues like ship design because one of the reasons the Navy has objected to doing this in the past is that the configuration of our ships are sort of a custom-designed approach. So while there were ship classes, each one was a little different inside in terms of how things were actually set up. So one of the problems was how you were going to deal with the training of each crew as opposed to our aircraft and our ground vehicles where our paradigm, it's a member of Class X, it's not the same inside. If you've been trained to operate the M1A1 tank, you could step into any M1A1 tank and do your thing, as it were. So there are a variety of issues like that that have to be confronted successfully. You can't change all this at once, but yes, Admiral Clark is I think bringing a very visionary approach to all these issues. That was evidenced by the fact that he stepped forward for this project, which I think is just the first step in rethinking how we use all the assets the United States has in the most productive way.

Q: The military pay and compensation there has been a big emphasis the last couple of years on increased education levels and responsibilities of enlisted, particularly senior enlisted folks. As a result they've gotten huge pay raises compared to the junior officers.

How long can you continue doing that before you create a disruption in what the junior officer earns versus a senior enlisted person? And is there a graying? Is it irrelevant to even have this distinction?

Chu: The last is the most fundamental question but let me deal with the first and challenge the precept that you bring to it. I think that's really the message of the fiscal 2002 pay raise proposed by the Administration as well as the fiscal 2003 pay proposal which is I think we're beginning to move away from the idea that the structure of the pay table is sacrosanct and the right way to think about pay changes is we just increase every cell by the same percentage amount. That's not the way any private sector organization manages its compensation. You think about who you need, how you're doing your recruiting and retaining the kind of people that you need; and the areas where you're weak, whether that's judged by results, i.e. things are empty or you have a long line outside the door, or it's judged by looking at various benchmark comparisons, you adjust according to those standards.

The key finding, and I really urge that you take a look at this, of the 9th Quadrennial Review of Military Compensation is that if you look at the mid career levels for the enlisted force, 5 to 15 years of service, roughly speaking, that we are weak relative to the competition. Part of the reason is the competition has changed.

For a long time we thought our competition was people with a high school diploma and that's the extent of their education preparation who are out there in the job market. Increasingly our competition is with the young man and young woman who want to go on to college. So the benchmark that we need to think about is different from the old comparability days. I think we're trying to move away from that debate as being a bit sterile and outdated. The benchmark really ought to be what could someone who has some college education and ten years experience in the civil sector make typically, and we concluded, starting with the fiscal 2002 pay raise proposal, we didn't look as competitive in that regime as we need to and that's why the larger pay increases for the mid range of the enlisted force.

Now we did extend the most senior enlisted personnel because partly we need to draw people through a full career and you also want to avoid pay inversions.

We did something similar, as you know, for the officers. Again, looking at results this time because there's a long debate about what's the right comparison for officers. All the services have experienced weaker officer retention, again, in the mid career years. So not as much in percentage terms but significant in terms of effective loss. We've also tried to increase officer compensation more rapidly in that regime.

Going forward what I anticipate we will try to do is continue what you might call this results-based approach to what the compensation changes ought to be. As important as what any kind of base pay raise is, which tends to be the focus of debate, is how are we adjusting as the realities of our needs in the marketplace dictate we should, and that does imply that the pay changes will differ by the cells and whatever kind of pay table structure you might use.

Now what that has produced as you're pointing out, is the situation where the most senior enlisted personnel make more than the junior officers do. That may upset some traditionalists. I recognize that. I think one increasingly does have to ask the question you ended with which is well, what is the distinction between the officer corps and the enlisted ranks? After all, ultimately a social paradigm that comes out of the 17th or 18th Century in terms of its origin. Many of our enlisted personnel now have substantial college education which is one of the ways socially you still can differentiate the officer corps from the enlisted ranks because virtually every officer now has a college degree, although that achievement is only something that happened in the last generation. Several years ago you could still find a significant number of officers who did not have college degrees. Of course going back earlier, that was unusual to have a college degree as opposed to typical. And we even now have a modest fraction of the enlisted force that has a college degree. I think we're seeing already in a variety of personnel practices, the blurring of the line in terms of who does what and what the features look like.

