SEC. GATES: Sorry we're a little late. This is the first time we've had to hike from the new quarters, and we misjudged the commute. (Laughter.)
Good morning. As you know, the House of Representatives passed a bill Wednesday night that includes $70 billion for operations in Iraq and Afghanistan, and the president has indicated that he will sign it. The department welcomes this step. However, it is important to note that it represents only a partial solution. We're still analyzing the bill, so we don't yet know the specifics. But we do know that having received less than half of what the president requested to fund global military operations, absent timely congressional action in the new year, we will again face the risk of running out of money. I'm also very concerned that funding the war in fits and starts is requiring us to make short-term plans and short-term decisions to forego needed actions and to put at risk critical procurement, training and their activities important to deploying a ready and effective force. I only hope that next year we can all come together and move quickly to provide the remaining funds for troops.
Let me take a moment to address a group affected by this situation. Thousands of patriotic Americans who work for the Department of Defense as civilian employees form the backbone of our military support system in the United States and abroad, and they're an important part of our team. I realize and regret that in the last few weeks they have -- we have created anxiety and uncertainty for them. I hope we don't have to face a replay of this situation again this spring, but they can rest assured that this department treasures them and will not take any action affecting them unless it absolutely must.
This week marks my one-year anniversary as Secretary of Defense. It was a year that began with a surge of troops in Iraq and has ended with a sharp decline in violence. The war is far from over, and we must protect and build on the gains earned with the blood of our military, our allies and our Iraqi partners.
In Afghanistan, the U.S., our allies and our Afghan partners have inflicted heavy losses on the Taliban, launched a comprehensive reconstruction effort and strengthened civic institutions and security forces. Afghanistan remains threatened by ruthless extremists and destructive narcotics trade. NATO's efforts to rebuild and secure the country must be sustained and expanded into next year and beyond.
This year the department also faced up to problems with our outpatient care for wounded troops. Once again I would like to thank the press for bringing this situation to my attention and for continuing to identify problems. We have made significant progress on this front, but more clearly remains to be done. Securing the best possible care for our wounded warriors will remain a top priority for me, second only to the war itself, for as long as I am secretary of Defense. I owe them nothing less.
The past year I've had the great fortune of meeting with the very best people America can offer -- our servicemen and women of every rank and branch of service. I've met with many of our wounded and their families. These close encounters have shaped my thinking and influenced my decisions. They also have touched my heart and evoked my tears -- of admiration and of sympathy. I am awed by their courage, their devotion and sense of duty. The troops and their families are always foremost in my mind, and I thank them for everything they do.
During this holiday season I would ask every American to keep them and the families of all those who have made the supreme sacrifice for our country in your thoughts and prayers. They are the most noble of us all.
GEN. CARTWRIGHT: Just a quick add-on of my contribution or well- wishes to the troops; for those that are home, those that are deployed, for their families, those that are in the hospitals, to wish them a happy holiday.
And to you, the few of you that are here in the press corps -- I think I can hear the engines idling in the parking lot -- (laughter) -- but thanks for being here today and thanks for all that you've done this year in your contributions.
SEC. GATES: Lita?
Q Mr. Secretary, in September you expressed the hope that troop levels in Iraq could get down around 100,000 by the end of 2008. Can you say now whether you are more or less -- more or less optimistic about that goal for next year? And as you look ahead to 2008, what do you both see as the top military challenges in Iraq and Afghanistan, where the insurgencies are shifting and in some cases are surging a bit?
SEC. GATES: Well, first of all, I think the way that I -- I frankly lapsed once in using an absolute number in troops. And what I've tried to do consistently since then is refer to the number of brigade combat teams that are in Iraq. The situation on the ground, I think, makes it likely that General Petraeus will be able to decide and bring out the first five BCTs by July, as he indicated in September. And the first of those, of course, is coming out this month.
My hope has been that the circumstances on the ground will continue to improve in a way that would, when General Petraeus and the chiefs and Central Command do their analysis in March, will allow a continuation of the drawdowns at roughly the same pace as the first half of the year. It will be completely dependent on the circumstances on the ground.
And we obviously want to sustain the gains that we have already made. If we were to continue the withdrawals at the level of the first half of the year, if the conditions permitted that, then that would bring us down by the end of the administration to about 10 brigade combat teams.
