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Department of Defense News Briefing on the President's Fiscal Year 2019 Defense Budget

 STAFF: Good afternoon, everyone. Thank you for coming.


This is the rollout of the F.Y. '19 budget. It's my pleasure to introduce Under Secretary Of Defense Comptroller David Norquist and U.S. Army Lieutenant General Anthony Ierardi. They will provide an overview of the F.Y. '19 defense budget, followed by your questions.


After this briefing, the Army, Navy, Air Force and Missile Defense Agency will follow.


And so, with that, I will turn it over to David.




Good afternoon. My name's David Norquist. I'm the CFO and comptroller here at the Department of Defense, and I'm joined by General Ierardi from the Joint Staff. Thank you for being here to discuss the F.Y. 2019 budget request for the Department of Defense.


The Department of Defense's enduring mission is to provide combat-ready military forces to deter war and reinforce America's traditional tools of diplomacy. The size and type of force we need depends on our nation's strategy, which is described in two documents: The National Security Strategy and the National Defense Strategy.


Next slide, please.


The National Security Strategy explains how the president intends to put his national security vision into practice. It describes the challenges our nation needs to respond to, and identifies our four vital national interests. From this, the department creates a National Defense Strategy.


Secretary Mattis issued the National Defense Strategy last month and had several classified briefings with Congress last week, where he explained the strategy in detail. An unclassified version of the NDS is available on the DOD website, and a summary is included in your budget overview book.


To give a brief description, consistent with the National Security Strategy, the U.S. next slide, please. Consistent with the National Security Strategy, the U.S. must be prepared to compete, deter war and, if necessary, fight and win, expanding the competitive space by leveraging all elements of national power.


Great power competition, not terrorism, has emerged as the central challenge to U.S. security and prosperity. It is increasingly apparent that China and Russia want to shape a world consistent with their authoritarian values and, in the process, replace the free and open order that has enabled global security and prosperity since World War II.


Our nation's strategy seeks areas of cooperation with competitors from a position of strength. But we recognize that, if unaddressed, the eroding U.S. military advantage versus China and Russia could undermine our ability to deter aggression and coercion in key strategic regions.


Secretary Mattis has set out three lines of effort necessary to sustain U.S. influence and preserve peace through strength. These lines of effort include: build a more lethal, resilient, agile and joint force -- and ready joint force; strengthen alliances and attract new partners; and reform the department's business practices for greater performance and affordability.


Next slide, please.


The National Defense Strategy guided the process we used to build the budget. It determined the issues we examined, the decisions we made and the level of funding that was required. Last week, Congress voted to raise the caps on defense spending to a level that would support the strategy and allow us to restore and rebuild our military.


Let me briefly walk through the numbers. The overall number you often hear is $716 billion. That is the amount of funding for what is called national defense, the accounting code is 050, and includes more than simply the Department of Defense. It includes, for example, Department of Energy and others.


That large a number, if you back out the $30 billion for non-defense agencies, you get to $686 billion. That is the funding for the Department of Defense, split between $617 billion in base and $69 billion in overseas contingency.


For those of you who have a copy of our budget overview, that was printed before the budget deal. It was part of a reassembly, you see a slight difference in mix between base and OCO; the top line the same, all the initiatives and programs are in the same, but during the process of rebuilding this, some of those items were in OCO, and with the increase that came from the congressional action, those items will move to base.


This increase is $74 billion, or it's 10 percent real growth over the levels set in this C.R. It is 5 percent real growth over the president's budget. We are appreciative of Congress raising the caps and ending the destructive effects of sequestration-level funding. And we are committed to the reforms necessary to be good stewards of taxpayers' money.


Next slide.


While a $74 billion increase is large, it is important to put it in its historical context. Even with this budget agreement, defense outlays will remain near historical lows as a share of the U.S. economy. In 2010, DOD was 4.5 percent of GDP. But, even with the budget agreement, we will average approximately 3.1 percent for the next several years.


It is also important to understand the hole we are climbing out of.


Next slide, please.


Many of you heard Secretary Mattis' comments about the damaging effect of sequestration. So let me put that into numbers for you. Imagine if, starting in 2011, the year before sequestration, the defense budget grew by just inflation -- not as fast as the economy, not with requirements, but just inflation. That is the black line shown at the top.


The red line shows the actual funding, as modified by various bipartisan budget agreements. So, over a five-year period, our forces have endured over $400 billion in lost readiness, maintenance and modernization. With the bipartisan budget agreement, that hemorrhaging stops.


