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Principal Deputy Under Secretary Cambone at Reporters Breakfast

Presenters: Dr. Stephen A. Cambone, Principal Deputy Under Secretary of Defense (Policy)
June 19, 2002 8:00 AM EDT

(Breakfast meeting with reporters in Washington, D.C.)

Q: Welcome to Dr. Stephen A. Cambone. He's the principal, for the moment anyway, the principal deputy under secretary of defense for policy. On the record as we always are. Welcome, we're glad to have you.

Cambone: Thank you.

Q: He's actually been here before.

I remember the time he came with Admiral Jeremiah when we talked about the Space Commission. I think there was another time, which escapes me.

Why don't we start out today talking about your new job. Where it is and what you're going to be doing there and why you're making the move.

Cambone: The secretary has asked if I would be willing to take over as the -- to move from being the principal deputy under secretary for policy to being the director of PA&E, program analysis and evaluation, and to do so here in the next few days. So I think they're in the final stages of doing the directives and making the necessary paperwork flow. So that will happen in the next few days.

Q: Why are you doing this?

Cambone: The secretary asked me to.

Q: Why did he ask you?

Cambone: PA&E is in the planning, programming and budgeting process, as most of you know. It is the connective tissue, the in-between connective point between what you do in the way of guidance and what comes out in the way of budget. It is designed to give the secretary a view, an independent view of how DoD-wide the various programs come together in the context of the guidance that was given and the budget that is being proposed. So it is in that sense critical to him that he has an organization there that he's able to turn to get the kind of information that he's looking for.

What has happened over the last 18 months is as the purposes of, as the guidance has become clearer the strategy has emerged, the things that we need to do have become clearer. I think in his mind and that of others the role for PA&E will shift a bit as well. So in shifting its role and its focus it's sometimes easier to do that by bringing in different leadership to do that, so I think that's why he's wanting to do it.

Q: Refresh my memory. Is that a position that requires Senate confirmation?

Cambone: No, it does not.

Q: Your current [position], does that require Senate confirmation?

Cambone: Yes.

Q: Is this a suddenly created job or does someone hold that now?

Cambone: PA&E had its origins back in the McNamara era. It has been held by any number of people. David Chu, for example, was PA&E back in the Bush administration and back into the Reagan administration. So no, it's not a new position at all. It's been there for some time.

Q: You said the role of PA&E will shift. Do you mean it will become more important as the budget priorities --

Cambone: It's not a question of I think more or less important, but we, in our approach to the QDR, as you recall we talked about, for example, the six operational areas that we believed we needed to emphasize and to be highly capable then in order for us to be able to both forward the transition, the transformation, and to assure ourselves of a capabilities-based force.

What you want to do is probably think about your analysis in light of those goals. So you want to be sure that as you're doing your analysis you're kind of tracking the things that are important to you. So it just means shifting the way you think about things.

The current arrangement has a land forces group and an air group and we're talking at this point more about joint. So how do you establish the joint, an analysis of joint operations and assess what our old ways, service-based programs in the context of joint capabilities and operations. So that's a bit of a change in the emphasis, so we just need to see if we can work that over the next little bit.

Q: You've become a very controversial figure in the hierarchy. You're not greatly loved by many senior military people because of the major changes that have been made and the entrenchments in general and entrenchments in the Pentagon.

Is this a move to make you less visible, perhaps less answerable to Congress in a public way, and while not losing any power with Rumsfeld, is this a move to make you less powerful? Has he just assured you that you're not losing any power here?

Cambone: I don't have any power.

Look, it is not, in the way that you are thinking about it, a less visible post. That is not I think a way to think about it. It is an office that sits squarely, as I said before, between the planning side and the budgeting side in evaluating the programs, and we want to be able to evaluate those programs in a joint context.

So no, I don't think the visibility, I never thought that what I had was a high visibility job.

Q: Do you anticipate major clashes with the services over the next several months in this position?

Cambone: Major clashes? No. I think what we have and have had over the last year and a half are very capable and dedicated people trying to work out a series of very hard problems in the context of trying to put together, we've done five, six budgets. If you count the amendments, the supplementals, the '02, the '03, and now the '04, we may be at six or seven at this point. It's a hard job. It is always the case that when you're trying to talk about changes under those kinds of conditions, and to try to be making them under those conditions, it's a difficult exercise so people tend to work hard and try to move things forward that they think are important.

