Town Hall Meeting with Secretary Leon Panetta, Ramstein Air Base, Germany

             MODERARTOR:  All right, Team Ramstein warriors.  It is really a thrill for me to introduce the leader of the world's greatest military, the 23^rd secretary of defense, the honorable Leon Panetta (inaudible).  

            SECRETARY LEON PANETTA:  Thank you very much.  I wanted to take this opportunity to be able to come by and thank all of you, thank all of you for the great service that you provide. 

            You're truly unsung heroes.  And you know, I really - I really appreciate the kind of dedicated service that you're involved with, because when you guys do evacuation, you do - you literally - you literally save lives.  And I've seen - you know, having gone to Bethesda, had a chance to visit with our wounded warriors there.  And when you - when you look into their eyes and when you see that kind of great spirit wanting to get back to duty, wanting to get back to service, wanting to get back to life - you see that spirit, and you know that that would not have happened were it not for you, were it not for your ability to move these warriors, to get them treated and then to move them on.  And that's very special.  It's a - it's a very special treat. 

            And I - you know, I know that in addition to that service, the fact is, you know, you help, for many of those that don't make it, give them the dignity and the respect that they need as we return their bodies back to their families.  And I appreciate that as well. 

            So you really do the Lord's work, and I'm here to say thanks, thanks on behalf of the department, but more importantly, thanks on behalf of the American people. 

            You know, we're at a - we're at a turning point as we come to the end of a decade of war.  And we begin to see the opportunity to try to ramp down in some of these areas.  And that's good.  But at the same time, there's going to continue to be some heavy fighting, and we will continue to have to deal with our wounded warriors.  And we will depend on you to continue to do what you do best, which is take these lives and then give them a new life so that they can be with their families.  And ultimately, there are those that will return back to duty and be able to serve this country. 

            So thank you again.  I deeply appreciate what all of you do.  I can't tell you how proud we are of the service you provide.  God bless you, and keep doing what you're doing (inaudible) that you will be there for any of those - and you'll get a chance to come back home and be able to be with your families (inaudible) and will greet you and will say to you, thank you for a job well done. 

            You've got the secretary of defense.  Want to ask some questions?  Go ahead and ask some questions.  You know, you're not going to have this opportunity for a while.  

            Q:  Sir, with the new proposed budget cuts, what do you foresee the long-term footprint of the Air Force in Europe being? 

            SEC. PANETTA:  We were just at - I just came from a NATO ministerial conference, and I'm going to the Munich conference.  And I wanted to make clear to our European and NATO allies that we're still going to be maintaining a significant presence here in Europe. 

            You know, look, this question (inaudible) we were asked to cut $487 billion over 10 years.  That was a requirement from Congress to cut that amount of money.  And what we decided from the beginning is that, you know, you take that kind of challenge - and it is a hell of a challenge - and you try to make it an opportunity.  And so what we did was we said, rather than we take that money and cut it across the board, which would just frankly hollow out the force - if you cut everything, we'll essentially have a hollowed-out force - we said, let's base it on strategy.  What kind of defense do we want not just for today, but in 2020? 

            And so I really pay tribute to all the service chiefs and their undersecretaries because we basically came together as a team and basically sat there and said, okay, what kind of strategy do we want for the future?  What kind of force do we want for the future? 

            And so there were about five key elements that were part of it.  One, we know we're going to be smaller just by virtue of the drawdown that has to take place from the war areas.  So we're going to be smaller, we're going to be leaner, but at the same time, we've got to be agile, we've got to be quickly deployable, we have to be flexible, and we've got to be able to move.  And that means that not only – not only do we have to maintain those services that provide that kind of quick movement, but we also have to (inaudible) a technological edge.  We've got to make sure that these troops have the best technology available to them for the future. 

            Secondly, we had to rebalance our forces, which means, you know, we have to focus on where the many problems of the world are.  So you know, we have focused in the Pacific.  We're going to maintain our forward presence in the Pacific because that's where some of the problems are that we're going to face in the future.  And the same thing is true for the Middle East.  We're going to maintain our presence there and in some ways strengthen that as well. 

            At the same time, we have to maintain - and this is the third element - we have to maintain our presence everywhere.  We've got to maintain our presence everywhere.  That is very important for our security.  And so here in Europe, for example, we are going to have the largest troop presence of anywhere else in the world.  We're at about 44,000, right now, soldiers.  And we are going to take down some of the BCTs.  But most - those two BCTs, frankly, were operating in Afghanistan going on a year.  So we're going to take those two down; leave two BCTs here.  Plus, we're going to develop a new brigade in the United States, where we're going to have the Italians rotate into Europe to do exercises, and do them twice a year.  You train, do exercises and you have that presence.  So we're looking at about 37,000 soldiers that will remain here in the European area. 

