Press Briefing by Acting Secretary of the Air Force Eric Fanning and Air Force Chief of Staff General Mark A. Welsh III on the State of the Air Force in the Pentagon Briefing Room

BRIG. GEN. LES KODLICK: Good afternoon, everybody. Actually, good morning. I'm Brigadier General Les Kodlick, director of public affairs for the Air Force. Welcome to the state of the Air Force briefing.

It's my privilege to introduce Acting Secretary of the Air Force Eric Fanning and General Mark Welsh, the chief of staff of the Air Force.

Our ROE for this morning is what we're accustomed to. They are -- as you're called upon, please identify yourself and your affiliation; one question and a follow-up. We've got about 45 minutes, so we want to be able to give everybody in the room an opportunity.

Oh, by the way, happy holidays to all of you.

Mr. Secretary?

ACTING SECRETARY ERIC FANNING: Thank you, Les.

Happy Friday the 13th, everyone. There's much to celebrate in the -- the Air Force today.

First, of course, acknowledging the confirmation earlier this morning of Debbie James to be our next secretary of the Air Force.

I've known her since I first came to Washington out of school. Worked with her on the House Armed Services Committee, here at the Pentagon in the Clinton administration, and then at Business Executives for National Security.

Very excited to go back to my day job as undersecretary full time.

I've seen a number of secretaries and chiefs in my 20-plus years of doing this. I think she and General Welsh will be the strongest team I've ever seen and great advocates for the Air Force and for airpower. So I'm very excited to see her in the building.

She'll be starting formally on Tuesday, assuming her commission paperwork is signed.

I also want to acknowledge today the 377th birthday of the National Guard Bureau, a critical part of the -- of the Total Force, and an important day for them.

And today is also important for the delivery of the 100th Joint Strike Fighter down in Fort Worth. I think some of your colleagues are down there for that event rather than here -- but an important milestone for us.

During my time as acting secretary the last six months, I've traveled to over 40 bases and met with thousands and thousands of airmen, some one-on-one, some in larger settings.

And if -- if you have any doubt or any question as to why we're the best Air Force the world has ever known, it's clearly our Airmen in and out of uniform. It's just a really impressive tour to meet these people that we recruit and retain in the Air Force, both in and out of uniform.

I have many people to thank in and outside the Air Force for making these six months easier than they probably should have been, and no one more so than the Chief of Staff of the Air Force, General Welsh. He's been an incredible partner during this time. And I want to thank him for -- for all of his support during that acting tenure.

I'm gonna focus most of my opening remarks on the budget situation. Try and talk briefly so that we can get to the Q&A.

I believe that the American people have a right, as we come out of two long wars, to feel that they can spend less, invest less in national security forces. And the national debt burden is a long-term national security issue.

We are committed to being a part of that solution, and we recognize that defense budgets are coming down. After conflicts historically -- World War II, Korea, Vietnam, the Cold War -- we've reduced defense spending. But we've usually not started 'til the conflict is over, and we're still at war. And we've always been allowed, or had some type of ramp to ease into those cuts.

Sequestration is not allowing for either of those things. They are immediate cuts, and the law does not allow for flexibility. Congress did eventually allow us some flexibility last year.

So it's not just the dollar cuts that we're taking in sequestration that is difficult on top of previous cuts. It's the mechanics of sequestration, the immediacy of those cuts. It's forcing us to make choices that we wouldn't make otherwise. And it's forcing us to draw down in a more destructive way than -- than I believe is necessary.

It's also put disproportionate pressure on investments and readiness, because resizing the force takes time and, in some ways, isn't even possible. Congress is resisting another round of BRAC so we carry an increasingly oversized infrastructure on our books. And it costs money and takes time to reduce your personnel force, so that's an investment up front.

The only accounts then that can be quickly assessed are operations and maintenance, and then investment. This has resulted in a profound impact on our readiness. The Air Force was already in a 20-year readiness decline, something we were just starting to address when sequestration hit.

And the Air Force is sized and structured in a way that requires us to be ready. Tiered readiness models simply don't work for the Air Force. When the flag goes up, the Air Force is expected to get to the crisis rapidly. Speed is a key advantage of airpower. We stabilize the conflict until the Army, Navy and Marines can get there. And by being at a high state of readiness, we provide trade space for our national security team.

The number of Air Force squadrons equals the COCOM requirement. We need to be all in right away. There isn't time built into plans for us to bring some of our forces up to full readiness; they need to be ready at all times.

