SECRETARY OF DEFENSE MARK T. ESPER: Thanks, Michael, for that kind introduction. I guess I’m going to have to double up on my Christmas gift to Tom Grecko for his kind words.
Well, I also want to thank the Reagan Institute for inviting me here today. It's a true privilege and an honor.
As many of you know, because there's a lot of friends of mine out there in the audience. I have attended this forum every year since its inception in 2012 and I found this to be an incredibly important venue to discuss the state of our national defense.
It is quite fitting to have this discussion here at the Ronald Reagan Presidential Library to pay tribute to a leader who did so much to enhance our military strength and our nation's security during a time of profound consequence and change – just like today.
And on a personal note, I always enjoy walking through the halls and looking at the photos. As some of my closer friends know, my mother's side of the family are Reagans from County Cork.
And over the years, my mom has claimed that we have a relationship with President Reagan. I've often pressed her for evidence - none has been forthcoming, and so my only other request to the library is this: As you go through your files, if you find that relationship, call me. If you don't, I'll give you her cellphone number.
(Laughter.)
I don't want to make mom mad. When President Reagan took office, he faced a Herculean task building a military capable of defeating the Soviet Union. He got to work.
Highlighting the dangers of insufficient defense spending and the various shortfalls that plagued the force. He secured substantial budget increases from Congress and advocated reforms that cut the cost of defense programs and delivered savings back to the Department.
He spoke fiercely about peace through strength and launched a major effort to modernize our nuclear arsenal. He held innovation and R&D funding as the key to American advantage over our adversaries.
He articulated this vision of American strength and global engagement in our nation's first ever national security strategy and most importantly, he inspired us. He gave us confidence.
Reagan brought to the forefront a commitment to American values: Values such as freedom, human rights and the rule of law. He embodied these ideas as he rallied against the threat of communism. He stood for peace during nuclear weapons negotiations with the Soviet Union and he championed liberty, and opportunity in Berlin when he called on Gorbachev to “tear down this wall.”
To say the world has changed since then would be an understatement, but President Reagan's vision and strategies to secure peace for America and for the world remain as relevant today as they were in his time.
In this new era of great power competition, our war fighting advantages over strategic competitors are being challenged. The international rules-based order is increasingly under attack. China and Russia – today's revisionist powers – are modernizing their militaries while seeking veto power over the economic and security decisions of other nations.
China's economic ties has allowed it to triple its annual military spending since 2002 with estimates reaching close to $250 billion last year. Beijing continues to violate the sovereignty of Indo-Pacific nations and expand its control abroad under the pretense of Belt and Road infrastructure investments.
Meanwhile, it is pursuing competitive advantages, often in illicit ways in emerging technologies like artificial intelligence and 5G, while exploiting other nations’ intellectual property for its own gain.
Russia is another nation intent on upending the international norms through its aggressive foreign policy, broken treaty obligations, nuclear intimidation and cyber operations.
It has violated the borders of its neighbors in the pursuit of regional dominance and turned to coercion and hybrid tactics as a means to regain strategic advantage.
Elsewhere, we face ongoing threats from rogue regimes including North Korea's nuclear weapons program and Iran's continued efforts to destabilize the Middle East.
And around the world, terrorist organizations such as ISIS continue to pose a threat to the United States and our allies. This environment presents us with a host of challenges we must overcome to compete, deter and, if necessary, to fight and win tomorrow's wars.
Winning future battles requires us to contend with our competitors growing anti-access area denial capabilities, hypersonic weapons, anti-satellite systems and other emerging technologies.
We must develop and deploy new warfighting doctrine, including multi-domain operations and command and control to be prepared to fight not just in the air, on land and at sea, but also in space and cyberspace.
This requires a robust defense budget and continued investments in our readiness and our modernization.
It requires us to make tough choices to ensure our resources go to the right priorities. It requires an emphasis on innovation and cutting edge technologies, and it requires us to leverage our growing network of allies and partners.
The National Defense Strategy remains our guiding beacon to meet these needs. Our focus is on three major lines of effort: Enhancing our military’s readiness and lethality, strengthening our alliances and attracting new partners, and reforming a Department to make sure our finite resources are directed toward our highest priorities.
Alongside the N.D.S., we're also placing renewed emphasis on taking care of our service members and their families because we know that people – people – are our most valuable resource.
Since releasing the N.D.S., we have invested in new equipment, improved operational readiness and continue to modernize our nuclear deterrent forces. For example, we are developing next generation smart munitions across our services. We are procuring advanced fighter jets. We are modernizing all three legs of the nuclear triad and investing in our missile defense program to protect the homeland.
We're developing unmanned naval vessels and improving the readiness of our fleet and we are developing a new generation of ground fighting vehicles.
The Department continues to invest in advanced technologies that will help us maintain our tactical advantage, such as artificial intelligence, directed energy, robotics, and hypersonic weapons. Our current research and development budget is the largest it's been in 70 years, growing funding for space by 15 percent and cyber by 10 percent.
While our adversaries seek to surpass us in developing these cutting edge technologies, we must press ahead to preserve our long held battlefield overmatch. We're well aware to doing so – on our way to doing so, for example, we established the United States Space Command and are modernizing our space capabilities.
We increased our investments in both offensive and defensive cyber space to boost resiliency against adversaries. We stood up the Joint Artificial Intelligence Center to get ahead of the curve in machine learning, and we are identifying ways to leverage big data to gain efficiencies across the Department.
Meanwhile, we are working to reallocate our forces and equipment to priority theaters that enable us to better compete with China and Russia.
