SEC. GATES: Good afternoon. First of all, let me say that the full text of both my and the chairman's statements will be available immediately after the briefing. The statements are kind of long, and so just to put your minds at ease, we'll have about 25 minutes for questions after the statements, and I would ask that you confine your statements to the QDR and the budget. As we get toward the end of the 25 minutes, if we've got time, we'll be happy to take one or two questions on other subjects.
Today, this department is submitting the fiscal year 2011 defense budget request, along with two important strategy documents -- the 2010 Quadrennial and Ballistic Missile Defense Reviews. After my opening statement and the chairman's, and our questions, you will hear from the Undersecretary of Defense for Policy Michéle Flournoy, who will discuss the QDR and BMDR in more depth, and then our comptroller, Robert Hale, will provide more detail on the three budget requests.
The three requests are FY '11 base budget request of $548.9 billion, the FY '11 overseas contingency operations request of $159.3 billion, which will fund military operations in Iraq and Afghanistan next year, and the FY '10 supplemental request of $33 billion, which covers the additional estimated costs of the president's new strategy for Afghanistan. To make sure we have the resources we need to support our troops in deploying to the theater, I will be asking the Congress to enact the supplemental by spring.
For the next few minutes, I would like to place into a wider context the base budget request, which reflects the department's institutional priorities, plus the associated strategy reviews. Last year, we began the process of reshaping America's defense establishment and reforming this department's priorities, procedures and institutional culture.
The objectives were to reaffirm our commitment to take care of the all-volunteer force, to rebalance our programs in order to institutionalize and enhance our ability to fight the wars we are in today, while at the same time providing a hedge against current and future risks and contingencies and reform how and what we buy, meaning a fundamental overhaul in our approach to procurement, acquisition and contracting.
To those ends, the FY'10 budget increased funding for programs that directly support those fighting America's wars and their families, and created an institutional home for the war-fighter by shifting many of these programs into the base budget so they would acquire a bureaucratic constituency and steady, long-term funding.
The FY '10 budget proposal cut, curtailed or ended a number of programs that were either performing poorly or in excess of real-world needs. These programs, had they been pursued to completion, would have cost the American taxpayer approximately $330 billion. Conversely, future-oriented programs where the U.S. was relatively underinvested, were accelerated or received more funding. The FY '11 request builds on reforms begun in last year's budget, changes that were broadened and deepened by the analysis and conclusions contained in the QDR.
These budget submissions and strategy reviews are suffused with two major themes. The first is continued reform -- fundamentally changing the way this department does business, the priorities we set, the programs we fund, the weapons we buy and how we buy them. The budget and the reviews are also shaped by a bracing dose of realism -- realism with regard to risk, realism with regard to resources. We have, in a sober and clear-eyed way, assessed risks, set priorities, made tradeoffs and identified requirements based on plausible, real-world threats scenarios and potential adversaries.
Just one example: For years, U.S. defense planning and requirements were based on preparing to fight two major conventional wars at the same time -- a force-sizing construct that persisted long after it was overtaken by events. The department's leadership now recognizes that we must prepare for a much broader range of security challenges on the horizon. They range from the use of sophisticated, new technologies to deny our forces access to the global commons of sea, air, space and cyberspace to the threat posed by non-state groups developing more cunning and destructive means to attack and terrorize -- scenarios that transcend the familiar contingencies that dominated U.S. planning after the Cold War.
We have learned through painful experience that the wars we fight are seldom the wars we planned. As a result, the United States needs a broad portfolio of military capabilities with maximum versatility across the widest possible spectrum of conflict. This strategic reality shaped the QDR's analysis and subsequent conclusions, which directly informed the program decisions contained in the budget.
The QDR concluded that the U.S. military must balance resources and risk among four major objectives. The first is to prevail in today's wars -- the first time this objective has appeared in a QDR. Achieving our objectives in Afghanistan and Iraq has moved to the top of the institutional military's budgeting, policy and program priorities. We now recognize that America's ability to deal with threats for years to come will depend importantly on our success in the current conflicts.