It is a sign of how deep the hole is that we are in, that it takes this big of an increase just to get the department's budget back to where inflation alone would have put us.


Next slide.


Looking forward, after 2019 the Defense topline grows by inflation through F.Y. '23. In addition, starting in F.Y. '20, per OMB's direction, we will look to shift the enduring costs of our overseas contingency operations into base on a one-for-one basis, reducing the size of OCO while staying within the same topline.


The number in '18, here, represents the C.R. level, which is where we are held flat at F.Y. '17 levels of funding during the continuing resolution plus the missile defense and defeat funding that Congress adopted in December.


Next slide.


In 2016, our military was the smallest it had been since before World War II. So the National Security Strategy directed, quote, "The U.S. must reverse recent decisions to reduce the size of the joint force and grow the force while modernizing and ensuring readiness."


Consistent with that guidance, we are proposing to increase the force by 25,900 above the F.Y. '18 president's budget, and an increase of 56,600 by 2023.


This allows us to fill in units and provide key skills related to recruiting pilots, maintainers and cybersecurity experts. It also allows us to add units related to reinforcing the National Defense Strategy, such as with the Army, the security force assistance brigades, the Multiple Launch Rocket System battalion, and their shorehead battalions.


Next slide.


To support a more lethal force, we have a number of investments in major acquisition programs. The F-35 Joint Strike Fighter would increase from 70 to 77 aircraft. The F-18 Super Hornet would go from 14 to 24 aircraft to help us address an operational shortfall in Navy TACAIR.


The Navy's purchase for its battle force ships is 10, with 54 ships over the next five years. This increases the size of the Navy from 2018 of 289 ships to 326 by F.Y. '23.


Among the increases in the ships that you see listed there, is the DDG-51 Arleigh Burke-class destroyer goes from two to three, each of those destroyers equipped with the air and missile defense radar, reflecting the changing threats that we face.


Next slide.


The National Defense Strategy also directed that we be able to strike diverse targets inside adversaries' air and missile defense network, to destroy mobile power projection platforms. This required us to make a significant investment in the capacity and the production of munitions, so you'll see some quantity increases in the budget related to munitions.


The Joint Direct Attack Munition goes from 35,000 to 44,000. The Guided Multiple Launch Rocket System used by the Army, production quantities go from 6,000 to near-10,000.


For those who aren't familiar, this is a long-range missile about 40 miles in range, useful for the high-end fight, when you're dealing not with the assumption of air superiority, but when you're trying to suppress the enemy's defenses. You need to be able to reach them from a distance.


Also consistent with the challenges of the high-end fight, you'll see the additional investment in the Army's M1 Abrams tank modernization and upgrade program. We go from upgrading 56 tanks in a year to 135.


Next slide.


The National Defense Strategy called for the modernization of the nuclear triad. It also directed that we focus on a layered missile defense and disruptive capabilities for both theater, missile threats and the North Korean ballistic missile threat.


UNDERSEC. NORQUIST: With that guidance, we invested in a nuclear deterrent modernization program for the triad, as well as increased funding for Missile Defense Agency and the larger missile defense program.


If you compare '17 to '19, the missile defense goes from $8.5 billion to $9.9 billion. Part of the reason the '17 to '19 is there was a missile defense amendment in '18 that began a series of initiatives. This budget continues those initiatives adopted by Congress in December. For the ground-based midcourse defense, we're on path to procure 20 additional missiles, to bring that capacity from 44 to 64 by 2023.


Part of the nature of the changing environment is the importance of staying in front of the technology changes and the evolving threats as it expands across a number of different domains. And so our research program reflects that. We have investments in critical areas, such as hypersonic technology.


UNDERSEC. NORQUIST: Next chart -- sorry. Thank you.


Hypersonic technology, such as high-speed strike weapons; investments in autonomy -- think of swarming tactics of UAVs, unmanned aerial systems -- cyber-integrated defense; defensive and offensive operations; space resilience; directed energy, such as high-energy lasers; electronic warfare; and artificial intelligence.


This spread shows how the domains that we are operating in, and that our enemies are attempting to operate in and challenge, has expanded, and we need to be able to address those. Next slide.


Now I'll turn it over to General Ierardi.


LIEUTENANT GENERAL TONY IERARDI: Good afternoon, ladies and gentlemen. Lieutenant General Tony Ierardi of Joint Staff G-8.


