Town Hall Meeting with Defense Secretary Leon Panetta

MODERATOR: Well, Mr. Secretary, distinguished guests, good morning, and air assault.

You know, it may be raining today, it may be hailing a little later, but when you're in the 101st Airborne Division, every single day is a great day.

And it's especially great today because we have our secretary of defense with us. He's served as an Army officer, a congressman, White House chief of staff, director of the CIA and is our defense secretary. There are few Americans with more service to our nation. Please join me in providing our secretary a warm 101st Airborne Division welcome. Hoo-ah! (Applause.)

SECRETARY LEON PANETTA: Thank you. Thank you. Thank you very much.

This has been a great day and a great honor for me to be able to come here to Fort Campbell and to visit the 101st, the Screaming Eagles. What a -- what a great and honorable tradition you have because of all of the brave men and women that have served in this outfit. From Normandy to Iraq and Afghanistan, you have all served tremendously. From those -- I think you're celebrating your 70th anniversary, and that's just -- that's just a terrific record of success.

Every place you've been, everywhere you've gone, you're now, as I understand, many of you, on the fifth -- you've done the fifth -- five deployments abroad. You're on -- some of you are going to be doing your sixth deployment. Every one of you has served with tremendous courage, tremendous bravery, and we really respect and are proud of everything you've done. Thank you for your service. The first thing I want to say here in this part of the world is to thank you for your service.

I'm a -- I'm a believer in what public service is all about. I think this country, our democracy, was based on men and women who are willing to give something back to this country and to serve, serve in uniform and protect the United States of America. And that's what you do. And in doing that, you serve the most important purpose of all, which is to hopefully give our children a better life in this country, a more secure life.

I'm the son of Italian immigrants, and I used to ask my parents, why would you come all that distance to this country -- no language, no money, no capabilities -- come all that distance to the United States? And my father used to make very clear that the reason is because my mother and I believed that they could give their children a better life in America. And that's the American dream. That's what we all hope for. It's what our -- we want for our children and hopefully what our children will want for their children.

But what you do is basically fulfill that American dream by your willingness to go -- to go in, to sacrifice, to put your lives on the line, if necessary to die on behalf of your country. I think, you know, some 400 of you, some 400 of the 101st have given their lives in the last 10 years in battle. And we are eternally grateful for that.

I -- toughest job I have as secretary of defense is having to write notes to the families of those whose loved ones have died. And in each one, I express my deepest sympathies. But I also say this: that if there is any comfort that we can take, it's that your loved one, who loved you and loved life and loved his or her country -- that what he or she did was to give that life for everything they loved. And that makes them, in my book, a hero and a patriot. And they will never be forgotten.

And I guess I say that for all of you. You're heroes. You're patriots. And you will never be forgotten for the service that you are providing this country.

Because of men and women in uniform, I think we're at a historic turning point after 10 years of war. This country has been at war for 10 long years, and many of you have been on those front lines. But as a result of it, you know, we are seeing some very important successes.

We ended the mission in Iraq. And that fundamental mission was to establish an Iraq that could govern and secure itself. And although it's not going to be easy for them, the fact is that they now -- because of you, they have the opportunity to establish a democracy in a very important region of the world.

Because of you, 2011 was a key turning point in Afghanistan. We have -- we've seen reduced levels of violence. We have seriously weakened the Taliban. The Afghan military have engaged in operations. They're securing areas. We have -- transitioning more areas in Afghanistan to their control and security. We just did a second tranche of areas. That represents 50 percent of the Afghan population is now under Afghan control and Afghan security. And we're going to continue that process.

NATO, the United States, ISAF forces are all together in the campaign to continue this transition and to ultimately be able to draw down by 2014, recognizing that we will always maintain an enduring presence in Afghanistan. We're going to continue to need counterterrorism work to go after those that would try to re-establish the Taliban there. We're going to have to continue to provide advice and guidance and assistance, and we'll have that role. We're going to continue to have to enable others to be able to provide for their security. But the fact is that, by the end of 2014, we will have transitioned Afghanistan to Afghan security and control.

And I can tell you, even though there are bumps and grinds -- we went over it the last few days and saw some of the brutal attacks that were done by the Taliban. Let me make clear that we will not be intimidated by what the enemy does. We will not alter, we will not change the course we are on to achieve the mission in Afghanistan.