But again, I just want to stress that all of this is conditions-based, and it will depend very much on the analysis and recommendations that the senior military commanders and advisers to the president make in March.
In terms of the principal challenge, I think that the challenge in Iraq will be to sustain the security gains that we have achieved, and in the non-military area, to see what we can do to encourage the achievement of some important legislative actions on the part of the Iraqi government and the continued execution of their budget. These are largely non-military tasks. I would say the military task is to sustain the gains and expand them.
I would say the same thing in Afghanistan. There is no doubt, as we've talked -- for those of you were in Scotland, that there has been an increase in violence over the past year, but in part it has been due to much more aggressive actions on the part of the NATO alliance and the U.S. forces that are there. There was -- the spring offensive we expected from the Taliban became NATO's spring offensive. And here again, I think that the challenge for 2008 will be to sustain the successes we've had; to hang on to places that we have cleared, like Musa Qal'eh; and create the conditions in which further economic development can go forward.
Do you want to add anything?
GEN. CARTWRIGHT: I would just add to build the capacity of international security apparatus -- their police, their military -- to be able to start to carry some of the load as we do the transitions. You see the transitions in -- (starts to say Afghanistan) -- I'm sorry -- in Iraq -- but those types of transitions. We just took the last city the Taliban held. We need to build the Afghan capacity to hold those and start to build in those provinces. So that's a challenge in the coming year.
SEC. GATES: Yeah, Barbara?
Q Mr. Secretary, could I follow up on that? Across the border in Pakistan, what's your assessment this year? Many people say al Qaeda actually is expanding its areas of operation, its areas of influence in Pakistan, far beyond just the tribal region. Your assessment of al Qaeda in Pakistan? And as secretary of Defense and a member of the National Security Council, what can you tell Americans at the end of this year about any progress in the hunt for Osama bin Laden?
SEC. GATES: Well, first of all I think that -- I heard just this morning, in fact, that the number of fighters coming across the border in RC East is down about 40 percent.
Al Qaeda right now seems to have turned its face toward Pakistan and attacks on the Pakistani government and Pakistani people. The Pakistani army has had some success in their counterinsurgency effort in Swat. We are beginning a dialogue with the new chief of staff of the Pakistani army in terms of how we can help them do a better job in counterinsurgency through both training and equipment.
So I would say that right now, at least, there is no question that some of the areas in the frontier area have become areas where al Qaeda has reestablished itself, but so far we haven't seen any significant consequence of that in Afghanistan itself. I would say, with respect to Osama bin Laden, that we are continuing the hunt.
Q Is there any progress, Mr. Secretary?
SEC. GATES: I think that the progress will be the day that the president goes out in front and says that we have either captured or killed him.
Do you want to --
GEN. CARTWRIGHT: I'd -- just on the Pakistani side, we are impressed with this new chief and how he has set some goals and a vision for their military. And already his leadership is starting to affect them. So that -- having that capability and that added capacity in Pakistan has an effect in Afghanistan as far as al Qaeda's concerned. It keeps them on the run.
SEC. GATES: Kristin.
Q Mr. Secretary, can you give us an update on the progress you've made toward closing the detention center at Guantanamo? You've spoken about this many times over the past year, spoken about roadblocks within the administration. Have you made any progress, and where do you put the chances of -- for some resolution on this issue in 2008?
SEC. GATES: I think that the principal obstacle has been resolving a lot of the legal issues associated with closing Guantanamo and what you do with the prisoners when they come back.
This is obviously not an area where I bring any expertise. I know that different parts of the government have been working on this together and addressing these issues. So I would say that the honest answer is that because of some of these legal concerns, some of which are shared by people in both parties on Capitol Hill, there has not been much progress in this respect.
Q Can I ask a macrobudget question looking out to '08?
You have talked about the need to increase the budget from 3.3 percent of gross domestic product to 4 percent. That's about $98 billion, depending on what estimate of GDP -- (off mike). How much of a challenge is that going to be, to convince the public and Congress to go along with an increase of that magnitude, to a Defense budget that's about $505 billion right now?