I think the more important point is that the department over a number of years has concluded we should treat both groups as professionals. Back to the draft era kind of problem. And has just as much respect for someone who's reached the enlisted status as someone who's reached the senior officer rank, how we deal with this question, what differentiation between the two is over the long term is not something that is going to be resolved quickly or easily, and back to the strategic planning issue that's one of the very longer, one of the very long term kind of issues, the sort of social status question, that will eventually have to be confronted. It's not something we have to take up right away.

Q: The Congress is about to provide concurrent receipt, at least partially, for military retirees. As far as I know, the Administration is still opposed to that.

Could you talk just a little bit about why they, I understand it's expensive, but there are a lot of things in the defense budget that are expensive and we buy anyway. What is the rationale for denying to disabled military retirees a benefit that with regard to a civilian job the law would require?

Chu: It's not an issue of whether it's expensive that really is driving this. The question really is what is the problem to which this change is the solution? I think you put your finger on it with the way you phrased your question.

These are people -- what's really the issue here is the bulk of the issue, people who have served a fully military career and who have retired. So they've been in reasonable physical shape. It doesn't mean they haven't gotten hurt during their careers, but to come back to the social compact, the bargain the nation had with them, this dates from the 1890s, is that in return for your service you're going to receive the following pension and ancillary rights. We give full health care for the rest of your life. That's long been true and it's been enhanced with TriCare for Life. You get commissary privileges, exchange privileges, so on and so forth. A whole package of things that comes to you.

Now separately the nation constructed for those veterans who did not serve a full military career and who were in fact injured by that service, a system of payments, and of course originally it was focused especially on those who were very severely injured, but over time came to include payments of those who had more moderate but still important losses of function.

The difficult thing you get into is, the real issue that's being raised I think [inaudible] debate, but unfortunately it's been posed that way is, is there something inadequate about our retirement pension for our personnel who serve a full career that doesn't properly recompense them for their service and what they've been through and the injuries they've suffered. That question has never really been answered. The Congress last year in the budget resolution, as you know, called the Department to start looking at that question, beginning by figuring out who would be affected here. And I think we have that study, we've not released it yet, but let me titillate you with the more important findings which is the bulk of the affected people in this regard are those who, in terms of the VA disability rating, have a 10 or 20 percent disability rating. So this is not -- that's according to common sense. You couldn't serve 20 years of your military career and suffer an injury so severe as is imagined I think by some of those who are putting this forward. In the military, someone wearing the uniform has to pass a rather demanding physical fitness test every year. He can't do that if he's got -- He may have a hearing impairment, but not one that necessarily precludes him from continuing his military career.

So the ultimate question is, is there something wrong with our retirement system that in some sense does not properly compensate people? Obviously everybody would like to have a bigger check. That's a natural human instinct. But the public policy question, the question for the nation in terms of its responsibilities in terms of personnel is should I be offered a different pension than I am now?

Just merging the two systems is not necessarily the right answer. The two systems were constructed with very different purposes in mind. It is the case, as it's true of all personnel benefits, that you'll get situations where people get both things and you've named that kind of situation. If you didn't serve a full military career or work in the civil sector then you had a [inaudible]. But it's not clear that that ought to be the way we compensate our uniformed personnel who serve a full career. That's really the issue. You saw that in the New York Times article, whether it was Sunday or Monday, shows an Army retired colonel who is campaigning for concurrent receipt.

The problem is that the country and of course the federal government and the Department of Defense within that large aggregate only have so many resource to spend. If we dispense it in a way that really isn't answering any problem that's out there but it's simply making everybody feel better by sending larger checks, we don't have the money to do things like fix the family housing or fix the barracks. This ultimately will get reflected back long term as a charge in the accrual system of the Department of Defense. This is not free. Buddha is not raining this cash on the federal government.

So if we start paying the accrual charges behind this, which we will do under the current law, that means that the barracks I don't get to fix. And having had the privilege of touring many of the barracks, even the renovated ones, they ain't all so great. Some of them I urge you to look at the mildew that results from low quality design and poor maintenance over the years.

Now my question is, should I give, and I don't mean disrespect for this gentleman, a colonel who is enjoying a quite healthy pension, who is enjoying lifetime medical care, an even larger pension to compensate for his hearing loss at the expense of the privates' shower which is covered with mildew and that he has to use every day? That's the tradeoff for us.

So this is not just a theoretical let's be nice to everybody issue. This is a question of how do we use the nation's limited resources, back to the question you're asking of what's stretched thin a few moments ago, in the manner that's best for the country as a whole.