In addition, we have seen NATO come together, not only in Afghanistan; they came together in Libya in a coordinated operation. And it was, believe me, a tough coordinating challenge. I've been to Naples, been to the headquarters there, the operations room. We were spotting targets. We were distributing targets to all of the nations that were involved. You know, planes were coming in from country after country, going after those targets.

It was not an easy mission to coordinate. And yet as a result of that, we brought Gadhafi down and gave Libya back to the Libyan people.

And with regards to terrorism -- which is the fundamental reason we went to war, because of 9/11 -- because of our targeting operations, we have decimated al-Qaida's leadership. We've taken down bin Laden, we've taken down their key leaders; we've made it difficult for them to be able to plan the kind of attacks that we've seen in 9/11. But terrorists are still out there. We still have to keep the pressure on on terrorism. But we have achieved some very significant success in going after them, again because of you and because of the men and women throughout the intelligence agencies, throughout the military agencies, who are willing to engage in going after those targets.

So we are at a turning point. Now, you combine that with the fact that this country is also at a turning point, by the fact that we're running these huge deficits and this huge debt. USA Today had a headline that said the national debt is comparable to our GDP. That's $15 trillion, by the way. And that impacts. You know, that impacts on our national security. Why? Because it impacts on the resources that I need in order to be able to have a strong defense in this country.

So we are facing budget constrictions as a result of that. I was handed a number by the Congress, the Budget Control Act, that said I had to reduce defense spending by $487 billion over 10 years. Not easy to do. Almost a half-a-trillion dollars. And I've been through this in terms of budget negotiations and budget issues throughout most of my congressional career.

And so I said the way we are going to do this is, we are going to focus on the strategy we need to maintain the strongest military in the world.

And so working with the service chiefs, working with the combatant commanders, working with the undersecretaries, we pulled everybody together, and I said: What kind of force do we need, not just today but in 2020? What kind of force do we need for the future? And we were willing to work together to develop that kind of strategy and then make the budget decisions that had to be made.

I said there were four guidelines.

Number one, I want the strongest military in the world. We are the strongest military in the world, and we are damn well going to remain the strongest military in the world.

Secondly, I don't want to hollow out the force. Now when you face those kinds of cuts, the natural instinct is, why not just cut across the board? If we cut across the board, the problem is, we'll have -- we will cut into training, we'll cut into equipping, we'll cut into every strength we have, and we will weaken every element of the -- of the Defense Department. That's what's happened in past drawdowns. We're not going to make that mistake.

So that meant put everything on the table, look at the entire defense budget, look at every area, and try to relate those decisions to our strategy.

And lastly, I said, we do not want to break faith with the men and women who have served this country, the troops and their families. Deployment after deployment after deployment, we pledged to you that you would get benefits, certain benefits, and we're going to stick to that.

So where did that bring us in terms of the strategy? Let me just summarize the key elements. Number one, we're going to be a smaller and leaner force. We're going to do that as a result of the drawdowns we're already involved in.

We are going to be smaller, we're going to be leaner, but we have to be agile, we have to be flexible, we have to be deployable and we have to be technologically advanced. What you do here is exactly what we need. You need to be agile, you need to be able to move quickly, you need to rappel, when have to rappel, you need to go in quickly. And this is what it's all about. That's the kind of force we're going to need for the future.

Secondly, we said we're going to have to focus on where the big problem areas are, focus on the Pacific region, the Asia-Pacific region. You know what the challenges are there, with Korea, Taiwan, China. Focus on the Middle East. You know what those challenges are about, because that's -- those are potential problems and conflicts for the future.

So we need force structure. We need to have the kind of technology and equipment that can maintain force presence in those areas.

Thirdly, for the rest of the world, we have to maintain a presence as well. In Europe, in Africa, in Latin America. And there, I have to tell you, General Odierno and others have developed some great ideas, developing rotational presence, where we go in and we exercise and we train and we work with other counties, we develop partnerships with them. We developed alliances. Special Forces do that. The Marines do that. The Army's going to do that. So that we have a presence elsewhere in the world.

That's a key and that's important. And it gives us the kind of mission to perform that will make clear to the rest of the world that the United States is a leader in the world and that we can be a strong partner in trying to make sure that those countries move in the right direction.

