Question and Answer Session with Secretary Gates following remarks at National Defense University's Distinguished Lecture Program at Ft. Leslie J. McNair, Washington, D.C., Sept. 29, 2008

Text of the speech can be located at; http://www.defenselink.mil/speeches/speech.aspx?speechid=1279 .

Now I'll try and take a few questions. Yes, sir.

Q Yes, sir. Bill DeBow (ph), United States Navy. As you alluded to in your speech, the Department of Defense has taken the lead in reconstruction efforts in Iraq. In future conflicts, what organization, agency or combination thereof should lead reconstruction efforts?

SEC. GATES: Well, I think from an institutional standpoint and a long-term perspective, it probably should be the State Department and AID. The problem is, those institutions, and particularly AID, have been gutted over the last 15 years.

When I left government, AID had about 15,000 employees and it was an expeditionary agency. People that worked for AID expected to be deployed into developing countries, and they had all the requisite skills to do reconstruction and help with governance and building rule of law and agriculture and all the rest. AID today has less than 3,000 people. It's essentially a contracting agency that outsources the entire thing.

So, as I've said in some earlier speeches, these civilian institutions that have traditionally, at least in the post-World War II period, the Cold War period, had the lead in carrying out these functions need to be recreated and dramatically strengthened. Until they are, we will probably end up carrying most of the burden.

Yes, ma'am.

Q Captain Stevewright (ph), United States Navy. Do you think that the mid- and long-term economic challenges, domestic economic challenges, will result in significant downward pressure on the DOD budget? And if so, are we preparing for that?

SEC. GATES: I think that despite the current economic problems that we're facing, that there have been some important lessons learned subsequent to the end of the Cold War. One of my favorite sayings is, experience is the ability to recognize a mistake when you make it again. (Laughter.) We basically gutted our military after World War I, after World War II, in certain ways after Korea, certainly after Vietnam and after the end of the Cold War. One would hope that the fifth time around, that we've learned a lesson.

And I actually think that in terms of basic military capabilities, while there's a lot of debate over Iraq, there really is very broad bipartisan support for a strong defense and support for our men and women in uniform in the Congress. And so I would expect -- I certainly would expect growth to level off, and my guess would be we'll be fortunate in the years immediately ahead if we were able to get -- if we were able to stay flat with inflation.

But in terms of the kind of deep cuts that followed the end of the Cold War, I would hope that we've gotten smarter than that.

After all, the Army was cut by 40 percent; the Navy was close to -- had, I think, over 550 ships at the time, now sort of half that number. So I hope that there is recognition of the importance. And I think the fact that the world does remain a complicated and dangerous place is further incentive not to cut capabilities.

So I think the kind of growth rates we've experienced over the last six or seven years are probably a thing of the past, but I would hope -- there has been -- we had a very interesting hearing in the House Armed Services Committee earlier this year. And there was a good discussion on both sides of the aisle in terms of whether we ought to mark 4 percent of GDP as kind of a floor for the Defense budget. And I think as long as you consider it a floor and not a ceiling, that's not a bad benchmark. But as I say, I'd want it to be a floor.

Yes, sir?

Q Sir, Lieutenant Colonel Henry Seer (ph), U.S. Air Force. Within the National Defense Strategy, quite often we see the theme of interagency requirement, to improve that, plus also to improve our information capabilities. Can you speak to, at the department level or above, how that will occur, since as you said, without that bureaucracy being fixed, nothing will change?

SEC. GATES: Well, I think that -- and this is something I've talked about before. I think that the national security institutions that we have today were essentially created to fight the Cold War, and reflected lessons learned in World War II. And so the Department of Defense itself, the Joint Chiefs of Staff, the Air Force, CIA and the National Security Council all came out of the National Security Act of 1947.

It seems to me that there needs to be a new National Security Act that looks at the kind of complicated world that I just described, and says, how would we write a National Security Act for the 21st century to update the institutions and the framework that helped us wage and win the Cold War.

And to be honest, my view is that we need some substantial change in the structures, but I'd be the first to admit that I don't have the answers. Some people have said we need -- and it's come out of the Pentagon, as well as other places -- we need a Goldwater-Nichols for the interagency.

The only problem is -- and I heard this also about the intelligence community, we need Goldwater-Nichols for the intelligence community. The only reason Goldwater-Nichols works is because at the end of the day, everybody who is subordinate to it works for one person. And the secretary of Defense can make decisions for all of the institutions in the organization. You can't do that in the interagency, and you can't do that in the intelligence community.

