SECRETARY OF DEFENSE CHUCK HAGEL: Deputy Secretary Carter and I wanted to take a few minutes this afternoon to talk a little bit about sequestration and what was announced today. Many of you saw the President a few hours ago. And I'll make a statement, and then the Deputy Secretary and I will entertain questions. So, thank you for coming.
I just spent an hour, actually and hour-and-a-half, with the Joint Chiefs to talk about this issue and to talk about consequences, and how we will continue to adjust to the realities that face our country and face this institution.
In particular, I'd like to address the uncertainty that sequestration is causing, [and] will continue to cause this department. But at the outset of my remarks, let me make it clear that this uncertainty puts at risk our ability to effectively fulfill all of our missions. Leadership in the Pentagon, all of us, have two serious concerns: first, the abrupt and arbitrary cuts imposed by sequester; and second, the lack of budget management flexibility that we now face under the current continuing resolution.
Over the past two months, DOD has begun to see the effects and consequences of that uncertainty. As sequester continues, we will be forced to assume more risk, with steps that will progressively have far-reaching effects.
Let me highlight a couple of actions that we are taking as a result of these budget constraints. The Navy will gradually stand down at least four wings. The first wing will stand down in April.
Effective immediately, Air Force flying hours will be cut back. This will have a major impact on training and readiness.
The Army will curtail training for all units except those deploying to Afghanistan, adversely impacting nearly 80 percent of Army operational units.
Later this month, we intend to issue preliminary notifications to thousands of civilian employees who will be furloughed. These steps come on top of those the department began in January to slow spending in view of this uncertainty. Those included delaying deployment of naval assets; imposing civilian hiring freezes; beginning to lay off temporary and term employees; sharply cutting back facilities maintenance; and beginning reviews to delay contracts.
If sequester continues and the continuing resolution is extended in its current form, other damaging effects will become apparent. Our number one concern is our people, military and civilian, the millions of men and women of this department who work very hard every day to ensure America's security.
I know that these budget cuts will cause pain, particularly among our civilian workforce and their families. I'm also concerned, as we all are, about the impact on readiness that these cuts will have across our force.
For these reasons, the department's senior leadership and I will continue to work with the administration and Congress to help resolve this uncertainty. Specifically, we need a balanced deficit reduction plan that leads to an end to sequestration. And we need Congress to pass appropriations bills for DOD and all federal agencies.
We will need to make hard choices. And I will do everything within my power to see that America upholds its commitment to our allies and our partners and, most importantly, to our service members and their families.
Today, America has the best fighting force in the world capable of responding to any challenge. This unnecessary budget crisis makes that job much harder. But we will continue to ensure America's security. Thank you.
I'll take a couple of questions, and then I'll ask Ash for his responses.
Q: Mr. Secretary, thank you.
You, having laid out a number of consequences there, you -- the language you used was not as dramatic as been used by others in this building in recent months of talking about "catastrophic" and "disastrous" results if sequestration happened.
Are you of the view that this is not a situation which the U.S. will be reduced to a second-rate military power?
And may I ask a question also on Syria: What's your view about whether the U.S. ought to be doing more militarily to help the rebels?
SEC. HAGEL: Well, Bob, your first question, America, as I concluded in my remarks, has the best fighting force, the most capable fighting force, the most powerful fighting force in the world. The management of this institution, starting with the Joint Chiefs, are not gonna allow this -- this capacity to erode.
We will manage these issues. These are adjustments. We anticipated these kinds of realities. And we will do what we need to do to assure the capabilities of -- of our forces.
On Syria, I think it's clear what our policy -- the administration's policy is on Syria: non- lethal assistance. Secretary of State Kerry has recently commented, as you know, following his trip around the world. And I think the policy that the United States has is the correct policy.
Q: Sequestration has been described as a slope not a cliff. So in your opinion, how long can sequestration go on before there is real damage to the defense of the United States?
SEC. HAGEL: We are adjusting for the realities not just of what happened today, but, as I noted in my remarks, we have a continuing resolution that expires on March 27th that's an additional complication.
I have confidence in the -- the president and the Congress that decisions, consensus, to -- at some point to avert tremendous damage to this -- this institution.