Next, it's extremely important that we are able to defeat any adversary anytime, anyplace. We can't just be based on facing one adversary. There are a lot of adversaries we may have to confront. So it's going to be extremely important that we have the capability and the technology to be able to confront more than one adversary at a time. If we have to fight in Korea, we got to be able to deal with problems in the Straits of Hormuz. And so having a strong Army, having a strong Navy, having a strong Air Force is going to be essential to that effort.

And lastly, this isn't just about cutting. It's also about investing. We're going to have to invest in cyber, which is a whole other challenge that we've got to confront. We have to invest in space. We've got to invest in unmanned systems. We've got to invest in special forces operations. We've got to invest in that kind of agility that I talked about. We've got to be able to mobilize quickly, which means a strong Reserve and a strong National Guard. And we've got to protect an industrial base in this country so that if we have to mobilize, I can -- I -- we can get the ships; we can get the tanks; we can get the helicopters; we can get what we need in order to be able to mobilize.

So those are -- those are all big challenges. But they're tied to a strategy for the future, a strategy that everyone in the Pentagon stands behind. We've made that clear to Congress. We've made that clear to the nation. And I make it clear to you. We need to have an effective force for the future.

Why? Because unlike the past, we still face a hell of a lot of challenges in the world. We still face terrorism. We are still at war in Afghanistan.

We have to confront the challenge of Iran, North Korea, whose goals oftentimes are to destabilize the world that we're in and to develop nuclear capability. We have weapons of mass destruction that are still, out there that we've got to confront. We've got to deal with the turmoil in the Middle East. We've got to deal with rising powers in Asia.

We've got to deal with cyberwar. This is a whole new area. We're getting attacked now by cyberattacks every day. And cyber is developing the capabilities to basically cripple this country. The next -- the next Pearl Harbor could very well be a cyberattack that takes down our power grid system, that takes down our government systems, that takes down our financial systems.

So this is the world we live in. Those are the threats that are going to face those kids that we worry about. And that's why this force needs to come together and be able to fight the battles of the future. And frankly, that's what the 101st is all about. That's what you're about. The army is going to have to play a very important role in this agile force for the future. And you guys are there. You're already there. And I want you to know that you'll have my support, you'll have my backing, because you are there on the front lines.

This is ultimately about you. All the weapons I have, all the technology we have, I can't do any of that without the men and women in uniform that are willing to step up to the plate and do what you have to do. And that's why, frankly, you know, even though we had to look at compensation as well, I said we have to protect basic benefits for the troops and their families, and we will.

At the same time, this is an area that's grown by 90 percent in the defense budget. So I've got to try to control those costs for the out-years. So we're going to -- we will not cut your pay; we will provide full pay increases for the next two years. We'll begin to limit some of the pay increases beyond that in order to try to gain some control over those costs.

On health care, on TRICARE, we're probably going to increase -- we've recommended increasing some fees for retirees. We haven't done that since 1990. So I'm going to have to do something there because health care costs are about $50 billion of my -- of my budget.

And lastly, on retirement, we've made clear: Let's look at it, see what kind of reforms need to be made. But we are going to grandfather everybody who's on active duty so they receive the benefits that were promised to them, and I commit to you that you will get the retirement pay that you were promised. We're not going to impact on that. But, at the same time, we got to look at reforms for the future.

So those are the challenges that we face, and I -- I'm eternally grateful for the support I've gotten within the Pentagon to design the strategy that I just talked to you.

We're in a -- we're in a challenging historic time, but the thing that gives me great confidence is you. The men and women in uniform that are willing to stand up, to sacrifice and, yes, to die if necessary in order to protect this country.

Thank you for your sacrifice. Thank you for all you do. And may God bless you, and God bless this country.

Thanks very much. (Applause.)

All right, I'm happy to answer some questions -- (pause) -- as long as they're easy.

Yeah.

Q: Sir, as we transition to full GIRoA in Afghanistan, what are the concerns or the pressures that senior leadership may have that may cause them to overestimate GIRoA capability if this is the case, could you speak to this?

SEC. PANETTA: GIRoA -- you're talking about what the --

Q: The Afghan -- ANA -- (off mic).

SEC. PANETTA: OK. Yeah. Good question with regards to Afghan army and police capability. This has always been the challenge. It was the challenge in Iraq; it's the challenge in Afghanistan. If we're going to make the transition, if this country's going to be able to govern and secure itself, it damn well has to have a good army and a good police force.

