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State of the Air Force press briefing by Secretary James and General Welsh in the Pentagon Briefing Room

STAFF: It's been about six months since we've done a State of the Air Force briefing. It honestly feels like a little longer than that.

A lot has transpired. So, joining us today is the Secretary of the Air Force, Deborah James, and Air Force Chief of Staff, General Welsh. They will open with a few remarks with the secretary and then go through where we've been, where we are today, and where we plan to go in 2015.

So, a little bit of business rules please, if you don't mind. We have about 60 minutes total. Again, the secretary will open with remarks. Following that, there will be on the record Q&A. And if you would please identify who you are, who you're affiliated with as you ask your questions.

And then at the end of this, if there are any unanswered questions, follow-ups, please get with Air Force press desk or any of us in the blue uniforms that are still out here.

So again, like I said, we have about an hour, so with that ma'am, the floor is yours.


Hello everyone, happy new year, and thank you very much for joining General Welsh and me for about an hour this afternoon.

Since becoming the secretary of the Air Force about 13 months ago, our Air Force has dealt with many issues that are enormously critical to our national security.

First, the United States Air Force remains fully engaged in combat operations against ISIL forces in Iraq and Syria. To date, we have provided more than 60 percent of the 16,000 plus sorties that have been flown. We also continue, at the same time, our enduring efforts to provide air and space superiority, intelligence, surveillance, and reconnaissance, rapid global mobility, our very important global strike, our nuclear forces, and command and control. These, of course, are our five core missions and we deliver them through the air, space, and cyberspace domains.

We have never wavered, even with this operation ongoing in the Middle East with our sizable and our long-standing commitments in Europe and throughout the Pacific, and we certainly won't be wavering in the future.

Additionally, we have been navigating in our Air Force through some very challenging issues that are facing us as an institution, including shortfalls in our nuclear enterprise, tackling sexual assault, and the very tough decisions involving the downsizing.

In order to increase our perspective, the chief and I have made a commitment to routinely get outside the Beltway and insure that we are getting some firsthand feedback and firsthand look at the missions that are being performed by our airmen and the issues that are affecting our airmen and their families. So, the chief and I have been on the road a good bit this past year.

We also are staying very connected with our sister services, with the combatant commanders, with Congress, industry, our allies, and international partners. We meet with them routinely to hear their needs and their concerns and so that they can hear ours as well.

And so the bottom line, if I step back, and what's my key take-away from all this, is everyone wants more Air Force. And indeed, we have never been busier around the world.

So, demand for our services is way, way up. But we are meeting those demands today with the smallest Air Force in our history. And when you couple that smaller force against the backdrop of austere budgets, and with the huge demand, what we have is we have a total force that is under significant strain. And of course by total force, I mean our active duty, our National Guard, our reserve, our civilians, and their families.

And indeed, General Welsh and I saw this strain firsthand as we conducted our travels.

Fortunately, we have very dedicated and professional people who have been getting the job done despite all of these pressures. However, it is taking a toll.

Let me now briefly talk about the F.Y. '15 budget as well as a bit of an outlook for F.Y. '16 and beyond, and then General Welsh and I would be very happy to take your questions.

For those of you that were with us when we did our last update in July, you'll remember that we made a call, you might say we issued a call to Congress, and that basically was that obviously we understand it is the constitutional prerogative of the Congress to rearrange our funding priorities, but in so doing, please do not decrement our readiness accounts. Please do not make choices which end up with readiness as the bill payer, because readiness is too important. We have to get our levels back up.

Well, of course, as you know, we cannot accomplish our duties without congressional support. And in that spirit, I want to now step back and thank the Congress, particularly the defense committees, for supporting our Air Force readiness and our modernization going forward. In fact, the Congress appropriated the overwhelming majority of the Air Force portion of the defense appropriation budget request for F.Y. '15. Indeed, we ended up with a higher top line than our original request, which I think is recognition of just how necessary and valuable our Air Force is in the world today.

Now with that said, of course we did not agree on everything. Congress restricted our tough choices regarding the retiring or the reducing of aging force structure. But they did give us the funding that we needed to sustain the operations and to operate near current force structure levels for this year of F.Y. '15. And most importantly, they did not pay for these add backs from our readiness accounts. So for this, we are very grateful.

And speaking of force structure, our travels also showed us that when it comes to the downsizing that we have been undergoing, enough is enough. And indeed that is the number one source of strain for our airmen: it has been the downsizing.

So General Welsh and I agree that we have now downsized as much as we can in support of trying to balance our resources and capabilities, but we simply cannot do more. And indeed, we have already announced that there shall be no involuntary boards in 2015.

So, we're actively now working toward an F.Y. '15 goal of maintaining end strength around 315,000 for our active duty personnel. And that is where we intend to remain. If anything, we perhaps need to look about going up in terms of some of our numbers, and that goes for the Guard and reserve as well.

Now, turning to the future, the Air Force will still face many challenges as we continue to restore readiness, modernize our force, and take care of our airmen with a special and on-going focus on ending sexual assault.

Now, the sexual assault response coordinators, the SARCs, with whom I meet regularly on all of my base visits, they tell me that we are making progress in this fight. The information, of course, contained in the secretary of defense's recent report, bears this out. But it's not good enough. We have to keep on it. And the chief and I are committed to doing that.

This past Monday, I kicked off our sexual assault prevention summit, where we have brought together over 150 airmen from different ranks and backgrounds to have discussions and workshops and particularly to focus on the issue of prevention. And this is just but one of the many ongoing efforts which is designed to demonstrate that we will give this persistent focus, persistent leadership, and persistent action going forward.