This is the security of the United States of America we're talking about. That is the highest order of any government, any leader. And we will -- we will do what is necessary, what it takes to assure that security, as I noticed before and mentioned in my -- in my comments.
Q: Mr. Secretary, your predecessor and many other senior leaders of the department have expressed concern that the budget uncertainties with sequestration and the C.R. are going to prevent the department from implementing the defense strategy that the Obama administration unveiled last year.
Do you share that view? And, if so, when do you think you need to start modifying the strategy?
SEC. HAGEL: Well, as I said, first, adjustments are being made, and we've anticipated the required adjustments to our budget to assure the capabilities and readiness of our -- of our forces.
As to the issue of the President's strategic guidance, that is the policy. In my opinion, I think our leadership's opinion, it's the correct policy.
We have been implementing that strategic guidance over the last year. We will continue to implement that -- that policy.
Q: (inaudible), Swiss Television.
Given your role inside NATO, what is going to happen to NATO? And are you in contact or will you be in contact with the allies and the secretary general to explain the situation?
SEC. HAGEL: Well, we have been in touch with our NATO allies. We, as you know, are in constant communication with our NATO allies. I think that they are not unmindful and not unaware of this issue that we are currently engaged in.
Our NATO allies have difficulties as well, with their economic issues. And the fact is NATO represents probably the most successful collective security relationship in the history of man.
That relationship remains strong; will continue to remain strong; must remain strong.
Q: Mr. Secretary, just to clarify something you said earlier, when you said the consensus will be reached to avert tremendous damage to the institution, are you saying you think there'll be some sort of an agreement made on sequestration or...
SEC. HAGEL: I said -- I said I hoped that and I have confidence that we will eventually see a consensus. And that's the only way that we're going to get out of it. This is a partnership. This is a -- this is a republic, and it is the executive and the congressional branches working together to find a way out.
If you listen to our leaders, all are saying the same thing. We need to find a way to resolve the issue. And that -- that's the only way out.
SEC. HAGEL: I'm going to leave. This gentleman, who some of you may know, are not unfamiliar, Ash Carter, who, as you know is our deputy secretary and has had a very significant role, a leadership role, on this particular issue as well as others.
And I might say, as I ask him to come to the podium, I appreciate very much his leadership and his focus on what not only has been going on here, but his years of service to this institution. And it's -- it's a benefit to our country, and it's a benefit to this institution, especially at a difficult time like this.
So I don't want to say anything more about him, other than that.
Ash, thank you.
Q: A couple questions. Can you flesh out over the next couple weeks what practical impacts we will -- the Pentagon and its forces will see from sequestration, versus three or four months now, but over the next two weeks what will we see?
DEPUTY SECRETARY OF DEFENSE ASHTON B. CARTER: Let me start with the Army. You'll see the Army beginning to curtail training at, for example, the National Training Center. If we go to the Air Force now, you'll see the Air Force beginning to curb flying hours. And that means that the nuclear-capable Air Force, that part of the Air Force that is participating in operations in Afghanistan, we will protect them, and that means that the cuts caused by sequestration, also the continuing resolution, will fall more heavily on other parts of the combat Air Force. They'll need to cease training, which means they won't be ready for other conflicts, which is a serious impact.
You've already seen the Navy begin to make adjustments in terms of how many ships are at sea. And you will see each of our program managers -- remember, sequester affects each of 2,500 individual investment programs individually. And so we're working with our industry partners on each of those, and you'll them begin to make adjustments, for example, in the number of weapons systems in a given category that are being purchased. So a different kind of arrangement -- fewer weapons systems in a contract that we anticipated were going to be put in a contract.
That's the kind of thing you'll see. And as the secretary indicated and as the president indicated earlier today, this progressively builds over -- over coming months and constitutes a serious problem, particularly in the readiness accounts.
Q: And one follow-up. Don't the services have flexibility within their individual -- their O&M accounts to protect the operations -- the operating forces account that actually bankrolls training?
