Town Hall Meeting with Secretary of Defense Leon Panetta

                 (Applause.) 

                 SECRETARY LEON PANETTA:  Thank you.  Thank you.  Thanks very much.  This is a great honor to be able to be here at Barksdale. 

                 What do you think of the jacket, huh?  (Laughter, cheers, applause.)  I didn't even have to buy this.  (Laughter.)  I got this at the -- I got this at the Air Force-Navy Game.  And the Air Force did all right at that game and throughout the whole season. 

                 Great to be here.  This is -- this is one of our premier air bases.  And the reason I wanted to stop here is to tell you how important this base is.  It's a key priority for us, and it's going to stay a key priority for us in the future. 

                 This is -- this is the home of Global Strike Command.  It's also the home of the Mighty Eighth.  And all of these B-52s that are here are a very important part of our national defense in the past, in the present and in the future. 

                 I also wanted to come here to thank you.  Thank you for your great service to this country.  You know, I get involved with a lot of these weapons, a lot of these planes.  I see a lot of the technology that we have that we bring to the war front.  But very frankly, the most important weapon we have is you, the men and women in uniform who serve this country. 

                 And I want to express my personal thanks to all of you for the service you provide and how proud I am of all of you. 

                 This country has asked an awful lot of you over the last 10 years.  And everything that this country has asked of you, you have not only done but you have done more.  And so for that reason, I want to deeply thank you. 

                 I'm a great believer that our democracy is dependent on people who are willing to serve.  Our forefathers developed a country that was dependent on men and women who cared about this country and were willing to give something back to it. 

                 As I've mentioned time and time again, I'm the son of Italian immigrants.  My parents came to this country like millions of others, not a lot of money in their pocket, not a lot of skills, not a lot of language ability, but a great deal of hope about what this country could provide for them in terms of opportunity. 

                 I used to ask my dad, why would you travel all of that distance to a strange land not knowing where you were going, what it was going to be like?  Why would you do that?  And my father said, the reason we did it is because your mother and I believed we could give our children a better life. 

                 And that is the American dream.  That's what my wife and I wanted for our boys.  It's what, hopefully, they want for their children and what their children will want for their children. 

                 The American dream is making sure we give our children a better life. 

                 And in many ways, that is dependent on people who are willing to serve this country -- to be able to protect this country, to keep it safe, and to give our children that secure life for the future.  And that's exactly what all of you have done, and I deeply appreciate your service.  This country is strong because of you, and so thank you for all you do.  

                 This is a historic time to be serving this country.  It's a historic time for a number of reasons.  It's also historic and challenging.  We've just come to the end of 10 years of war, and this represents in many ways, kind of a turning point.   

                 We've ended the mission in Iraq.  We're in the process of being able to -- as tough as that battle is, we're moving in the right direction in terms of transitioning in Afghanistan.   

                2011 was a key year.  We were able to weaken the Taliban.  We were able to reduce the violence levels in Afghanistan.  We were able to see the Afghanistan army really come forward and take over operations, take over security and operate in a way that could help secure the country.  We've transitioned a number of areas to Afghan control and security.  We still have a tough fight on our hands, but this is headed in the right direction.  And NATO and all of our forces there are now working together to try to make sure that we meet our goals and complete our mission there.   

                In Libya, we came together and involved some of these planes that were involved in the Libya mission.  And we were together with NATO. You brought all these countries together.  The fact was they were able to work together in a coordinated way -- not easy to do.  I remember visiting the naval -- our naval operations base there in Naples, and seeing what it took to coordinate it:  It was incredible.  But it was a successful mission, and we were able to bring Gadhafi down. 

                And lastly, you know, the very reason we went to war:  because of al-Qaida and Osama bin Laden.  The reality is, we have had some very successful efforts to go after those who attacked this country.  And I was very proud to be part of that effort in my prior capacity as director of the CIA, that we led a successful mission in order to get the number-one terrorist in the world. 

                We have been able to go after them.  We've decimated their leadership.  We've undermined their command and control.  We've weakened them in their ability to attack this country.  Doesn't mean it's over:  We still have terrorists to go after and keep the pressure on.  So we -- we've made some very important achievements, because of you, over these last 10 years. 

