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Secretary Esper Discusses Readiness and Modernization at the Heritage Foundation

SECRETARY OF DEFENSE DR. MARK T. ESPER:  Good afternoon everyone and thank you, Kay, for that very kind and generous introduction. And I want to say a big thank you to the Heritage Foundation for hosting this discussion about the successes of the Department of Defense and the challenges we face, when it comes to implementing the National Defense Strategy in this era of great power competition.

Today, our strategic competitors, China and Russia, are attempting to erode our hard-earned gains as they undermine international rules and norms and use coercion against other nations for their own benefit. We continue to see this behavior globally, from Beijing’s predatory economics and its aggression in the South and East China Seas, to Moscow’s violations of its international obligations and the sovereignty of its neighbors.

When I was confirmed as Secretary of Defense in 2019, I made my top priority the irreversible implementation of the National Defense Strategy. This strategy guides our work to protect our comparative and competitive advantages and defend a free and open global order along three lines of effort: first, improving the lethality and readiness of the force; second, strengthening allies and building partners; and third, reforming the department for greater efficiency and accountability. I also added a fourth, personal priority: taking care of our service members and their families. 

We have made great progress on all these fronts, which we distilled into ten targeted goals to drive change across the entire Defense Department enterprise – from focusing the department on China, to developing coordinated guidance to strengthen allies and build partners; from modernizing the force by investing in game-changing technologies, to reforming the Fourth Estate; and, from reallocating, reassigning, and redeploying forces in accordance with the NDS, to developing a new joint warfighting concept, just to name a few. 

In recent weeks, I have discussed our progress in several of these areas, including modernization, and our plan for our future naval fleet of over 500 ships. Today, I’d like to highlight our efforts on another top ten goal: achieving higher levels of sustainable readiness. 

First, it is important to define what readiness really means for the United States Armed Forces. Simply put, readiness refers to our military’s ability to answer the nation’s call, and to fight and win, anytime, anywhere. It is comprised of the training and equipment we provide our soldiers, sailors, airmen, Marines, and space professionals, as well as the deployment and maintenance schedules that drive our operations, and the way we keep our service members physically strong and mentally tough.

The bottom line is that each part of the readiness life cycle is vital to preparing and enabling our men and women in uniform to successfully execute their mission. The question we must answer is this: if called upon to fight tonight, are we ready? 

Today, given our efforts over the past few years, I am fully confident the answer to that question is a resounding yes!  

I will explain why in a few minutes, because first I want to show through historical example how we learned the hard way the costs of not being ready. 

In July 1950, at the beginning of the Korean War, an understrength infantry battalion and an artillery battery of close to 500 American soldiers rapidly deployed to the outbreak of that conflict to a position north of Osan, South Korea, to delay the invading North Korean forces. These men, known as Task Force Smith, arrived without the standard kit of a regimental combat team, including tanks and air defenses. Moreover, they had very little ammunition, their training was inadequate, few of them had any combat experience, and their anti-tank weapons were ineffective.

Yet, they would soon encounter thousands of enemy forces and dozens of North Korean tanks. Outgunned by the heavy armor and outmaneuvered by enemy infantry, Task Force Smith was forced to retreat, suffering heavy casualties in the process. The Battle of Osan demonstrated the tragic consequences of leadership’s failure to understand the mission and their responsibilities, leaving American troops unprepared, with obsolete equipment, and heavily outmanned.

For many years, to include my time on active duty as an Infantry Officer in the 1980s, the training imperative of the Army was “No more Task Force Smiths.” That must remain our mantra today.

Our security environment looks much different 70 years later, but the lessons we learned about the importance of readiness remain with us. Today, the NDS requires the U.S. military to focus on preparing for a high-end fight against near-peer adversaries. To do so, we must acknowledge that for the past two decades, our attention was directed mainly toward fighting low-intensity conflicts against insurgents and violent extremist organizations. Moreover, years of insufficient budgets and sequestration caused significant damage to our readiness – until 2017, when we were able to begin reversing course by adding over $200 billion to our budgets through fiscal year 2019. 

Over the past few years, the department has refocused and restored readiness in accordance with the NDS, along three major categories – people, policy, and performance – each of which I want to address in greater detail. 

In the policy category, the department has made our biggest changes in Global Force Management since the early 2000s, with the aim of creating more ready forces with far greater readiness and operational unpredictability. The NDS recognizes the need to balance the department’s modernization for future, high-end conflicts with the demands of current operations. 