DR. CARTER: They do have some flexibility even under sequestration with O&M accounts. They are using that flexibility. They're using that flexibility to protect operations in Afghanistan. So we are not curbing or withholding in any way training from units that are going to Afghanistan. What that means, though, is that the burden falls more heavily upon the rest of the Air Force.
A lot of people ask why does so much happen so fast. And you begin to see some of the reason for that. You have the combination of sequester and the continuing resolution. You have the fact that we're trying to protect the war in Afghanistan. You have the fact that only half of the fiscal year is left.
And so what remains even in those O&M accounts, even after that we move everything around -- and -- and what Secretary Hagel just said is we're doing everything we possibly can to protect national security and minimize damage. But the reality is, even after you've done all of that, even in the O&M accounts, which are the largest, you still don't have enough money left to do the training that underlies readiness. And that's why the readiness crisis that the chiefs referred to is very real. It builds as the year goes along.
Q: (inaudible), thank you, sir.
You talked about the programs that you're concerned about. Now, which people are you most concerned about today, now that the sequester is official? Are there any immediate impacts on personnel and their families (inaudible)?
DR. CARTER: I -- I think the impacts are immediate in all three of the populations that we depend on for national defense. First, for the troops themselves, of course, the president has exempted the pay for military personnel from sequester -- the right decision.
However, our military personnel will still feel things immediately. For example, if you planned to fly or to train in the next few months, that's their duty. That's their profession. That's their responsibility to our national security. They're not going to be able to do that. They'll feel that immediately.
Second, our civilian workforce. As you know, our civilian workforce is about 800,000 strong. Those people, too, are dedicated to the defense mission. They live all over the country, which I remind you, 86 percent of them live completely outside the Washington area; 86 percent. Forty-four percent of them are veterans. So they're dedicated to the mission, too. And as the year goes on, many of them will be subject to furlough.
Third, and finally, the contractor workforce that depends on us, and we in turn depend on them. We -- we don't make anything here in the Pentagon. So we depend upon the industrial base to make our weapons systems, which, second only to our people, what make us, as the Secretary Hagel said, the greatest military in the world.
Many of them will be affected very directly by this, because we'll be cutting back on contractor spend.
Remember, we have to find $46 billion -- $46 billion -- between now and the end of the year. And -- and the civilian and military workforce, per se, will only provide of those savings -- even if we do drastic things there -- a few billion dollars. The rest of that will affect the contractors.
So all three of those populations upon whom we depend, the effects will be serious and immediate.
Q: The -- in your view, how many of these initial cuts will have lasting effects that will trickle on and be felt in the years ahead?
DR. CARTER: That's a good question.
Q: Will readiness -- or if it's not immediate, how soon until the cuts that will impact readiness for years to come?
DR. CARTER: It's a good question. Once again, in this as in every other area, we're doing everything we can to minimize lasting damage. But you can't eliminate it. Let me give you two examples right away.
When you can't afford to begin overhaul or maintenance of a ship and you defer that maintenance, what that means -- our shipyards have their -- their planned maintenance planned out heel -- heel to toe through many years. And so once you've created a gap this year that gap propagates into the future.
Another example. I -- I explained that the Air Force wasn't going to be able to afford to have many of the pilots in combat aircraft -- Air Force train in the latter part of the year. Well, if you stop training for a while and you're a combat pilot, then you'd lose your rating and eventually can't fly at all. Because we can't allow you to fly if you can't fly safely. So you not only can't fly safely, you obviously can't fly proficiently if you can't even fly safely.
Then you have to go back to the long building back process of getting your readiness back.
So this is not something that, even if it's temporary -- and the secretary explained that everybody hopes that in -- in some way both sequester and the problems or experiences (inaudible) associated with a continuing resolution will be resolved through legislation and a -- a large budget deal of some kind.
But even were that to occur some months from now, there would be lasting damage from this. It's very serious.
Q: (inaudible), ABC News.
Of all of the cuts that you see potentially coming down the pipeline, what gives the Pentagon the greatest pause?
And can you tell us at midnight today what are the specific threats to the Pentagon that you feel -- the cuts that you could be seeing immediately right at midnight tonight?
DR. CARTER: The -- right at midnight tonight and then building, as I said, through the days and weeks and months into the future, we will begin curbing training for units.
