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Opening Summary -- Senate Armed Services Committee (Budget Request)

Thank you, Mr. Chairman, Ranking Member Reed, and all the members of the committee. Thank you for inviting me to be here today with you, and thank you for confirming me as Secretary of Defense. I’m honored by the trust and confidence of President Obama in appointing me, and the Senate in confirming me.

My care and respect for the men and women of the finest fighting force the world has ever known is as boundless as their skill and devotion. I know this committee shares the same devotion to them – and shares responsibility for them, and for the defense of our great country. And I hope that my tenure as Secretary of Defense will be marked by partnership with you on their behalf.

I’m here to present the President’s budget for the Department of Defense for Fiscal Year 2016. Since I’ve been on the job for exactly two weeks, it’s plain that I did not have a role in shaping this budget. But I’ve studied it carefully, and I’m fully prepared to answer your questions about it, and to work with you to find common ground where you have concerns.

Most importantly, I strongly support the President in requesting a defense budget above the artificial caps of the Budget Control Act – above the so-called sequester levels – next year and the years thereafter. I share the President’s desire to find a way forward that upholds the fundamental principles behind the Bipartisan Budget Act of 2013. And I support the President’s commitment to vetoing any bill that locks in sequestration. Because to do otherwise would be both unsafe and wasteful.

Before I turn to the budget to explain what I mean by that, allow me to share some observations from my short time on the job – observations that help reinforce my testimony here.

Shortly after I was sworn in, I spoke to the people of the Department of Defense – military, civilian, and contractor – and told them I had three commitments as Secretary of Defense.

The first is to them and their families – to their safety, their welfare, and their effectiveness – and equally to those who came before them, and to those who will come after them.

The second commitment is to assist the President as he makes difficult decisions about how to defend the country in a turbulent world, and then to carry out those decisions where they involve the use of military force.

And the third commitment is to the future – to make sure our military remains the very best in an ever-changing world, amid fast- moving technological and commercial change, and as we seek to attract new generations to the mission of national security.

Because of those commitments, I traveled at the end of my first week on the job to Afghanistan to visit our troops and commanders, and also the leaders of Afghanistan and some of their military leaders. I wanted to assess the conditions on the ground there as we enter a new phase of our long campaign, and as we carry out the transition to an enduring presence that will ensure, as the President says, our progress in Afghanistan sticks.

Next I traveled to Kuwait, where I met with the Amir before convening senior American diplomats and military leaders from throughout the region – ambassadors from several countries, our commanders from CENTCOM, EUCOM, AFRICOM, and SOCOM, and the commanders of the campaign in Iraq and Syria against ISIL. I wanted to hear directly from them about the complex political and military situation in the region, and about the best approaches to leveraging U.S. leadership of the broad coalition combating this ugly scourge.

And this afternoon, I’d be pleased to discuss these challenges or any others – the Chairman mentioned Ukraine – in addition to the budget.

The point is that in these regions of the world, just as in the Asia-Pacific, in Europe, and elsewhere, it’s America’s leadership, America’s men and women in uniform, who frequently stand between order and disorder – who stand up to malicious and destabilizing actors, while standing with those who believe, with us, in a more secure, just, and prosperous future for all our children.

But this Congress will determine whether our troops can continue to do so.

The Administration is proposing to increase the defense budget in line with the projection submitted to Congress last year. By halting the decline in defense spending imposed by the Budget Control Act, the President’s budget would give us the resources we need to execute our nation’s defense strategy.

But – and I want to be clear about this – under sequestration, which is set to return in 212 days, our nation would be less secure.

Mr. Chairman, as you yourself have reminded Congress, sequestration threatens our military’s readiness, the size of our warfighting forces, the capabilities of our air and naval fleets, and ultimately, the lives of our men and women in uniform. The Joint Chiefs have said the same before this committee – and they could not have been more clear – in their assessment of the damage sequestration would do to our national security.