If it takes months to generate combat airpower, the president loses deterrents, diplomatic influence and contingency options on which the nation has come to depend.

We're encouraged by the budget compromise that is being debated on the Hill right now, and hope for its passage. While it still takes us down to numbers lower than we would like and doesn't solve all of our problems, it at least provides some relief over the next two years, additional funds that will help us with our readiness shortfalls.

And it allows for some stability and planning, something we've been without far too long. But even with this relief, we will need to resize the Air Force to one that is smaller than it is today in order to protect investments we need for the future and to shape an Air Force that we can keep ready. The sooner we can get on that path, the sooner we can get to a new normal for our Airmen, uniformed and civilian, and allow them to return their attention more fully to the mission that attracted them to service in the first place.

But this will entail a budget with cuts none of us like. And each of those cuts will have a constituency inside and outside the Air Force, including on the Hill. It's important to remember that we can't view these cuts individually and ad hoc and in isolation. We need to remember, even with the relief this budget compromise offers in the next two years, we are building a budget that includes steep cuts. If something is restored to the budget we present to the Hill, something else will need to go.

So while we wait to see what level of funding the Air Force will ultimately be given for this year and next, we need to be prepared for real change.

Thank you.

GEN. KODLICK: General Welsh?

GEN. MARK WELSH: Thanks, Boss.

And good morning, everybody. Thanks for taking your time to be here.

I'd also like to add my congratulations to Secretary James, and let her know that her Air Force is excited about getting her on board. We're looking forward to following her leadership, and we're excited about what she'll bring to our organization and to our people. And I'm confident she's going to love them just like Secretary Fanning does and I have for years.

Speaking of Secretary Fanning, the greatest thing about Eric Fanning as the acting Secretary of the Air Force for the last six months is that he never acted like the acting Secretary of the Air Force. He acted like the Secretary of the Air Force from the day he was put in this position.

He's been absolutely fantastic, and I don't need to butter him up. The guy's really, really good at what he does. He has taken on this job full force. He has made tough decisions at great personal pain at times, because these are not easy decisions he's faced with. He's taken the time to get to know our Air Force, to get to know our Airmen. He's worked tirelessly on their behalf. He has been fantastic.

And the only good thing about losing him in this role is that he's still our under secretary.

So the Air Force wins all around today as far as I'm concerned.

I'd like to add my congratulations to the National Guard. I hope I look that good at 377, because I plan to still be kicking and harassing you in some way, Sir.

The 100th aircraft roll-out at Fort Worth is a big deal for the Air Force, the F-35 today.

General Robin Rand is down there, the commander of Air Education and Training Command, and he's there specifically because that airplane is our first training-coded airplane. It actually is the first airplane that will go to Luke Air Force Base as we stand up our permanent formal training unit there. That's why it's a really big day in context of the F-35 program for us.

I just came off of two days with our vice chief of staff, with all the wing commanders in our Air Force. We brought them all to D.C. We had a three-day conference planned, one of them, unfortunately, was snowed out. But we did get the last two days in. The first day focused on people-specific issues -- sexual assault, harassment, inclusion, diversity, respect, those kinds of things. And then yesterday, we spent the day talking about all the other things that our wing commanders need to worry about and explaining to them the things that we are working on here at the Air Staff.

We talked about what a great time it is to lead in our Air Force, because there are a lots of issues that our people turn to us for help on. We talked about how great those people are doing their job. We talked about the issues that sequestration and the resource changes in the future have for our Air Force. We talked about the best ways to balance capability, capacity and modernization and readiness over time, because that's what the problem is going to be for us.

We tried to explain clearly to them that the reality of sequestration is that the bill will be paid primarily from force structure, modernization and readiness. That's where the money is. And that's what will be affected as we look into how we adjust for the next 10 years.

We talked about the proposed budget deal and what it will mitigate; and what it will mitigate for us near term is readiness. It's at the top of our payback list. And so if we get any more funding here in the first couple of years of sequestration, clearly it doesn't change the long-term picture of sequestration, but it allows us to put money back into near-term readiness. Which is a really good thing because what sequestration does essentially for the Air Force is it gives us a dilemma: Do we keep near-term readiness or do we fund long-term modernization and capability in the future? That's the balance we're trying to walk.

We also talked about the great Airmen we're privileged to lead. We talked about them a lot. And we talked about you -- not really.

(Laughter.)