The FY '11 budget takes a number of additional steps aimed at filling persistent shortfalls that have plagued recent military efforts, especially in Afghanistan. They include enhancing intelligence, surveillance and reconnaissance capacity, including a 75 percent increase, over the next couple of years, in the number of combat air patrols by the most advanced UAVs, increasing the availability of helicopters by procuring more aircraft -- around $9 billion worth -- of all kinds and adding two Army combat aviation brigades and growing Special Operations systems and personnel, with nearly 2800 people added to the U.S. Special Operations Command in FY 2011.
The second major objective is to prevent and deter conflict by better employing and integrating all elements of national power and international cooperation, and should those fail, by possessing superior military capabilities and the means and will to use them. To help prevent the conditions from arising that lead to crises or conflicts, we strongly support the increased funding for diplomacy and development provided for in the president's international affairs budget request.
And in a world where, arguably, the most likely and lethal threats will emanate from failed or fractured states, building the security capacity of partners has emerged as a key capability for this department -- one that reduces the need for direct U.S. military intervention, with all its attendant political, financial and human costs.
To provide more resources, predictability and agility to this important mission, the department will seek an increase in the global train-and-equip authority in the FY '11 budget, authority that has now been extended to coalition activities. That increase will be from $350 million to $500 million. Furthermore, the department will continue to work with allies and partners to stem the proliferation of dangerous weapons and materials, and we will maintain a reliable and credible nuclear deterrent, which will be laid out in the upcoming nuclear posture review.
Deterring potential adversaries requires us to prepare for a wide range of contingencies, including the disruptive, high-tech capabilities being developed by other nations. To meet the potential threats to our military's ability to project power, deter aggression and come to the aid of allies and partners, the QDR places more focus on and investment in a new air-sea battle concept, long-range strike capabilities, space and cyberspace.
The FY '11 budget requests include nearly $11 billion for the F-35 Joint Strike Fighter, along with a strategy to stabilize its cost and schedule, and a buy of 43 aircraft and possibly more, depending on contractor performance; more than $25 billion to support a realistic, sustainable shipbuilding program; more than $3 billion to modernize ground forces by applying mature technologies to current forces quickly, including development of a new ground combat vehicle; nearly $10 billion to support the development of flexible, scalable and adaptive missile defense that work, are cost effective and address the real and growing threats to the United States and our allies; and some $4 billion over the next 5 fiscal years for a number of long-range strike programs, to include the development of a conventional, global strike capability and the upgrade and modernization of the bomber fleet.
Our fourth major objective is to preserve and enhance the all-volunteer force -- America's single greatest strategic asset. For programs like these, that directly support the war-fighters and their families on the battlefield, at the hospital or at home, we have continued to shift funding from war appropriations to the base budget. This will help ensure these critical programs receive an institutional home and long-term support.
Recognizing the strain that post-9/11 wars have put on so many troops and their families, the department will spend more than $2 billion for wounded warrior initiatives, with a special focus on the signature ailments of current conflict, such as PTSD and traumatic brain injury. We will sustain health benefits and enlarge the pool of medical professionals. We'll broaden electronic information-sharing between the Departments of Defense and Veterans Affairs for wounded warriors making the transition out of military service.
We'll increase the time spent between deployments for our ground forces with a goal of achieving a dwell-to-deployed ratio of 2-to-1 for the active component and 5-to-1 for the guard and reserve. We'll raise basic pay, revisit bonus policies and pursue more innovative and flexible ways to retain quality personnel. And finally, we will expand assistance, counseling, childcare and education to support military families -- some $8.8 billion, total, in the base budget and overseas contingency operations requests.
To achieve these objectives, the department must continue to reform the way it does business, from developing and buying major weapons programs to managing our workforce. Building on the reforms in the FY '10 budget, when a number of excess or poorly performing programs were canceled, the QDR proposed additional steps reflected in the FY '11 budget submission.
They include terminating the Navy EPX intelligence aircraft, ending the third-generation infrared surveillance program, canceling the next-generation CGX cruiser, terminating the net-enabled command-and-control program, ending the Defense Integrated Military Human Resources System -- DIMHRS -- due to cost overruns and performance concerns, completing the C-17 program and closing the production line, as multiple studies in recent years show that the Air Force already has more of these aircraft than it needs, and ending the alternate engine for the F-35 Joint Strike Fighter, as whatever benefits might accrue are more than offset by excess cost, complexity and associated risks.