So no, again, I'm not sure that I think that much of the tension as you reported --

Q: The point is the people have had to work hard and clash violently, and you've become a touchstone in that whole fight, haven't you?

Cambone: If you say so. [Laughter]

Q: You don't anticipate clashes with the services. How about with Chuck Spinney?

Cambone: No. I don't know Chuck, I don't know Mr. Spinney.

Q: Yet.

Q: [inaudible] -- one of the most [inaudible] individuals [inaudible] critical [inaudible].

Cambone: I think it is consistent with his desire to keep the transformation process moving forward.

The 2004 budget is sort of the, I don't know quite how to describe it. It is the budget that is going to make some of the major decisions and commitments with respect to direction-paced timing of this transformation effort. Why is that?

Well, if you look at it the '04 budget is associated with an '04 to '09 program plan. And so within that program plan then each of the services, the OSD components, and other elements of the department will be asked to present in their '04 budget and their out-year projection then how they think they're going to end up in the '09 and '10 timeframe.

So with that in mind, this is a budget that takes us into the next decade. So getting the priorities straight, understanding what the trades are going to be, what are the risks that we are going to have to address and how we're going to resolve them. All of that needs to be made transparent and clear.

So if there is a difficulty, if there is a touchstone of controversy, as Charlie wants to call it here, the job is to make sure that those trades, those risks, the costs, the benefits, are all transparent in the department and they are acceptable to the secretary. That's the purpose of the job.

So to the extent that that causes controversy, it's a function of doing the task, I think, because there are some big decisions to be made and when you make big decisions, people are going to disagree. If everyone agreed, decisions wouldn't be needed, would they? Everybody would move along.

So there are some big decisions to be taken, and that will generate its own debate.

Q: Tell us about this aircraft [inaudible], I'm not sure. The review of F-22, Joint Strike Fighter, F-18.

First of all, are you still going to be in charge of that? And can you tell us what the methodology is? What the services will be required or be allowed to present, and who will [inaudible]?

Cambone: As part of the planning guidance we asked for a number of studies to be undertaken and here's the context. Guidance for fiscal '03, which was in the Defense Planning Guidance last year, and guidance for fiscal year '04 and then the out-year programs was finished in early May. Or was issued in early May.

Both set a framework for what we think is essential in the way of capability to provide the basis for transforming the force. Critical to those capabilities are things like command and control, what we've done in the way of attempting to improve communications, commitments that we have made on intelligence, surveillance and reconnaissance. They sort of set the framework into which then you ask how do some of the major programs that we have entrained or that we anticipate. And by the way the reviews are not only for programs currently existing, but also for those that have been proposed. How do they fit into that framework?

If you are able to communicate, if you are able to have the kind of surveillance and reconnaissance we think is necessary, if you can do all of that, what does the joint operation look like? And in that joint operation then, what is the relative value, contribution of different systems? And would you do in that environment the missions that are familiar to all of us today, would you do them the same way in 2015 or 2020 when the new investments that we're calling for now will begin to come on-line, and others that have been made over the last five years or so are fully mature? How do they mesh? That's the question that's being asked.

So whatever the particular program that would be reviewed, those are the kinds of questions that I'm trying to ask.

Then you say what will they be allowed to present? There's no limit on what can be presented. There is a desire to have certain things presented along the lines that I'm talking about. But beyond that if there are other proposals, ideas, ways of thinking about the issues, they will be welcomed and integrated as appropriate.

Q: It misses the POM this summer. Is this for the '04 budget?

Cambone: Well, it misses the POM.

What the services have done is they have completed their cut at the POM because they get started very early. So what we'll go through over the course of the summer is this review process with many of the studies that have been asked for appearing in the September timeframe. Then there's a program budget review that will take place through that period of time, in the aftermath of which both the FY04 budget and any then required out-year POM adjustments would get made.

So the POMs as they stand are their cut, presently, at where they thought the guidance was going to come out. Again, that was a fairly open process. We had all of the three star planners for the services involved, with AT&L, so people knew where the guidance was going. None of it was a surprise. So that was integrated in part into what they were doing. But then as you go through the analysis and then you come back and look at the POMs, you adjust them, you adjust the budget, and then you put it together for January.