Now, turning to F.Y. '16, we are going to be asking the Congress of course to eliminate sequestration, we will renew that call, as well as to allow us to get rid of excess base infrastructure. We'll be renewing that as well. And we will once again ask for the authority to divest some of our older aircraft in order to free up money to plow back into people, readiness, and modernization. Keeping in mind, as we've said many, many times, if sequestration does return in F.Y. '16, it will have very, very serious and devastating effects on some parts of our Air Force.

We will of course ask Congress to resource our manpower requirements to meet mission, force structure, and readiness needs, to support the combatant commanders.

General Welsh, by the way, has coordinated very, very closely with our combatant commanders as we assembled the F.Y. '16 budget, and indeed, we are committed to meeting their most pressing needs. We can't share too much today, but after the budget is submitted, we certainly will have a lot more to say about what our key investments are, and these will be investments in the nuclear enterprise and cyber, space, our National Guard and reserve forces, and ISR, intelligence, surveillance, and reconnaissance.

I do, however, have a few announcements today to share with you with regard to ISR. Last June, I visited Creech Air Force Base and saw our remotely-piloted aircraft ISR mission firsthand. Of course, the chief has been there many, many times. The airmen who perform this essential mission do a phenomenal job, but talks with the RPA pilots and the sensor operators, and their leaders certainly told me -- suggested to me, that this is a force that is under significant stress -- significant stress from what is an unrelenting pace of operations.

Now, these pilots, just to give you a little color on this, fly six days in a row. They are working 13, 14 hour days on average. And to give you a contrast, an average pilot in one of our manned Air Force aircraft flies between 200 and 300 hours per year. Again, these are averages.

But in the RPA world, the pilots log four times that much, ranging from 900 to 1100 flight hours per year. And again, this is very stressful operations because mistakes can cost lives.

Finally, I learned that many of our experienced operators are nearing the end of their active-duty service commitment, which means they will have a choice in the not too distant future to either stay with us or leave the Air Force.

Now, to start working on these problems and to remedy some of these issues, I want to share with you some of the steps General Welsh and I are taking now to address it. Our plan is designed to immediately relieve some of this strain while still meeting the combatant commander requirements, and then we of course recognize we'll have more work to do for the somewhat longer term to address the people side of this very important, but nonetheless high-demand weapons system.

So, here are the near-term steps. We will maximize the use of the National Guard and reserve and indeed, we will be redirecting some resources in order to provide the money to bring additional personnel on active duty.

Number two, we will seek recently-qualified active duty RPA pilot volunteers to deploy for six months to some of these distressed RPA units. So, these are folks who have been RPA pilots, but they've gone back into their original airframes, perhaps. We will seek volunteers in that category to come back into the RPA world.

And number three, we will delay the return of some of the RPA pilots who were on loan to the RPA world from other airframes. So those three items, we are acting on now. And we believe that this will provide some near-term relief to the ops tempo and to boost the quality of life concerns of this force.

Now, we're also looking at pay. Previously, policy did not allow us to offer retention bonuses to RPA pilots who are only qualified to fly unmanned platforms. We think we need to get this changed and we're working to do so.

But for now, what we can do right now is I will be utilizing my authority to compensate and incentivize career RPA only pilots whose service obligations are expiring. In fact, I just signed the memo earlier today.

As our experienced operators reach the end of their initial active-duty service commitment, we will increase the monthly incentive pay from $650 a month to $1,500 for those RPA pilots while we also explore more permanent incentive plans, which will be a little bit more down the road.

Our combatant commanders expect and demand the unique ISR capabilities that only the Air Force can provide. Airmen who operate RPAs on a daily basis have delivered time critical data. They have prosecuted targets and supported our combatant commanders without fail. But this pace has been unrelenting. And so it's critical that we address these problems now.

And again, we'll have more to say about this plan as we finalize the details in the next few months.

So let me wrap by saying this is the greatest Air Force anywhere in the world, and it is so primarily because of our airmen. The American people expect our Air Force will be able to fly, fight, and win against any adversary. And combatant commanders obviously demand and expect the same. So it's important that we continue to afford our nation the Air Force capability it needs well into the future by appropriately investing in our people and in our platforms.

So again, thank you so much for joining us today, and now we will take your questions.


Q: Secretary James, General Welsh, do you have regrets about attempting to retire the A-10? The decision came before the current war with ISIS. Do you regret that at this point?

MS. JAMES: No. I do not.

Q: And why?

MS. JAMES: The -- first of all, the current war against ISIS, the operation against ISIS, there are a number of strike platforms, of course, that are engaged in it. A-10 is one of it, but there's also F-16s, F-15s, and so forth. They're each contributing.

I believe the statistic is 11 percent coming from the A-10 community in that -- in those sorties.

GENERAL MARK WELSH: That's been up to date.

MS. JAMES: So my point is, the A-10 is a great contributor, but so are the other aircraft. And so even had the plan to retire the A-10s over five years, which we've submitted last year, even if that had been agreed to, we would've still had A-10s in our inventory. And so it makes good sense to use them. And so we -- obviously, we always will use them.

Q: Why do you think it's such an emotional issue to our people on the Hill who are protecting the A-10?

GEN. WELSH: Well it's not -- it's an emotional issue inside the Air Force, too. I would be disappointed if the people who flew the A-10, if the people who train with the A-10 weren't emotional about this. They love their airplane. They should love their airplane. I would expect that.

For the Air Force, it's not an emotional issue: it's a sequestration-driven decision. We don't have enough money last year or this coming year to fund all of the things that we currently have in our force structure. The good news is last year, although we weren't allowed to move forward with the plan we recommended, we were funded to continue operating the A-10. And if we have a conflict that we can use it in appropriately, we should absolutely use it. It's been intended to be around until 2019 or even under our initial recommendation, and our intent would've been to use that great platform and the great people who employ it anywhere we could.