I'm fully aware of the political pressure to continue building the C-17 and to proceed with an alternate engine for the F-35, so let me be clear. I will strongly recommend that the president veto any legislation that sustains the unnecessary continuation of these two programs.
Reforming how and what we buy continues to be an urgent priority. As the QDR says, the department and the nation can no longer afford the quixotic pursuit of high-tech perfection that incurs unacceptable cost and risk, nor can the department afford to chase requirements that shift or continue to increase throughout a program's lifecycle.
Fundamentally changing these practices requires enough full-time professionals with the right skills and training. The department's budget plan includes an increase of more than 20,000 such positions to supervise or replace contractors by 2015. Fundamentally reforming acquisitions, above all, calls on us to foster a culture and practice of accountability -- accountability with regard to industry and within the walls of this building, as well. This is especially important when dealing with our most costly and critically important programs -- programs such as the F-35 Joint Strike Fighter.
As I mentioned earlier, we have restructured the F-35 program and believe it is on track to become the backbone of U.S. air superiority for the next generation. Nonetheless, the progress and performance of the F-35, over the past 2 years, has not been what it should, as a number of key goals and benchmarks were not met. As a result, I will withhold $614 million in performance fees from the lead contractor, since the taxpayers should not have to bear the entire burden of getting the JSF program back on track.
This step is being taken with the agreement of the contractor, and I appreciate their responsiveness and commitment to finding the best solution. Accountability is not just about holding contractors responsible; the Department of Defense also bears responsibility for the JSF's troubling performance record. Accordingly, I have directed a change in the leadership of the Joint Strike Fighter program office. In addition, given the importance of this program to the future of military aviation, I am elevating the level of the JSF program manager to that of a three-star officer.
In summary, the cumulative effect of this and last year's budgets, along with the recommendations of the QDR, is to make sure this department is doing everything we can, and more, to prevail in the wars we are in while preparing our military to confront the most likely and lethal threats of the future. In closing, as I said last year, we must remember that every defense dollar spent on a program excess to real-world military needs is a dollar not available to take care of our people, reset the force, win the wars we are in, and improve capabilities in areas where we are underinvested and potentially vulnerable.
That is a risk the president and I are not prepared to take. Making these tough decisions and tradeoffs is especially important in the constrained budget environment we face today and almost certainly will face in the future. I'd like to thank the members of the department, both military and civilian, along with our interagency and international partners for their hard work over the past year on these important documents.
Admiral?
ADM. MULLEN: Thank you, Mr. Secretary. Good afternoon. Let me state up front that the chiefs and I fully support the president's 2011 budget submission and the recommendations of the 2010 Quadrennial Defense Review and the Ballistic Missile Defense Review. I'd also add that we support and greatly appreciate the process through which the secretary derived these documents. As with last year's budget request, he presided over a comprehensive and collaborative process, inclusive of all the uniformed leadership and integrated across various disciplines.
Every service chief and every combatant commander had a hand in the result you see before you, and every one of them share my enthusiasm for the way ahead. The secretary has already walked you through the context and details of the budget and the QDR. I would like only to reiterate that these submissions represent, in my view, the right balance of capabilities to deal with the threats to our national security across a broad spectrum of potential military operations. I've said it before, but we must be ready for challenges big and small, near and far, for the wars we may need to fight in the future even as we win the fights we're in right now.
I applaud the secretary's desire to fund the current operations through the base budget, and we're getting there. But because this year and next, we're still looking at some measure of contingency funding, I would like to direct my attention to those specific allocations. In short, I'm comfortable that the fiscal year '10 supplemental and the fiscal year '11 overseas contingency operations requests provide our troops what they'll need to complete a responsible drawdown in Iraq and execute the president's strategy in Afghanistan and Pakistan.