We have been building up that element there. We've been training them. We've been giving them literacy training as well, which is extremely important, their ability to do the job. And we're now at about 340,000; we're going to go to 352,000. And what happened in 2011 was very important, because for the first time -- you know, there was a lot of concern about whether or not these units could go into battle, whether or not they could do the operations they had to do. In 2011, more and more of them were becoming combat ready. More and more of them were able to engage in operations. More and more of them were actually securing areas that came under their control. And it began to give us a level of confidence that in fact you could make the transition of these key areas. You know, obviously, our forces demand a hell of a lot of credit, particularly in the south, the southwest, in the east, where there are some very tough areas.

And there are still some tough areas. But they were able to go in, to secure these areas, to weaken the Taliban, to take 'em out with raids -- night -- a lot of night raids that were conducted and are still being conducted -- going after the leadership of the Taliban. So they created an atmosphere of greater security, and obviously the Afghan security forces were able to come in and do their job.

And we continue to see improvements in that. I've talked to General Allen. General Allen feels very confident that, you know, overall, they are really becoming much more capable at being able to provide that security cover. The concern we've had, you know, over the last few days, as a result of some terrible incidents -- we've had situations where we've had the so-called green-on-blue kind of operation -- and it's been -- it's been of concern. We've had some isolated incidents where our troops have been shot at by some of them, but they are isolated incidents.

General Allen is doing everything possible to make sure that we review these guys. We look at their capabilities. We look at who they are. They go through a very careful screening process; they're continuing to do that. But, every once in a while, obviously, the Taliban tries to engage in that kind of activity.

And frankly, you know, I think -- I think since the Taliban has not been effective at regaining territory, at conducting combat operations, since they've been weakened in their capability to do that, they're going to use this kind of tactic to try to undermine our position there. And we just have to make very clear that we're not going to be intimidated by that.

You know, the ISAF forces have suffered some of the same casualties. But it means that -- you know, when you go there, you're going to have to, you know, make sure we train them properly, make sure we screen them properly, and make sure that each of you watches the back of your buddies. That's important to do.

But the end result here is going to be that we can make that kind of effective transition. Over 95, 96 percent -- even higher -- of those that out there are doing the job. The Afghan army is doing the job. Even over this last period of a few days, the Afghan army, the Afghan police have performed well in controlling the demonstrations. We haven't had desertions, we haven't had people walk away from their job. They've controlled it. They've provided greater security, and we've seen the level of violence going down.

So I think bottom line here is that they are getting better. This is the right step, to try to prepare them, because in the end, the only way we're going to be able to make this transition is if you have a strong Afghan army and police.

OK. Other questions?

Q: (Off mic.)

SEC. PANETTA: Go ahead.

Q: (Off mic.) My question refers to our brigade combat teams and our aviation brigades that are in Korea and Germany. How do your foresee their mission manning and equipping changing in post-Afghanistan environment?

SEC. PANETTA: In Germany?

Q: Yes, sir.

SEC. PANETTA: We're -- you know, what we're going to do in Europe generally is, we've got four brigades we're going to be -- actually, a few years ago, there was an effort to bring down two of the -- two of the four brigades. Then, obviously, we got involved in 9/11 and the impact of that, and so we maintained those four brigades.

Actually, in Europe, out of the four brigades, two were pretty much involved in both Iraq and Afghanistan. But -- so we're going to be taking down two of those brigades.

At the same time, we're going to form another brigade here that will rotate battalions out of Europe, so that we will be there, we'll be exercising, we'll be training, and we'll be rotating a great deal through Germany and some of the other cuntries that are there.

We are going to maintain, you know, our -- some of our key bases there because they are important to our ability to maintain a presence in the Middle East, to maintain a presence in that part of the world. We've got some very important airbases. We've got some very important bases that relate to exercises and training with our NATO allies. So we're going to maintain those.

So, you know, I would say generally that, you know, in terms of the Army and in terms of what we need in order to do the job, those facilities will remain, but there will be some reductions because of the loss of those two brigades. But at the same time, we're -- and I pledge this to NATO -- we are going to maintain what we need in order to strengthen our partnership with NATO forces. So we'll still have a pretty significant presence in Europe. As a matter of fact, we're probably talking about somewhere over 40,000 troops still remaining in Europe.