As part of our dynamic force employment, we will deter aggression by becoming more operationally unpredictable to complement – to complicate adversary decision making. This will require us to adjust our force posture around the world to become more responsive to and more prepared for future threats.
It also requires us to maintain a robust network of allies and partners. We recognize that they are an inherent strategic advantage our opponents do not possess.
To bolster our collective security, we continue to emphasize burden sharing and it is working.
Since 2016, our NATO allies have invested an additional $130 billion annually in defense. Nine NATO member states currently meet the two percent GDP commitment, and many more are on their path to reaching that goal by 2024.
We continue to add more partners to global efforts to deter aggression, such as the International Maritime Security Construct in the Strait of Hormuz, and the more nascent integrated Air Missile Defense effort to protect critical infrastructure in the Middle East.
And we have secured greater host nations support in countries where U.S. troops are stationed abroad.
Full implementation of the N.D.S., however, relies on more than just new concepts, smart investments and robust relationships. To be effective in an era of great power competition, it also requires us to reform. This means re – revisiting our industrial era management structures and processes that were born during the Cold War.
The leadership team across the Department, O.S.D., Joint Staff, the services and combat commands must achieve a new level of integration and results with far greater speed than the Pentagon bureaucracy has traditionally accommodated.
We need shared goals, management based on data and accountability for N.D.S. outcomes. To align our efforts, we have made major changes to our battle rhythm.
Every week, all the Department's senior leaders, uniformed and civilian, now meet as a leadership team to measure progress toward implementing the N.D.S.
This is a significant management shift inside the Pentagon, but we are committed to fully implementing the strategy at every level, and I'm proud to report we've already made solid progress.
However, to keep up this momentum, we depend on a predictable, sufficient and timely budget.
Under President Trump's leadership and with the support of Congress, the Department's recent budgets have allowed us to rebuild our warfighting readiness, which had been depleted due to several years of insufficient funding and numerous, numerous continuing resolutions.
Last year's budget allowed us to really begin modernizing the force and increasing lethality to meet future warfighting demands.
Our 2020 budget and beyond will drive those modernization efforts and ensure their long term success. We understand that the nation's resources are limited. To enable sustained investment and critical next generation capabilities, our future budgets must free up those resources by divesting from legacy systems and low priority activities.
We need your support to get this done, after all, great power competition is not solely the concern of the Department of Defense. The rising theft of intellectual property, cyber intrusions into public and private networks and state-backed market manipulation are consequences of China's growing power.
These activities erode our industrial base and make American innovation vulnerable to exploitation. Everyone – everyone in this room is impacted by this reality.
To further complicate matters, the Department of Defense remains hamstrung by the ongoing continuing resolution, for every day under a CR is a day we are competing with Russia and China with one hand tied behind our back.
This summer's budget agreement showed great promise, but unfortunately, we are still operating at level of $19 billion below the top line. In fact, we continue to lose nearly $5 billion in buying power for every quarter we remain in a CR. This must end. That is why I continue to call on Congress to pass an Appropriations Bill that provides our service members the support they deserve, and allows the Department to fully implement the National Defense Strategy.
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Let me repeat. Our soldiers, sailors, airmen and Marines and civilians need a Defense Appropriations Bill now. Let's get it done.
In addition, we need Congress to grant us the authorities required to maintain an edge over our adversaries in every war fighting domain, to include space.
It was also essential that this year's N.D.A.A. fully authorized the creation of the Space Force as the sixth branch of the Armed Forces, and I want to thank Congress for doing that and I want to specifically thank – where is Chairman Smith? And Congressman Thornberry. Thank you both, as well as your counterparts in the Senate for doing that.
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Within the Department, we are implementing aggressive reforms to free up time, money and manpower to put back into our highest priorities.
The week after I was confirmed, we launched the defense-wide review to begin reforming the Fourth Estate. In just four months of work, we have saved over $5 billion. By decreasing overhead, divesting legacy activities and reducing lower priority programs, we were able to invest more in the warfighting requirements of the services. However, we can't do this without the backing of Congress.
When our budget comes to the Hill next year, I ask you to support our proposals and enact the legislative changes needed to get these reforms across the finish line.
And to be clear, this is just the beginning. I expect every leader in each military service, in O.S.D., and the Joint Staff and in the combatant commands to review their budgets with the same rigor and to reprioritize to support the N.D.S.
We will continue the defense-wide review process early next year from a clean sheet as we start looking at the 2021 budget to ensure we make the most of every taxpayer dollar.
The security the United States of America, and in fact, the world depends on our willingness to prepare for an uncertain future. As I meet my counterparts throughout my travels, I'm reminded just how much other nations desire America's presence and our leadership.
They look to us to deter aggression, to help build their military capacity and to promote American values like freedom and respect for the rule of law.
The United States plays a unique role in the world as a beacon of those principles.
In his farewell address, President Reagan recounted a story from the early 1980s about an American sailor on the carrier Midway in the South China Sea.
As its crews saved a boat full of refugees escaping communist control of Southeast Asia, one of those refugees called out to the sailor, "Hello, American sailor. Hello, freedom man." And as the President recounted at the time in his own words, he said, quote, "A small amount with a big meaning. A moment the sailor who wrote it in a letter couldn't get it out of his mind. And when I saw it, neither could I. Because that's what was to be an American in the 1980s. We stood again for freedom."
America was synonymous for freedom then, and it still is today.
Our service members were seen across the world as sentinels of that freedom, then as they are today, and Reagan understood that American military power was the key to security and prosperity then, just as it is today.
The United States military will continue to demonstrate leadership across the globe. We will continue to uphold America's values, and as President Reagan championed, we will continue to promote peace through strength.
Thank you all, and I look forward to our discussion.
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