            So you'll have a hell of a lot of work; don't worry about it.  You're going to be - you know, you'll have to provide that kind of support.  And we'll have a rotational presence elsewhere.  What we're doing - what Ray Odierno is doing is we're going to develop a rotational presence and our troops are going to go into an area, develop new partnerships, train, advise, assist, exercise, develop those kinds of new alliances.  And that will be true in Latin America, it'll be true in Africa, it'll be true elsewhere in the world and, obviously, here in Europe. 

            The fourth area is we've got to be able to defeat - confront and defeat any enemy, anyplace in the world.  And we feel we've got a force that we think is able to do that.  For example, if we have to confront a land war in Korea and at the same time the Straits of Hormuz closed in Iran, we've got to be able to confront those kinds of challenges.  And we feel confident that we've got the force levels and capability to be able to handle any enemy that tries to come at us. 

            And the last point I would make to you all is that we've got to invest.  We've got to invest in new technologies; we've got to invest in special operations; we've got to invest in cyber; we've got to invest in space; we've got to invest in armored vehicles; we've got to invest in mobilization - if we have to mobilize quickly in order to confront a crisis, we have to do that.  That means we maintain a strong Guard and a strong Reserve, and we've got to maintain a strong industrial base as well. 

            So those are all the key elements, or the strategy.  And basically, all the decisions we make are basically to back up that strategy if we can - we can go to the Congress, go to the country and justify what we present.  Now, there's some pain here:  There are going to be some cutbacks and - you know, but that's the nature of what we have to do.  But in the end, I want to maintain the strongest military force in the world.  I mean, that's what we do.  And that's why you're still going to have a large role to play in the force, not only now, but the force of 2020. 

            Do you have any questions? 

            Q:  (Inaudible) personal question: When (inaudible) going to grow up, sir?  

            SEC. PANETTA:  (Inaudible).  You know, I've had - I've had a great career in public service.  I'm - I believe in public service.  My parents were immigrants and came to this country, like millions of others.  And when we used to sit down at Sunday dinner - as we do - with my brother and I, my parents would make clear that we both owed something back to this country.  And so they always built in a sense of public service in both of us. 

            And, you know, for me, it goes back to being an Army officer in the Intelligence Corps in the Vietnam era, and then after that working in government in different levels:  the Senate, to directing the Office of Civil Rights, to legislative aide for the mayor of New York City; got elected to Congress; came back; was chairman of the Budget Committee; became OMB director; chief of staff for the president; went back home with my wife and started a public policy institute in Monterey (inaudible) which was in my district in Monterey (inaudible) university campus there and established a public policy institute; and was asked to come back here by President Obama as director of the CIA - sure as hell didn't expect that - but it was a hell of a challenge at that job.  And I consider that one of the achievements that I relish most is the operation to go after bin Laden and deal with him.  And then, I was asked to be secretary of defense, and this is, obviously, one of the proudest roles I have played in public service. 

            So I can't hold a job.  I have basically been all over the place in terms of public service.  But I love the challenge; I love serving the public.  And I - and I do it because, frankly, there is no more important role than what we do to protect the safety of our country.  And that is what it's about:  We're protecting America.  And you - you are able to give our children a better life.  And it - you know, my parents would always say this:  the reason they came over to this country was because they wanted their kids to have a better life.  That's the American dream.  That's what we all want for our kids. 

            And frankly, that's what we're involved with.  What you guys do in working here and saving lives and working here and trying to help others, is you're clearly - is making sure that our kids get a better life for the future.  And you know what?  I've done a lot of jobs, but there is nothing more important than making sure our kids have a better life in this country. 

            Any more questions? 

            Q:  Hi, sir (inaudible) in regards to what's going on between Israel and Iran, in terms of Israel , at what point would the United States become involved? 

            SEC. PANETTA:  You know, we've made clear that - our concerns with regards to Iran.  And this is something that worries us, that, you know, they continue to try to develop a nuclear capability.  And we've made very clear that they cannot - they cannot - develop a nuclear weapon.  And the world community is unified on that and, you know, the whole international community has said:  Don't do it.  Don't do it.  And - so if they continue to do it, that's the reason they've applied all of these sanctions.  And everybody in the world community is unified in applying those sanctions.  

            They're very tough.  They're economic sanctions.  They're diplomatic sanctions. And as a result of that, we'll put tremendous amount of pressure on Iran.  They've isolated Iran; (inaudible) against the wall by virtue of what we're doing.  And we have to continue that kind of pressure.  