It's not about not liking or not wanting the A-10. It's about some very tough decisions that we have to make to recapitalize an Air Force for the threat 10 years from now.

MS. JAMES: Barbara.

Q: General Welsh, can I ask you about -- you speak of -- you've spoken in here a lot about drones, RPAs. The combat lessons that are being learned from the use of drones, and whether it's the fight against ISIS or airstrikes in Yemen, just operationally, out in combat, people seem to think airstrikes are, you know, the thing that solves the problem out there.

What are the limitations that you're seeing in terms of lessons learned in combat from the use of drones and airstrikes more broadly, in terms of limitations of what they can and can't do on achieving military combat objectives?

GEN. WELSH: Yes well in general, not speaking to any specific operation, but in general terms, our RPA fleet is predominantly the great, great, great majority of the time used for ISR, not -- not for strike activity. We have the capability to conduct strikes from some of our ISR platforms, our RPA platforms, and so we've taken advantage of that. But that is not the primary use that we use them for in most military operations.

The limitations of using an RPA to conduct a strike are very similar to limitations of using an aircraft to conduct a strike. It -- you have to identify a target. You have to clearly try and deconflict friend from foe. You have to minimize civilian collateral damage. Same problems you have in a manned aircraft. Some of the limitations in using RPAs is that you're trying to develop situational awareness through a very narrow aperture view as opposed to having a pilot over the battlefield looking and using the human brain sensor, which is a pretty good sensor for situational awareness, to assist you in that effort.

So ideally, you'd have both tools available to you. Having people on the ground assist because it helps you point at the most -- at the highest priority targets, it also helps you deconflict friend from foe easier if there are people on the ground with friendly forces. Now, all those factors apply everywhere we are using RPAs today, as they would in any other place that we use them in conflict.

Q: Do you think that there's just too much emphasis at the moment on the air part of the equation, that everyone thinks you're going -- from the air, you can defeat ISIS, you can defeat Al Qaeda in Yemen, when defeat may not be what is possible from the air?

GEN. WELSH: No, I don't think, speaking specifically to ISIS, that the -- that the DOD approach is not to defeat ISIS from the air. The intent is to inhibit ISIS, to attrite ISIS, to slow ISIS down, to give a ground force time to be trained because the ground force will be required.

You -- you don't dictate end states from the air. You can't control territory. You can't influence people. You can't maintain lines of control after you've established them. That will take a ground force -- in this case, a coalition ground force that's being trained now to try and make that effort, and we'll support it from the air.


Q: Yes, ma'am.

Amy Butler with Aviation Week.

I have a two part question on the Joint Strike Fighter. First, with regard to the IOC, least year there was some discussion about when the Air Force's IOC could actually happen, in part because the maintainer issue coming from the A-10. So, I'm curious if you can give us your current thinking on when it is likely to be able to declare IOC, and if you are looking at maybe changing the parameters for IOC, or how you are going to achieve that.

And then secondly, bigger picture with the Joint Strike Fighter, whenever you do IOC, whether it's 2016 or '17 or whatever, these jets are dribbling into the service. They're not going in at the rates you wanted. So, this thing will not become wholly influential until years after you expect it. There's a lot of talk among the technology people that stealth at that level won't become obsolescent, but that it will be at a risk of compromise because the risk of proliferation of high-frequency radars and integrated air defenses.

So, I'm wondering if you're looking at how to address that issue. And obviously, that's not an issue for today, but you know, it's an issue probably five, 10 years down the road.

MS. JAMES: You want to...

GEN. WELSH: Let me try this one, boss? First of all, I believe the F-35 IOC will be as-scheduled between August and December of 2016. I've seen nothing that changes my opinion of that.

I'll tell you this, IOC is an important term, because it's initial operational capability. It means that we will have the ability to deploy a number of aircraft to conduct operational activity, should we desire to do so.

FOC, to me, is the key date. That's when this airplane should be fully capable of doing the thing that we put in our requirement set for it to do.

So, our development of capabilities that aren't available at IOC has been part of the plan the whole time. It's been the plan of every airplane we've ever bought, as far as I know, at least recently.

So, you get at the airplane, you have initial capability, you continue to develop the capability through new software upgrades, adjustments you find during initial operational test, and then by the time you declare it fully operational capable, that means it now meets the requirement set that you defined. That's the ultimate goal.

And so that's where we're focused. I don't see anything that leads me to believe we're changing from those timelines. In fact, I'm fairly comfortable with where the F-35 stands today. Now, none of the things that are coming out from the JPO as far as concerns about software development et cetera are real surprises. This program has tracked pretty much along the milestones set in the re-baseline in 2011. I won't talk about before that.

But since then, it's tracked pretty consistently along the price curves and all the milestone points since then. And we -- we must continue to do that. The big challenge for us is operationalizing maintenance for the airplane, making sure the ALO system is capable of supporting deployments, and that's what we're focused on right now.

So, I feel pretty good about that. But remember, for me the focus is capability at IOC, fully capable at FOC.

Stealth is an interesting discussion, because people tend to identify a piece of it and think someone will compromise that piece, and therefore stealth is no longer valuable. The reality is, is stealth is a combination of things. It's not just low observable. It's also speed, low observability, different ways of collecting data, different ways of transmitting and protecting transmissions. It is a way of breaking kill chains, if you're sitting in an airplane or flying an unmanned aircraft.

And while we may have a new radar developed that allows an acquisition radar to see an airplane, that doesn't mean you can pass the track off to a radar that will then guide a weapon to be able to destroy the airplane. As long as we break the kill chain sometime between when you arrive in the battle space and when the enemy weapon approaches your airplane, you're successful at using stealth.