But I'll talk about you for a minute. Thank you for continuing to tell the story, not just of the Air Force but of the Department of Defense. Most days, I think it's a great story. Some days it's not so good. It needs to be told. Thanks for doing it so well.

We'd love to answer your questions.

Yes, sir?

Q: Hi. Larry Abramson with NPR.

I wanted to ask you to talk about A-10 a little bit. Is it too soon to know whether -- what the compromise would have any impact on your decision about this plane? And please talk about whether or not your decision on -- which I know is still taking shape on this plane will be dictated largely by budgetary concerns or by the feeling that close-air support is no longer a key mission in likely future conflicts.

GEN. WELSH: Let me start with the last part. Absolutely has nothing to do with this. Close air support will always be a key critical mission for the United States Air Force. I grew up as a close-air support pilot. I believe in it completely. I've spent years working with the United States Army. I have a son who is a United States Marine Corps infantry officer. Close air support is like not close to my heart, it's in my heart.

The issue with the A-10 or any other aircraft that we're examining as a part of our budget proposals this year has nothing to do with that specific airplane. It has to do with the balance I referred to before. So our job is to provide the capability to do five mission areas for the combatant commanders, for the Joint Task Force commanders. Close air support is part of one of those mission areas. It's part of the global strike mission area, as we refer to it. And it's the ability to strike throughout the depth of the battlefield - close air support, air interdiction, deep strike, everything that we have to do on the battlefield to support the combatant commander.

The issue for us is: How do you provide that in the best balance possible with a reduced force? That's the issue. And to pay our $12 billion a year bill toward sequestration, we have got to find savings in big chunks. That's the problem. And that's what all these discussions are based on. It's not about a specific platform. It's about balancing the mission sets.

We have a lot of airplanes that do closebair support in an uncontested environment. We have a lot of them that do it, and they do it well. Is the A-10 the best at close-air support? Absolutely. I'm an A-10 guy. Are there other airplanes that do it? Absolutely, and they do it pretty darn well. So we had a plan to replace the A-10 with the F-35 for a long time. That plan hasn't changed.

Q: As you know, a lot of A-10 supporters feel that even if the F-35 is best designed to take over that role that it's going to be a while before it's ready to do that. Can you promise them that your decision on the A-10 will come before the F-35 is ready to take over that mission?

GEN. WELSH: Well, what I would tell you is that 75 percent of the close-air support sorties in Afghanistan today are not done by the A-10. They're done by the F-16, the F-15E, the B-1, the B-52 is close air support. We have a lot of airplanes that can perform that mission and perform it well. I've flown close-air support missions in the A-10 and the F-16. We can do it with other aircraft.

Those other aircraft do other things for us. If I'm the ground component commander, my most critical concern on the battlefield as far as a warfighting concern is where is the enemy's operational reserve and when will they be committed and how. I can handle the fight in front of me. Our Army and our Marine Corps are the best on the planet. There's nobody who can stand in front of them and survive. The operational reserve concerns them.

An airman's job, an air component commander's job on a big fight is to eliminate the operational reserve. Get rid of the enemy's second echelon forces so they can't affect the ground fight. Eliminate the enemy's will to continue to fight by taking out his strategic infrastructure and affecting his leadership and its centers of gravity.

That's what air forces do in a big way to save big numbers of the people on the ground.

Those things are done by the other airplanes I just mentioned, which can also do close air support. The A-10 can't do those things. So when we get into the debate about which to keep and how many to keep, those are the kind of things we have to factor into this.

The other thing we have to factor in, having nothing to do with any specific airplane is, how do you save dollars that have a B after them, instead of amounts of dollars that have an M after them? And to do that you have to start talking about fleet divestitures, because you have to get rid of the infrastructure behind the aircraft -- the logistics tail, the supply systems, the facilities that do all the logistical support, depot maintenance, et cetera. That's where you create big savings.

So to find $12 billion a year, we have to look at chunks of money. That's why we're having this discussion.

And it's a long way from over. There's -- you know, I've said this before, there are proponents for a whole lot of systems, and I agree with all of them. But somebody has to balance this. And I believe that's our job.

SEC. FANNING: And the budget compromise gives us some relief in '14, less relief in '15, but still takes us down to those lower numbers. And so, we still have to plan for what kind of force we can afford and keep ready in the long term.

Q: So -- I'm Dan Sagalyn from the "PBS News Hour." So the language of the Defense Authorization Act, assuming it goes through, states that you can't spend any money in 2014 for retiring the A-10s. Is that helpful or not helpful?