A major thrust of the National Defense Strategy oriented on great power competition: specifically, Russia and China. And, in this respect, our investments to support activities, both capability and posture, in Asia and Europe are an important aspect of this budget.


Just a highlight here on this chart: Some of the key enhancements with regard to Asia including continued investment in air and space superiority; procurement of additional weapons systems, including the Virginia payload module for our Navy submarines; procurement of additional P-8As, three additional in this budget; and work to increase naval presence appropriately as this strategy is implemented in the Pacific, to include infrastructure investments.


In Europe, we continue robust increases in our investments to enhance Army pre-positioning stocks and responsiveness from Europe, including the enhancement of a second armored brigade combat team's worth of equipment in an Army pre-positioned set; replenishment of wartime stocks, including preferred and advanced munitions and increased lethality of each; and expansion and enhancement of air bases to support our operations, as appropriate, in Europe.


 Next chart, please.


 LT. GEN. IERARDI: Warfighting readiness continues to be an emphasis that Secretary Mattis makes from his arrival in the department, last year, and continues with this budget, with a robust budget to support full-spectrum readiness recovery across the board in the joint force , advances the department's multi-pronged, multi-year approach to enhance readiness, and to do so in a way that orients on major competitors, and have a full-spectrum capability would include enhancements at the individual level, as well as collective level, in our joint force units, and would support combatant command exercises and enhancements to support joint training capabilities, reassuring allies and providing for our presence abroad.


 Next chart, please.


The services will all come and talk to their programs to you. Each of the services have plans in place to leverage this budget and to enhance readiness, to support the joint force.


 The Army will increase home-station training and high-end training at its combat training centers and will grow end strength -- continued growth from '17 to '18 and '18 to '19, to avail a larger number of soldiers in both the active and reserve components to fill critical personnel gaps and to grow appropriate structure.


 The Navy will orient their efforts on maintenance and depot-level repair of ships and fighter aircraft and to work to build depth in that enterprise, to enhance the overall readiness of the Navy.


 The Marine Corps continues focusing on training and expeditionary operations and will enhance the force by including an additional 1,100 Marines, with the associated enablers, to build additional training readiness and capability in the Marine Corps, as well as enhancing long-range precision fires, air defense and enhanced maneuver capabilities.


 The Air Force will grow the force to have appropriate and adequate levels of pilot, cyber, specialists, maintainers and intelligence, surveillance and reconnaissance specialists to support operations in the Air Force, as well as supporting weapons systems sustainment and lethality in the force.


 United States Special Operations Command, our Special Operations Forces -- investments will continue to be made to enhance intelligence, surveillance and reconnaissance, as well as the mission training and support to the deployed special operators and those in training for future missions.


 I'll turn it back over to Mr. Norquist.




 Next slide, please.


The budget provides a competitive compensation package that reflects the unique demands and sacrifices of U.S. service members. The F.Y. '19 military pay raise request is 2.6 percent, which is higher than '18 and the largest pay raise in nine years.


It is linked to the employment cost index. For an E6 for example, an Army staff sergeant -- that would represent an annual increase of $1,169. Of significance: The 2019 budget request does not include any health care cost-sharing reforms, as requested in previous years. I will talk about this more later.


But, when you hear this administration talk about reform, we are referring to changing the way that Defense's business operations function to make them less expensive and more efficient. We are not talking about the types of reforms that were done in the past, with shifting co-pays. We also invest $8 billion to sustain family support initiatives, including educating 78,000 students and operating 2,837 commissaries.


One of the challenges of being under sequestration for a long period of time is the effect it has


Next slide.


On facilities. It's one of the first things, maintenance, that gets affected when money is tight. And so that was one of the areas we wanted to address in this budget.


 UNDERSEC. NORQUIST: We are committed to giving our warfighters the facilities and training areas they need. So we've increased the facility investment by 7 percent over the 2018 base budget request, for a total of $10.5 billion, ensuring they have the facilities they need to be successful.


This includes operational and training facilities, such as airfield improvements, training ranges, maintenance and production facilities, such as hangars, missile-assembly buildings, high-explosive magazines, all related to readiness, investments in recapitalization of poor or failing condition buildings and facilities, and improving the quality of life for service members through additional investments in schools, barracks, and medical facilities.


Next slide.