And I don't see anything that indicates that is not going to be true 10 years from now.

Q: Okay. And just to make sure, to clarify, General Bogdan had told the press back in December that the maintainer issue actually could be a show stopper. I want to make sure I'm clear: you don't think that the agreement...

GEN. WELSH: I'm talking about in development of the aircraft. The maintainer issue is not an F-35 program issue. The maintainer issue is an air force problem.

Q: Yes sir, but it is -- it is critical for IOC declaration, correct?

GEN. WELSH: And we will look at -- well you have to have enough to operate your initial detachment of airplanes. But we will have enough for that.

Q: Okay. So you will have enough maintainers in December to declare IOC?

GEN. WELSH: Yeah, we have enough people to prioritize this to the point where we will be able to get to IOC.

Q: Okay. Thank you.

GEN. WELSH: And by the way, we got some help from the Congress on this as well, and freeing up maintenance folks from other organizations that will allow us to get there.


Q: Thanks. Aaron Mehtawith Defense News.

I was wondering if you can speak. Just to clarify, you said you will attempt again next budget to retire some aircraft. Is that the same aircraft, same groups of aircraft that you talked about in the last budget, trying to retire?

Secondly, can you talk maybe generally about how the operations against ISIS have been packed at the budget request: if there's certain areas that you felt you need to plus up, or could take away from because of those operations?

MS. JAMES: Aaron, I would answer that question by saying we are constantly monitoring what is going on in the world. We're constantly making adjustments as a result, so I think it's safe to say that the budget submission, when you see it in totality, will reflect some of those changes. And in terms of the retiring of the older aircraft, and will the plan be identical to what it was, I doubt it will be identical, but there will be some similarities.


Q: Thank you.

Jeff Schogol with Air Force Times.

We're very interested in the new pay for RPA pilots. I just wanted to clarify, is this for all pilots, or just those nearing the end of their active service commitments?

GEN. WELSH: It's -- you know, as you know right now Jeff, RPA pilots get the same flight pay that a pilot on any other airplane gets. The difference in the two communities is that right now, pilots of manned aircraft, when they reach the end of their initial commitment, they're offered the aviator continuation pay. Now -- which tries to keep them in the service for a period of time after that at up to $25,000 per year.

That is not available to RPA pilots. So as an interim measure, what the secretary has done -- has got approval within her own authorities has approved plussing up that monthly $650 flight pay for RPA pilots to $1,500 a month as an interim step.

The next step is to pursue aviation continuation pay similar to what our manned aircraft pilots get for the RPA force.

Q: Sure. I just wanted to make sure it's for all RPA pilots.

GEN. WELSH: Yeah, this is for RPA pilots that were currently operating on MQ-1 and MQ-9.

Q: So we're talking...

GEN. WELSH: Is the initial look.

But the proposal for aviation continuation pay is gonna be a broader look. We'll look at where it should apply across the community.

Q: And that's effective this month?

GEN. WELSH: Boss, I'm not sure what the -- what the actual -- (inaudible) -- was.

MS. JAMES: Let us get back to you right after this on that. Just let's -- we double-check that -- (inaudible).

GEN. WELSH: We can give you that answer.

Q: One way to tackle the shortage of RPA pilots, which I don't think has been explored, is allowing noncommissioned officers to fly them, such as the Army allow noncommissioned officers to fly ScanEagles.

Is that something the Air Force is interested in looking at?

GEN. WELSH: Actually, we're looking at two things related to what you just said. One is, yes, we should look at the enlisted force as a potential approach to more RPA pilots. There's some pluses and minuses in the second -- (inaudible) -- effects of that. We're looking at those now, and I'll come to the boss with recommendations in the relatively near future.

And the second step is to look at other services who might be divesting themselves of aviation assets and see if there's an interest in those -- the crews for those assets of moving into the RPA business. So...


GEN. WELSH: ... we'll look at that as well.

Q: One last one: Secretary James, you said you have delayed the return of RPA pilots on loan elsewhere. Could -- I wasn't quite sure what you meant by that. Could you...

MS. JAMES: So, pilots who have been trained and who specialize in another air frame may spend some portion of their career in the RPA field. Some portion. But then the idea is to go back to the original air frame. So we would delay that going back for some of those pilots.

Q: For how long?

GEN. WELSH: Right now, Jeff, I mean, specifics, to give you a context, we have about 38 people who are on alpha tours into the RPA community from other airplanes. They're scheduled to go back this summer.

Q: And they're not?

GEN. WELSH: Of those 38 people, we are talking to each one of them and asking them about staying. That's where we are right now. We know there are five of them who've already been matched for other jobs. They'll leave.

The other 33, we're gonna just ask them if they would consider staying in light of having these other things that are gonna come in to try and help the schedule problem that they're facing.

Our crew force out there actually will tell you they enjoy the mission, they like the work, they're excited about the future. They're just worn out, because this is not a new problem. It's been going on since 2007, as the requirement keeps increasing and all our solutions to it keep lagging the requirement change.

And so, we have just got to get ahead of this. The biggest problem is training. We can only train about 180 people a year and we need 300 a year trained. And we're losing about 240 from the community each year. So losing -- you know, training 180 and losing 240 is not a winning proposition for us.

And the reason is because we are only 63 percent manned in our RTU, our training unit for RPAs, because we can't release the people from the operational units who are flying the operational support to go be training instructors, and even the people in the training units, who are there, about half of them daily are flying operational support missions.

So we have got to get ahead of this training curve, or the enterprise is gonna have a major issue. And that's what we're trying to get done right now.

MS. JAMES: Julian?

Q: Thank you. Julian Barnes, Wall Street Journal.