To do so, we must grow our available pool of ready forces. Next, we must deploy them with greater agility in response to crises and strategic opportunities. And finally, we must be more disciplined in how we manage this ready supply from the Services with the requests from Combatant Commanders. In addressing this challenge, the department has undertaken two major policy shifts. 

First, implementing Dynamic Force Employment allows us to rapidly reposition forces to enhance deterrence, to introduce operational uncertainty into our adversaries’ calculus, to take advantage of global opportunities and emerging situations, and to test our own readiness. 

Second, increasing the number of highly-ready Immediate Response Forces and follow-on Contingency Response Force units, the IRF and the CRF, and providing greater central authority to use them globally, allows us to tailor the readiness of the Joint Force for the most stressing war plans.

Combined, these policy shifts – which constitute another one of our top ten NDS objectives – have enabled us to think and act globally, with speed, unencumbered by limitations within individual, geographic Combatant Commands. This construct has also allowed us to be much more confident in the joint force’s preparedness, and in directing readiness levels from the Services, while also creating predictability and efficiency within our programming and budgeting system.

A particularly salient example is the Bomber Task Force operational concept. In April of this year, I approved an Air Force construct to improve the readiness and strategic flexibility of our bomber force, moving away from a 16-year static and predictable presence on Guam that was burning down readiness. This change was also necessary to complicate Beijing’s decision-making and prevent them from targeting our assets or limiting our range with their growing capabilities.

The impact of the Bomber Task Force concept extends beyond the Indo-Pacific, however, offering a range of options to Combatant Commanders in multiple theaters, including Europe. In August, six B-52 bombers from Minot Air Force Base, supported by a robust airborne tanker brigade, overflew all 30 NATO countries in a single day, integrating with allied fighter aircraft along the way. This robust show of force by a broad coalition did not go unnoticed by Moscow. Neither did our ability to rapidly deploy our bombers anywhere, at any time, sending a strong message of our commitment to our allies and partners.

Moreover, the Air Force continues to maintain a heightened posture of readiness to deploy fighter squadrons on short notice, much like we did late last year to support Saudi Arabia, following Iran’s attacks on its soil.

Another example is the aftermath of U.S. airstrikes against Iran-backed militia sites in Iraq last year. On December 31st, Pentagon senior leaders were informed of a large, violent protest outside the U.S. Embassy in Baghdad, followed hours later by notice of a possible embassy breach. This triggered the requirement to deploy an Immediate Response Force, which was successfully accomplished within 19 hours of the incident. Over the next three days, an entire Infantry Brigade Combat Team consisting of more than 3,000 soldiers and equipment was deployed halfway around the world to secure American lives and property in Iraq.

The Navy has also executed multiple short-notice movements under dynamic force employment. This includes the deployment of the USS Dwight D. Eisenhower earlier this year, which was quickly adjusted in light of the coronavirus outbreak and forced the Ike to remain at sea for seven months to continue its maritime stability and security operations in the Middle East. It also includes the rapid deployment of the Comfort and Mercy hospital ships to the east and west coasts of the United States in March, to provide medical support in COVID hospitals to support the American people. 

Moving on to people, the department has pursued several initiatives to train our personnel for great power competition, to better prepare them to deploy if called upon, and ensure they are less likely to serve in back-to-back deployments – all while improving their quality of life.

Our path forward also relies on Service-level training and professional military education that develops the expertise of our force on Chinese military systems, tactics, and doctrine – much like my generation did when we studied the Soviet armed forces during the Cold War. As part of our top 10 goal to focus the department on China, I directed the National Defense University to refocus its curriculum by dedicating 50 percent of the coursework to China by academic year 2021. I also tasked the military Services to make the People’s Liberation Army the pacing threat in our professional schools, programs, and training. 

Another critical factor in our readiness is the size and composition of our deployable force, which we now track in ways we never did before. We have added nearly 30,000 military personnel to our ranks since 2016, and made great gains not simply by growing our end strength, but by maximizing the number of service members we are able to deploy at any given time. This was the result of close, senior level and senior leader attention to needed reforms such as quickly resolving medical conditions, enabling service members to get back to a ready status sooner. 

Ultimately, we drove down non-deployable numbers past our goal of five percent of the force, increasing readiness by returning tens of thousands of personnel to fully deployable status months ahead of schedule. For example, over the last few years, the Army’s non-deployable population has decreased well over 50 percent, meaning many more soldiers are available for a potential, high-end fight, if called upon to go.