Q: So who then is going to make the allocations, the adjudications?

Cambone: The deputy secretary and the vice chairman will oversee this process over the course of the coming months. Then they will prepare all of that for presentation to the senior leadership of the department, undoubtedly in that late September, early October timeframe. The decisions then are rendered for the Budget Commission, and then in the end, of course, it is the secretary who recommends to the president what the budget should or shouldn't contain.

When you get to the very end there is a process. It will be run out of the comptroller's office when they sort of get the Program Review Board together and the Resources Board together and sit down and ask, all right, here are the issues we looked at, here are the conclusions or the options that have been drawn, these are the resources that are available, how do I match resources against preferred outcomes in terms of programmatic choice, and what risk am I taking in making those decisions? So that's a process that will bring everyone together towards the end.

Q: Just to clarify. Is this a budget-cutting drill, or can some of these programs actually be increased?

Cambone: Absolutely. It is not a budget-cutting drill. And part of the difficulty in dealing with this is just trying to think your way through it. The axiom that budget is policy only goes so far. It is insofar as the budget reflects the policies that have been laid down or the guidance that's been given. But the secretary and the senior management, that is to say the secretaries of the departments as well as the chiefs of the departments, and the chairman, have long argued for and have now in hand a process which is driven by the strategy rather than by the budget.

Now we can say that, but in the end resources are finite and choices have to be made. So you come back then to what I said earlier which is how do you adjust risk? How do you measure the risk? You've got the need to look after the troops near term in terms of force management, OpTempo, things of that sort. You've got operational risk. You want to be sure that now and for the interim period of time the combat forces of the United States are capable of always being able to conduct an unfair fight. Then you have that out-year timeframe when if you don't start making investments now, you are not going to realize the new capability in the middle of the next decade.

Well, there's only so much money to cover all of that So the choices have to be made, the risks have to be weighed, and that's what the process is designed to do. And the answer to the question is to get all of that up on, as the secretary would like to say, onto the table so you know what you're choosing. Then you can say all right, I took the risk here, I decided not to take it here, and therefore I distributed my resources in the following fashion.

Q: Will you continue to keep on your policy hat when you change jobs?

And talk about -- there's been a lot of speculation about how a regime change in Iraq could be brought about. There seems to be some disagreement about the best method of doing that. Whether it's covertly, whether it's the Afghanistan model, whether it's a Desert Storm like.

Can you talk about what the thinking is, your best understanding of how this might unfold or what the options are?

Cambone: No.

Q: Can you -- [Laughter]

Are there differences of opinion about the method to bring about, the president and everybody in the administration says they want to bring about. Can you give us some insight into the discussions that are going on?

Cambone: No.

Q: Do you want to go for the third try? Think of another question.

Q: Will you stand on that no? [Laughter]

I wanted to know more about transformation. John [inaudible] said [inaudible] more transformational programs in the Army. Can you take us through the other services? How is transformation going in the other services? What programs do you see that maybe need to be looked at?

Cambone: There is a lot of work that is being done in each of the services, to include the Army, in thinking about how to address the risks I just talked about. Because a way to think about transformation is, one way to think about it is that it is a method by which you manage the risk. So you're looking for ways to assure that you can have that out-year capability without doing harm to your nearer term needs.

So the Army is working very hard to arrange its Future Combat System concept and technologies and organizations so that the mesh between that and the Interim Combat Brigade approach that they're currently developing and deploying is tighter sooner and that they are able in doing so to take advantage of command and control, these communications, intelligence, surveillance and reconnaissance I talked about before. So they're working very hard on that and have been for some time.

Both the Navy and the Air Force continue to develop concepts of operations, as they're called, that are responsive to the strategic direction that we have embarked on. So they are working hard to think about how you get, how you can place and sustain flexible and effective combat power forward, so that you can move into an effects-based campaign against an adversary very quickly with a minimum of delay and be able to counter the kinds of asymmetric threats you think you're going to face. There's a tremendous amount of work being done there.