So some -- a different kind of model has to be found, a different kind of reform. And it seems to me that this is something that institutions like this and others ought to be devoting some time and energy into looking at in terms of how would you restructure it in a way that captures the important role of a USAID in reconstruction, or does a better job of strategic communications for the United States.

Yes, sir?

Q Richard Sachs, State Department foreign service. Sir, you mentioned Iran. Iran is a big and important country. It is potentially dangerous but also vulnerable and it may respond to incentives. We have not had relations with Iran for 30 years. It strikes me that the way we act, what we do and what we say can potentially affect the internal politics of that country. Mr. Secretary, I wonder if you could share with us your views on Iran and how you would advise the next president of the United States about how to improve relations with that country?

SEC. GATES: I have been involved in the search for the elusive Iranian moderate for 30 years. (Laughter.) I was in the first meeting that took place between a senior U.S. government official and the leadership of the Iranian government in Algiers at the end of October, 1979. Brzezinski -- the Iranian prime minister, defense minister and foreign minister asked to meet with Brzezinski, who was in Algiers for the 25th anniversary of the Algerian Revolution and I was with him. He asked me to go as the note-taker.

And he walked into that meeting and, in essence, said, "We will accept your revolution. We will recognize your country. We will recognize your government. We will sell you all the weapons that we had contracted to sell the Shah. We have a common enemy to your north. We can work together in the future." Their response was, "Give us the Shah." Each repeated their respective positions about five or six times and at the end, Brzezinski stood up and said, "To give you the Shah would be incompatible with our national honor." And that ended it. And three days later they seized our embassy and two weeks later all three of those officials were out of their jobs.

Every administration since then has reached out to the Iranians in one way or another and all have failed. Some have gotten into deep trouble associated with their failures, but the reality is the Iranian leadership has been consistently unyielding over a very long period of time in response to repeated overtures from the United States about having a different and better kind of relationship. And it seems to me that the effort that we are now engaged in with our allies, with Russia and China, in terms of trying to bring pressure to bear on the Iranians to change their approach to the rest of the world is probably the best way to go about this.

We've been engaged in talks with the Iranians. This administration, in 2004, as I recall, reached out to the Iranians and there were some discussions at that time because there was some ambiguity about whether the Iranians were being helpful or not in Iraq. There were some instances where they were being helpful, some where they weren't.

And of course, in the 2004 or (200)5 study that I co-chaired with Brzezinski for the Council on Foreign Relations with respect to U.S. policy on Iran, given the fact that President Khatami was in power, sounded more moderate -- at least was not making some of the outrageous statements that Ahmadinejad does -- we said, "It's worth reaching out to them."

But with the election of Ahmadinejad and the things he has said and the things that Iran continues to do, it seems to me that the contacts that we've had at the ambassadorial level -- the opportunity to engage in a dialogue should they be willing to stop their enrichment in some kind of verifiable way is not an unreasonable precondition to high-level talks.

I just think this is a case where we have to look at the history of outreach that was very real, under successive presidents, and did not yield any results. I think until the Iranians decide they want to take a different approach, to the rest of the world, that where we are is probably not a bad place.

Yes, sir.

Q Mark Kodak, with the Army Corps of Engineers.

How is DOD addressing more amorphous threats such as climate change, water quality and availability and energy?

SEC. GATES: Well, the services actually have some very aggressive, and the department itself, some very aggressive energy conservation programs going on. The Air Force is doing a lot of interesting things, in terms of biofuels. They've test flown several aircraft using synthetic fuels, biofuels rather. So I think there are a number of green initiatives under way, both in the department and in the services that, that have a lot of promise.

It's, it's important for us to do this. And the Senate and particularly Senator Warner have pushed us very hard to exercise some leadership in this area, in no small part because we're probably the biggest single energy user in the country. But there is a lot going on. And frankly I was surprised at how much was going on.

Yes, sir.

Q Sir, Tim Evans from Department of Energy.

Thank you first for your support of the Reliable Replacement Warhead program. I don't think many people know about that. But we think it's important to maintain our nuclear deterrents.

My question concerns China. Could you expand on your remarks related to their growing importance in the world?

SEC. GATES: Well, I think, China -- my view is that China is a competitor, not an adversary.