Since 2017, the Air Force has recruited and trained 4,600 additional maintenance personnel, which, coupled with additional investments, drove a 19-percent increase in overall unit readiness. At the same time, the number of sailors filling operational sea-duty billets is at its highest point since 2014.

Meanwhile, we are doing everything in our power to balance the inexorable demands of overseas deployments with readiness and our service members’ commitments at home. One of our first tasks – before we make a decision to send forces abroad – is to determine how the deployment will impact their work/life timelines. By increasing and monitoring these deploy-to-dwell thresholds, we are working to make sure every warfighter and unit gets adequate time to recover from their last deployment, is well trained and prepared for their next one, and on a more personal note, experiences more of the important moments in their families’ lives. We aim to do all this while enabling the Services to continue to generate enough readiness for both today and tomorrow.

Key to our people’s ability to execute their mission is their resiliency and wellbeing. This is why we continue to take steps to improve service members’ quality of life, including by expanding the availability of childcare, helping spouses sustain their careers through multiple PCS moves, improving housing, and providing mental health resources and other support. It is also why we remain focused on reinforcing ethical leadership across the force, fostering trust in the chain of command, and promoting inclusion and equal opportunity for all. 

Finally, regarding performance, the department is working alongside industry partners to improve maintenance and sustainment, while investing in high-end training and exercises to increase the proficiency of the force.

Many of our aircraft have undergone extensive maintenance and much-needed upgrades over the past few years to substantially increase their readiness levels. This includes the F/A-18 Hornet, whose mission capable rate increased from a long-term average of 55 percent, to 80 percent, as of last year. Among several initiatives, the Navy divested from the oldest, legacy Hornets, and harvested more than 14,000 repairable items for spares. 

Additionally, improvements were made to manage the aircraft undergoing depot repair and increase workforce employment. As a result, we now have more ready aircraft on the flight lines, and pilots with greater proficiency and experience.

The department’s fiscal year 2021 budget request aimed to strengthen warfighting readiness with a balanced mix of fighter aircraft – including F-35s – to ensure American air dominance. As we transition to new platforms, we continue to restore and maintain legacy ones, such as the CH-53E Super Stallion heavy lift transport helicopter. The Marine Corps has improved this helicopter’s mission capable rate by nearly 10 percent since fiscal year 2017 in fleet squadrons, and returned 38 helicopters to full mission capable status – supporting the execution of over 104,000 flight hours in training and operational flights.

Overall, the Navy’s readiness has been on an upward trend since 2018, thanks to increases in readiness funding, and process improvements in aviation and private shipyards, including the hiring of hundreds of additional shipyard personnel. As a result, on-time ship maintenance completion rates have increased considerably, which I was pleased to see during my visits to shipyards in Norfolk, Virginia, and Groton, Connecticut. Further, the Navy is investing $20 billion over the next 20 years to modernize our aging public shipyards, recognizing the impact that these improvements will have on our goal for Battle Force 2045 – the modern 500-plus ship Navy I outlined last week. 

The Air Force and Space Force have also made significant progress in rebuilding readiness across multiple aircraft fleets, satellite constellations, and mission sets, while actively pursuing the development of integrated systems such as the Advanced Battle Management System. Key in this effort has been our investment in Weapon System Sustainment, with a nine percent funding increase yielding tangible improvements in aircraft availability and training opportunities. And, as the priority for manning, “first to fight” front-line units have seen increased readiness as high as 45 percent over the past two years.

Meanwhile, we have enhanced our ground combat capabilities by converting Infantry Brigade Combat Teams to Armored Brigade Combat Teams, the Army’s most lethal and mobile combat formations. Over the past four years, the Army has increased the number of ABCTs ready for deployment by 30 percent, while also upgrading and modernizing more than 470 Abrams tanks. Additionally, this year the Army conducted its largest strategic force projection exercise in nearly two decades, with Defender 20, integrating Armored Brigade Combat Teams with our NATO partners in both maneuver and live-fire exercises on the European continent. 
Among our efforts to further enhance the proficiency of our force, the Defense Department has streamlined pre-deployment training, preparations, and medical requirements, by returning those decisions to the military departments. This April, I also signed the Joint Operational Training Infrastructure Strategy to integrate our efforts to modernize operational training over the next ten years. This is a vital step toward fulfilling another one of our top 10 goals: that is, establishing realistic joint war games, exercises, and training plans. In doing so, we will ensure the Joint Force receives better training that replicates operational conditions in contested environments against our strategic competitors. 

The Air Force, for example, has migrated to a common simulator platform to enhance interoperability and cybersecurity, and to integrate multiple domains. This step was taken in response to the insufficient capabilities of simulators that were designed as stand-alone devices, training crews to fly specific aircraft.