I'm going to take this slide from the bottom up. But this relates to the secretary's third line of effort, reform. So there's a series of congressionally directed reforms. Those are all being implemented including the chief management officer, the reorganization of AT&L.


We continue to reduce headquarter staff consistent with the 2016 NDA to come down 25 percent. But we also have a series of initiatives going forward, led by the deputy secretary of defense, Secretary Shanahan, whose focus is on our business operations. And those reforms -- and it's a series of areas that they are examining -- those savings will be reinvested in the out years by the services to improve the lethality of the force. So that will become one of our major focuses going forward.


Next slide.


The OCO budget supports the needs of U.S. military forces to continue to execute operations around the globe, particularly Afghanistan, Iraq and Syria. And it also includes funding for increased support to the European Deterrence Initiative. It allows us to enhance partner-nation capabilities through training and equipping, and allowing U.S. forces to be available to be moved to other operations.


This is again the chart where the numbers in your book are right. The total for OCO and the total for base is different in the handout you have. The slides are right. The slides match the deal that was done by the Hill on Thursday. But the budget material you have has a different mix because it was sent to the printers before an agreement was reached. So about a $20 billion-dollar difference moving from OCO to base.


Next slide.


In conclusion, this is a strategy-based budget. The strategy determined what we looked at. It determined the choices that the department made, and it determined the level of funding requested and required.


Congress' action last week was an essential step in restoring and rebuilding our military. We look forward to working with Congress this year to put the budget process back on a normal schedule, and to avoid disruptive continuing resolutions in F.Y. '19.


I look forward to taking your questions.


Q: Thank you, Mr. Comptroller.


Some OCO whiplash here. So right now we're looking at an OCO account that is smaller than what you initially had planned for in these books that we have. But the books show that the department was going to use the OCO account to finance this buildup. It's a $90 billion OCO account.


Now we see it, it adheres to the bipartisan deal, but you also said that come F.Y. '20, you're going to start phasing OCO out altogether. Could you talk a little bit more about what that effort's going to look like? Because you were going to use the account to finance a buildup, now we're hearing in '20 it's going to be phased out.


UNDERSEC. NORQUIST: So originally then the budget was being built, it was not clear where the Hill was going to come up on its negotiations. And the direction we had was to assemble the budget with this piece of OCO that was labelled -- in fact, it's labelled in your books "OCO for base." That had been done in '17. In fact, under the '18 C.R. that's what we had, and the numbers are about the same. What the Hill did was a step in the right direction, was to say no, no, that belongs in base. And so their funding has the correct split between OCO and base. And we'll adjust our tables to match. But in some cases we've already indicated what that mix would be.


UNDERSEC. NORQUIST: What OMB has suggested going forward is once you get to '20 and out, that we look at moving even more of OCO to base, that you look at some of those enduring costs that were created as part of OCO, but we'd keep, almost under any circumstance, going forward, and reduce the size of OCO to much more of the incremental costs.


So we will look at what the guidelines and rules would be for that, but that's not in the '19. That would be in '20. But OMB -- and we want to make sure people are aware that that's the direction we were headed.


Q: But the BCA cap will still exist in F.Y. '20. Isn't that a haircut for the department, if you start moving OCO into your base?


UNDERSEC. NORQUIST: My understanding is the BCA cap in '20 is actually down to sequestration levels. So there will need to be an addressing of '20 or '21. And what OMB is suggesting is we should look at the OCO to base mix when Congress looks at that change. But that doesn't affect the current deal on -- from last week.


Q: Just for those listening and for those who will read your highlights book, this glossy, thick book -- the 597 base is wrong? That's in the glossy highlights book?


UNDERSEC. NORQUIST: The budget overview book? Correct, it has the wrong mix of base to OCO. The numbers in your slides are correct.


Q: Are you going to correct that on the website?




Q: Because this is a piece of record now.




Q: I know you did a good job of laying out percentage of GDP. Under this agreement, what percentage of the overall federal government budget is 050 these days? And, conversely, what is the discretionary share? Is it like 7 percent, 13 -- 30 percent? That...


UNDERSEC. NORQUIST: I'll get you those. I don't have -- I didn't bring those numbers with me. But it's been declining over the past few years under sequestration. But I'll get you the table of what it would look like after the adjustment for the deal.


Q: I'm looking at the F-35. You say you're growing the program. The last Obama plan had 80 jets for '19. You're down to 77, so you're kind of -- it's a decrease, versus an increase from the last Obama plan. I just wanted to address why that is. Why didn't you bankroll for 80 jets?


