SEC. GATES: Good afternoon. General Pace is traveling in the Far East. I will leave as soon as we're done here, to go to the -- Colorado Springs for the change of command at Northern Command tomorrow morning and then will participate in the change of command for Pacific Command in Hawaii on Monday.

This morning I had -- I met with members of the House Army Caucus, a bipartisan group of representatives who have a special interest in the strength and well-being of the Army. We discussed several key issues relating to the Army's readiness. I received questions from both sides of the aisle as to the measures the military will need to take if the Congress does not pass the FY '07 supplemental by April 15th.

For example, according to the Army, which went through this experience last year, if the supplemental is not passed by April 15th, the service will be forced to consider the following kinds of actions: one, curtailing and suspending home station training for Reserve and Guard units; two, slowing the training of units slated to deploy next to Iraq and Afghanistan; three, cutting the funding for the upgrade or renovation of barracks and other facilities that support quality of life for troops and their families; and fourth, stopping the repair of equipment necessary to support pre-deployment training.

If the supplemental is not passed by May 15th, the Army will be forced to consider the following: one, reducing the repair work being done at Army depots; two, delaying or curtailing the deployment of brigade combat teams to their training rotations; three, this, in turn, will cause additional units in theater to have their tours extended because other units are not ready to take their place; four, delaying the formation of new brigade combat teams; five, implementation of a civilian hiring freeze; sixth, prohibiting the execution of new contracts and service orders, including service contracts for training events and facilities; and seventh, holding or cancelling the order of repair parts to non-deployed units in the Army.

This kind of disruption to key programs will have a genuinely adverse effect on the readiness of the Army and the quality of life for soldiers and their families. I urge the Congress to pass the supplemental as quickly as possible.

I can take your questions now.

Bob?

Q Mr. Secretary, I'd like to ask you about the reports of -- within the Mahdi Army of splintering or breaking up into splinter groups, do you think that's more likely to be a good thing or a bad thing in terms of potential for political reconciliation?

And also, if I may add, do you see indications that some of the more radical elements are going into Iran and receiving training in Iran and financial support from the Iranians?

SEC. GATES: I don't -- I don't really know whether the splintering would have a beneficial or a deleterious effect on progress, to tell you the truth. And I haven't seen anything that would suggest that kind of splintering is going on. There clearly are divisions in the Sadrist movement, probably accentuated by Sadr's continuing absence from Iraq. But whether that has had an impact in terms of splintering the military forces, I don't -- I haven't seen much to that effect.

Q What about the Iranian element, some of them going into Iran and receiving training and financial support?

SEC. GATES: I have not seen anything to that effect.

Yeah?

Q The administration has decided to ramp up the Navy -- the U.S. Navy presence in the Persian Gulf. Would you tell us, please, if you are trying to send any message to Tehran behind this military -- I mean activities in the Gulf?

SEC. GATES: Other than the deployment a couple of months ago of a second carrier strike group to the region, I'm not aware of any significant additional Navy forces being sent to the area.

Q And just to follow up, Mr. Secretary, the USS Nimitz is leaving the base in San Diego soon.

SEC. GATES: It may just be a rotational replacement. I don't think there's any expectation that we will have more than two carrier strike groups in the area.

Q Mr. Secretary, next week marks the hundredth day since you assumed office as the secretary of defense.

SEC. GATES: That's only a hundred? (Laughter.)

Q Now that you've been privy to information, documents that you hadn't seen before you became secretary, and given that you promised to Congress and the American public a candid assessment of Iraq, or views on Iraq, do you still believe it is realistic for the department and this administration to state its goal for Iraq as wanting to establish a democratic Iraq that can govern and sustain itself? Or do you think it's time to lower the bar?

SEC. GATES: I think that the -- what the president has been saying and what I've been saying is that we would like to see an Iraq that is able to govern itself, sustain itself and defend itself, and an ally in the war on terror. I think those are the goals that we've set.

Q But a democratic Iraq?

SEC. GATES: Well, govern itself, I think, implicitly involves that. But I think that the three criteria that I have described are the way we have been describing it.

Q Sir, on readiness, we're seeing increasing evidence of strain on the U.S. military from Iraq. Even beyond any request for supplemental, how is the U.S. military positioned in the face of the commitments in Iraq and Afghanistan to deal with a major confrontation in a third state?