Just to follow up on this, has the pressure and the strain on the RPA pilots led to a decline in the number of CAPs that you can put out there at any one time, or a slow-down in any hoped-for growth that you had in the number of CAPs ?

Has there been an operational effect? Obviously on these individual pilots, a lot of extra hours, but have you had to reduce what you can provide combatant commanders in terms of...

GEN. WELSH: Yeah. Julian, no, we had not. We've met the operational demand signal, but we're doing it by putting people in a position where they're now having a debate whether they want to continue doing this. And that's not a healthy debate for us over time or for the combatant commanders over time.

Q: Is this something, just to follow up quickly, that -- do you think these initial steps that, Secretary James, you've outlined here, is this just a first step, or are you gonna need something more from Congress, do you think, in order to, you know, build up the number of pilots you need?

MS. JAMES: These are first steps. And within the next few months, we'll have a more robust plan, so to speak. But these are the immediate actions, with more to follow.

Yes? Second row?

Q: Thank you. Sandra Erwin I wanted to ask you about the deputy secretary of defense, Bob Work's, initiative to invest in innovation. And he's been directing a long-range investment plan.

I was just wondering if you can talk specifically what the Air Force expects to get from this. It sounds like it would be more centralized than the usual approach. So anything specific that you can say that you will want the Department of Defense to invest in, and how the Air Force would apply that new technology?

GEN. WELSH: I would offer that if you're a service founded from technology and to be successful, you're required to stay on the leading edge of technology over time, anything that drives innovation within the Department of Defense, which will likely benefit science, technology, research, development, is good for us.

We are actually, under the secretary's guidance, now putting together a new strategic master plan that includes an annex that is purely science and technology, prioritization, ideas for the future. Technology we can -- we can use to change the way we do business.

That will tie very closely into this effort. And we think we have a number of ideas that we will feed into this Department of Defense effort, and it may assist us in moving faster in some of these areas, or it may give the department ideas for how they can move forward with other services in these areas.

Q: So will you talk about some of those ideas?

GEN. WELSH: Oh, I think some of the standard ones are things like hypersonic technology, how you would use it, how you wouldn't. How quickly can it be developed?

The new advanced engine technology demonstrator is a great example of a place where we can not only get better performance, but save maybe as much as 25 percent of fuel costs. If we can prove that, we need to get that fielded on as many airplanes as we can, as we can afford over a reasonable timeline, because that's a game changer in cost, with the number of hours that we fly airplanes around the world.

I think directed energy and how you apply it. I think there are great applications in the I.T. world. Quantum computing springs to mind, although I won't tell you I can understand it completely, the possibilities of how it could be employed are really kind of stunning.

Now, I think there are things in individual human capital development, in terms of education and training -- how do you interest people, how do you teach people as we go forward over the next 20 or 30 years?

I think the possibilities here are just endless.

Q: When you say "directed energy," do you mean like the Navy's laser gun? Would you want something comparable to that?

GEN. WELSH: There are lots of applications that you could use for the Air Force. We should piggyback on successful efforts in other services like the Navy. We should be looking at laser defense against air-to-air missiles or surface-to-air missiles. We should be exploiting laser communications. There are a number of ways that we should be moving forward in a lot of these areas.

So this -- this is exciting to us. This is a great opportunity in my mind.

MS. JAMES: Yes, sir? Second row.


Q: Hi, Pat Host Defense Daily.

Secretary James, why should a new entrant in EELV certification believe the Air Force is performing in good faith with its stunning six-month delay in certifications for the EELV?

MS. JAMES: I think we were all disappointed that SpaceX was not certified by the end of December. We had high hopes.

However, they have come a very long way. Eighty percent of the criteria were met; 20 percent are still to go.

And this is real engineering work that needs to be demonstrated. This is not a paperwork shuffle.

So I hope SpaceX knows that we're operating in good faith. General Greaves, the certifying official, personally put a great deal of time and attention on this -- resources, people and money -- to try to make sure that we were doing everything that we needed to do to get this over the finish line.

As far as I'm concerned, this is not a question of if they will be certified, it's a question of when. And, as you pointed out, it's still some months away, but I am certain that it will be there.


And, the last point I will make is that this certification process is written down. It is contained in a proprietary document called a CRADA, which stands for cooperative research and development agreement, and it was signed by both parties. It was signed by the Air Force; it was signed by SpaceX. And this lays out in detail what needs to happen.

So, you know, it's important that all parties reread that document and understand what needs to happen.

And, again, I'm sure that that final 20 percent will be done expeditiously and we will get there. It's in our national security interest to make sure that we get there.

Q: If I may follow up, will you publicly release the CRADA?

MS. JAMES: It is proprietary. So we will not.

Q: How about a limited, redacted release or -- for transparency purposes?

MS. JAMES: I guess we could consider that. I hadn't thought of that. So, let us look into that.

Q: Thank you.

Q: Tony Capaccio Those are all conciliatory remarks. I want to get your reaction to Elon Musk's statements to Bloomberg Business Week in a recent interview.

He says here, "The people fighting it, the certification, are really in the bureaucracy of the Pentagon and the procurement officers who then go and work for Boeing and Lockheed, the prime contractors," which has actually happened.

"It's easy to understand this from a games theory standpoint. Essentially, we're asking them to award a contract to a company where they're probably not going to get a job against a company where their friends are." So they've got to go against -- "so they've got to go against their friends and their future retirement program."

This is a difficult thing to expect, kind of a slap at the integrity of your acquisitions program, an observer would say.

What's your reaction to that?

MS. JAMES: I think those are rather unfortunate comments. I don't know who he means. I don't know who he's referring to. But the people that I know are working very, very hard on this certification process. And so I think those are unfortunate remarks and I don't agree with them.