Admiral Clark I think just gave a talk recently, maybe last week, in Rhode Island up at Newport. [ transcript ] That is the fruit of a lot of hard work inside the Navy and it's interesting and exciting work. The Marines are doing the same and trying to develop those new ideas and new concepts.

So I think what we're seeing is that the services and the combatant commanders both are looking to find ways to be responsive to the new direction that's been laid down.

Q: What about the Navy and Marine Corps? They're looking at more integration and as a result will perhaps cut back on the JSF buy by 30 percent or more. Is that going to be approved?

Cambone: I don't know. I separate the details which I know that Secretary Aldridge is discussing with both the Navy and the Marine Corps, separate that from the idea, and that idea which again, I don't consider this a budget drill, tends to be translated into budget. There's no question that what they did has an affect on their budget, but what's exciting about it is that they are looking to reorganize themselves in a way that actual combat power provided by the aircraft in the Navy and Marine Corps inventory is much greater than it is under the present arrangement. They believe that they can do that with fewer total aircraft.

Now what mix that aircraft will be in between JSF and F-18s and so forth, that's an issue that Secretary Aldridge and the services are working on. But the real story there is the desire to increase the combat power of the aircraft that they have and to have it on station in a way that makes it useable and therefore increases the options that a president will have in dealing with a crisis in the future.

Q: And the Air Force?

Cambone: The Air Force?

Q: Transformational --

Cambone: Well, General Jumper has been working very closely with Secretary Roche in trying to devise what I think General Jumper calls the concepts of operations and he has a handful of them. And they're interesting in that he is looking to permit the Air Force to make combinations of systems that will answer to the changing circumstances that we face.

I think from General Jumper's point of view not every problem is a nail and therefore a hammer is not the right answer. So he's looking for a larger toolbox to provide the secretary and the president. Part of that's done by internal reorganizations and organizational changes.

The other part is he's looking at some innovative concepts for doing the intelligence, surveillance and reconnaissance mission. He's looking at the impact of command and control, improvements in our ability to do command and control. And then to be able to do what I think he's talked to you about which is this notion of predictive intelligence. You don't want to be always in the position of discovering two days, two weeks, and two years after the fact that something happened. What you'd really like to be able to do is think ahead about what could happen and position yourself to have to deal with it.

It is also the case, and again things that sort of go unnoticed, there is an increasingly tight coupling between the Air Force and the Navy, between Secretaries Roche and England; between the CNO and the chief of staff of the Air Force on these questions. Insofar as the Air Force provides tankers to the Navy; the Navy provides forward support to Air Force operations; the multi-mission aircraft that they've talked about. Those things, that kind of cooperation and discussion is becoming more and more regularized and over the last few months the Army has become an increasingly prominent member of that discussion.

So what you're seeing is, under the current service leadership, I think an increasing understanding and commitment to the joint operation and finding out, and discovering the ways to make joint operations a reality in the future. It's exciting stuff.

Q: Is part of that toolbox going to be a lot more emphasis on directed energy? Or are we going to see that emerge? A Block 30 USAV, JSF, DDX, all have directed energy attached to it in different ways.

Cambone: I don't know the answer to that. I honestly don't know the answer to that one. I have not thought about that question that way. I'd be happy, if we want to come back some other time, I can go get smart on that question. I couldn't answer it in a way that would be helpful to you.

Q: In PA&E you have a wonderfully colorful group of analysts who have been a goldmine for the trade press at least over the years. Are you going to encourage that continuing kind of candor or do you expect to clamp down on them a bit more? And maybe a corollary to that is do you expect to expand the staff or go with what you've got?

Cambone: On the last, I'll have to take a few days to figure out what the workload is over against the expertise of the staff and how they match up. So whether we need more people or not, I don't know.

Candor. You have all heard, I think, the secretary on leaking and leaks. I think his advice on all of that is good. The ability for people who are authorized to speak on any given subject has not been, as far as I know, in any way inhibited or hindered by the secretary of defense. That there needs to be a robust discussion inside the department on choices to be made is important. So my view is that the role for staff is to function as staff for their principals and to give them their best advice and to do it in a way that doesn't have the affect, intended or unintended, of boxing principals into positions.

Q: Is this going to break the news to Spinney?

Cambone: I don't know.