SEC. GATES: Well, General Pace has testified to this. We've been asked this on the Hill. And what he has reminded people of is that there are about 200,000 people, all together, deployed in the Central Command area of operations. There are an additional two million soldiers, sailors, airmen and Marines in the American military, either in the active force or in the -- and in the Navy and Air Force.

What General Pace has said is that clearly, with the level of commitment, what we have in Iraq, if we were to have another conflict, another major conflict, we would not be able to achieve our goals on the timelines that we've set for ourselves in terms of being successful in that other conflict. But we would prevail. It would take a little longer, and we would not be as precise. We would not have as many precision weapons and so on, so it would be more of a blunt force effort.

So our ability to defend the United States, despite the heavy commitments in Iraq and Afghanistan, remains very strong. And every adversary should be aware of that.

Q Sir, can I ask you to go back to your opening statement? As you mentioned, this happened to the Army last year where the supplemental got held up. But if I remember correctly, the things they had to implement were far less severe in order -- for a stop-gap. I mean issues like slowing down deployment to Iraq and Afghanistan, extending troops -- those things were not implemented last year. Is there any reason why the things the Army has to do this year will be more severe than it was a year ago when this happened?

SEC. GATES: Well, I don't -- I wasn't here last year, but based on what the deputy secretary and others have told me, the disruptions in the budgeting process and the disruptions for the Army itself were in fact pretty severe last year. And I remember even in Texas reading the newspapers, when I had no idea I would have any responsibilities here, about the fact they couldn't pay the electric bill at Fort Sam Houston.

So I think that the -- I think Army would disagree with the premise that these are necessarily more severe than what they had to go through last year.

Q On the deployment issue, would that directly affect the current surge of forces into Baghdad? Because, obviously, if they're talking about slowing down deployment, they're still only two brigades fully in there, thus far. Would that -- if the supplemental doesn't go through, do you expect the surge to slow down?

SEC. GATES: This would probably affect the replacement brigades more than those that are already scheduled to go.

Q Mr. Secretary, MNF-I in Baghdad today put out a press release in which it said: Coalition forces over the past several days captured two brothers, Qais and Laith Khazali, and several other members of the so-called Khazali network that started in Iraq, which, according to the release, says, is directly connected to the January kidnappings and murders of five American soldiers in Karbala. And that's it.

I mean, can you flesh that out a little bit? Is this network or are these individuals charged or directly connected to the kidnappings and murders of these individuals? There's some belief that some of these members may be directly connected to Muqtada al-Sadr. And is there any evidence of Iranian influence whatsoever in the killings of those five American soldiers?

SEC. GATES: What you read in the press release from MNF-I is essentially what I know. They have only had these guys a couple of days, and I think they're looking for the answers to all the questions that you've just raised. I don't know the answers to those questions.

Yeah?

Q As far as you know, they haven't been charged in any way with the killings of those five American soldiers?

SEC. GATES: Not that I know of.

Q Just to clarify, do you know if the one brother is in fact connected to Muqtada al-Sadr, his former spokesman or whatever, as some press reports have suggested?

SEC. GATES: I have heard that. I don't know whether it's a fact or not.

Q Mr. Secretary, do you think that the Mahdi Army -- a couple weeks back, General Petraeus said they rolled up about 700 Mahdi Army members. Do you have a new figure on that? Does that -- how many more have they rolled up?

The other thing is a lot of the Mahdi Army officials, we understand, have either fled to Iran or to other cities within Iraq. Are you or the Iraqi army in pursuit of them and/or are you in negotiations with any of those leaders to try to bring them in?

SEC. GATES: To be honest, that's a level of detail that I just don't -- I don't know. The command out there would have to respond to those questions. As I said, I don't know -- the figure that you cited of having rounded up 700 is the latest figure I have seen. I'm sure they've rounded up more since then, but I don't -- I haven't received a report on it.

Q (Off mike) -- Mahdi leaders to bring them in? Anything on that?

SEC. GATES: Not that I know of, but they may be carrying those out. I just don't know.

Q Mr. Secretary, the Italians, together with the Afghan government, have orchestrated this hostage exchange -- one Italian journalist for five Taliban fighters. Already one of those Taliban prisoners now released said that he's going to go out grabbing two rifles and begin jihad again to hunt down invaders and fight nonbelievers. Are you concerned about a hostage exchange like this has now put, you know, five more Taliban fighters out there targeting presumably U.S. troops?