                Add to that now the fact that we are a country in heavy deficits and debt.  I think there was a headline in the USA Today the other day that said that our national debt is the equivalent of our GDP [Gross Domestic Product] -- almost $15 trillion dollars.  We're running deficits now in excess of a trillion, trillion-three, each year.  And because of that, this country has to face up to the responsibility to be fiscally responsible. 

                Congress passed what was called the Budget Control Act, and in that law required that I come up with about $487 billion in savings over the next 10 years. 

                So, historic and challenging time.  We've had some great successes, and now we're facing the challenge of how do we -- how do we do this, how do we do defend this country and do it meeting our fiscal responsibilities -- not easy.  This is not an easy challenge. 

                In the past, when we've drawn down, whether it was after World War II, whether it was after Korea, whether it was after Vietnam, whether it was after the fall of the Soviet Union, what happened was that the threats we were confronting receded. 

                Today we still face some serious threats in the world.  We're still fighting a war on Afghanistan.  We're still confronting terrorists.  Al-Qaida may be weakened in the FATA [Federally Administered Tribal Areas], but they're in Somalia, they're in Yemen, they're present in North Africa, and they continue to try to plan attacks on this country.  So we still face a terrorism threat. 

                We face constant challenges of dealing with unpredictable countries like North Korea and Iran that threaten the stability of the world.  We face the continuing proliferation of weapons of mass destruction.  We face rising powers in Asia that continue to challenge international rules and international relationships.  We face the whole issue of rising turmoil in the Middle East. 

                I mean, God, any one of those countries in the Middle East could blow on us -- from Syria, which is already in turmoil, to Egypt, to Yemen, to a number of others.  So we still face that kind of turmoil.   

                And we still face the challenge of dealing with a whole new arena of technological warfare called cyberwar.  We are the -- we're the target of a number of attacks in the cyber arena every day, and now we have the capacity in the cyber arena to go after our grid system, to go after our security systems, to go after our financial systems, to go after our government systems, and virtually paralyze this country.   

                So we're still dealing with a hell of a lot of threats.  And our responsibility in national defense is still to protect this country, to keep our kids safe for the future.  That's the challenge we face.   

                So how do we do this?  That's the question I asked the chairman of the Joint Chiefs, our service chiefs; basically said, how do we -- how do we approach this?  And the decision was that we have to take this and make it an opportunity for the future, to look at what we need in national defense today, but also to look at what we need in terms of national defense for the future.   

                And so it was important for us to say, what strategy do we want to put in place?  What kind of force do we need to make sure we can confront these threats I just talked about and, at the same time, meet the challenge that we're facing in terms of fiscal responsibility and having to achieve the savings we have to achieve?   

                So we went through that process, and I did it with the service chiefs, who I have tremendous respect for.  I did it with the combatant commanders.  We sat down and we walked through it, and we said, what do we need?  What kind of force do we need for the future? 

                And before we got there, we made -- we made a commitment that we didn't want to -- we didn't want to make the mistakes of the past. 

                So number one, we wanted to maintain the strongest military in the world.  You are part of the strongest military force in the history of the world, and we're going to keep that.  We're going to stay with that. 

                Secondly, we do not want to hollow out this force.  Every time we've done this in the past, we've made cuts across the board, and the result was we weakened everything.  We're not going to do that.  That means we have to look at every area of the defense budget, make sure we put everything on the table and look at where are our strengths, where are our weaknesses, where can we try to find savings, and what do we have to invest in for the future that's important to our national defense? 

                And lastly and most importantly, we all agreed we want to -- we want to make sure we keep faith with our troops and with their families.  You've been asked to deploy time and time and time again. We've asked a tremendous amount of all of you over these last 10 years.  And we want to stick to the commitments and promises that we've made to you because of that. 

                And so all of that represented the guidelines that we needed as we developed the strategy for this country. 

                And as you've seen, I've been in hearings for the last three days.  Shit, I think I should get some kind of award for going through that crap. 

                (Laughs.)  I mean, I told -- I told General Dempsey I need a new, you know, combatant -- a new combat badge -- (laughter) -- for going to Capitol Hill -- with clusters.  (Laughter.) 

                But we laid out what that strategy is, and I'll just briefly summarize the key points. 

                Number one, we know we're going to have a smaller force.  We're probably going to face a smaller force under any circumstances because of the drawdowns we're involved in.  So we're going to have a smaller and leaner force. 