            And I guess my view is that, right now, the most important thing is to keep the international community unified, to keep the international pressure on to try to convince Iran that they shouldn't develop a nuclear weapon and that they should join the international community of nations and that they should operate by the rules that we all operate by.  Again, I have to tell you, if they don't, (inaudible) have all options on the table, and we're prepared to be as strong as we have to. 

            Other questions?  Yes, sir. 

            Q:  Sir (inaudible) I have a statement and a question.  The statement is me thanking you for fighting for our benefits to remain in place but also for us (inaudible) serving here right now and (inaudible) grandfathered in after the budget cuts.  Appreciate you (inaudible).   

            Yeah, you can (inaudible).   

            And my question, sir:  As a person who has had access to the CIA, as a person who is now in charge of the Department of Defense, the amount of intel that you have and the amount of resources at your fingerprints – who's going to win the Super Bowl on Sunday?  

            SEC. PANETTA:  My hope was the 49ers, but ­­that didn't happen.  That didn't happen.  

            So – well, I guess this is one where I'm going to - this is one of the few Super Bowls when I really don't have a - I don't have a team here.  I've got – you know, I'm going to sit back and watch it, and I think it'll be a good game.  It'll be a close game, and see what the hell happens.    

            But I guess I was really pushing for the 49ers to play.  The 49ers have had some shitty seasons (inaudible) finally - finally came back and, finally, you know (inaudible) they had a great season.  So, I can't - one would expect (inaudible) too much, and so we're all rooting for them.  

            And you know what?  I hate games to end with a screw-up.  And we had two - two of the last games ended with a screw-up.  (Inaudible) a field goal for the Raiders and then (inaudible) dropped the ball.  So it's just not - it's not a good way to end the season, but there's always next year.  (Inaudible) has to – has to (inaudible).  

            On the - let me just mention a conversation in that area because that - we have a - one of the things we had to do in order not to hollow out the force was to look at every area of the budget.  So obviously there's force structural reductions by virtue of the drawdown (inaudible).  We looked at the whole weapons procurement area because it's an (inaudible) area to try to tighten up on the procurement of different weapons (inaudible) and try to get some savings from that area.  

            We're also looking at a whole set of efficiencies:  How can we tighten up the department?  It's a big department.  You have three million people in the Department of Defense.  As you know, it can be a pretty big (inaudible) bureaucracy.  So trying to eliminate duplication; trying to eliminate some of the overhead; trying to, you know, improve the efficiency of the department - these are the areas that we're focusing on as well, hopefully trying to get about $60 billion in savings through those kinds of efficiencies.  

            And then the fourth area we had to look at was compensation because compensation is an area of the defense budget that's grown by 90 percent over the last 10 years.  And if it continues, the problem is, it eats away at everything else that we have in the budget.  So we have to try to limit some of those costs.  

            So what we did was, we looked at several areas.  Number one, on pay, we said we're going to provide full pay increases for the next few years and then limit the pay.  There's not going to be any pay cut for people, but on pay increases in the - in the out-years, beginning in 2015, we're going to limit the amount of pay increase that people get and try to achieve some savings that way in order to try to control some of the costs. 

            Number two, on health care - and this is for retirees, but not the junior retirees - we're going to increase fees; we're going increase the copay in order to help pay for health care costs.  Health care costs cost me about $50 billion in the defense budget.  So I've got - we got (inaudible) what health care is all about, you know (inaudible).  So we've got to try to control those costs, and the best way to do that is try and provide some additional (inaudible).  They'll still be paying far less than what you pay in the private sector. 

            The third - the third area is on the retirement area, which needs to be looked at, and what we've decided is, you know, we'll have a commission look at retirement reforms for the future.  But that's where we said it's very clear that we've got to grandfather everybody who's in service.  You guys have been deployed time and time again.  You know, you put your - put your lives on the line.   We felt we owed to you to stick with the benefits that we promised you.  And so what we said is, for everybody who's served, we're going to protect those benefits.  

            So, you know, we want to maintain faith with the troops.  We want to maintain faith - maintain faith with their families.  We're going to protect, obviously, the wounded warrior care.  We're going to protect their health benefits.  Those benefits are not going to change.  But at the same time, I think we have an obligation to try to control some of these costs for the out-years because if we don't, then ultimately that'll eat away at the other things we're trying to do to try to develop that kind of defense system that we need for the future. 

            Thank you for the questions.  Other questions? 

            Okay, guys.  What I'd like to do is to be able to give you your coins and take a picture with each of you.  The coins aren't worth a hell of a lot but at the same time, you know, they - they are appropriate for framing and for giving to your kids.  

            So let's line up, and we'll start that process here.