Q: [inaudible] ground forces. The Army sort of takes what it's got [inaudible]. [inaudible] and not wait for the IBCTs. What has OSD done [inaudible] and what do you [inaudible]?

Cambone: You have already seen decisions taken by Secretary White and General Shinseki that tend to move in that direction. The desire to see the Future Combat System move back and toward the current time rather than pushed to the outer years is evidence of the desire to move more rapidly to give the Army greater flexibility. The IBCTs are just coming on-line. It takes awhile to get things so they will come on-line and we'll get one every ten months or so is sort of the rate over the next five years. That will give General Shinseki and others the wherewithal to start to work on those new formations. And they will look different than your standard brigade.

The capabilities will be different, and if for no other reason that they'll be organized differently and employed differently.

They have made some decisions [inaudible]. I have discussed with them some other budget decisions, and I've not seen them yet, which when inevitably they roll them out, I think again you'll begin to see that they have made some choices along the lines that you're talking about in terms of the relationship of their active components or the reserve components in terms of equipment and so forth. Data modernization and so on.

But let me just take that as an occasion to say something about the relationship of the active component to the reserve component. As we go forward in time, we're going to have to think about what that relationship can and should be, and we need to measure it in two dimensions. One is the internal composition of the active and reserve component. Then where you place in the active and reserve component, given capabilities.

In the case of the active components we have to think about whether we need a fraction of the force of some size, and I'm not sure how big that is, that is able to be moved into active operations without having to be filled out by reserve component units. How much of the force? Don't know.

On the reserve component side we need to be able to do two things simultaneously. We need to be able to assure ourselves that some element of the reserve component is available for the kind of homeland defense missions that we can anticipate. But at the same time we have to assure ourselves that some other portion of it, again as yet undecided, can be moved into the active component to be used in operations abroad. And we're not configured at the moment to be able to do all of that in a way that is optimal all the way around.

So over the next probably years we're going to have to work our way through that and do it in a way that we preserve the unique characteristics of the Guard and the things that they do well, that we improve the capability of the active component and come out with a force that in the end gives the president the greatest flexibility possible in meeting a range of threats, both as they might emerge at home or as they might emerge abroad.

Q: When you're talking about the active/reserve mix, are you referring to the Army or --

Cambone: No, no. It would be the total force.

Q: I'm intrigued by your description of your new job in trying to apply a joint analysis to service programs. That's kind of the mission of JROC. How are you going to relate to the JROC process Is your new duty some indication that there's dissatisfaction with the way the JROC program has gone to force jointness on the service programs?

Cambone: The first half of the question which is the relationship, it will be a very close relationship. The first person I went to see on Monday morning was General Pace who is the chairman of the JROC. And so that's going to be a close working relationship.

What might be the difference between the two? I think it is a matter of bringing perspective to the issue. The JROC reflects that combination of service and combatant commander requirements done in an operational context. How does the expectation about the employment and the operation and so forth.

They have a number of working groups that try to carve out the mission areas and so forth.

I think on the other side what we're looking at is trying then to take that kind of analysis, marry it up with the other constraints that might be imposed by time or risk analysis, budgets or timing -- there are other issues that affect the decisions that you take. So what you need is an ongoing interactive process back and forth between those two organizations to assure that we all have the same facts. It gets to be an important part of all of this. Then the difference on what the implications of those facts may be is, from the point of view of what's needed in the department, a good thing. Because if there is a difference on where risk ought to be taken then the secretary needs to know that. And he needs to hear it from his military advisers, that is up through the Chairman, as well as from his other staff to make sure that there is a proper weighing of those risks and of decisions taken, that all are aware of the implications.

Q: Is there any intent to try to get an earlier joint [operational plan]? Sometimes it's kind of like painting purple paint on a program that has already been conceived.

Cambone: Well, going back to where I was early on here on the start, to the extent that we have given a description of the framework in which we could be operating if the investments we have made prove to be capable, you have to start asking yourself now from the beginning how a program operates as a contributor to a joint operation.

So yeah, the answer to that question is yes.

Q: Spinning off of Otto's question on jointness, and given your new PA&E hat on jointness, when the V-22 began, it was the JVX. It was going to be joint. The Army was a big purchaser. Now we're left with the Marines as basically the sole buyer with a couple of little buys tacked on by the Air Force and the Navy.