Meanwhile, the Navy is developing an integrated Live, Virtual, Constructive training environment, which merges live and synthetic training to prepare our forces for conflict against peer and near-peer competitors. At the same time, the Navy and Marine Corps are preparing for Large Scale Exercise 2021, a multi-domain maritime exercise that will test their ability to integrate and operationalize fleet design and supporting concepts at multiple levels of war.

As we continue to strengthen the United States military readiness for the future, our imperative is to build upon the gains we have made in recent years, while adapting to stay ahead of emerging challenges – including cyber.

We know adversaries and malign actors are attempting to attack and jeopardize the networks that our platforms, weapons, and formations rely upon to operate. The tremendous investments we have made in our most lethal capabilities could be rendered ineffective in a high-end fight, unless we treat cyber capability readiness with the same seriousness as we do materiel or personnel readiness. This is why the department has put cyber on par with the other elements of readiness I discussed earlier: people, equipment, and training. 

The coronavirus pandemic represents another challenge to our military and our industrial base. However, the department has been quick to minimize its impact on our forces, by taking immediate action, going back to January, to stem the spread of the virus in our ranks. We suspended international travel for our personnel, then shifted to a conditions-based approach. We published thirteen iterations of Force Health Protection guidelines since early February, when we activated our global pandemic response plan. And, we modified our training to mitigate COVID risks – this year’s RIMPAC exercise, for example, was held only at sea, without port calls. 

At the same time, we provided medical support, personal protective equipment, and other supplies to federal agencies working in hotspots around the country in support of the American people. And, through the Defense Production Act, we announced over $500 million worth of contracts to sustain essential domestic industrial base capabilities.

Meanwhile, more than 140 DoD labs have performed over 1.2 million COVID clinical diagnostic tests so far, as part of our work to enable the safe deployment of forces across the globe. And we are testing an average of 40,000-plus service members weekly; that number reached more than 54,000 earlier this year, due to our robust monitoring efforts. 

We also developed a convalescent plasma collection strategy to support advanced illness within the force, and collected nearly 11,000 units by the end of the fiscal year. While our competitors attempt to exploit the pandemic and extend their malign influence, the United States military continues to protect our people, remaining prepared to deter every threat, and to fight and win, if need be.

Lastly, the success of our efforts relies on the support of Congress. In the face of rising strategic threats, we depend on steady fiscal commitments to sustain our current force, and prepare for tomorrow’s challenges. The past few years of funding allowed us to rebuild our readiness after years of insufficient budgets, yielding significant results; 52 percent of our major combat force elements are able to generate more combat power during the initial phases of a conflict today than they could in 2017. 

Now, as I’ve said many times before, we need predictable, adequate, stable, and timely federal budgets to continue to support the investments of our industrial base, to grow our capabilities, and to further strengthen readiness. I would like to see 3-5% annual real growth for the Defense Department to stay ahead of the challenges we face, especially from China, and no more CRs!

Looking ahead, I am confident that the department’s civilian and military leaders are aligned to deliver more sustainable readiness, particularly as I meet regularly with them to assess our progress toward that goal. Much of this involves bringing together hundreds of data systems into a common, advanced analytics architecture that provides real-time data and predictive indicators. This tool allows senior leaders to evaluate readiness at every level, better manage our forces in response to emerging threats, and to make decisions to best address readiness challenges. 

The department’s vision for readiness is one in which our people are focused on great power competition from day one, and trained to deter and prevail in the high-end fight, while able to perform across the full spectrum of combat operations. It is a vision in which we have more planes in the air, more ships at sea, more units prepared to go into combat at a moment’s notice, more cyber warriors online, and more space assets ready to defend the high ground. 

It is a vision in which our people have the resources they need, when they need them, so that they never find themselves in a fair fight. We must, and will, maintain our decisive overmatch well into the future. 

And, it is a vision in which senior leaders have more flexibility to move our forces and equipment around the globe, enabling us to project power, to reassure our partners and allies, to deter aggression, and to effectively respond to emerging crises. 

Thanks to the hard work of our men and women in uniform, and with the support of Congress, industry, and our like-minded partners, the United States military will continue to honor that vision, and strengthen our readiness, now and in the years to come.

Thank you.

MODERATOR:  Secretary Esper, thank you so much for those remarks.  You have covered a lot of ground there and so I look forward to exploring some of these topics in a little more detail.  Ladies and gentlemen, my name is Tom Spoehr.  I'm the Director of the Center for National Defense here at the Heritage Foundation.