                But it has to be agile.  It has to be quickly deployable.  It has to be flexible, and it has to be technologically advanced, so that we're ready to move when we've got to confront an enemy. 

                Secondly, we knew, looking at the world, that we're going to have to refocus on two key areas of the world:  the Pacific and the Middle East.  Why?  Because that's where the likely problems are likely to arise.  So we want to make sure that we remain strong in those areas, that we have strong force projection in both of those areas to be able to deal with those threats. 

                Thirdly, we also want to have a presence in the rest of the world.  We don't want to walk away from the rest of the world.  So we need to maintain the strong partnerships and alliances that we have with NATO, with the ASEAN [Association of Southeast Asian Nations] nations, with others, to make sure that we're working together in a partnership and alliance, to have a presence throughout the world. 

                We're also developing rotational deployments.  I mean, the Marines have been doing that.  Special operations forces have been doing that.  The Army is going to develop that same kind of capability to rotationally deploy in areas from Europe to Africa to Latin America, training and exercising with units in those countries so we have a presence there. 

                Fourthly, we want to be able to confront any enemy, anytime, anywhere, and defeat that enemy; and if we have to -- we have to fight more than one adversary at a time, we can take on both of them and defeat them, take on three of them and defeat them.  That's extremely important to our ability to protect the country. 

                So we needed to have in the 21st century the capabilities to take on the kind of asymmetric threats that we face.  That means using space, using cyber, using the kind of special forces operations, using unmanned systems, using the kind of new technologies that we need for the future.  So that, yes, we may be fighting a war in Korea, a land war in Korea, and we'll have the capability to fight that land war. At the same time, if somebody wants to close -- if Iran wants to close the Straits of Hormuz, we will have the ability -- using this stuff, using our naval power -- to be able to deal with that, as well.  We need to have that kind of capability. 

                And lastly, this isn't about just cuts.  It has to be about investing in new technologies for the future and, as I said, investing in cyber, which is going to be extremely important for the future; investing in unmanned systems; investing in space; investing in our abilities to try to move and be agile and be technologically advanced. We've got to leap forward, to be ahead of any adversary in the world today.  And that means investing in new planes, in new bombers, in the kinds of things that we will need for the future. 

                And it also means protecting a strong Reserve and a strong National Guard, because we are -- we are going to have to have the capability to mobilize quickly. 

                And to do that, we've got to have a strong Reserve.  They have performed in an outstanding fashion over these last number of years. When I go to the battlefront, I can't tell the difference between who's National Guard, who's Reserve, and who's active duty.  They're out there doing the same damn thing, and doing it well.  And I want to protect that kind of experience; I want to protect that kind of expertise for the future. 

                And I also want to protect our industrial base.  I mean, building these planes -- the skill that's involved, the craftsmanship that's involved, I don't want to lose that.  I don't want to be dependent on somebody overseas to build these planes for us.  I want to maintain an industrial base here, in order to make sure that, if we have to move, if we have to build the force we need, we have that capability in this country. 

                So those are some of the challenges that we're confronting.  And it's the strategy that we think is important to have for the future. Now, at the same time, with that strategy, I've got to find almost a half a trillion dollars in savings.  So we looked at about four areas to try to do that, in line with the strategies I just talked about. 

                Number one, if I'm asking the force to tighten up, we've got to tighten up at the Defense Department.  So I've got to go after waste and bureaucracy and overhead and the kind of -- you know, the kind of weighty impact that huge bureaucracies have.  I've got to be able to make them more efficient.  And we're going to do that.  We've got about $60 billion in efficiencies, on top of about $150 billion that my -- that Bob Gates put in place as well. 

                Secondly, we're looking at, obviously, at force structure reductions.  Now, the force structure reduction will be largely in the Army and in the Marine Corps, and we're going to do this over a period of five years through 2017.  And the end result will be a force that will be stronger than we were before 9/11 even though we'll take down some of those troops.  But we've got to -- we've got to reduce the number in the force structure because, frankly, the worst thing I could do is to maintain a heavy force structure and then cut training and equipping and all of the kind of support system you need.  That's how you hollow out the force.   