SEC. GATES: Yes.

Q So what -- I mean, how did this happen? (Is this the ?) Afghan government -- did we know this was happening --

SEC. GATES: This was between the Afghan government and the Italians.

Q And I mean, are we doing anything to keep this from happening again or --

SEC. GATES: Well, we are not the sovereign government of Afghanistan, so -- I think we have influence, but we don't have the authority or the ability to dictate decisions to that government.

Q Mr. Secretary --

Q Mr. Secretary, there was a report that a Mahdi Army leader who had been detained by the United States was released at the insistence of the prime minister. Are you aware of that report? Is that in violation of this commitment --

SEC. GATES: I read about the release. I'm not aware of whether it was at the request of the prime minister.

Q And was that the -- you know, would a release of a detainee under those conditions be a violation of the agreement, a sign that he's backtracking?

SEC. GATES: I think not necessarily. I'd need to know a lot more details about it and about him before I made a comment on that.

Q Mr. Secretary, what about your sense of how the Baghdad security plan implementation is going? I know you said it's going to take some time before you know whether it's succeeding or not, but we're a couple of weeks into it here. Do you have a sense at this point, a status report on how things are going?

SEC. GATES: Well, four days after my last status report, I'd say the same: So far, so good.

Q Mr. Secretary, Representative Tierney had a hearing about unexploded IEDs in Iraq, and was asking whether or not the Pentagon was doing everything in its power to protect our troops over there by identifying and securing munitions that are still stored there. And the GAO has concluded that the sites remain vulnerable. At least as of October 2006 they couldn't ascertain that all the sites had been secured, and there are estimates of 600,000, and possibly millions, of these things still in the country.

What steps is the Pentagon taking to try to secure unexploded IEDs or roadside bombs, former Iraqi regime munitions in Iraq?

SEC. GATES: I don't remember the exact figure, but General Pace has briefed that we have destroyed several hundred thousand tons of Iraqi munitions. I mean, fundamentally, the entire country was one big ammo dump. And there were thousands of these sites. And so, you know, we're doing our best to try and find them, but given the expanse of the country and all the other tasks which the military is trying to carry out there, it's a huge task.

In terms of whether we're doing everything we can with respect to IEDs, I met with General Meigs just a couple of weeks ago, three weeks ago, and I had just one question for him: Is there anything you need to be able to do better against these IEDs? Money or any other kind of resources? And his response to me was that if the money that is in these three different budget requests that we have before the Congress is in fact appropriated, then he believes he has the resources that he can use.

But in terms of the unexploded munitions, it's just a huge, huge problem.

Q Mr. Secretary, with all your experience, you think still today Osama bin Laden is alive? Because according to India Globe, there is news that he has just celebrated his 50th birthday somewhere, wherever he's hiding. And also, still are you hunting for him, as his support around the globe for terrorism and also here at home?

And another question, sir, are you worried --

SEC. GATES: Is this a three-fer? (Laughter.)

Q Yes, three-fer. Are you worried or concerned about the ongoing massive arrests and protests within Pakistan because of the U.S. interests in the area?

SEC. GATES: One, we are still looking for Osama bin Laden. Two, I have no idea whether he's alive or not; I assume so, until proven otherwise. Three, we are clearly watching the situation in Pakistan. I'm told that formal charges will be brought later. And we'll just have to see what those charges are.

Q Sir, you've said so far, so good. How surprised would you be if General Petraeus said he needed more troops to sustain that trendline? And where would the vulnerabilities be in the force over there that you would need more of?

SEC. GATES: Well, I would -- I mean, I hope and believe that the forces that have been pledged by the -- for the commander are sufficient. I have no doubt that as this goes forward there may be certain capabilities that he identifies that he needs that are fairly limited in terms of the numbers of troops where we would need some additional capability. After all, it's not a static situation. Somebody briefed me just a couple of hours ago that we moved something like 240,000 troops in and out of the area of operation in the last four months of 2006. So there's a steady dynamic and a flow. But in terms of a significant additional number of combat troops, I don't see that in the cards.

Q Sir, are you satisfied with the rest of the U.S. government in supporting the surge as you hoped? Is the State Department providing enough people, other government agencies?

SEC. GATES: My impression is that the PRTs are being filled, that the positions are being filled. We are filling some of those positions with volunteers, principally civilian volunteers, from here in the Department of Defense on a limited-time basis until the State Department can contract with outsiders and get other people deployed overseas. I believe that the State Department has delivered all of its own officers that it has pledged.