By the end of this year, the remaining 10 combat brigades in Iraq will be reduced to six advisory and assist brigades, and all troops will be withdrawn by December of 2011. A key element of this transition is to maintain enough resources to outfit, train and sustain Iraqi security forces. While the government of Iraq is funding a significant part of this effort, falling oil prices and budget constraints make re-establishing the Iraqi security fund a priority. One billion dollars in fiscal year '10 and $2 billion in fiscal year '11 will provide General Odierno the resources he has requested to assist the Iraqis in establishing a security structure that supports responsible drawdown and allows us to transition both to our civilian side, as well as to the Iraqi security forces.
In Afghanistan, likewise, a key focus is the development of competent Afghan national security forces, and our requests also make that a reality, accelerating ANSF and Afghan police growth, infrastructure, training and equipment. As for our own infrastructure and equipment, I'm delighted to see that we have kept faith with the secretary's desire to place a premium on force protection by procuring and fielding more MRAP vehicles. The fiscal year '10 supplemental calls for more than $1 billion to complete the MRAP program. And the fiscal year '11 request includes $3.4 billion to sustain it.
As we've seen firsthand through 8 years of war, intelligence, surveillance and reconnaissance assets are absolutely critical enablers for the war-fighter. With this funding, we will increase the unmanned Predator and Reaper orbits from 37 to 65, while enhancing our ability to process, exploit and disseminate information gathered by this game-changing technology.
Commander's emergency response funds, known as CERP, also have proven to be game-changers, inasmuch as they give our troops more flexibility to truly make things happen for the local populace, wherever we are. As one junior officer noted, in a counterinsurgency fight, CERP dollars are faster, more precise and more impactful than bullets.
Our request for this year and next will devote more than a billion dollars to the CERP program, the majority of which is to be spent in Afghanistan. Frankly, I'd like to see even more flexibility in the rules governing the use of these funds. Proper accountability remains a must, of course, but I've seen with my own eyes the huge difference CERP can make when it is applied to the greatest need and with the greatest speed.
In a similar fashion, our coalition support funding empowers our partners and builds their capacity, ultimately giving them the tools they need to help us all defeat common enemies around the world. These funds account for $2 billion of the fiscal year '11 request and could possibly be some of the most important expenditures we will make.
Let me close by conveying my continued thoughts and condolences for the people of Haiti. At the request of the Haitian government, and in partnership with the United Nations and the international community, we will continue to do all that is required to alleviate suffering there. As USAID and NGO reconstruction and projects evolve, I think we can all expect that there will be, over time, less need for the United States military. Indeed, U.S. Southern Command is continuously assessing and redeploying their assets accordingly.
As you know, just this morning, General Fraser released the aircraft carrier Carl Vinson and other units. That said, we will remain in Haiti just as long as we are needed, and I couldn't be more proud of the way in which our Soldiers, Sailors, Airmen, Marines and Coast Guardsmen have stepped up to perform this important mission of mercy. They and their colleagues overseas in Iraq and Afghanistan prove every day the great strength of our nation and the great flexibility of her armed forces. Thank you.
SEC. GATES: Tony, I don't know how you can possibly have any unanswered questions, but -- (laughter).
Q Are you abandoning, jettisoning or deep-sixing the two-war construct, or simply de-emphasizing it in favor of a broader outlook on the world. And I have a follow-up on that bombshell you just dropped on the Joint Strike Fighter.
SEC. GATES: I think we have -- if I gave -- one of the steers that I gave to the folks working on the QDR was that I felt that, for some time, the two-major-theater-of-operations construct was out of date, that we are already in two major operations. What if we should have a homeland disaster? What if we have another encounter? What if we have a Haiti? The world is very much more complex than when the two-MCO concept came together in the early 1990s.
And what I wanted to convey was a much more complex environment, in which you may have to do not just two major conflicts, but a broad range of other things, as well, or, perhaps in the future, one of those conflicts and then a number of other contingencies. So I just felt that construct was too confining and did not represent the real world that our country and our military forces are going to face in the future.
Q August 30th, you were down at Fort Worth and you gave a relatively sanguine assessment of the Joint Strike Fighter program based on what you knew at the time. Fast-forward. What's happened today to force you to take this relatively drastic move of removing the program manager and basically slapping Lockheed and the Pentagon and its management around?