In this next segment, we'll pose some -- some questions to the Secretary, focusing on readiness.  And Mr. Secretary, you talked a lot about the progress this administration has made building readiness, line of effort number one in the NDS.

The strategy calls for a requirement for a multi-year investment to restore warfighting readiness.  What's your assessment?  You talked -- you gave us some numbers, but what's your assessment on where the department stands today on improving tactical readiness, and what was the rationale for moving away from the 80-percent mission capable goal that the department had previously established for four of your major fleets of aircraft?

SEC. ESPER:  Sure.  It's a good -- it's a good question, Tom, of course.  As I said very clearly in -- in my remarks, we are ready today.  No doubt in my mind we are ready to take on any mission and -- and we are prepared to fight and win, if a president calls upon us to do so.  And that has been enabled by much of what I said, that our readiness rates have seen dramatic increases across all of the services -- double digits, without a doubt.

With regard to your specific question about readiness of the tactical air fleet, if you go back in time a few years, I believe it was Deputy Secretary of Defense at the time, Shanahan, who said -- who looked at the fleet readiness and -- and it was -- it -- it was not sufficient to meet the needs of what we had.  I cited the example of the F-18s.

And so we set a mark of 80 percent and I'm pleased to report that the services reached that 80 percent mark for the -- for the -- for the most part.  But as I stepped into office -- office, we -- we -- and with a goal of implementing the NDS, we looked more broadly and tried to put readiness in the context of a war plan.

And when you do that, as we've done with our Army, Navy, Air Force, and Marines, we establish what we call the Immediate Response Force, the IRF, and those are units that have to deploy within a period of days, and then we also have another slice of the force across all of the services that's called the Contingency Response Force, and they have to be ready within a period of weeks.

So, to take an arbitrary number such as 80 percent and say that if you're in the IRF, if you're in that response force that has to deploy in a number of days, 80 percent's too low.  I need you well above 90 percent.  But if you are further back in the flow, let's say you don't deploy until day 40 or 50, I don't necessarily need you at 80 percent.  I might be able to have a lower readiness rate, as long as you can, when you deploy, you're at -- at an adequate level.

What that does is, that allows the services to use dollars spent to maintain an unnecessarily high level of readiness and invest it into people, into modernization, in -- in -- into any other thing they want without jeopardizing their ability to meet the war plans.

So what we did is we took that metric of 80 percent, which brought us up to a high level, and now we've been able to put it into the context of the war plans, specifically the IRF, CRF, and follow-on forces, and make sure that the readiness levels we've established within those categories are sufficient to deliver combat power consistent with our war plans, again, if called upon to do so.

MODERATOR:  That's very interesting.  It's almost counter-intuitive but you’re suggesting, you can have too much readiness, and that you -- you're better served investing those resources elsewhere.

SEC. ESPER:  You -- you absolutely can.  You can spend too much money and be too ready, particularly if you know the trade-off for that one extra dollar may be modernization, which we call future readiness, and that's one of the things that I'm constantly balancing and juggling, is today's readiness versus future readiness.

MODERATOR:  Thank you, sir.  You know, another -- you touched upon this -- people -- a major component of readiness is having the right people at the right place, and we've heard how the services have had to adapt their models based on COVID, leaning more heavily on virtual engagements versus that traditional recruiter, face-to-face meeting.

As -- as I look, especially in my research, to the future, a lot of the trends that I see that predict future recruiting success, such as youth obesity, veterans -- the percentage of veterans that are in our society, the percentage of people leaving high school that immediately want to go to college, that's up, but that's -- may not be great news for the -- the military.

They're not pointing in the right direction, these trends.  And so first, I'm interested in how is recruiting going this year, how did it go for Fiscal Year 2020, how's it look ahead, and then as you look to the future, do you see a future recruiting problem for the United States?

SEC. ESPER:  Well I'll -- I'll take your last question first, if you will.  I mean, I -- cause I worked this pretty hard as Army Secretary.  When you look at the numbers, right, first of all, the young Americans who are qualified to serve, that number gets down to below 30 percent, and then when you look at that number plus the number who have a proclivity to serve, you're talking a single digit number.  And so it does not auger well right now for where we are.  

And so, when I was Army Secretary, and Secretary McCarthy is continuing to this day, we -- we looked at all of the different ways we can go out to reach all parts of America -- rural, urban, east, west, north, south, coastal, mountain, you name it -- how do we go out and find those young Americans who would be interested in serving, that just don't know that opportunity exists, and how do we reach them?