Part of the problem -- quite frankly, I think we have two significant problems in this country and in this government in terms of dealing with these kinds of situations, both in Iraq and Afghanistan. When I left government, AID had 16,000 employees. It has 2,000 now. We used to have this kind of a deployable expeditionary capability in the government. That's what these folks did. We don't have that anymore. Now it's more or less a contracting agency. Similarly, in terms of the strategic communications part of civic action, we basically dismantled USIA and that capability at the end of the Cold War.

And so two critical components of the kind of work that needs to be done in both Iraq and Afghanistan have disappeared as assets of the United States government. And so now we're trying to replicate them through volunteers both from the private sector and inside the government, but it's clearly not as fast and not as robust as if -- as when we had those capabilities in-house.

Yeah.

Q Mr. Secretary, clearly the surge into Iraq has exacerbated this strain on equipment, on the training timelines and on the troops themselves. Do you believe -- and it's created some vulnerabilities in the United States by drawing down the pre-positioned -- (inaudible). Do you believe that some more drastic steps may need to be taken to alleviate these shortfalls, some things that haven't been done before? Do you think the Army needs a greater share of the Defense Department budget?

SEC. GATES: Well, the Army is getting a pretty substantial increase in its budget that we've put on the Hill, both in the -- well, in the supplemental, in the global war on terror request, and in the FY '08 base budget.

Among those three, the Army will receive -- the Army alone, during the fiscal years FY '07 and FY '08, will receive 46.4 -- or 46 -- 46 -- a little over $46 billion for new equipment, for reset and reconstitution. We've approved an increase in the end strength of the Army. We've changed the deployment policy with -- and mobilization policy with respect to the Guard and the Reserve component, so that units are being sent out.

It seems to me that with all these measures, as we proceed with them, the stress on the Army will be alleviated even while we're carrying out the kinds of deployments that we have. But it's going to take a little time, there's no doubt about it. But I think what's important is for the soldiers and Marines out there, the ground forces, to know that help is on the way; that we are addressing these problems. And frankly, it's a partnership between this building and the Congress. The Congress has been very supportive in these areas.

Q Sir, you've been on the record saying that you want to undo some of the overlap in intelligence agencies that have evolved in recent years where the military is doing some intelligence work that perhaps was done by other agencies in the past. What concrete steps have you taken or do you plan to take to make those changes?

SEC. GATES: Well, there was a time when I was concerned about the overlap. And when I was director, I wanted the authority from the Congress to be able to move money and people from one part of the intelligence community to another, with the proper notifications and all. I think, first of all, as part of the intelligence legislation, the DNI has that capability now. It's limited, and there's, as I recall, a ceiling on the dollar figure that can be done. But I think there is limited capability to do that. And frankly, that was at a time when budgets were being cut pretty dramatically in the intelligence community, and so that was one of the aspects of it.

What I'm more focused on in terms of intelligence is I think that there were some real deficiencies in the legislation that created the DNI. For example, the DNI has the statutory responsibility for executing the National Intelligence Program, and for a variety of other things, including ensuring that everybody in the intelligence community obeys the law. And yet, he can't fire the head of a single intelligence agency in the United States government. Now, my view is, without clear authority to hire and fire, it's very difficult to hold people accountable. I have some direct experience in this. (Laughter.)

And so I think that -- I think that there are ways we can cooperate, and things that we can do to empower the DNI to help him carry out his responsibilities in a way that doesn't sacrifice secretary of defense authorities. And frankly, I think that we have a constellation of leaders in the intelligence community and here at DOD now that provides what potentially -- at least based on my experience -- is a unique opportunity to make some recommendations to the president and, if necessary, to the Congress to address some of these issues.

Frankly, I think we can enrich the law in a way that doesn't require additional statutory -- or it doesn't require additional legislation but in a way that I think members of Congress would find very satisfactory.

Yeah.

Q Thank you, Mr. Secretary. It is known that the joint military command will be disbanded after the transfer of the wartime operational control. Would you tell us what will happen to the -- (inaudible) -- and mission of the United Nations military commission?

SEC. GATES: In Korea?

Q Yes.