                The third area is, obviously, in procurement, to look at where we could find savings in procurement.  What do we need?  What don't we need?  What do we have to have for the future?  We want it to emphasize multi-mission capabilities because that's the kind of agility we need for the future.  So that made some hard decisions about some of the areas where we could stretch out some procurement and also make some decisions to move to other systems.   

                And then, lastly, compensation -- and this is a tough area, to try to make sure we meet our responsibilities to you and to your families, but, at the same time, I've got to control costs in this area.  This is an area of the budget that's grown by 90 percent.  So I -- I've got to be able to try to do some steps to control those costs in the out-years.   

                So what we did was basically this:  We said, we're not going to touch pay.  We're going to provide full pay increases for the next two years.  But then, in the out-years, we're going to limit the pay increase -- not base pay; we're not going to touch base pay.  We're going to limit the amount of increases in the out-years, and the service chiefs thought that that was an effective way to try to begin to limit some of that growth there. 

                Secondly, on health care, we're not going to touch active duty. We're not going to touch those who are in the service, the troops or their families.  We're not going to increase your fees whatsoever. But for retirees, we looked at TRICARE and said we've got to be able to get some additional fees to cover that.  We haven't touched those fees, frankly, since the '90s.  So -- (chuckles) -- I've got $50 billion that I pay in health care costs.  So I looked to that area to try to get some additional help. 

                And then lastly, on retirement, we said, you know, we really have to look at the retirement system for the future.  But one thing we made clear is we do not want to touch the retirement benefits of those who serve.  So we're going to grandfather everybody who's in the service.  You will not see anything impact your retirement as a result of that effort.  But we still have to look at how we can improve that for the future. 

                So those are some of the key areas we've had to look at.  I'm not going to -- I'm not going to BS you.  Look, if I have to take a half a trillion dollars in savings, it's not -- it's not going to come without some pain and some impact.  And as I told the Congress, it's going to impact on all 50 states; it's going to impact on constituencies. 

                I've been through it.  As a member of Congress, I had a base called Fort Ord.  And Fort Ord was closed in a BRAC [Base Realignment and Closure] process.  It represented 25 percent of my local economy in Monterey.  Now, we had to confront that and face it.  We've reused our base.  We now have a university there for the California State University system, and we've been able to make a success of it.  But it's painful. 

                So this is not going to be easy.  This is going to be a challenge for all of us.  But at the same time, we're doing the right thing. We're putting in -- we're putting a strategy in place that will protect this country for the future. 

                It's the kind of force we will need, not just now but in 2020. 

                And at the same time, we have stepped up to the plate with regards to our responsibilities in trying to make sure that we exercise some fiscal responsibility so our kids won't have a country that goes bankrupt. 

                Those are -- those are all tough challenges.  And I guess, in many ways, what I -- what I have done is looked at all of you and the challenges that you deal with every day, and said, damn it, if you can do what you do, we can do it as well. 

                So let me again thank you for your service.  And let me thank you for what you do to help make sure we give our kids that American dream of a better life, a more secure life for the future and an America that remains of, by and for all people.  Thanks very much for having me.  (Applause.) 

                OK.  I'm happy to answer your questions if you have any.  Got the secretary of defense; what the hell.  (Chuckles.)  I've been answering questions for the last three days.  (Chuckles.)   

                (Laughter.)  If you got any questions, really, go ahead, shoot. 

                Q:  Mr. Secretary -- 

                SEC. PANETTA:  Yeah. 

                Q:  Sir, my name is Senior Master Sergeant Michael Lamont (sp) from Global Strike A47.  Sir, you alluded to earlier problem areas that we have, and my question is -- comes from that area, one of them being in the Middle East.  How close is Israel to going to war with Iran? 

                SEC. PANETTA:  The question was on Israel and Iran. 

                Let me begin by saying that we have common cause and common concerns with Israel and with the international community about Iran. 

                We've made very clear that Iran will not develop a nuclear weapon.  We will not tolerate an Iran that has a nuclear weapon. 

                Secondly, we've made clear that we will not tolerate an Iran that tries to block the Straits of Hormuz.  A fifth of the oil of the world goes through those straits.  They're international waters.  We're not going to allow them to block that. 

                And frankly, we don't want an Iran that basically spreads violence around the world, that supports terrorism, that conducts acts of violence.  They planned an attack here against ambassadors of other countries here in the United States.   