UNDERSEC. NORQUIST: I know they had, we had a program in the out years that went up to those numbers, but I don't think it was a change in '19. We'll double check.


Q: Eighty is in the SAR for '19; the last SAR...




Q: ... about 77, so you can't really say it's increased.


UNDERSEC. NORQUIST: It's increased from the '18 request. We went from 70 to 77.


LT. GEN. IERARDI: (off mic) increased it from '18 to '19 (inaudible) request.


Q: For the general, the European Deterrence Initiative -- could you flesh that out a little bit in terms of the types of equipment that will be pre-positioned in Europe under this new funding scheme?


LT. GEN. IERARDI: It's combat equipment for Army combat units, ground -- including air defense, multiple launch rocket systems, combat brigades, armored brigade combat teams, those both to sustain exercises with our allies, as well as pre-positioning equipment for a unit to fall in on and operate either an exercise or in a contingency with on a short-notice basis.


UNDERSEC. NORQUIST: Two questions -- let me just keep moving. Yes, sir?


Q: You said the government's focusing a lot on cyber. Could you give us a sense of what the cyber budget is and what the U.S. Cyber Command -- what your request is for your Cyber Command, or sort of an overall picture of how much money you foresee going into cyber?


UNDERSEC. NORQUIST: So the overall cyber effort's spread into a lot of -- a number of different areas. There's about $8.6 billion. Cyber Command is now a unified command under STRATCOM, and this funding includes support for 133 Cyber Mission Force, which is part of the units there.


So that gives you some of the idea of the scale.




Q: Thank you very much, sir. Two-part question, sir, on South Asia: One, as far as this new budget is concerned, how are you going to stop China’s military buildup in the area? And it's threatening the regional nations -- because of China's expansion.


Q: And also, at the same time, as far as the -- Afghanistan is concerned, the ongoing, longest war, Afghanistan people are now asking, maybe in this new budget they will see a new light in the dark tunnel, and this will be end of the terrorism or Al Qaida and Talibans for the people of Afghanistan.


LT. GEN. IERARDI: What I'd say is in, with respect to the Asia question, it's enhancing both capability and posture of the Department of Defense, of the joint force, to contend with China.


With respect to Afghanistan, it's continuation of rather adequate and appropriate resources to support the strategy in Afghanistan that has been adopted, and to work with Afghanistan forces in countering the violent extremism there in Afghanistan.


STAFF: So on this side. Yes, sir.


Q: Thank you.


The budget calls for adding 24,100 personnel. Is it the Defense Department's position that at current manning levels, the Defense Department cannot meet all the tasks required of it and win wars?


UNDERSEC. NORQUIST: Well, the increase was designed to address a couple things.


One is readiness issues, by adding pilots and people with skills in cyber areas. And also allowed the capacity to add the types of units related to the emerging threats and challenges that we see.


So I think part of what this strategy did is it looked over time, and said, "Where do we need to be?"


Adding personnel takes time, but it also is something that if you need to know where you're headed, and what you're trying to accomplish. And so that's what those additional forces are for.


And the services, I think, can talk to some detail.


LT. GEN. IERARDI: And I would just add that this strategy requires enhancements in capability, capacity and readiness. And we, indeed, are focused on achieving all of those to execute the strategy.


STAFF: Next question.


Q: Let me follow on (inaudible)'s question -- Military Times.


The Marine Corps has a relatively modest gain in personnel compared to the other services. Is that reflective of the strategy, or do you think you'll be leaning on the Marine Corps less, and going to more of a conventional warfare approach?


LT. GEN. IERARDI: The Marines will continue to focus on the missions that they're being assigned, to have an expeditionary capability, and to be trained and ready to accomplish those tasks.


It was the judgment of the department, and the judgment of the Marine Corps, that the additional 1,100 Marines was appropriate, given the enhancements that were required in the overall warfighting elements of the Marine Corps.


UNDERSEC. NORQUIST: Each of the services took a different look at what it takes to improve their readiness and their capability. And in some cases, it's additional end-strength, and in some cases, it's additional training, in other cases, it's moving more things to maintenance for readiness. So you'll see some variation between them. It's not a matter of emphasis of one service over the other. It's a recognition on their part of what they need to be effective.