SEC. GATES: Well, first of all during the interval of the last several months, the undersecretary for AT&L, Dr. Carter, has immersed himself in this program. We've had a couple of joint estimating teams look at the program. It was clear that there were more problems than we were aware of when I visited Fort Worth. And I think that the restructuring program that Dr. Carter has put in place will work. It is realistic; the cost estimates are now in accord with what the joint estimating teams are predicting, rather than what the program is predicting.
I would say there are no insurmountable problems, technological or other, with the F-35. The measures that Dr. Carter is taking, I think, will mitigate, significantly, some of the more pessimistic conclusions of the JETs -- the joint estimating teams. So I believe that we are in a position to, now, move forward with this program in a realistic way. But by the same token, one cannot absorb the additional costs that we have in this program and the delays without people being held accountable. And I think if I've set one tone here at the Department of Defense, it is that when things go wrong, people will be held accountable.
Q Mr. Secretary, in the QDR, you talk about countering weapons of mass destruction with emphasis on terrorists or failed states. You talk about positioning forces to monitor and track lethal agents and, where relevant, defeating the agents themselves. Walk us through what you hope to see the force look like, in the future, on this issue. And are you talking about, you know, commando teams similar to the Energy Department's Nuclear Emergency Support Teams?
SEC. GATES: Well, I think in a lot of areas -- well, in many ways, what we're talking about is support for the president's program proposals, in terms of a global lockdown of nuclear material and whatever we can do to support that program. A lot of it is technological, in terms of markers and being able to track things. Some of it is better intelligence. So I would say it's a broad array of policy, intelligence, and technologies, rather than necessarily new capabilities.
Q The QDR says that China's rise, and that of India, is going to continue to reshape the international system. China said this weekend that it's reducing contact -- military-to-military -- with the United States -- certain strategic dialogues -- over the Taiwan arms sales. Does this affect your plans to go to China this year, and more generally, how do you respond to China's complaints over the arms sales?
SEC. GATES: Well, first of all, I don't know whether I'll be going or not. I have not heard anything, and so my current plan is to continue to plan on that trip. The United States, as you're well aware -- the Taiwan Relations Act commits the United States to providing a certain level of support to Taiwan so it is able to defend itself. We went through this kind of a downturn in the last year of the Bush administration, when there was an arms sale to Taiwan and we saw a reduction in military-to-military relationships. They have clearly announced that they intend to reduce those contacts now, again.
I will say that one of the points that I made to General Xu when he was here -- the vice-chairman of the military commission -- was that I'd hoped that in the future, we could shield the military-to-military relationship from the political ups and downs in the relationship. I think that we have a lot to learn from each other. I think that stability is enhanced by contact between our military, and a greater understanding of each other's strategies. So I hope that if there is a downturn, it is a temporary one, and that we can get back to strengthening this relationship.
Q What's your response to the Chinese threat to sanction U.S. companies involved in the Taiwan arms sale?
SEC. GATES: Well, we'll just have to wait and see.
Q Secretary, to follow up on Tom's question about WMD, in the QDR, it calls for the establishment of a joint taskforce headquarters to, as I recall the wording, "train, plan for, and execute" operations to eliminate WMD. What does that refer to, any why, now, is there a need to establish this kind of headquarters?
SEC. GATES: Well, I think that's one of the recommendations, obviously, of the QDR. It is a recommendation. I think we'll take it under advisement, and see whether we follow through on that or not.
Q Mr. Secretary, completing the MRAP program, are you planning on buying more MATV's for Afghanistan, and if so, how many?
SEC. GATES: Yes, we now have a little over 15,000 regular MRAPs in Afghanistan and Iraq -- in the CENTCOM AOR. The additional requirement that has been levied by CENTCOM is for about 10,600 more MRAPs; 6,600 of those would be MRAP ATVs, the all-terrain vehicle version of the MRAP. And they've asked for about 4,000 of the original MRAPs in various forms. So we have the funding for that, and we will try and be responsive to that requirement.