                So we're not going to tolerate that, and we've made that clear. And as a result, the international community has come together.  We have implemented strong diplomatic sanctions, we have implemented very strong economic sanctions, and we're continuing to do that -- sanctions that are in many ways crippling Iran, crippling their economy, isolating them from the rest of the world, and having an impact on Iran.   

                The basic message is, you got to change your behavior.  If you're a nation that wants to be part of the international family of nations, then join it.  Operate by international rules.  Operate by international laws.  Join us in a -- in an effort to try to diplomatically reduce your efforts in terms of nuclear capability. 

                So that pressure needs to continue, and Israel has been part of that.  And my hope is that -- for the future, that Israel will be part of that international effort to keep the pressure on.  That's the most effective way to isolate Iran and to keep the pressure on. 

                If they cross one of those lines I talked about, then we have all options on the table -- we, the United States, have all options on the table.  But, as the prime minister of Israel himself said, that ought to be the last option, not the first. 

                Other questions?  I think there's a lady -- right here. 

                Q:  Hi, Mr. Secretary.  Master Sergeant Widener (sp), from Air Force Global Strike Command Inspector General's Office. 

                We have great airmen doing great things in defense of our freedom, as you said, in Afghanistan.  And 24 of the Air Force's great airmen have received Air Force crosses -- people like Senior Airman Jason Cunningham, and Tech Sergeant John Chapman; most recently, Tech Sergeant Rob Gutierrez, and also Airman Zachary Rhyner. 

                My question is, the last time the Air Force -- the last time the Air Force received the Medal of Honor, it was upgraded from the 1960's:  Chief Etchberger, and also Airman Pitsenbarger.  Is there anything at the Defense level that reviews current-day our 24 Air Force Cross recipients, so that their families may also have an opportunity to be looked at for the Medal of Honor? 

                SEC. PANETTA:  We have -- and I meet with the service chiefs every week, and we talk through a lot of these issues. 

                And one of the things they've assured me -- we've done this with other services.  We've looked at going back and making sure that we've properly honored those in the past.  And we're doing the same thing with regards to the Air Force.  So there is an effort to review all of them to make sure that -- you know, that we have properly honored them in the most effective way. 

                I might mention another thing, too, that one of the things I know -- you know, I was involved with it, and I know some of you may have been.  But we have now a lot of unmanned systems that involve a lot of very capable pilots who are flying some very effective missions going after the enemy.  And one of the things I would like to do is to be able to recognize their service as well.  And I know the Air Force is thinking of trying to develop a proper reward -- an award for those that perform that service as well.  And I think that's a good thing to do. 

                Other questions?  There was somebody who had a question here. Yes. 

                Q:  Good afternoon, Secretary.  This is Captain Gibson (sp), 20th Bomb Squadron.  With the increased rise of powers in Asia, sir, where do you see Global Strike Command -- (inaudible) -- B-52 increased presence in the Pacific? 

                SEC. PANETTA:  Yeah.  One of the -- one of the decisions tied to that strategy I talked about is our -- maintaining our bomber fleet -- we thought that was extremely important -- and secondly, putting money into developing a new bomber.  So we're going to do both of that. We're going to maintain this bomber fleet.  We're going to keep it in place.  We need it for forward projection. 

                We need it for power projection in the Pacific; we need it for power projection in the Middle East.  The Air Force is going to play a very important role with regards to this strategy I just talked about. 

               We're also going to continue to invest in a fifth-generation fighter.  The F-35 represents that fifth-generation fighter.  And my -- my commitment is to do everything possible to make sure we get that fighter plane in place.  We're still testing it.  It's coming off the production line.  It's actually testing pretty well.  I just took the STOVL [short take off and vertical landing] version of that plane off of probation because it met some of the concerns we had. 

                But it is -- it's an essential plane for us, to be able to have that stealth capability, the kind of precise target -- precision targeting that that plane has.  That's the kind of weaponry we need for the future. 

                Add to that, we're putting money into developing a new air tanker as well so that we have that capability improved for the future.  We're maintaining a strong airlift capability.  We're maintaining a strong ground force support system as well. 

                But most importantly, I think the centerpiece of that is the bomber fleet.  And that's, frankly, one of the reasons I'm here at Barksdale, is basically to tell you how important this base is because of these babies behind me, and because this is going to be absolutely essential to the kind of future strategy that we're going to need. 