Given Secretary Aldridge's recent comments about the flight characteristics of the bird and your emphasis on jointness, how do you handicap the prospects for that aircraft going forward?

Cambone: How do I handicap the process?

There's, again, let's go back to weighing risks and alternatives here. The V-22 is a fascinating concept and the ability to move quickly and carry large numbers of troops and so forth is very attractive. Pete Aldridge needs to reach a conclusion about flying characteristics and technical performance and all those other things.

You ask yourself what's the alternative to the V-22 as it now stands? It is some combination of HH-53s and UH-60s and so on, which don't share the characteristics of the V-22.

So in a perfect world the V-22 would be something that one would like to have. To paraphrase the secretary, we don't live in a perfect world. So I think where we are is that Pete Aldridge will continue to assess technical performance. At the same time we will look at what alternatives there may be if it proves that that aircraft is just technically not going to be able to perform in a way that it is safe, reliable and so forth. And we're going to have to wait on, we're in a kind of push/pull situation here of waiting on the technical analysis. They just reopened the flight program last month.

Q: [If it's] technically proficient you will buy it?

Cambone: I think if it is certified as technically proficient then the secretary of defense has one set of choices to make; and if it is proven not to be, he has a second set of choices.

Q: [inaudible]

Cambone: Exactly.

Q: Can you handicap the other choice for us?

Cambone: I don't think so. Pete [Aldridge] will bring it forward, the service will bring it forward, and they'll have to take -- again, it's got to be then put in the context of all the other pieces that are sitting on the table, to include what is clearly a shortfall in the kind of capability that is provided by the V-22.

Q: From the V-22s, have you made any early assessments based on its performance over at Pax River now?

And on another program, the F-22, there's been a lot of speculation that it's next on the hit list after Crusader. Is it going to be cut? Is it going to survive at all?

Cambone: I can't answer the question on the V-22. If you probably asked me in two weeks I'd know better how it's been doing at Pax River. I've only gotten [limited] reports and what you guys write in the press.

On the F-22, it is one of a number of very large programs that are currently in the program plans for the services. It is clearly going -- It is a program that is under discussion and review. The secretary of the Air Force has been asked to come back with an approach to it that spans a number of possibilities, to include variants of the aircraft.

Back to the question earlier, what won't they be allowed to present, there's nothing that is prohibited from being presented. So if the secretary of the Air Force and the chief of staff think there is a role for that aircraft different than the one for which it may have been originally conceived or where the emphasis has been placed in its ongoing development, I fully expect that both of them will want to bring that forward. Again then, they will sort of put forward their recommendations. That will go into the mix with all of the others and that process that I described to you earlier where you then sit down in the Resources Board environment and start thinking about contributions in the joint environment over against the need to meet near term requirements, will be looked at.

The Air Force has an increasing age problem in its aircraft that has to be addressed. JSF doesn't come on for them until after the turn of the decade. The F-22 is here now. It has characteristics and capabilities that other aircraft simply do not have. So you put all that in the mix and you sort of start weighing the risks and people make their arguments, and then the kind of debate that you're talking about ensues, and then a decision is taken and the budget is done and the secretary recommends, the president decides, and away we go.

Q: On variants, are you talking about perhaps a multi-service aircraft or multi-role as in F-15D and F-15E?

Cambone: I don't know. That would be the Air Force's call, but I suspect it would be rather the latter.

Q: More of a multi-role aircraft --

Cambone: Yeah. You have an --

Q: as opposed to a multi-service.

Q: Earlier, Dr. Cambone, you walked through the process this summer and fall of making some of these decisions. It sounded an awfully lot like the regular annual process. I'm wondering, and then also you talked about the jointness, the importance of trying to develop systems that are joint against this framework of C4ISR which sounds remarkably like what the administration and the Pentagon have regularly tried to do.

Is there something I'm missing here? Is there something that you're doing that you believe is different from the way things have happened previously, in terms of either processes or objectives?

Cambone: I think so. One is that with respect to the C4ISR there is real money put against those programs in the '03 budget and the out-year program. As part of the requirement from the secretary and from Secretary Aldridge that we fund programs and not just say here's a down payment in this year and in the out-year it balloons to this but we'll worry about it out then. These programs are laid in, so therefore the out-year-planning limit or constraints are better understood and are more of a part of the risk management discussion that I talked about earlier. So that is firmly part of the issue.