SEC. GATES: Well, part of the problem is that if you add in the costs of the war, the percentage of GDP is about 4 percent being spent on defense, if you will. I actually think that we had a very thoughtful conversation in the House Armed Services Committee earlier in the year on what the percentage of GDP devoted to defense and securing the nation should be. And I got the impression from both sides of the aisle that there was a sense that that probably ought to be about 4 percent.
The question is whether you make a transition to that after, whether you can make a transition to that after principal combat costs in the war are behind us, whether that remains an aspiration, or whether we try and do something in the near term about that. The FY '09 budget for us is largely locked into place and, I would say, does not contain the kind of significant increase that you were talking about. So I would say that particularly as long as the costs of the war continue that having a base Defense budget that is 4 percent of GDP is likely to remain an aspiration rather than a specific goal.
Q A quick follow-up to your opening statement: Are the furlough notices going to be suspended from here on in? You left that hanging.
SEC. GATES: Yeah, the -- I will be putting out a letter later this afternoon that basically acknowledges that we have to continue to do some planning because we didn't get all the money. But yes, it will specifically say that there will be no furloughs and furlough notices at this time. We'll -- you know, as I say, what happens next spring -- we'll have to see what happens. But there is -- there will be no furlough notices sent out in the holiday season.
Q (Off mike.) (Soft laughter.)
SEC. GATES: Merry Christmas. Yeah.
Q I think it was about two weeks ago that you were asked about Iran and its continued or alleged involvement in the insurgency in Iraq, and you said the jury is still out with respect to whether Iran is cooperating now. Have you seen any additional or more current information to suggest maybe Iran is playing a more constructive role in trying to seal its border from arms shipments and so on?
SEC. GATES: No, not yet.
Q So Iran, as far as you're concerned, is still playing a destabilizing role?
SEC. GATES: Well, I would just repeat what I said a couple of weeks ago. I think the jury is out. There are -- as people have briefed out in Baghdad, there has been a reduction in IED attacks, and what is uncertain is the degree to which that is a result of successfully finding caches, successfully finding IEDs, successfully breaking up the networks, the cease-fire that has been put in place, or whether the Iranians have begun to reduce the level of support. And in that array, my impression is that we don't have a good feeling in terms of -- or any confidence in terms of how to weight those different things.
(To the general.) I don't know --
GEN. CARTWRIGHT: And you asked two different questions there. I mean, we have not seen any indication along the borders that they are doing something, but we also have not had any hard confirmation that they -- that weapons that we're finding that are being used actually came across the border after Iran made its declarations.
SEC. GATES: Tom?
Q I'd like to turn our focus to Asia for a moment, if I could. You had a very successful visit to China some weeks ago. Yet afterwards, a matter of days, they cancelled a visit of the Kitty Hawk and denied safe harbor to two ships, American minesweepers in a storm.
Have you yet gotten sufficient explanation to your satisfaction, even an apology? As you look at the Chinese military buildup and these actions, where do you put China on the continuum of friend, ally, challenger, competitor, or even adversary?
SEC. GATES: Well, first of all, I think that I have read that the Chinese believe that I should have told them that we were going to continue our arms sales to Taiwan, some sales that apparently were announced a few days after I returned. The fact is, in the middle of -- in those conversations, they raised at various levels our arms sales to Taiwan, and I was very explicit that our arms sales were consistent with the Taiwan Relations Act and the joint statement, and that as long as they continued to build up their forces on their side of the Taiwan Strait, we would continue to give Taiwan the resources necessary to defend itself. So I think that to a certain extent, I find that argument a little specious.
What has been interesting to me this year is that I think we have had two situations in which there appears to have been a disconnect within the Chinese government. The first was the ASAT test, where the foreign ministry didn't seem to understand or know what had happened and there was -- appeared to be some confusion. We seem to have had a little bit of the same thing with the Kitty Hawk, where the military may have made a decision that was not communicated to the political side of the government. Now, I don't know that for a fact, but there's just some hint of that.
So, I'm not quite sure what to make of the Kitty Hawk thing. I will tell you that we were pretty annoyed by it. We were pretty annoyed by the fact that the two smaller ships that were actually seeking shelter were denied that shelter.