The last point I'd like to make, if I might, Tony, is that after all is said and done, I am going to set up an independent review. That review is going to be led by the former chief of staff, Larry Welch, who you may recall very recently did an excellent job doing an independent review of our nuclear enterprise.

And so he has agreed that he will take this one on. We're finalizing the details of what the work plan will look like and so forth. Because I'm the one who thinks that any process, which we've now been operating under this process for about a year-and-a-half with SpaceX.

What have we learned from it? Are there ways that we can streamline, speed it up, do things a little bit differently, but still, of course, protecting what we call mission assurance. Mission assurance means we want these satellites to be launched without failures, without crashes and burns. Which, by the way, we had some spectacular failures in the late '90s. And out of that, the process and procedure and what we now call the certification process essentially was born.

So we don't want to sacrifice that. But there could be lessons learned. And I want to make sure we have those and implement, if it looks appropriate to do so.

Q: I need to ask you. These are unfortunate remarks, but he did say them in a fairly deliberative manner. Are you going to communicate your displeasure to him directly? And might this ripple-effect through the Air Force certification process among your acquisition professionals, who might want to say, you know, "to hell with him"?

MS. JAMES: It will not ripple through the Air Force acquisition professionals. I feel very confident of that. I only wish that Mr. Musk would have said some of this to me directly when I called him to tell him that SpaceX had not quite made it. We were still working it and so forth. I only wish he had said this to me directly.


Q: Brian Everstine, Air Force Times.

Going back to renewing the push to retire some of the older aircraft. I'm just wondering what will be different this time around? General, you recently talked about the need for the Air Force to explain itself a little bit better to Congress, to justify some of these cuts. I was wondering what will change.

And I have a question on a separate issue. Recently, there were a lot of changes announced to Air Force structure in Europe, the future of Mildenhall and the F-35 basing. Is this a sign of changing strategy in Europe? Is there any shift on that front?

MS. JAMES: Why don't I take the first one, and if you wouldn't mind taking the one on Europe.


MS. JAMES: In terms of what will change, there's probably not a magic bullet answer to that. There's new members of Congress. We have to educate. We have to continue to explain the position about why we need to not only invest in today, but also invest in tomorrow.

If we had a lot more money, I mean a lot more money, we could do it all. But of course, we're not going to have a lot more money. So we have to make choices. And that's what we're paid to do. We're paid to make some tough choices in this environment. And so we will explain that story to the members who we have known for some time, as well as to the new ones.

GEN. WELSH: The infrastructure consolidations in Europe are just that -- consolidations. It's not giving up mission capability. There was an opportunity to actually save money over time in a fairly significant way by consolidating installations in the U.K., for example, and getting rid of three bases and consolidating at one.

It also reduces operating cost because that base already had the common infrastructure and everything required to continue the activity that's currently done at Molesworth.

So that was just a consolidation of capability. It will be much more efficient over time. It will pay for itself in a pretty expeditious way. Mildenhall is a base closure because the cost of updating Mildenhall over time, with very old infrastructure that hasn't been maintained well over the last 30 or 40 years, is excessive compared to the combat capability we get from the operations that go on the base.

And we have other installations where that can be bedded down at much less operating cost over time. We can save the recapitalization costs of rebuilding the infrastructure. The good news is that our partners in the U.K. have done a lot of downsizing and soul searching on how they're going to operate under a lower top line themselves for the last 10 years in the defense business, and were very supportive on this, although neither one of us really likes giving things like this up. Mildenhall has been a great, great installation for the Air Force for a long time and remains that way today. But this is all about cost savings and efficiency.

Q: Marc Schanz, Air Force Magazine.

On force structure, different AOR. The Air Force has been pouring a lot of MILCON into what used to be expeditionary wings in places like Al Udeid, especially over the last year. I don't know whether it spiked in the aftermath of OIR. My question to you is, is this part of an ongoing effort to normalize the Air Force's presence in that region a la Korea, U.K., et cetera, expanding of accompanied tours, things like that? Do you expect this to continue at Al Udeid? Do you expect it to continue at other locations? What's the trend line here?

GEN. WELSH: What we're trying to do, Marc, is support U.S. Central Command's desires in any way we can, in any way that makes sense, in any way that we can afford. So it -- when U.S. Central Command decides on this long-term footprint, which is their decision, we support it with an air component commander and then airmen to do the jobs that we bring to their command.

If they would like to establish a more permanent presence over time, and have been able to work that agreement with Department of Defense policy folks, State Department, and the host nations, then we figure out how to help them as kind of the keepers of the installation and the facilities. We then provide investment to build that capability for them, whether it's a new air operations center or it's trying to expand family presence so we can build stronger relationships with the community and the nations that are hosting you.

In all those things, we try and meet their requirement, just like we try and meet their operational requirement. That's what this is all about.

Q: The requirement is going up, correct?

GEN. WELSH: Well, as we draw -- well, we are actually drawing down the number of installations in the greater Middle East, I think, as we come out of Afghanistan. And it will be necessary to identify which will be semi-permanent to permanent. CENTCOM's responsibility is to -- is to lead that effort. And then our job is to try and support them in making those facilities capable and credible in terms of the mission support they're supposed to provide.

Q: John Tirpak, Air Force Magazine. Madam Secretary, going back to the question about force structure reductions. Since the Congress told you "we really don't like the idea of retiring the A-10," will you now graduate to that second tier of items that you mentioned last year, like the KC-10, the new engine, as places where you have to go to get the money to live within sequester?

And also are you going to submit a budget that has two levels of numbers, one with and without sequester?

MS. JAMES: So, I would suspect, first of all, that the president's budget proposal, which will of course be revealed in February, so I'm sorry we can't go into a lot more detail about -- about the specifics in it. But I do suspect it will be above the sequestration level. I suspect we're going to be asking for a level which is much closer to what we think we need, as opposed to what we might be forced to live under if sequestration hits.