And so it's a -- it's a big effort, it's a strategic challenge that will last many years and depends on a number of factors, but it's a -- it's one that we have to focus on in a whole of government approach.  Now, boring in on what happened over the last seven months, I will tell you that COVID actually forced us to accelerate the process of which we go after today's youth.

So what we try to do is find that opportunity in a crisis.  And what that demanded, because we had begun this a few years ago in the Army, was that -- reaching out to young Americans through text, online, through social media, through the platforms by which they communicate with each other today, and with their parents, in some cases, too, and find them there.

And the Army had begun that process but we were forced -- all services were forced to accelerate -- accelerate that in the midst of COVID because, of course, things were shut down, schools were closing, you couldn't get recruiters into a high school, you'd -- in some case, you had to -- you had to close recruiting stations because of COVID.  So it forced us to go online and do all of those things.

And I'm pleased to report that right now, the numbers look good, that the services have met their marks -- that's the good news -- but what COVID did was forced us, I think, to accelerate that process and -- and to really look hard at what we do.

And so as we look at that, we -- we look at what COVID did, how it forced us to adapt the force -- and, of course, the impacts of COVID go beyond recruiting.  It -- it goes, you know, the pipeline and then the readiness of the current force, and I've got to say, I'm very proud of how the force has done through all of this.

You know, I laid out really early in January that my priorities were taking care of our people.  Number two, ensuring that we maintain our mission readiness, our capabilities.  And then, number three, provide support to the American people through civilian authorities, and we did all of that really well.

Our infection rates were much lower than the American people, and every -- every loss is terrible, but thank God we only lost one active duty service member, and that the force has done pretty well.

And to this date, in the wake of 13 health -- force health protection measures, we continue to maintain our protocols and do everything that's necessary.  So, look, we're going to get infections. They will happen out there.  We'll find hotspots -- we follow – you know, we train our people.  If they get infected or near somebody we treat them.  And of course we trace. 

So, you know, again, train, treat, trace, and follow those protocols, and then you had to be able to operate if you're in some type of quarantine status.  You've got to be able to do your job and we're all capable of doing that, whether you're, you know, the lowest private or secretary of defense, you name it, everything in between, is DOD is standing ready, standing tall, and we're prepared to continue on and make sure that we accomplish our mission.

MODERATOR:  Thank you, sir.

You referred to this in your remarks.  On October 6th, you talked about a new fleet for the U.S. Navy, which emphasizes submarines, small-surface combatants, amphibious ships, and unmanned vessels seeking to exceed 355 ships by the mid-2030s and over 500 by 2045.

And often overlooked, although you touched upon it on this -- in this discussion of increasing the fleet size, is the need for the maintenance, and the workers, and the capital infrastructure to not only maintain the fleet we have today, but if we're going to grow it, to keep it deployed and out there.

And as you know in the past, the Navy has suffered from consistent maintenance delays in its shipyards, both public and private, and forecasts that, without change, they're going to be unable to accommodate 68 maintenance availabilities in the next 20 years.  How can the department overcome that big challenge?

SEC. ESPER:  It's a great question.  It's something I've spent a lot of time on since I entered office as secretary of defense last year.

First of all, to frame it, the discussion if you will, you're right, last week I introduced what we call Battle Force 2045.  It's what I did earlier this year where I stopped an ongoing process, and said, look, we need to take a new look at what the future fleet might be in the year 2045, which is a few years before the -- before the Chinese military wants to have a world -- what they call a world-class military.  What is the force we need to build in order to make sure that we can compete with them, but if competition and deterrence fails, we're able to fight and win?

And what it took us to is we looked at key attributes, as we needed more submarines; we needed a larger fleet, but composed of smaller combatants. We need to still have a carrier presence of course.  We needed distributed lethality.  We needed greater survivability.  There were a number things, and so it produced this fleet of 500-plus ships, a combination of manned and unmanned, to make sure that we could do that, that we can fight and win in the years ahead.  And then do all of the other stuff, the forward presence, control sea lanes, and then reassure our allies and partners. 

But you're right, a big challenge built into that, and I addressed this in my remarks last week, is capacity.  And it's capacity not just to build that future fleet, but its capacity to then maintain it, because what we don't want to do is have a hollow force.

The Navy last year, as I stepped in office, had made the choice -- and it was a smart one -- to say, we're going to invest our limited dollars into today's readiness.  And what that meant was we had to slow the shipbuilding down a little bit.