Q Mr. Secretary, 2 years ago when you issued the national defense strategy, you asked the service chiefs to accept risk in their conventional capabilities in order to make investments in irregular capabilities and also to deal with high-end, asymmetric threats. How far does this QDR go towards moving the services in the direction that you wanted, and how close are the services now to being in balance -- as you, as you, over year ago, said that you wanted to --
SEC. GATES: Well, let me answer that, and then turn to the chairman. First of all, I think, again, it's important to keep this rebalancing in perspective. As was the case last year, of our research and development and procurement budget, roughly half of it goes for conventional modernization, unrelated to the current wars -- so, 50 percent. This year, roughly speaking, the current war funding, if you will, of transferring programs or funding programs, represents somewhere between 7 and 10 percent of the budget. And then dual-capable capabilities, such as the C-17 and various other kinds of equipment, account for about 40 percent.
So it's important to keep in perspective that when we're talking about rebalancing -- as I said at the very beginning of this process, my problem, when I arrived here, was that those fighting the current war had no seat at the budget table at all. And for example, most of Special Operations Command funding has been in supplementals, and now these OCOs. My goal is to move those capabilities, which we need long-term, into our base budget -- same thing with caring for our military families, caring for our wounded, helicopters, all these other things.
But relative to the entire defense budget, half of it is still going for the modernization. So I would say in terms of risk -- a year-and-a-half ago, or 2 years ago, our level of highest risk was actually in the current fight, not in terms of our future capabilities. I believe that we have now, by taking a little risk on the high-end capabilities, have significantly reduced the risk in the current fight.
ADM. MULLEN: This budget is 1.8 percent real growth, and I can tell you, and if you've been through the details you can see in particular that each of the services' budget has grown. And I'll just pick one area of great focus for us for these last several years, and that's helicopters. And I think the number in this budget is on the order of 117 helicopters, which certainly have what I would call dual use across -- what the secretary just described.
As I've said for a long time, it is about rebalancing. The ability to swing the pendulum hard in the other direction, just, almost doesn't exist. So we continue to move it to seek that balance, and in fact, funding these wars, as the secretary's described, as a priority, has become a top priority in my view, as it should be. And I also think that that is a significantly important investment for the future as well.
It does both things, because these kinds of capabilities -- let's say, the Special Forces, the ISR piece -- they're going to be with us in the future no matter what our fights are, or what our engagements are. So I think the balance -- we're moving in that direction, and that the risk shift is absolutely minimal with respect to where the services are.
Q Aaron Beiner (sp), with Tokyo Broadcasting System -- question on Japan for you from the QDR. This year it said that with Japan, we will continue to implement the bilateral realignment road map agreement. That's slightly different from previous language, which said that we will continue working with Japan to implement the bilateral agreement. So why is it different, and does that mean that the road map is the only way forward for Japan?
SEC. GATES: I think you'd have to be a Kremlinologist to find a significant difference in those two. (Chuckles.) We are still committed to the agreements that we have reached with the Japanese. We understand they are reviewing it. I am comfortable with that. We have a new government in Japan. They have some very high priorities they're trying to deal with, and so I would say that right now, I think, the watchword for us is patience.
Q So you will continue working with Japan?
SEC. GATES: Sure. Look, let's not misunderstand. We just celebrated the 50th anniversary of our alliance with the Japanese. That alliance is very important to both Japan and the United States.
Q Secretary Gates, I wonder if you could talk a little bit more about the ISR, the Predators and Reapers in this budget. You mentioned that the number of combat patrols is going up from 37 to 65. Talk a little bit more about the purpose of the shift to the Reapers, and what -- sort of, how quickly you expect to see gains or advantages in Afghanistan?
SEC. GATES: I think we can both answer this. But I think that we've already seen what the gain is, and the Reaper clearly has some capabilities that the Predator does not. They both are useful; we are buying both. But we are buying as many Reapers as we possibly can. And to the chairman's point a minute ago, we have, to a considerable extent, stripped the other combatant commands of much of their ISR capability to put it into the fight in Iraq and Afghanistan.