But I still think that -- and China, no question China is continuing its military modernization programs. That said, I don't consider China an enemy, and I think there are opportunities for continued cooperation in a number of areas. And I still would like to see -- I still think it's important for us to develop the strategic dialogue with China where we sit down and talk about how we see the threat, how each of us perceives the threat and the purpose behind our modernization programs and so on.
I still think there is value in that, and my hope is that we can continue it.
Q May I have a follow-up?
SEC. GATES: Yes.
Q This March, Taiwan's going to hold a referendum using Taiwan as the country name to enter U.N, and this action has raised serious concerns by the U.S. and China. Do you worry this might lead to some military reaction in the region?
SEC. GATES: No, I'm not worried that there will be a military reaction. We obviously are watching it very closely. The United States has spoken out on this quite clearly to the Taiwanese government, and the Chinese government knows that we have spoken out. They made reference to it while I was there. I think they'd like for us to speak out every single day, but I think that they know that we have weighed in heavily on this matter with the Taiwanese. By the same token, we've made pretty clear to the Chinese that this matter, that should continue to handle this matter in a political way.
GEN. CARTWRIGHT: Can I just follow up, just real quick, I mean, on this and the last question?
SEC. GATES: Yes.
GEN. CARTWRIGHT: It's the lines of communication and developing them so that we don't misinterpret, in both the ship case and the ASAT and the Taiwan piece. I had my counterpart here two weeks ago and sat down, and that was the key dialogue between the two of us, is we do not have good enough lines of communication so that we don't misinterpret or misunderstand each other's actions. And that's important in this relationship.
SEC. GATES: And we have used the Kitty Hawk incident as an example of where the direct link, the direct telephone link could have been helpful.
Q Mr. Secretary, the highly respected retired Army General Barry McCaffrey just returned to the U.S. from an extensive tour in Iraq and he was there about the same time you were. And he said that what was striking to him is once you get outside the Green Zone, the national government, in a practical sense, for the people of Iraq just doesn't exist. And he said in fact, the U.S. military on the ground serves that purpose, in assuring that the local populations get the kind of basic services that they need, which are actually required for long-term stability.
And he warns that if you take the military out, all that goes away.
Since the withdrawal of American troops from Iraq is conditional, would that be an absolute condition, that there has to be political reconciliation, political progress made by the national government before substantial numbers of American troops can be withdrawn from Iraq? And what kind of assurances did you get in your meeting with Maliki that he was willing to make progress on those issues?
SEC. GATES: Well, I would say that first of all, that balance of the capacity of the Iraqi security forces to bear the burden -- the security burden, the efforts and capacity of the provincial governments to provide services, and finally, the ability of the national government, all of these things are going to have to be weighed by Ambassador Crocker and General Petraeus, and as well as CENTCOM and the chiefs when they make their recommendations to the president.
The ministries themselves -- first of all, the performance of the ministries is uneven. The Ministry of Finance, for example, is apparently doing a really pretty good job. And the macroeconomics in Iraq look pretty good. In one area that is critically important, revenues, the revenues are being distributed by the government to the provinces. A lot of the funding of reconstruction that is going on in the provinces is being funded from the center. And so the budget -- they are having better success in executing their budget.
And creating -- getting the ministries down into the provincial and local areas, you know, frankly -- I mean, this is a challenge we face in Afghanistan, as well. It's a challenge that many developing countries face. So I think it's a weighing of all of these things that will -- that will underpin whatever analysis General Petraeus and Ambassador Crocker and the others do next spring and in terms of the speed with which they can recommend drawing down our forces and how much they can be drawn down.
Q And the assurances from Prime Minister Maliki on the kind of progress along the lines that --
SEC. GATES: I received, in my conversations with both President Talabani and Vice President Hashimi on the one hand and Prime Minister Maliki on the other -- they know they have to get this work done.
Q But did they say they will? I mean, did they make a commitment that they can get it done?
SEC. GATES: They are committed to getting it done. We'll see if they get it done.
Q Sir, I wanted to ask you about al Qaeda in Iraq. In terms of new intelligence, what can you tell us about their composition, where they're coming from? And on that point, what has Syria or Saudi Arabia even done to curb the flow of fighters into Iraq?