I think we have to be realistic about the, about the military modernization programs that are going on in China. And we have to be in a position to develop countermeasures to maintain our, both our technological and our strategic edge.

But the reality is, the Chinese, as best I can tell, from everything I've read, have learned well the lessons of the Soviet Union, in terms of excessive military spending having significant economic consequences. And so as a result, the Chinese seem to be relatively content with a relatively modest number of intercontinental ballistic missiles, as an example.

They are building submarines. They are doing all the things that I described. But in the context of their economy, it is not a disproportionate amount of effort that they are devoting to that.

The United States and China -- this economic relationship is very important to both sides. I, I once read that if Wal-Mart were a country, they would be China's eighth-largest trading partner.

And so we are dependent on them in many respects; they are dependent on us. And that's why I see us as competitors. And I see their efforts around the world -- in contrast to their outreach efforts in the '60s and '70s in Africa, which were aimed primarily at influence and spreading the gospel, if you will, I think that those outreach efforts in Africa and Latin America today are aimed at sewing up resources, at long-term commitments to meet both their energy and mineral needs.

So, China is a great power. It will become a more powerful country as time goes along. I don't think China is an enemy. I think if we pursued the wrong policies, we could make them into one, and I think that would be a serious mistake.

Yes, ma'am.

Q Hi. Nanette Sidowski (ph). I work in OSD. My question is if you could please share your views of transformation specific to intelligence capabilities and institutions.

SEC. GATES: Well, I would just say that I was talking with -- when I was part of the Iraq Study Group, I was talking with a senior CIA person, and I said, "How goes the cooperation between CIA and the military?" And he kind of laughed and he said, "Oh, sir, you wouldn't believe how much better it is than when you were here." (Laughter.) I took that in a positive way. (Laughter.)

But I think there's been a revolution in both intelligence collection and the application of intelligence to operations. What's going on in the fusion of intelligence and operations in Iraq and Afghanistan, not just with special forces but with the conventional forces, is something that 10 years ago I think people wouldn't have believed possible. And the integration of the capabilities and the seamless cooperation many times between the various intelligence agencies and the military, I think, represents transformation, if you will, at its most significant. The capabilities that we have, the range of technical capabilities, the growth, the rapid growth of those using a combination, as I suggest in my remarks, between high-tech sensors and low-tech platforms, these are all things that to a considerable extent have been developed in the field with some cooperation from back here.

But I think there really has been an enormous transformation in intelligence. And I would say -- I would add beyond that, because people -- because we don't talk about it all the time -- the chiefs will probably have several more meetings, or at least a couple more meetings, with the president, and I encourage them to take one of those meetings and talk about how each of the services has dramatically transformed in the last seven or eight years, because I think every service can point to dramatic changes in the way it does its business over that period of time. And I think we've gotten so involved in it and it's become so much a part of what we're trying to do, that maybe we don't talk about it enough in terms of what has already been achieved and what is going forward still.

Yes, ma'am?

Q Yes, sir. Colonel Pam Hoyt (ph), U.S. Army. My question is, based on what you said about current conflicts and the American way of war, and how we've used the RC recently for these conflicts, and the Punaro commission result that came out with over a hundred recommendations, do you think that change needs to be made to the force structure? And how would we balance this better so that we're not probably taxing certain forces more than others?

SEC. GATES: Well, I think a couple of things. First of all, one of the things that I -- that I worried about when I took this job was whether there had been kind of a bait and switch with the National Guard; that a lot of people had signed up for a strategic reserve, where they went to camp a couple of weeks every year, and trained in their home areas, and suddenly found themselves deployed for 12 months or 18 months.

First of all, I think most of the younger people in the Guard, certainly anybody who's joined since 2001, has known what they were getting into, as we have transformed the Guard and Reserve from a strategic reserve into an operational force. And I think the key here is, as I indicated in the remarks, by growing the ground forces with the likelihood of continuing draw-downs in Iraq, I don't think it'll be one for one, Iraq to Afghanistan. I've -- you know, we'll try and do next year the three additional BCTs that General McKiernan wants for Afghanistan, but I think we need to think long and hard about how big a footprint we want in Afghanistan compared, say, to growing the Afghan army much faster.

All of that simply to say that as we increase dwell time, our ability to do full-spectrum training, the relief of stress on the force -- I mean, what we're trying to get back to is, first, one to two for the active force, then one to three. We want to try and be at one to five dwell time for the Reserve and the Guard. And I think we will slowly move in that direction.