Q: On AFRICOM, as we shift to this great power focus with the military, (inaudible) AFRICOM's funding and troop levels and support, such as for personnel recovery? Are they still going to be asked to do, you know, more with less?


 LT. GEN. IERARDI: We're certainly committed to developing capabilities to support AFRICOM, including personnel recovery. As the National Defense Strategy is implemented, resources will be allocated appropriately to meet the missions of the combatant commanders and the National Defense Strategy. So there's a determination yet to follow on the breakdown between commands, but it'll be a very dynamic and fluid way in which that proceeds, based on the situation that we find ourselves in.


STAFF: Next question.


Q: Thanks. (inaudible) with Jane's.


Can you give us a sense of how or if interest on the national debt factors into your future budget planning? Because CBO, I think, last year, projected somewhere in the next 30 years, it would become about a third of federal spending.


So does that start to squeeze out your discretionary funding anytime soon?


UNDERSEC. NORQUIST: So let's go back to the chart that had the percent of GDP on it. Because I think this is a useful one to go.


Slide four.


So one of the things, while they're bringing the slide up, is to understand that when you look at the effect on spending and the national debt, defense has gone down consistently as a percent of GDP.


And even after this increase, when you look at the out-years, we're only growing at the rate of inflation. Which means as the economy grows, it will continue to grow faster than the Department of Defense. So our share of the economy, our share of that process will continue to go down.


And so it -- we think this strikes an appropriate balance between security and solvency. It's necessary to implement the National Defense Strategy. But the National Defense Strategy -- while it was not resource-constrained, it was resource-informed -- recognizes that the long-term competition requires the United States to be effective across a number of areas, economic growth and solvency. And so this is part of that, and I think the chart reflects how that is balanced.


Q: Any time in the next -- within this budget at least, that is not something you're concerned about?


Q: (inaudible) discretionary fund?


UNDERSEC. NORQUIST: The thing I'm most concerned about is economic growth. And when you look at long-range competition, a growing economy is a significant differentiator.


Yes, sir?


Q: (inaudible) with (inaudible) Agency, sir.


I want -- I have a question about the counter-ISIS training program. There is a detail for Syria, the activity training activities in Syria, you have stated, $300 million. And also there is a $250 million for border security requirements related to the counter-ISIS mission.


First, as the ISIS operations, anti-ISIS operations, are being folded up or kind of fading away, what are the details of this $300 million? How are you going to use the $300 million?


And this $250 million for border security requirements, can you explain, what is it? Is it the one that formerly disclosed that it was -- if the U.S. is going to build up at 30,000 kind of border security force in northern Syria, or what is the detail of this $250 million?


UNDERSEC. NORQUIST: I need to get back to you on the specifics of those programs. We have a series of train and equip initiatives inside the budget to enhance our ability to cooperate and work through and alongside our allies in that particular one. And the specifics of it, let's just take your question for the record and we'll get back to you with an answer, sir.


STAFF: Yes, in the back.


Q: Joe Gould from Defense News.


Forgive me if it was in there, but I didn't see a request for a BRAC round. Is that -- does that reflect some change in the current thinking, here, around viability of asking Congress for BRAC?


UNDERSEC. NORQUIST: So you are correct. Very observant. You get the gold star. We did not ask for that in this budget. We've asked for it for a number of times in the past without much success.


And so I think we're looking at doing two things, going forward. One is, working with Congress to find common areas where we can make reforms and changes that don't create the same types of obstacles. The other is that we are undergoing a financial-statement audit that includes a look at property, and assets and investments and improving the accuracy of the data behind it.


And as a view of being able to take advantage of the data coming out of that process, to help us make better decision-making on real property. But, yes, you are correct, there is not request for another BRAC round in this budget.


Q: And do you have a sense of, overall, you know, in terms of quantifying the kinds of savings that you might reap from some of the reform efforts that -- that are detailed here, do you have a -- kind of a ballpark as to how much you might get back in investing in lethality?


UNDERSEC. NORQUIST: I don't have a ballpark at this point. One of the things we've tried to be cautious about is, in past, people have often put in wedges, and then they've lost interest in the reform because they've assigned the piece.


UNDERSEC. NORQUIST: And so we've tried to be very careful about working with the services, that as we see those savings captured, and are credible, then they can reinvest them. But we'll try to avoid some of the previous mistakes of how that's been handled.


STAFF: We have time for just a few more questions, about five minutes.