Q: Why don't you let the privates clean up the mildew instead of cutting the grass? [Laughter]

Chu: Unfortunately, the mildew I'm no mildew expert, but I've had a crash course on mildew. They've tried everything possible to get rid of the mildew. I mean it's, apparently in some of these locations you get mildew in the material and short of tearing the whole thing out, which they actually tried doing also, and it reappears.

Q: Like kudzu.

Chu: Like kudzu, that's right. [Laughter] I knew I had someone here from the south. It's a real problem.

Moderator: We're out of time. Thank you very much.

Chu: Thank you.

Moderator: Thanks for coming.

Q: Can I ask a question? After September 11th, with a boost in patriotism and national fervor and talk about an effort like World War II. Has September 11th had any effect on personnel recruiting and retention?

Chu: Let me be precise. On recruiting, we've had a much larger number of inquiries, particularly right after September 11th. Not a significant change in actual bottom line results, at least to date, although one always hopes that this will turn to more [inaudible]. That actually is consistent with our experience in the Persian Gulf War where there was a big burst of interest likewise, but it didn't really change the long-term situation.

That really argues that recruiting responds to fundamental issues of what does a military career hold for an individual and how can it appeal to him or her.

On retention, it's a little early to tell because we put into place stop loss policies, in the Air Force case across the board at first; in the Army and Navy case more selective, in character, so it's a little hard to judge. We're doing quite well on retention, thus far. On recruiting we're doing decently. We're a little bit ahead of our numbers last year. But again, there does not appear to be any fundamental affect to date.

Q: By the way, I've been reading Eisenhower's book about World War II recently, and I was flabbergasted when in the introduction he says at the end of World War II there were 12 million Americans in uniform. Twelve million.

Chu: A smaller population, too.

Q: Imagine.

Q: I just wanted to ask you a quick question about funding, especially with respect to the reserve call-ups that talked at pretty good length about.. How do you with the uncertainty that you mentioned, plan in future budgets to try get some sort of a grip on the funding requirements, especially with the unpredictability of this war on terrorism? And are you fully funded for the call-up that has already occurred?

Chu: Well, that's why we have supplementals, as you know. We do try to forecast underlying [inaudible], but there is just no way, particularly on operating costs, to be exactly right that's the process [inaudible]. For fiscal 2002 as you know that's happened twice. The first supplemental, the second round is on the Hill right now to be debated. You can't ever get precisely correct for an ongoing operation. I think the key problem you want to [inaudible] is not to view this as just a one-year deal. This is a long-term struggle. In the department we're trying to not repeat the mistake of the Vietnam War. Which is, if you look at the Vietnam War, we always assumed the war would end next year. We are not making that assumption. We are making the assumption that it's an ongoing, long-term conflict. We will take our best shot at what the military personnel operating cost numbers will look like. We are grateful to Congress for recognizing that it is just that, our best shot, that the actuals may be somewhat different. And it allows us to put forward supplemental requests.

Q: Given the Administration when it came in said hey, we want to be honest brokers, we don't want to have supplementals for things that aren't required --

Chu: And --

Q: Do you have a different metric?

Chu: No, no. I'll walk along as we talk. [Inaudible] We will not [inaudible]. We are [inaudible]. [Inaudible] for this amount of money in this fiscal year, absent some truly unusual change my job is [inaudible].

Q: Has the Air Force [inaudible] study of the AEF and [inaudible] realignments, like you said, that it might have a net zero. Have they reported out to you yet?

Chu: Each group we've been to, we have a series of task forces working on these issues. Each group has in some fashion given its mid term report. But they're not due to report back to us until the middle of June. So it's --

Q: Okay. Do you have the preliminary assessment for the Air Force's situation?

Chu: No.

Q: Not just yet. Okay. Great to meet you.

Q: I talked to Barry McCaffrey last week and everyone's saying there's another MRC coming and it's obvious where it's going to come, at least that's something the military views, Iraq obviously. Let's keep Iraq out of this. When you were back at PA&E, as I said, those assets, intel, F-117s, jammers, there was always talk that you'd have to swing assets from theater to theater if there were two MRCs.

Chu: Uh huh.