The reality is, there is huge demand all over the world for these capabilities -- in the drug fight, here in this hemisphere, and a variety of places around the world. They're useful in natural disasters. And obviously, in a combat situation like we face, they also carry armaments. So this is a capability where I think that we will continue to see significant growth for some years into the future, even as the wars in Iraq and Afghanistan eventually wind down. Just because the more we have used them, in a way, the more we have identified their potential in a broader and broader set of circumstances. So I think everybody who's had anything to do with this sees this as a terrific capability.
ADM. MULLEN: Starting in the early 2000s -- 2001, 2002 -- many of us talked about having the characteristic of persistence over a target or an area. And there's no platform in the world that gives us better persistence, longer staying time, than these platforms. And to speak to the needs and the desires of using them very specifically, in Haiti, to look at the population migration, and to do it real-time.
So we -- and back to 2000-2001, while we knew what constituted ISR, we really didn't understand it very well. We have, in these fights, learned a lot about what the requirement is, how many of the platforms we need, the centers we need, and what to do with it. And that speaks volumes about our ability to succeed in these wars, but also how we will use them in the future. So the 37 to 65 is a best estimate right now, but I would suspect it will continue to grow.
SEC. GATES: And I would just add, when I was director of central intelligence in 1992, and I tried to interest this building in UAVs, and was unsuccessful. (Laughter.)
Q Secretary, as you mentioned, this budget will include war funding for fiscal year '11, and if I'm not mistaken, that's the first time that a budget will institutionalize war funding in that regard. One of the criticisms of the --
SEC. GATES: Actually, the war funding itself with be in the '11 overseas contingency operation funds. So the '11 OCO will have the -- but yeah, it is submitted together with the budget --
Q And I think you used the word "institutionalizing." One of the concerns in the past about war funding is that this building has not been rigorous enough in setting aside what truly is war funding, directly related to the fight, and what, maybe, is on the margins. What is your direction, going forward, in the next few years, for making sure that the war funding is indeed directly related to the costs of fighting the wars, and the building doesn't have an opportunity to throw other things in there, perhaps, that they weren't for?
SEC. GATES: I would say that one of the changes that came about with the advent of the Obama administration was a much more rigorous approach by OMB as to what was allowable in these OCOs. And so, in fact, both in the '10 budget and in this budget there have been several billion dollars of things that we submitted as part of the OCOs that we have ended up absorbing in to the base budget. So the guidelines have become much more rigorous in this administration to get at just the problem you described.
Q Mr Secretary you mentioned several months back that you wanted to find a more humane way of implementing the Don't Ask Don't Tell policy. Have you found a way to do that yes, and does this budget in any way address that policy, or a way forward, an alternative of some sort?
SEC. GATES: The budget doesn't address it. Stay tuned 'til tomorrow.
Q Sir, can I go back to the Joint Strike Fighter? Did you have concerns that the cost overruns potentially might trigger McCurdy? And do you think that it's too premature to not continue on with the F-22 production as a hedge for future potential JSF overruns?
SEC. GATES: No, I don't think there's any need to go on with the F-22. And I think that -- I'm not sure about McCurdy.
Q Mr. Secretary, you're asking for $50.7 billion to fund the military health system. That well outpaces the rate of inflation. I wonder if you could discuss the amount of money, the growing fund of money on your defense budget. Are you asking Congress in this budget to increase co-pays? If not, how do you hope to contain those costs in the future?
SEC. GATES: I am glad you asked me that question. There has not been an increase in the premium for TRICARE since the program was founded in 1995. I ask anybody to point me to a health insurance program that has not had a premium increase in 15 years. The benefits are generous – as they should be – for our men and women in uniform. But the reality is for a family of three, the out of pocket costs per year in TRICARE is about $1,200. The out of pocket costs for a family of three, who are under the federal employee health care program is about $3,300. We see a lot of people coming back in to TRICARE because the benefits are so good and the costs are so low. For at least two or three fiscal years running we proposed a very modest increase in the premium. Each of those years, that was voted down in the Congress. Both for FY '10 and this year, we have fully funded health care, rather than leaving -- making the assumption about the premium increase. But we certainly would like to work with the Congress in figuring out a way to try and bring some modest control to this program.