So let me just take that example and sort of play that out. What does that mean for national security? What it means is that as the -- as the year goes on, apart from Afghanistan, apart from nuclear deterrence through two missions we are strictly protecting, the readiness of the other units to respond to other contingencies will gradually decline. That's not safe. And that we're trying to minimize that in every way we possibly can.
But reduced readiness is a serious matter. As -- as the chiefs have emphasized and as the Secretary emphasized.
Q: (inaudible) do you have any -- do you have any concerns that the lack of any clear impact on national security, short of something obvious and tangible, will make people think the Pentagon can simply absorb these cuts?
And (inaudible) a lot of these things are kind of down the road. They're -- you know, they're -- they're -- people will be less ready, they'll be less capable. But it might not be something obvious. Does that concern you that it might not be tangible enough to really sound alarms with the American public?
DR. CARTER: Well, we have been trying now for 16 months to sound the alarm about sequestration. We're describing to you in all the detail that we can how each and every part of this enterprise will be affected adversely -- the people, the weapons programs, readiness.
We're not going to take actions that are unnecessary just to do something, to use your word, "obvious." But all this is going to be abundantly obvious, starting tomorrow and building through the year. And I think people when they -- those who do not appreciate how serious this is, as the year goes on, it will be unmistakable. This is not subtle. This is an abrupt, serious curbing of activity in each and every one of our key categories of activity in the Department of Defense. It's not subtle.
Q: Thank you very much.
There's a contrarian narrative out there. I'm sure you've heard it. I'd (inaudible) to hear your response. It says the war in Iraq is over. The winding down in Afghanistan; Al Qaeda central is diminished; we're not in a nuclear standoff with Russia; China's a competitor, not an enemy.
So even if we stipulate sequester is a clumsy tool, why can't and why shouldn't this department be forced to operate on less after 10 years of so much money coming your way?
DR. CARTER: Well, first of all, beginning back a year ago, the department embarked on $487 billion in defense cuts, exactly in accordance with what you just said. That in fact built upon $300 billion or so that Secretary Gates had begun back in the so-called "efficiency initiative." So we understand that as the wars in Iraq and Afghanistan wind down, that our overall budget authority will go down and that will make a contribution to -- to deficit reduction. The -- but sequestration is a different matter. It is arbitrary. It is abrupt. And on top of sequestration, we have a continuing resolution in force which creates its own set of problems, I won't go into, but in some categories are just as serious.
So, the net of this is, as I described, something that is abrupt. It's deleterious. It's a very real detriment to defense. We should only get the money that we deserve and that the nation needs. We understand that, and that is the principle upon which built the new strategy last year. And that's right, and the secretary alluded to that.
This country's turning a strategic corner, and that's the broader point, I think, that you're -- you're making, Tom. We're coming out of the era of Iraq and Afghanistan. We're trying to address the national security problems that are going to define this country's future and this world's future. And we're prepared to do that.
And we also understand that we're going to have less resources than we did in that last decade. All of that is understood. This is a different matter. This is something that is not managerially or, from a national security point of view, prudent.
Q: Mr. Secretary, you mentioned before how the civilian workforce has a mission with the department also.
DR. CARTER: I'm sorry -- the...
Q: The civilian workforce has a mission.
DR. CARTER: Yes, indeed.
Q: And feels they have the mission. What do you say to a GS-5 or somebody contemplating a career -- a civilian career with the military (inaudible). Do you still think it's a good idea, given the uncertainty that this causes?
DR. CARTER: Well, I mean, we're realistic. We -- our civilians who make important contributions to defense, otherwise they wouldn't be part of the defense establishment. As I explained, 44 percent of them are veterans. They do real things that are really important to us.
And they've had their pay frozen for years. Now, they're subject to furlough. And as I talk to -- and you say, "why would anybody join our ranks under those circumstances." And the reason is -- the reason you'd want it to be, they join with us, and I hope they'll stick with us, because of mission, because they're committed to what we do, which is defend the country and help to make a better world.
That's why they do it.
DR. CARTER: Thank you all very much.
Q: Thank you.