SEC. GATES: (To General Cartwright) You may be better able to --
GEN. CARTWRIGHT: On the curbing of the flow, we are seeing that that is being reduced, number one. What they do internally to do to accomplish that, you know, whether it's proclamations from the central government or whether it's actual activities by their military or their police, et cetera, but the flows are in fact being stemmed. That's contributing to our ability to maintain the security. We see that out to the west in Al Anbar. The traffic that's moving now is more commerce-oriented than it was military-oriented. And that is incentivizing both sides of the border to keep that flow going.
From the standpoint of al Qaeda and their movement in and through, that we're still trying to judge and understand. We've disrupted, particularly in Iraq, the al Qaeda activities -- their ability to organize, their ability to reinforce, move logistics, move people around and do training -- but not enough.
Q Would you consider Syria to still be the most porous border? And if so, why?
GEN. CARTWRIGHT: I don't know that I could quantify it that way. I still think there are challenges along the Syrian border, but not to the extent that there were. Again, out in that area, the flow has turned heavily to commerce and to the returning refugees and not so much to fighters moving back and forth, which is what we experienced six months ago.
SEC. GATES: Last question.
Q So you were in Scotland in talks to allies about stepping up in Afghanistan. I know your position is to not let them off the hook, and you're still kind of in the middle of negotiation. But can you kind of give us a little bit more of a readout of what your sense was returning from there? And where is your head in terms of sending U.S. forces back to Afghanistan? There's a sense, certainly, that the White House is reluctant -- slightly reluctant to do that any time soon. Is that an accurate sense?
SEC. GATES: Well, first of all, I think that, you know, we've just seen the Dutch renew their commitment for a couple of years -- a couple of more years. Several of the allies have stepped up with some additional capabilities.
I think the general sense of the ministers in Scotland was that sort of continuing to publicly go after our allies for things that -- to do things that politically are just impossible for them is probably not very productive. As I've commented on, on other occasions, many of these governments are minority governments; they're coalition governments; their position is fragile.
One of the reasons for doing this three- to five-year strategic concept paper, if you will, is to acknowledge the achievements that have been made in Afghanistan over the past year or two and then how we build on that for the future. And one purpose of that is to help the European governments perhaps persuade their people of the value and importance of the mission in Afghanistan. That would then make it possible for them to do more.
We're also going to look for more creative ways in which the allies can be helpful. And perhaps those -- where politically they cannot engage in combat, perhaps they could pay. Or they don't have helicopters. Perhaps they could pay to re-engine somebody else's helicopters so they could in altitudes. Maybe they could do PRTs in secure areas. Maybe they could do more embedding or more police training.
So we're going to try and be more creative in terms of finding ways for people to do more within the framework of the political realities of the different countries.
In terms of our own troop levels, the first thing that I think is important to understand is the magnitude of the need. If you took the shortfalls identified by the commander of ISAF today, it's fundamentally about 3,500 trainers to -- and the majority of those for police training -- three maneuver battalions, and some additional helicopters and some other bits and pieces. But the bottom line is, you're -- if you have satisfied every requirement he has, you're talking about probably somewhere in the neighborhood of 7,500 troops. So it's not like moving 100,000 troops from one place to the other or something like that.
And we will be looking at the requirements ourselves, and we will be talking with our allies. But there is clearly, in the view even of the commander on the -- in the field, no requirement for a substantial plus-up of forces in Afghanistan to meet -- to accomplish his mission.
(To the general.) Do you want to add anything --
GEN. CARTWRIGHT: No, I think that's right. It's -- one, it's playing to the strength of your allies, and two, the delta -- we started the year at about 35,000. We're ending the year about 43(,000). And we're trying to make sure that what it is we're doing out there is aligned with the need. To the extent that it is -- that there are needs, it is -- it's about in the 7,500 -- but it's spread across combat-type forces, trainers, et cetera. And so we're trying to make sure we understand that and then target our allies for those capabilities which play to their strengths.
SEC. GATES: What --
Q But do you feel at all politically constrained to send back U.S. forces, if need be?
SEC. GATES: I don't think there's a political constraint.
I would close with two comments. First, my Christmas gift to you all is that I don't anticipate we'll any foreign travel until February. (Soft laughter.) And second, I just want to wish you all a happy holiday and a happy New Year.
GEN. CARTWRIGHT: Happy holidays.
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