So that's kind of my best guess at the moment about that. If -- assuming I'm right about that, we would also, of course, just like we did last year, explain to the Congress that if we had to go to the sequestration level, here would be the choices which, again, if -- if the choices were considered tough, and we certainly thought they were tough in the last year's go around, sequestration will be much, much more severe and will do damage to a variety of areas within our Air Force.

So, we say again that will be bad for everyone and we need to lift sequestration.

Q: So not specifically a second-tier budget, if you will, for sequestration, but a list of probable alternatives if you do have to do it.

MS. JAMES: That's what I suspect we'll do, yes.

Yes, please?

Q: Courtney Albon, Inside the Air Force.

I have two questions. The first is a followup to Amy's question earlier about F-35 maintainers. Not to belabor the issue, but just a few months ago there was a lot of urgency and concern about not having enough maintainers to achieve IOC. And now it sounds like you're saying that there will be enough.

What -- what has changed since then? Is it simply NDAA provisions? Or is there more that's happening there?

MS. JAMES: So, what we're doing, and this is a very difficult problem to figure out, but -- but what we've been doing in the last -- what? -- month or so, two months I guess since the final decisions were issued by the Congress, we have been trying to work our way through it. We think we're getting close to a solution which is anything but a perfect solution.

It presumably would leverage a little bit of the flexibility that we were allowed in Congress, but it would leverage a number of different factors to try to bring this together so as not to risk the IOD of the Joint Strike Fighter.

But as you point out, there aren't enough of these experienced maintenance people to go around for all of our needs, and that is why this is so difficult.

GEN. WELSH: If this -- if the proposals that we've come forward with are not agreed to, then IOC is a risk.

We are now into the second set of solutions beyond what we thought was the best military approach because we haven't been allowed to take that. We don't have 1,000 extra maintenance people waiting for a job. They're doing other work. We have to get them into a new platform by taking them out of something else.

It's the only way to develop them or hire contractors or delay IOC. Those are the three. And there's some combination of those things that have to happen. We don't want -- like the option of delaying IOC. So, if -- if we will do everything we can to come up with other creative solutions that will be painful in different ways to try not to do that.

Q: And when will -- when will those solutions start to be implemented? And is this something that is already happening, you're already...

GEN. WELSH: This is something we've been working with folks on the hill for awhile to try to come up with a solution to get this done and within the department. And I think as the budget rolls out and we get into the discussions on the budget and the timelines of supporting the F-35 IOC and beyond, it'll become pretty clear.

Q: The other question I just wanted to ask was on the rocket engine development program. Congress provided an extra $220 million for that. How -- how do you expect Air Force will use that to speed up current processes or what is, I guess, the status of that?

MS. JAMES: Right, so we're trying to work through those details right now. We don't have it fully fleshed out, but we're appreciative of that money. That'll kickstart the effort so that we can, as we've said many times, get off of the reliance on the RD-180, the Russian engine. But we don't have all those details fleshed out yet.


Q: And last year's QDR -- sorry, -- (inaudible) -- with Foreign Policy.

In last year's QDR, the department announced the decision to cut 10 Predator and Reaper combat air patrols, and I was curious if the demands out of CENTCOM and the fight with the Islamic State have forced the department and the Air Force to reconsider that decision, and if that total number does go up, how does that exacerbate some of these manning challenges that you're talking about?

MS. JAMES: As far as I know, these numbers get confusing sometimes. But the number of CAPs is on the upward trend, not on the downward trend.

GEN. WELSH: The answer is yes, we had to reconsider the decision because of the new activity that was not projected at that time, and it's exacerbated the problem. That's why we have got to do something right now to stabilize this workload issue.

We thought we were drawing down and had a plan in place to man this enterprise that would, if we had actually drawn down, we'd be fine right now.

Q: 55, is that the number that was the plan?

GEN. WELSH: There's been a lot of discussions. 45, 55, we've been on a plan for 55...

Q: And now we have to -- that's going up, you think?

GEN. WELSH: It's increasing.

Q: Okay. To a number you can share?

GEN. WELSH: No ma'am.

Q: Okay.

GEN. WELSH: I'm not real confident about where it's going to. But it's -- it is increasing.

Q: Okay.

MS. JAMES: And these numbers do get confusing. Yes, in the back please.

Q: On that same issue, how much money does the Air Force spend right now to train these 180 or so RPA pilots, and how much money would it take to spend the 300 or so that you would need?

GEN. WELSH: Yeah, that's a great question. I don't know the specific answer, but I'll get it for you.

I don't know what the cost is per student. I'd have to get that for you.

Q: And then just how much did these measures -- you've just announced these initial measures, cost roughly? Or is there a cost or is this just a matter of...

GEN. WELSH: The only cost to the initial, there's a very small cost in terms of the aviation bonus intended to keep a number of people in the career field. There aren't that many of them who are coming to the end of their -- their tenure. So it's -- that's not a very big number at all.

There is a cost associated with expanding support from the Guard and reserve units that fly RPAs today to expand their manpower so they can bring more people full-time to be able to support more cap activity.

That's a -- that comes out of an MPA pot that we have in our budget already. But there will be a cost associated with it. And if we continued it over time, we'd have to include it as part of an appropriation request. We can cover it this year, but in the future it would have to be part of an appropriation. That would be the big cost right now.

The funding for up to 300 people in the training pipeline is in our budget. We had planned on being there by now. So we have program for that. I just don't know what the amount is. But I can get that for you.

STAFF: And we are at the five minute mark.

MS. JAMES: Okay.


Q: Hi, Luis Martinez with ABC News.