GEN. WELSH: I don't think the language has a major impact on the discussion we're having right now, because the discussion we're having is about the FY '15 budget and what will happen over the five years after that.

And so this is a debate that needs to play out. And I think it's a fair discussion. It's a debate that -- what we will have inside the department. We'll have it with the Hill. I'm sure we'll have it with the White House to some extent. And it won't be just about the A-10. It'll be about a number of things that we are going to have to take out of our budget in order to meet the requirements of the law.

So, you know, it's gonna be an entertaining time period.

GEN. KODLICK: Yes, sir?

Q: Excuse me. Chris Carroll with Stars and Stripes.

You, the Air Force, introduced -- announced some force management tools in the last couple days. Does the -- first of all, does the kind of budget deal that's developed affect that in any way? Do you have any, you know, target of -- of how you're looking to affect end-strength with those tools? And what led to the selection of those specific tools?

GEN. WELSH: Well, I don't think the budget agreement will change the fact that we'll put these force management guidelines out.

Our intent by doing this was, again, as the secretary mentioned, our planning window is 10 years, through the end of sequestration. What can our Air Force look like in 2023 after 10 years of sequestered top lines? Adjusted, if this budget deal goes through, for the first couple of years, but eventually going to the same bottom line.

If we -- if we look at that Air Force in 2023, it's gonna have to look different than it looks today. And part of that will be it has to be smaller. We can't afford to operate and maintain readiness in the size Air Force we have today. So we will have to eliminate force structure. We will have to draw down people, which are part of the -- both the tooth and the tail that comes with that force structure.

And as a result, we need to have tools in place that allow us to do that. And if we're going to even consider impacting people that way, our belief is we need to put the guidance out as early as possible so they have a chance to think through the impact on them or the potential impact on them if they're eligible for any of these particular force-shaping measures.

We'd love to get all this done with voluntary force-shaping measures over a period of time. And if we have the leeway based on budget decisions to do that, we'll go that route.

If we don't and we have to take involuntary measures, I would like everyone to have at least six months of time to talk to their family, to think about the impact this could have on them, to look with a reality-based approach to where they are in their career, where they're going in their career, are they really at risk for any of these measures occurring to them, and have that conversation with someone in their immediate chain of command, so they have people talking to them and giving them the facts so they can make a fact-based decision as opposed to an emotional one. That's the reason for putting the guidance out early.

I hope that something changes in the budget environment and three months from now -- we put out a note saying, "Never mind, don't do any of that."

Q: (OFF-MIKE) the specific tools, like the, you know, Chief Master Sergeant Retention Board, for instance. Why those and not some other ones?

GEN. WELSH: Most of these are things that we have authority under the secretary's authority to actually do. A couple of these are tools that we have not used in the Air Force before, but the other services have used them fairly often. And so they're tools that are known to the department, they're understood by the department; we have the authority to execute them. That's the reasoning.

Sir, anything else you'd add?

SEC. FANNING: No, we did use -- institute every voluntary measure that we could, that we had authority to use. And then the others are, again, those tools that are available to us, and to the greatest extent possible, we'll try to use them in a proactive way to shape, but the tools don't always allow that capability.

But as the chief said, the most important part is, you know, the Airmen know what's coming. They see what's happening with the budget. They wanted this information, and we wanted to give them as much time as possible. We don't yet know what our budget's going to be, even for '14, certainly for '15, but we needed to get this information out there in order to have those tools available, give the Airmen as much time as possible to contemplate their futures, but also have the tools available when we know what we need to do in terms of force-sizing.

Q: Julian Barnes, Wall Street Journal.

You -- I wonder if you could a little bit more about the -- if the budget deal goes through and there is the relief in '14 and '15, where you put the -- the dollars back into -- you mentioned readiness. And could you talk about that a little bit?

And then after this deal is over and we go back to the sequester, are those readiness problems that we saw this year reappear? Or does this give you time to adjust the force size so that that readiness problem is not an issue in '16?

SEC. FANNING: First of all, we haven't fully sorted through the budget compromise, if passed, and how that's going to impact the Department of Defense as a whole. What it does for the Air Force -- whatever funds become available to us -- does alleviate the readiness problems -- doesn't fix them, but helps us with them in '14 and '15. And what we saw over the summer, the results of the SCMR, the Strategic Choices and Management Review, is that if you're going to change -- if you're going to resize your services, your Air Force in this case, it takes time to realize those savings. It takes time to get money out of force structure. There is a cost upfront when you do it in a voluntary -- where you use voluntary measures.