The second is that Dov Zakheim as the comptroller has taken what used to be a separate program review, which would have been happening now in the old way and combined that with the budget review. So you have a program and the budget now lashed together. That is, we think, an important change in the process.

Third, there is a commitment from the service secretaries in their role as members of the SEC, the Senior Executive Council, sitting together with the deputy sort of talking their way through these resource and budget and strategy issues, and receiving briefs on various programs that are taking place, and they're done across service. Whoever happens to have something of use and utility to them is crossed over, the Joint Staff is briefed, OSD is briefed, the services are briefed, and so they're there absorbing on a department-wide basis what's taking place.

They take that knowledge and bring it into then a very senior level panel, it's been called the Senior Level Review Group to this point, in which the secretary or the deputy chairs; the chairman or the vice is there as well; service chiefs and secretaries, principal under secretaries, and the discussion takes place. What is it we want to do and how do we translate that into then program and budget.

So yeah, I think it is different. Is C4ISR critical to the future? Yes. Has it been critical to the future since the turn of the last decade? Yes. Clearly. So in that respect it is not different, but I do think what is important in the way of change is the money has been laid in to those programs.

Q: What is it that's driving any changes that you might make? You've got a lot more money from Congress. Some of the hard choices in terms of cuts that you might have had to make previously you don't have to make now. What is it that's really going to force people to do things differently?

Cambone: That opens up a whole other set of subjects. Let me take a minute, and I'm willing to take a minute on this.

When you see those sand charts that get done, you get an O&M account and then you get the R&D accounts or the S&T accounts and then you get whatever it is, procurement on top of that and so forth. It is often thought that the discretionary funds are in procurement. But when you look at the cost to the department for personnel, it is a large cost and it is an increasing cost over every year. So if you took that chart and turned it upside down and you said let's think about what do we do with these personnel-related costs? Well, the secretary has asked us to look at upgrading the infrastructure, the housing and so forth that people work in. He's asked us to look at pay and benefits to make sure that those are appropriately targeted at the right level for the retention of the people we're going to need.

So when you look at it that way what you realize is that there is a large block of dollars in there that have to be managed in a way that brings as high a rate of return as possible.

Now when you realize that, then you say to yourself all right, if that's true and I look out into 2012, how am I going to, again, back to this point about risk. I can't transform the force unless starting today I bring into the force, train and retain the people who can run the kind of force we are going to have in 2012 and 2015. So how do I do that?

So David Chu and personnel readiness, becomes a very important element of this process of transformation that is oftentimes overlooked. There is a very important driver.

When you take the budget and you start laying down then what you think you need to put into personnel, what you think the cost of the war is going to be and all that other related cost, the 16 A-6s that otherwise would not have needed to be fixed. The six tankers that -- there's a wear and tear that is associated with the war separate from ordinary activity. The total dollars left out of the budget of $379 billion which was requested is not substantial. It is not a large number of dollars.

So just based on the things I've outlined for you here, you can sort of do a slope on the projected out-year budget without any substantial new program starts. So if you want to make changes in the programs and you want to start new programs, then something has to give.

So the question is where? How do I measure the risk in one as opposed to the other in order to be able to accomplish what I want to do?

Q: Let me ask you about one of our mutually favorite subjects which is missile defense.

Cambone: Okay.

Q: Long term budget. One hears from Democratic senators and others that the administration really can't come up with a valid budget in the out-years until it starts defining the acquisition budget for missile defense. Its like having an elephant in the room; nobody knows how much it's going to eat, but everybody knows it's going to consume quite a bit when it starts eating.

How do you plan to deal with this issue? It's going to force some tradeoffs. Do you have a number in mind? A ballpark number at least?

Cambone: Again, at the risk of going back to first principles all the time, let me just back up a little bit. I think there is some misunderstanding about what we tried to do with the program.