SEC. GATES: Well, first of all, this is a very long process. It won't -- the transfer of operational authority won't take place -- or operational control won't take place until 2012, and we have about five years to work on that. I told the minister of Defense from the Republic of Korea that we would need to begin the planning process this summer, and I think that that process is -- some of the questions -- the question you've asked as well as others will be addressed during that period.

Q Mr. Secretary, how worried are you -- back to the readiness question. How worried are you that the debate about setting a date for drawing down U.S. troops -- that will delay passage of the supplemental beyond the dates you laid out, and do you have any advice for members of Congress on what they should do with that issue?

SEC. GATES: I think -- well -- (laughter, laughs) --

Q (Off mike.)

SEC. GATES: No. (Laughs, laughter.) I think it's my responsibility to let everybody involved in the debate know the impact of the timing of the decisions. I think that that's about as far as I should go.

Q And that would include the president, right? So if the president vetoes this bill -- you know, if the Congress can get through these dates for a drawdown of forces, there's a presidential veto threat there.

SEC. GATES: Right.

Q I mean, you discussed your concerns with the president --

SEC. GATES: Sure.

Q -- but a veto would result in the very same list of --

SEC. GATES: Sure, but I've also discussed other concerns that I have with legislation that I've articulated on the record in terms of setting specific dates and specific conditions, so --

Q Mr. Secretary, as far as reporting on the problems at Walter Reed and other medical facilities around the country, we've heard from a lot of people who complain that the news media, the Congress, to some extent the department has overblown the problems at some of these facilities, taken it out of context, and that created a false impression of the general treatment that wounded soldiers and service members get.

What's you reaction to that, as somebody who endorsed The Washington Post's original series of reporting on this?

SEC. GATES: I think that -- I think the stories on Walter Reed, for example, have pretty carefully differentiated between the in- patient care and the out-patient care. And I think most of the interviews with patients and the wounded warriors and their families have underscored that the quality of the in-patient care at Walter Reed and the doctors and nurses and staff are unsurpassed anywhere in the world. So I think most of the stories have been reasonably balanced in this.

I think that there is a -- you know, I mean, we're all now going around turning over rocks to see what we've missed, to see if there are other facilities or other processes or other problems in the whole treatment of our wounded and our veterans around the country. And frankly, my view is that turning a spotlight on these things is probably a good thing, in terms of bringing attention to them. But I think it's really important that, having received an allegation, that there be a balanced investigation of it. And if a story comes out that says something terrible is going on, and the evidence proves otherwise, that that be reported, as well, that in fact perhaps the allegation was exaggerated, or that it was a one-off in a place where there really is extraordinary care.

So I think, you know, it's just a matter of professionalism in terms of taking care with the many things that will come in over the transom. I mean, we've got the Army hotline now up over the last couple of days, and we're getting some calls. And I think that's a very good thing, and we'll look into every single one of them. But I think that this is such an important area, the care and treatment of our wounded soldiers and our veterans, that attention to the quality of care they're given is, in my view, a positive thing.

Q Sir, does that apply to the Army home?

SEC. GATES: I'm sorry?

Q The Army retirement home -- does that apply to that as well? I mean, what's your view of that?

SEC. GATES: I sent -- I believe we sent four doctors out there to look at it yesterday. The inspector general is going out tomorrow. I think he's taking -- we're having some department officials go with him, and I think there are also some congressional staffers going. My view is, shine light on all these things.

Q Thank you, sir.

(C) COPYRIGHT 2007, FEDERAL NEWS SERVICE, INC., 1000 VERMONT AVE. NW; 5TH FLOOR; WASHINGTON, DC - 20005, USA. ALL RIGHTS RESERVED. ANY REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION IS EXPRESSLY PROHIBITED. UNAUTHORIZED REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION CONSTITUTES A MISAPPROPRIATION UNDER APPLICABLE UNFAIR COMPETITION LAW, AND FEDERAL NEWS SERVICE, INC. RESERVES THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO IT IN RESPECT TO SUCH MISAPPROPRIATION. FEDERAL NEWS SERVICE, INC. IS A PRIVATE FIRM AND IS NOT AFFILIATED WITH THE FEDERAL GOVERNMENT. NO COPYRIGHT IS CLAIMED AS TO ANY PART OF THE ORIGINAL WORK PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS PART OF THAT PERSON'S OFFICIAL DUTIES. FOR INFORMATION ON SUBSCRIBING TO FNS, PLEASE CALL JACK GRAEME AT (202)347-1400.