If I could follow on the maintenance question and then the RPA, the solutions that you're announcing today seem to be focused on the pilots, but the RPA mission is much broader, with sensor operators, with maintainers, with the intelligence analysts that review this.

What potential solutions are you looking at to ease the stress on that force? And when you talk about potential -- the damage that could be caused by further sequestration cuts, at what point -- at what number range, personnel wise, are we talking about that you could see operational readiness being affected in a severe way?

If you're talking about 350, if you're talking about lower 320,000, something like that?

MS. JAMES: You mean overall, our end strength?

GEN. WELSH: Up to the rest of that, we've been working the RPA retention issues for the entire force for awhile now. There have been a number of initiatives, Luis. We can give you a list of things that have been done over time.

The crisis right now is with the pilot force, because they are reaching the end -- because of the way their -- their tours of service are organized, we are reaching the point where some of them can go. And it is the most stressed part, because it is the lowest manned, percentage wise, part of the RPA fleet. That's why that's the focus.

But as far as future discussions, it's about the entire enterprise, and it has been for the last eight years.

So, I would tell you that we're considering everybody in this. These specific items, near term, are to try and keep the pilot force engaged. They have the longest and most expensive training pipeline in that community. But there are many other people, as you well know, who are engaged in this enterprise.

The other thing that you mentioned was the number. The number's actually three, one, five not 350. So 315,000. And this -- as the secretary mentioned to you, we believe we're there. We cannot go any lower. We are getting too small to succeed, as opposed to too big to fail. And we're -- so we're at a point now where we are undermanned in many career fields because we've taken people out of them to put in other areas to shore up those areas.

RPAs is a great example. We've grown from 21 CAPs in 2008 to going to 55 plus now, and those people have come out of other things, like maintenance, security forces, other areas where we just changed the ratio so we could build the RPA fleet on the fly.

And now we've got to go back and get our maintenance manning up above 84 percent, because it's affecting readiness and operational capability. We've got to get our nuclear security forces fully manned. We've got to get our intelligence business, which underpins all this RPA activity, up to full manning in every different category.

So that's why we think, even if we move hardware out of the Air Force, move into the reserve component, for example, the software, the people have got to stay. And let's bring new people into the reserve component to operate that hardware, and let's re-man the Air Force squadrons at the front end of our business.

We can cut things out of staffs all we want, but if we break squadrons, we're out of business.

Q: I'm sorry, do you?

GEN. WELSH: No, that's okay.

STAFF: Two more questions.

MS. JAMES: Two more, all right.

Q: How much (off mic) do you need to get the nuclear facility security fully-manned? What are some of the things that you're going to be doing next year to continue the process?

I know you said nuclear security and nuclear capability was one of your key investments. What are you going to be doing to keep that moving forward? And about what is the percentage of the budget that you're going to be using to invest in nuclear?

MS. JAMES: So, in terms of the manning, we are -- we have directed -- redirected, I should say, about 1,100 people to plus up the nuclear forces. Furthermore, there's eight what we consider critical specialties, and we're going to make sure that those are 100 percent manned.

So, as you heard the chief say earlier, as we were talking about the broader Air Force and why we were so passionate about not going any lower in terms of overall numbers, one of the things that certainly I've discovered as still a relatively new secretary is that we are undermanned in lots of areas of our Air Force, but we're not going to be undermanned in these eight critical nuclear, so we've -- you know, doubled down the effort on that. So that's the manning.

In terms of additional initiatives and whatnot, you know, we've announced quite a few. And there's a -- a long-term effect of these.

So, we're going to be continually monitoring how are we doing with these initiatives and prepared to tweak or change and that sort of thing as -- as opportunities seem to present. But we'll be, obviously, tracking that plan very closely.

And in terms of money, again, I'm sorry we can't you know, share the specifics of the money at this point, but this will be an area of additional investment next year as well as over the five year plan, which of course that will all be public in February.

Yes sir?

Q: David Lerman with Bloomberg.

Just wondering if you could give us any update on the new bomber program. Is the competition still on track? Any update to the timeline for an award for that? And could you also just speak to the urgency of it? Some sense of how urgent it is? And if it is urgent, why is it better to spend all this time and money designing a new aircraft instead of just buying more B-2s?

MS. JAMES: So the competition, there's really nothing new. It's on track. Best guess projection I would give you is sometime in the late spring, early summer, and no real changes to the program. Sort of steady as she goes from things that we have explained before. Do you want to talk about the operational, the need and so forth?

GEN. WELSH: I think first of all, B-2 is going to be a pretty old airplane now. We -- you know, compared to the B-52, it's pretty young. But compared to most other aircraft that are able to operate in the environment 15 to 20 years from now, it's old.

The timeline of the mid-20s for beginning delivery of the long-range strike bomber allows us to start retiring the B-1 fleet, the B-52 fleet over about a 15 year period so that by the time we get to 2040, we will still have B-2s in the inventory, but the same limited number we have now.

And hopefully by the mid-2040s, we'll have roughly 80 to 100 as the target number for Long Range Strike Bomber. We've stuck with that number for a very specific reason. We believe that's the number it takes, after doing some very significant operational analysis, to do nuclear deterrence and to do a large scale air campaign. You need that number of bombers to actually turn the number of sorties we have to fly.

It's a pretty mathematical equation. It's the right number. And so we're trying very hard to keep price as an independent variable so we can afford that number of airplanes. And staying on a very deliberate track in this program, limiting requirements, changes in growth, staying on the acquisition timelines are really, really important to us in doing that -- moving this program forward. So, that's the approach and right now, I'm really comfortable that we're about where we need to be.

MS. JAMES: We are, yes.

Thank you all very much.

Q: Thank you.