Q: Have things changed then? They sound like they haven't changed. Those assets are the ones that were the high value/high demand assets like those would have to be moved from theater to theater.

Chu: There are always going to be some units like that because you're never going to anticipate precisely what new events will require. Take civil affairs, for example. For many years the Army thought we have no use for civil affairs. Fortunately we kept some in the reserves, so we had to run part of Iraq after the Persian Gulf War, we mobilized all those people, in fact as the deployments of the 90s unfolded, they were one of the most mobilized people there.

I think the better answer to your question is that the present Administration is committed to taking on this issue that has languished for some time, the so-called high demand/low density units. Things that, intelligence, certain kinds of intelligence sensors being an example, we always in some sense seem to be "short on". I think as a management matter what we're saying is that whatever our current situation might be, we will do what is prudent. For the longer term our responsibility is if we know something is constantly, let me put it a different way. It's not a good management result to have a constant list of high demand, low density units. It means that you haven't planned very well.

Let's take mobility forces, airlift, sealift. I was privileged to participate in a major expansion of those forces. We reached the conclusion early in the 1980s these forces need to be expanded. Now that was not the most popular use of the resources, both from some military quarters and outside the department, but I think the Persian Gulf War and the present conflict are showing the payoff to that. I think this Administration is dedicating itself to a similar proposition as far as the so-called high demand/low density units are concerned.

Shame on us if five years from now that list looks the same as it does today, which has been the case I think for the last ten years or so. To allow there to be a chronic issue regarding whether there are enough of certain kinds of assets. Now we can't change all that situation overnight, but we can change it over time.

It's always going to be the case, and really this is part of my earlier answer to your question, that faced with a specific set of events, with 20/20 hindsight we might have said I wish I had more of X, Y, or Z. So there will always be such a list, but I think the criterion one wants to bring to its judgment is does it change over time. If it's the same list for a long period of time, then you as a planner do not deserve a very good grade because you should have been doing something about that.

Q: The other day I pulled out the Defense Planning Guidance, I think it was when you were in there, and looked at the two MRC time line and you could have said that today. Swing these assets here, you have to swing them there.

Chu: There's always going to be the situation, the World War II example you discussed I think illustrates that there are -- Every nation is a nation of finite resources, even the United States, rich as it is. So there's only so much structure. It will often be the situation, as has been the case and sometimes again occur where you have more immediate problems than you can tackle simultaneously, so you're always going to have a situation where you're going to have to decide what's my first priority, what do I do first, what's the most urgent thing to accomplish.

I think what you're getting to is where the department in the last decade or so was not attentive to the changing set of demands, ISR being the standard example people give, that we need to think about solving. And what this Administration is committed to is putting its nose to the grindstone and trying to solve some of these problems so that five years from now the list of what's viewed as "high demand/low density" --

Q: And those are the stretched thin things, too.

Chu: Well, again, I object to stretched thin because implies that --

Q: I realize that.

Chu: -- we can't cope. That's not our posture.

We have a very competent military. We might not always be able to use the first preference item, but we often have a very good second preference item or an alternative approach. In fact one of the strengths of the American military which goes to the quality of its officer and NCO force is that it is terrific in improvising. As you saw in Afghanistan, yeah, maybe they don't have the munitions or the exact sensor or the exact gizmo that the doctrine says I ought to have, but this is a set of people that are so well trained, so up there that they have a tremendous ability to say okay, I don't have what I prefer to have, I do have this over here. I can put these ingredients together differently. I can get your mission done, Mr. President. That's one of our strengths.

So stretched thin makes it sound like we can't cope, and I think the Secretary's fighting back at you guys in terms of that kind of issue --

Q: That was the language from the regional commanders, not --

Chu: If I were a regional commander...remember, I'm a supplicant. I've got ten regional commanders and the Secretary's got to say Eric, I know you'd like to have that extra carrier, but Jim over here has a higher need. Sorry about that. You will have to figure out a way and he will. They're great. They'll complain all the way up to the decision then they'll salute smartly. In fact they'll probably say right decision. No one would ever say that to him.

Q: More is better.

Chu: Of course. If you're a regional commander. Because you're going to be judged if get your job done well, not does Cassella get his job done. That's Cassella's problem. [Laughter].

Q: He's doing a fine job, too. Thank you for your time.

Chu: Nice to see you. Take care. My pleasure.

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