I want to commend you and thank you, Mr. Chairman, Ranking Member Reed, for your very thoughtful letter to the leadership of the Senate Budget Committee about the dangers of sequestration. And I completely agree with you that the threat of sequestration is, as you said, “a national security crisis of the first order.”

The great tragedy is that this corrosive damage to our national security is not the result of objective factors, logic, or reason.

It’s not that we have some new breakthrough in military technology or some novel strategic insight that somehow provides the same security for a smaller budget.

It’s not that sequester is forced upon us by economic emergency or dire recession that makes taking grave security risks absolutely necessary.

It’s surely not the case that the world has suddenly become more stable, or that America has less to do to keep it safe, allowing us to take a peace dividend.

It’s not even that these cuts solve the nation’s overall fiscal challenges – because the sad math is that they are large and sudden enough to damage defense but fail to resolve our long-term fiscal issues and the real drivers of the deficit and debt.

Sequester was not the result of objective factors. Sequester is purely the fallout of political gridlock. Its purpose was to compel prudent compromise on our long-term fiscal challenges – compromise that never came.

This has been compounded in recent years, because the Defense Department has suffered a double-whammy – the worst of both worlds – that has coupled mindless sequestration with constraints on our ability to reform. We need your help with both.

I know that Chairman McCain, Senator Reed, and others on this committee are as committed to reform as I am. And I look forward to working with you on new reforms.

We at the Pentagon can and must do better at getting value for the defense dollar. Taxpayers have trouble comprehending, let alone supporting the defense budget, when they hear about cost overruns, insufficient accounting and accountability, needless overhead, excess infrastructure and the like.

There are significant savings to be found through new reforms across DoD – reforms that we’re committed to pursuing. But sequester cuts don’t help us achieve any of them. In fact, the nature of sequester frequently leads to waste – as, for example, when it forces a reduction in contract production rates, driving up unit costs.

But at the same time that I’m committed to new and further reforms, I must note that in the past several years, painful but necessary reforms proposed by DoD – reforms involving elimination of overhead and unneeded infrastructure, retirement of older force structure and reasonable adjustments in compensation – have been denied by Congress. I need your help with these reforms, which have been frustrated at the same time sequester looms, and at the same time as – and at the same time as we make new reforms. I will work with Congress to resolve concerns and find common ground, but we must have your help.

If confronted with sequester-level budgets and continued obstacles to reform, I do not believe that we can simply keep making incremental cuts while maintaining the same general set of objectives that have anchored our defense strategy. We would have to change the shape, and not just the size, of our military – significantly impacting parts of our defense strategy. We cannot meet sequester with further half measures.

As Secretary of Defense, I will not send our troops into a fight with outdated equipment, inadequate readiness, or ineffective doctrine. But everything else is on the table – including parts of our budget that have long been considered inviolate.

This may lead to decisions that no Americans – including members of Congress – want us to make.

I’m not afraid to ask the difficult questions, but if we are stuck with sequestration’s budget cuts over the long term, our entire nation will have to live with the answers.

So instead of sequestration, I urge you to urge your colleagues to embrace the alternative: building the force of the future, powerful enough to underwrite our strategy, equipped with boldly new technology, leading in domains like cyber and space – as the Chairman and Senator Reed said – attracting and retaining the best Americans to our mission, being lean and efficient throughout our enterprise, and showing resolve to friends and potential foes alike.

I think we can all agree that the world in 2014 was more complicated than anyone could’ve predicted. Given today’s security environment, the President’s proposed increase in defense spending over last year’s budget is responsible, and it’s prudent.

I earnestly hope we can come together behind a long-term budget approach that dispels sequester and provides stability, rather than doing this one year at a time.

I hope we can again unite behind what our great nation should – and must – do to protect our people and make a better world.

And I hope we can provide our magnificent men and women of the Department of Defense – who make up the greatest fighting force the world has ever known – what they need, and what they fully deserve.

Thank you, Mr. Chairman, and I look forward to your questions.