I think that none of the -- if I recall correctly, none of the Guard units that we will deploy next year will have less than four years dwell time. So we're moving in the right direction. And I think that the structure of the force is probably right, and I think that the conversion of the Army to -- the modularization of the Army and making the Army more expeditionary -- making it expeditionary is a dramatic change from when I left government in 1993.

In the '70s and '80s and early '90s, if you wanted to -- well, I'll just use the example I've used on the Hill. There are questions about readiness. When we decided to drive Saddam out of Kuwait, we ended up with better than 500,000 troops in Saudi Arabia.

And my question was -- it took us six months to get them there, using the best -- probably the best logistical facilities, both air and sea, in terms of the receiving country in a peacetime environment. Now, which Army is more ready, the one we have today or the one that took six months to get ready to fight in Kuwait?

So I think this modularization -- this transformation is revolutionary, and it's a model we've been trying to talk to our NATO allies about in terms of the way they need to think about their ground forces. So I think the structure is right. We just need to continue with the growth of the ground forces and then take advantage of the drawdowns in Iraq to build dwell-time, get back to full-spectrum training.

Q Sir, Lieutenant Colonel Hullman (ph), U.S. Air Force. For balance and what we're looking at as future threats and future challenges, what implications are there for our overseas basing network?

SEC. GATES: Well, there has been an effort to draw down our forces overseas and bring them back to the United States. And I think part of the philosophy was that it makes -- it gives the country more flexibility. If you have a huge number of forces in a particular region of the world, sometimes that COCOM thinks those are his forces -- (laughter) -- and it makes it a little hard to move them someplace else. So I think it's actually been less a financial decision than a strategic decision, that we would actually have more flexibility in the way we deploy our forces and the way we train and so on, having the preponderance here at home rather than deployed around the world.

My own view is that where we are now is about where we ought to be. I don't think we ought to draw down -- I mean, we do still have the two additional brigades coming home from Germany. But other than the decisions that have already been made, my view is that in Korea and Japan and Europe, we ought to -- we ought to stay about where we are in terms of maintaining a presence. The truth of the matter is they like having us there.

Q Sir, Dave Miller (ph), United States Navy. You spoke of the requirement to build innovation into procurement to help meet current and future threats. You also talked a little bit about reforms required within the department to help achieve that. Given the steady budget, you talked about an increasing manpower cost. I was wondering if you could go into some details, what type of reforms you feel are necessary to meet these challenges.

SEC. GATES: Well, I think -- I think we need -- one of Komer's lines was, one of the problems in Vietnam was trying to wage war with a bureaucracy here in Washington that is not on a war footing and where everybody doesn't come into work every single day saying, "What can I do to enable the ground forces or the troops on the line?" And this is the area where I think we need to consider whether there needs to be a parallel kind of procurement process for the current fight, even as we continue the longer-range modernization, both conventional and strategic modernizations.

I think it's hard to do them both at the -- for the same people in the same institutions to do the same -- to do both. And I go back to my remarks, it strikes -- it has struck me as extraordinary, coming in here, that in each of these cases -- under my predecessor, the development of a counter-IED capability or during my time on MRAPs and ISR and some other things that we had to really establish something outside the regular bureaucratic process to get those jobs done. Moving MRAPs from concept to full industrial production was the first time that had been done with a major procurement since World War II, within the space of a single year.

We need something that can move that fast, and we need something that, with low-tech solutions and so on, can -- can get the job done. And I'm not sure what that structure looks like, but I think that it's something that as -- if, as I believe, we are going to be in this kind of a fight, maybe not with this number of troops deployed by any means, but at least some significant force deployed abroad and in combat someplace, we need to develop an enduring institutional capability to provide them very rapid response to needs identified on the battlefield.

That's really not an answer to your question of how you would do that. I don't know exactly how you would do that, but it's something I think needs to be done.

You get the last question, because I'm about out of gas here.

Q Sir, Lieutenant Colonel Firman (ph), U.S. Air Force. Despite the two different positions that the candidates take on the wars in Iraq and Afghanistan -- specifically Iraq -- given the resource limitations and the risks involved, do you ultimately see much of a difference in their approach, regardless of which one takes office? (Laughter.)

SEC. GATES: Thank you very much. (Laughter, applause.)

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