                Yes.  I can hear you.  Go ahead. 

                Q:  (Off mic.) 

                SEC. PANETTA:  Sure.  Sure.  Sure.  First of all, most importantly, you've got to be Italian.  (Laughter.)  But -- what's the last name?  Carraccio (sp).  Bravo.  (Chuckles.)  Thank you very much. 

                And thank you for that question.  I mean, I -- you know, I think it's one of the most -- one of the most important things we have in this country that our forefathers cared a great deal about was the ability to have freedom of religion and the freedom to enjoy your beliefs.  It's -- it goes to the heart of what America is all about. And so I'm a believer that we ought to protect that freedom. 

                And I try to -- I try to make sure that as we face these issues, even in the military, that we really do allow our troops, regardless of faith, regardless of beliefs, to be able to have the freedom to exercise their beliefs and not to try to impose, you know, limits on their ability to practice their religion. 

               So we have -- we've had a few instances.  I can assure you that what I've done in every one of those instances is gone to my general counsel and said, I recognize our constitutional requirements here and responsibilities, but I want to do everything possible to make sure we're protecting the right of all of our military to be able to exercise their beliefs.  And rest assured that I share your concern about that as well. 

                Yes, sir. 

               Q:  (Off mic.) 

                SEC. PANETTA:  Yeah, I think, you know, the issue for us as we went through the -- (audio break) -- you know, we talked about is -- the kind of stability operations that we had in Iraq and Afghanistan, you know, is that going to be something we're going to face again in the future.   

                And the sense was, you know, that we need to have the flexibility if we have to confront that situation, but the hope is that when we go to war, that we're going to be able to go to war and be able to get a victory and be able to do the kind of transitions that we can do, without having a huge stability force that's going to have to be there, as we -- (chuckles) -- over 10 years, as in the case of Iraq, and have to repeat that kind of process; that we're going to be smarter than that for the future 

                But having said that, you know, I don't think we can be naive, either; that as we achieve -- as we have to confront the challenges of the future, we may very well have to have some stability operations.   

                We have a sufficient force.  I've got 490,000 -- at the end of 2017, we're going to have to have 490,000 troops in the Army.  We're going to have almost 182,000 Marines that are going to be there [total end strength]. We'll have a very significant force that will be in place even after we -- as we go -- as we go through this drawdown over these next five years. 

                So number one, we'll have more than an adequate force, not only to fight a land war but obviously to conduct stability operations if we have to. 

                If we're facing a number of crises, then obviously one of the things we would have to do, as we did after 9/11, is mobilize and be able to bring more people in through the reserves and the National Guard to help play that role. 

                 But I think our view is, it's not that we're never going to be able to conduct stability operations, but we just -- hopefully we're a hell of a lot smarter about when we have to do that and how we do it, so we won't be bogged down the way we were over these last 10 years. 

                 STAFF:  Mr. Secretary, sir, we have time for about one more question. 

                 SEC. PANETTA:  One more question.   

                 Q:  (Off mic) -- question -- (off mic). 

                 Q:  Hello.  My question is, with the expanding role of unmanned aerial vehicles, do you think it's feasible to see an unmanned long- range strategic bomber sometime in the future? 

                 SEC. PANETTA:  The development of the long-range bomber that we're working on is going to be a bomber that has -- you know, they're going to look at both manned and unmanned capabilities for that -- for that bomber in the future.  But, you know, a lot of it -- because of the bomber fleet that we have, because of the planes that we have, I mean, the likelihood is we're going to be -- we're going to be running manned bomber raids for a hell of a long time. 

                 But we should be able to try to look at developing that capability for the future if we need it.  I'm a believer that you don't just lock in on one or the other.  We ought to have the flexibility to be able to have both of those capabilities for the future.  That'll make us strong on all fronts, if we need it. 

                 All right, listen, thank you very much.  Really appreciate your coming out.  And please keep up your good work here at Barksdale. Thank you.  (Applause.) 

                 STAFF:  Next, the secretary of defense will re-enlist six Barksdale airmen.  Attention to orders.  (Gives names of airmen to be re-enlisted.) 

                 Re-enlistees, please raise your right hand. 

                 SEC. PANETTA:  Raise your right hand.  (Administers enlistment oath.) 

                 Congratulations, guys.  (Applause.)