When it was restructured the idea was that, and is, that what we really need is a program that can develop technology for applications in various sectors of the threat profile, from launch to reentry, and do it, and be used, applied from different platforms. And the program manager, General Kadish or his successor, needed a freer hand in trying to match technical evolution and development and breakthroughs over against the need, threat environment that we were going to perceive, that he needed to do a lot of testing and he needed to be able to eliminate those things that weren't working; shift the money to things that were; and continue the process.

With respect to procurement then, what we I believe we would like to see is an arrangement in which we are able to bring out of the development program sufficient capability to meet or anticipate an emergent threat without necessarily having to commit to a major acquisition program of the kind that you are describing.

And why?

Two things. One, what we want to do is avoid having to commit to a long period of procurement and acquisition which is enormously expensive from a budgetary point of view and may not, and let me underscore may not, produce at the end the level of capability that you would need to have to meet the extant threat at the time it's finally deployed.

So if we can find a way to make the program more supple, more capable to bringing out in a kind of serial fashion the next level of capability and be able to produce sufficient quantities of that object, the interceptors, the front end, that keeps us ahead of where the threat is without having to commit to a major acquisition program, that would be the preferred alternative. I underscore preferred.

However, there is obviously some element of the program that has got to be sort of constructed and put in place. You need a sensor suite, you need a command and control suite, and you need to have all of those kinds of things. That's what lay behind Aldridge's decision last year to restructure SBIRS. He knows he needs a space-based sensor, needs one that is more flexible and so on and so forth, to take a program that is effectively fully designed, fully assembled, right up front and then buy all of them then. It was inconsistent with what I just described to you. Because what you'd like to be able to do is to take the first set of them and get the level of capability you think you're going to need for some period of time. Then you take the next flight and you modify it and bring along additional capabilities against the threat, and you want to build toward the system that is going to give you the level of confidence and capability that you think you need against the threat as it may appear in the out-year timeframe.

Now can we do that? I think so. Does it yield a --

Q: I was wondering if you could comment on the prospect that you used in terms of substantive missile defense cooperation with Russia in the context of the environment of a new arms control regime. Traditionally, as you know, the RAMOS program was always, it was a real benchmark of U.S.-Russian cooperation in this area. That program's been kind of stalled the last couple of years. It's always been part of an NMD debate and an ABM debate. I was wondering if you guys could play that a little bit forward finally. And what other prospects you see.

Cambone: Boy, that's another one I may have to take for the record. I have not talked with, recently with J.D. Crouch who is the assistant secretary who has been working that problem with the Russians, nor have I talked to General Kadish about it, so I can't give you an informed answer. I'm sorry.

Q: With regard to the combat aircraft, you were talking about risk management. What do you think is the bigger risk -- the ability to do the mission in the next ten years or the fact that the aircraft are aging, getting [inaudible]? What's the bigger problem?

Cambone: I think it's a, it may be more granular than the question.

The A-6 aged very rapidly over the last year. The EA-6B. It was as though it were Geritol in reverse or something. Literally flew the wings off it. So there's a problem. So when you think about that, you then say to yourself what problem does that raise? Then it gets to the mission area. So then the question is: what do you have to have, what combination of standoff jamming, low observable technology, and penetrating electronic warfare aircraft is appropriate? So the question is, in that case, does the A-6, the EA-6B need a follow on? If it's yes, how are we going to do it? So the measurement of risk takes place in that context, not whether or not the aircraft can meet the chop.

In the case of other aircraft you say no, it's perfectly capable of performing a given mission or the mission that we anticipate in the future. They're -- you're asking the question is the mission for which it was designed going to be the one that is on the leading edge of your concern at the time that it is in its full maturity? Or will warfare have changed in a way that gives you pause on that question? Or will you have developed other means of performing the same kind of mission? So you sort of run through that drill on that question.

When you make some of those choices, I would argue, you then come back and say: all right, given that what is the effect on the fleet age, on O&M, on where I want to be? If the answer is that -- or procurement costs. If the answer is that you have simply priced yourself out of the range of reality you say 'all right, I've got to come back now and reconfigure these estimates.' You can price yourself out on either side. You can price yourself out on procurement, or you can price yourself out on O&M.

Q: How will the EAF-22 fit in?

Cambone: Well, you asked the question what other things might come forward and I think that's all in discussion with the Air Force and the Navy. I think they're deep into that conversation.

Q: We're out of time.

Q: Thank you very much.