This year, though, based on reforms they made, based -- and -- and because the reforms they made, they freed up billions of dollars.  I said, hey, great job.  You continue to do that, given what you did, I will also put in additional dollars as well.  So this future fleet we're looking to raise the percent of Navy spend in their topline to 13 percent, which is matching what the Reagan era buildup looked like.  And so built into that, though, again, is investments in a shipyard.

So I mentioned $20 billion over 20 years to -- to improve shipyards and -- and then also predictable funding, building this larger fleet into the private shipyards.  We think, based on the types of ships that we need and the unmanned, we can grow the number of shipyards around the country, which will be good, not just for the fleet but for -- for the economy.

And we also need to make those investments -- and it's not just people -- or it's not just the infrastructure, it's people, too, and I've spent a lot of time talking to industry, talking to the ship builders about what they need, we've had good conversations about this.  As I've said, I've been to the shipyards, I've been to Kings Bay, Georgia, where we're doing work there, out to Hawaii, and really bore into this problem and make sure that we can do that.

The good news is on the delays, cause you mentioned that, in particular, and the Navy has done a really fine job here.  At the end of 2019, the -- what's called the -- the average number of days -- delays due to maintenance, right -- day delays due to maintenance was so -- over 7,000.  At the end of 2020, it's a little bit over 1,100.  So you see, like, an 85 percent reduction in the number of days of -- of -- of maintenance delays out there.  

So, a great achievement by the Navy, we need to keep working at it, we need to keep investing, and if we get support from Congress for this Battle Force 2045, the 500-plus ship Navy, it'll be a clear demand signal to the shipyards to improve their infrastructure, to grow their workforce, to build that fleet we need, to be able to fight and win and compete in the year 2045 and everywhere in between.

MODERATOR:  Thank you, sir, that's excellent.  Going to shift gears here.  You closed talking about resourcing.  And this administration, as you mentioned, with the support of Congress, has done a lot to get increased resources to the DOD, to help it rebuild and reorient on great power competition.

Both your predecessor, Secretary of Defense Mattis, and yourself have described the need for continuing growth in defense funding until at least 2023, calling for three to five percent real growth.  And a -- some people may not get that that word "real growth" is -- is important because it's three to five percent growth after inflation.

Yet, the 2021 defense budget, following the -- the agreement -- the budget agreement, is essentially the same as 2020's, and the administration's forecast for the years 2022 and beyond only calls for increases of less than two percent, maybe even falling short of inflation, falling far short of what you have called for.

If that funding projection holds true, is the National Defense Strategy still executable, or do we need to re-look at and maybe make our ends a bit more less ambitious?

SEC. ESPER:  Well we certainly need that sustained and predictable funding stream over the subsequent years.  If you look at what China has done over the past 20, I think the numbers will tell you that between 2000 and 2016, the Chinese were increasing their annual rate of defense spending at 10 percent real growth.  In the last two years, they're looking at five to seven percent real growth.

So if we're going to compete with them and be prepared to fight and win, if called upon, then we need to actually make those investments, as well, because it's crucial to our national security.  Now look, we -- it's incumbent -- incumbent upon us, as well, in DOD, and that's why one of our major lines of effort is to reform the department.

I talk about freeing up time, money, and manpower to put into other priorities.  The -- the American taxpayer gives us a lot of money -- last year, $740 billion.  We have to be very good stewards of those taxpayer dollars.  

We've got to be able to pass an audit, and we're making good progress on that front, but we've also got to make the hard choices that too often folks in government don't want to do, and that is to look at reducing or canceling programs or making -- taking lower priority programs and cashing them in in order to put your higher priority.

So we have to -- we have to do our part on that, as well, but we also know -- we recognize that, look, these are tough times.  The American -- America faces the fiscal challenge of -- of increasing debt out there.  We incurred more debt due to COVID.  It was the right thing to do, but it's a few more trillion dollars on top of this -- the growing debt that's already out there.

But if we're going to continue to maintain this rules-based international order, that is based among those values and principles that we and many other western countries share, that we hold dear, that protects our way of life, that guarantees freedom of navigation and commerce and -- and things like human rights and -- and those intrinsic -- what we call American values, then we need a strong American military to defend them and to protect them, as -- as – as Kay said upfront in her remarks, quoting President Reagan, "we have to be able to make those investments.  A strong national security is the foundation for a strong economic prosperity and vice versa."

So we've got to be able to do both, and again, that means a combination of us being better stewards of the taxpayer dollars, but also a -- an enduring commitment from the Congress to keep us at a -- a steady increase level of annual funding.