This program -- the military health-care program in 2001 was $19 billion. In 2010, it's $50.7 billion. It's only going to go up. And it is absorbing an increasing percentage of our budget. We absolutely want to take care of our men and women in uniform and our retirees, but at some point, there has to be some reasonable tradeoff between reasonable cost increases or premium increases or co-pays or something and the cost of the program.
Q Secretary, in your opening statement, you made references to building security capacity of partners. I wonder how much of that relates to the Iran threat. And we've heard a lot of talk in recent days about what the U.S. is doing to help allies in the region on Iran and I'm wondering if that's a change in strategy at all.
SEC. GATES: Well, it's -- I mean, part of it is in that region, but a good example of building partner capacity is Yemen, where we have worked with them on counterterrorism capabilities, on building their border security capabilities and so on. And obviously -- I mean, obvious to us at least, helping them build their own capabilities in lieu of eventually perhaps having to have U.S. forces present on the ground in substantial numbers or doing this ourselves -- is clearly much cheaper and much better for us.
We see a lot of opportunity here around the world and it's an opportunity for a whole of government because when you improve the indigenous security capabilities, you're also dealing with AID and the State Department in terms of governance and so on. And so I think that both we and State see this as an area of real opportunity to try and prevent wars from happening, rather than have to deal with them once they've already started. Mike, do you want to add any thoughts?
ADM. MULLEN: I'd just echo strongly what the secretary said, is this kind of investment and partnership with State, USAID and others is absolutely critical. And the example he used is one so that we have a relationship that is long-standing long before we get to a point where any kind of conflict breaks out.
And enabling -- giving capacity to other countries to take care of their own problems is absolutely critical. And some of the programs that have been ongoing in the Middle East and the Persian Gulf have been ongoing for several years. This isn't something that just came up the other day. We've actually invested in that fairly substantially over a period of time.
Q I'm curious about the size of the space posture review. You talked briefly about the QDR. We have seen some embargoed information on the ballistic missile defense and there was talk that the NSC was not pleased with the original version coming from the Pentagon's space posture. What's the status?
SEC. GATES: To be honest, I am not certain, but Michèle Flournoy is going to be up here in a couple of minutes and she can tell you straight out.
Q Can I get a quick follow-up on JSF? Who is the new PM?
SEC. GATES: I don't think we've announced it yet, so -- but it should be out within a day or two.
Q Can you say that with the departure of the Vinson, does this mark the beginning of the end of U.S. military involvement in Haiti? And to what extent does Iraq and Afghanistan help define what you're able to do still in Haiti for the long term?
SEC. GATES: No -- again this is one we'll both take a crack at. I think the answer to your first question is, no, it does not mean the beginning of the end of our engagement. One of the principal assets that the Vinson brought was helicopters. Nearly all of those helicopters are remaining in Haiti.
I think as the chairman indicated in his opening statement, we anticipate being in Haiti for as long as we're needed and as long as the president wants us to be there, and the Haitians want us to be there. What we're getting into now is what balance of assets makes the most sense for that period. And I would say that at this point the operations in Haiti have had, really, virtually no impact on the force flow to Afghanistan or our forces in Afghanistan or Iraq.
ADM. MULLEN: And as I look after the future, I don't see that becoming a significant problem. I think the Vinson really is a reflection of reality on the ground, that we just -- she's done great work. She had a big impact early. The helo capability is still there and this operation goes into phases and that she and one or two other ships are no longer required and we want to release them. As I look out to the future for the other units that are there, I just don't see it having a big impact on Afghanistan or Iraq.
SEC. GATES: Last question.
Q Mr. Secretary, on the alternate engine, you sounded like you've come up with a very hard recommendation for a veto. Last year, there seemed to be a caveat in that you did not want the program to be disrupted. If it were, then you would recommend the veto. Is there a difference this year or will you again have that caveat on disruption on the alternate engine?
SEC. GATES: I was very concerned about the program last year. And that was the reason that the veto threat was focused on disruption of the program. We think that the level of costs is such now that -- and the fact that this is unnecessary -- that it's important to take a final stand. Thank you all very much.
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