Q: This budget sort of asks for more than $2 billion more in Iraq and Syria. I'm just curious why that is, given the talk of the drawdown and sort of the same amount of U.S. troops as the last budget. So I'm just curious why that might be as we're talking drawdown and a move towards ...


UNDERSEC. NORQUIST: Are you talking about the change in OCO?


Q: Yes.


UNDERSEC. NORQUIST: OK, so I think in the change in OCO, one of the things we actually -- EDI, in the European Deterrence Initiative.


Q: Specifically for Iraq and Syria. I think it was $15.3 billion as opposed to $13.


UNDERSEC. NORQUIST: Right, there was a billion-dollar amendment I think we sent up in the fall. We laid it to the additional force presence that was there. If there's other differences in there, I'll have to check. They may be within some of the train-and-equip lines that are there as well. But we can get you a breakdown.


Is there a particular program within that, or just sort of the delta between one year and the next?


Q: A breakdown, because I -- my understanding and from the previous question is that the train and equip is actually falling by 300.




Could be, I'll go back and look at the specifics for you, but naturally because some of the achievement of some of the objectives that had originally been set ahead of schedule that may have adjusted some of the need for the resources.




Q: Interestingly, your F&T account hasn't gone up all that much. I think its $13.7 billion. Last year it was like $13.3 billion. That is where a lot of the investments we keep hearing about typically live, the artificial intelligence and autonomous systems.


Why isn't that account increasing to accommodate this new focus on great power competition?


UNDERSEC. NORQUIST: So I believe it is increasing. I think your question is, is it increasing as fast? And I -- a lot of those technologies, there's a range from 61 up to, you know, 63, 64, where depending on the maturity of the technology where it's going into.


But from hypersonics to autonomous to cyber, you'll see initiatives across those areas.


Yes, sir?


Q: Mr. Comptroller, you've often compared the defense budget with the role of U.S. GDP. Do you think a country's defense budget should reflect a country's GDP growth?


UNDERSEC. NORQUIST: Well, I don't think there's a requirement that the change in the budget reflect the change in the GDP growth. I think that's -- but that, what it shows you, is that as an economy is growing, the amount of it costs to support its defense, its other spending is affected.


The economy is growing faster than as a share of a budget, you're going down, and there's additional resources for deficit reduction or other items. And so knowing whether you're trending above or below that in the long term makes a difference.


Q: And also what's your prediction of the Congress reaction to this proposal? Where do you think they might take away something and add a little something? And what do you think the final budget would look like?


UNDERSEC. NORQUIST: So I believe that Congress is likely to act consistent with the legislation they just passed last week. So I expect them to function at the national security level at $700 billion in '18 and $716 billion in '19.


They, of course, are free to make their own independent decisions on the programs. They do so every year, and we look forward to working with them on that process.


Q: Quick one. Were any programs terminated in this "let the good times roll" budget?


LT. GEN. IERARDI: I'm aware of the Air Force will have a proposal to terminate the recapitalization of JSTARS.


Q: I'm talking about a legacy program that's being bankrolled now versus something that they were going to bankroll. And anything, Mr. Norquist, that you can point to?


UNDERSEC. NORQUIST: So there's been a shift -- I don't know that we have a major termination to announce. That wasn't, you know, part of the strategy. Part of it was relating to the new technologies and the areas of threats, and some of those will phase out as others come in.


But there's not a dramatic one like that that I know of, instead of what he's just mentioned. Yes?


Q: Hi, Federal Computer Week.


I just wanted to follow up on S&T comments. What's the DIUX investment look like?


LT. GEN. IERARDI: I think I have that. Give me one second.


The DIUX is in '19 at $71 million.


STAFF: Time for one more.


UNDERSEC. NORQUIST: All right. Yes, ma'am.


Q: Sir, is there any chance that you'll end up in another C.R. if Congress can't come to terms on the spending lines even though they have the overall 700 and 716?


UNDERSEC. NORQUIST: I have great confidence in the Congress' ability to move forward with this. I think that they're reached a tremendous bipartisan agreement. I think the Appropriations Committees are in position to move forward. The C.R. gives them a period of time to put that together.


It's not easy to pull all the different pieces of the appropriation bills together, so I know it's a heavy lift. But I also know the staff there is very dedicated and I look forward to working with them to make this possible.


And thank you, everybody. I appreciate you taking the time.


We'll now be followed by the services. So I think there's a short break and then you'll get to ask specific service questions.