MODERATOR:  Yep, thank you, sir.  So you mentioned this -- a lot of the discussion on readiness usually devolves to planes and -- and ships and formations of soldiers and Marines, and that's obviously very important, but we have also seen increasing mention, especially of late, about strategic readiness -- and not readiness of the strategic forces but the -- how the DOD mobilizes, how you deploy and how you sustain your forces and how this department probably ought to shift some attention to that.

I'm interested in your assessment of where DOD stands in strategic readiness, mobilizing, sustaining forces deployed in a future major fight that may take months, if not years, to conclude.  How -- how do we stand in that particular area?

SEC. ESPER:  I pay a lot of attention to that, particularly in the context, as I look at our war plans.  So another one of the top 10 objectives I laid out last year for us to pursue is for us to update our key war plans.  And when you look at those, you've got to make sure you understand the flow of forces, that strategic mobility you're talking about.

And when I think about strategic mobility, I think about airlift and sealift, principally.  And with airlift, you have to think about tankers.  And so one of the concerns I have out there is -- you know, is our tanker fleet modern and ready?  And clearly we've had challenges getting the -- the new tanker, KC-46, out there on time.

I've -- I've spent time with the Air Force talking about this, with the manufacturer Boeing, I've walked in and out of the aircraft, I've looked at the systems to understand how do we get that aircraft to meet its timeline, to -- to fix the system that's broken, with the -- the remote -- the remote system.

So I'm really focused right now in that leg with regard to tankers, because we know we need 487 tankers out there, so I have to extend the life of the current fleet, at the same time try and pull to the left that future fleet.  So that's one big thing I look at.

We have -- we have enough airlift to do the job, if you will, but the other big one is sealift.  So our ground forces have to get to the fight, as well, in a timely way, with everything they need.  So we have worked that pretty hard with Transportation Command.  We've come up with some new concepts whereby we can accelerate the process to get adequate sealift by -- by recapitalizing our sealift fleet with used commercial vessels.

And so those are some of the things you will see coming out in our budget here in February to do that.  But look, there's other things I think about too -- you mentioned mobility, it's important, there are other things like munitions -- you have to have sufficient munitions.  

There's all of these things out there that you have to buy, that you have to -- have to procure and make sure that they are ready at a moment's notice because you won't have time when that war tocsin sounds.

MODERATOR:  Thank you, sir, that's -- that's super important.  I remember in a hearing where Representative Wittman asked you -- I can't remember if you were the Secretary of the Army or Defense -- "should the Army fund sealift?"  And I think it's a capability that needs to get funded, no matter which service, and it's really irrelevant, at -- at this point, for our country.

Well it -- I -- Mr. Secretary, I think we're at the end of our time.  I greatly -- we greatly appreciated your comments.  It's been fascinating.  So glad you're able to come over to Heritage and share a snapshot of the readiness of the Armed Forces.  Thank you and all of the patriots at the Pentagon and the Department of Defense for everything you do to keep us safe on a daily basis. 

Any closing comments sir?

SEC. ESPER:  Well, I'd like to thank you again for hosting me this -- today.  It's a pleasure to be here to talk about the readiness of the United States Armed Forces.  I know it's important to everybody that we be ready.  And I can assure the American people that they -- that we are ready, thanks to their generosity with the defense budgets, and thanks to -- thanks to young Americans, men and women, every day going to a recruiting station, applying online, doing what they're doing.  

One of the great pleasures I have in this job as a did as secretary of the Army is to go out there and host an enlistment ceremony, and to watch these young men and women raise their right hand, and swear that oath that you've swore many times, I've swore many times, to support and defend the Constitution of the United States, and that's so very important because that document embodies all the values by which we and they are willing to certainly live for and to die for, if necessary. 

So really it's great, thanks to the American people out there, and to all of those young Americans each and every year who sign up in the tens of thousands to serve this great nation.  It's truly an honor.

MODERATOR:  Thank you, sir.  And thank you for coming here today.  For our guest thank you for your participation. I want to mention two upcoming events.  On October 27, Heritage will host General Gus Perna, who is the chief operating officer for Operation Warp Speed, and he's going to talk about the fight for the COVID-19 vaccine.  Looking forward to that one a lot.

And then on November 17th, we roll out the 2021 Heritage Index of U.S. Military Strength.  And Representative Mac Thornberry, who's been a great supporter of national defense, is going to provide the keynote remarks at event.  So ladies and gentleman, thank you so much, and have a great rest of your day.