We're working with Congress. We're trying to encourage them to allow another round of BRAC. The Air Force went into the last round with an estimated 24 percent excess capacity -- that was 2005 -- and we're smaller now than we were then without having closed many bases in that round. So that's a big chunk that we're carrying.

But these efficiencies that you try to bake into the budget, into your organization take time to realize. It takes time to harvest those savings. So hopefully the relief gets us through those first couple three years when readiness is hit the hardest, but it's gonna take us a while to dig out of the readiness bathtub that we're in.

So we won't face the same problems in '16 that we would without this relief, but we won't have our readiness problem fixed then by any means.

Q: Hi, Dan De Luce, AFP. You talk about resizing these different parts of the budget, but given that the F-35 program was born in a much different era, when money was much more plentiful and even the threats were slightly different, isn't it also then logical to resize the F-35 program? Should -- should that be less of a sacred cow if you have these very difficult choices? Isn't too much money then devoted to that one program?

GEN. WELSH: Operationally, we have to have it. The decision to truncate the F-22 buy has left us in a position where even to provide air superiority, which was not the original intent of the F-35 development, but even to provide air superiority on a theater scale, in a full-spectrum fight against a well-armed foe in 10 years from now, let's say -- and, remember, as a platform-based force, we're investing today for capability we'll need then -- you have to have the F-35 to augment the F-22 to do the air superiority fight at the beginning of a high-end conflict to survive against the fifth generation threats we believe will be in the world at that point in time.

Our legacy fighters against the new generation fighter will not survive. Operationally, it's just a fact. And so I am certainly not willing to go to my Secretary or to the Secretary of Defense or to the Chairman and say, "I would recommend that we keep our old equipment and update it and just accept more losses and count on the incredible ability of our aviators to win the fight anyway." I don't believe we have to settle for that in this country.

And so operationally, we need the F-35. We're at a point in the F-35 program right now where production rates are going up. Production costs are coming down. I am confident the company knows what it costs to build an airplane now and our program office is fully confident of that.

Since 2011, the program has met milestones consistently. Now, the 100th airplane coming off the production line is not a minor thing. We have allies buying into the program and committing to purchasing aircraft, which will keep being more and more of a financial benefit for us over time.

The airplane costs will come down. The operations and sustainment costs will be lower. The development of new capabilities over time for the airplane will be lower because they'll share in them, just like we did for the F-16 for many, many years. That's been a huge financial benefit to this nation.

And so this is not a good time to walk away from the F-35 program in any way, shape or form, or to affect the price curves that we're currently on. That's my opinion. And so I don't believe this is a good time to talk about truncating the buy, capping it at some number. I think that will put the program at risk of financially costing us even more.

And so operationally -- I come back to that all the time in this job -- operationally, we need the fifth generation capability. Right now it's the only option available to us.

Q: -- (inaudible) -- acquisition issues. The 100th airplane today is significant from a milestone standpoint, but also Lockheed is touting its automation down there on the factory line. The debate -- current debate is not to kill the program, but going from 29 airplanes to 42 in the '15 budget. Based on what you know, has Lockheed's production capability improved to accommodate an increase like that? You may or may not have insight, but I wanted to ask you that.

GEN. WELSH: Yeah, I have not been to the factory since they completed the automation changes, so I -- I wouldn't be able to give you direct knowledge of this. I visited there as they were starting to install them. I have not been down since. And so I'd prefer to refer you to the PEO on that one. He'd have a much better opinion down there.

Q: Can I ask you another airplane question -- aircraft question?

GEN. WELSH: Yes?

Q: I saw the movie "Lone Survivor" the other night, and among other things it -- it emphasized the importance of helicopters, of search-and -rescue choppers. You had 75 -- 74 congressional members yesterday write to Hagel asking them to fund the combat search-and-rescue chopper. The Air Force says contingent on funding it will do that. But is this one of those programs, though, that it's nice to have, but you might have to kill it because -- to get this big chunk of dollars?

GEN. WELSH: It's a program that we must have at some point. But we're talking about lots of things that we must have. The Air Force has to recapitalize in certain mission areas. The question for us in what order to we recapitalize as the budgets come down. If there's not enough money to do it all, what priority order to we put these things in?

The top three for us are clearly the F-35, the KC-46, and the long-range strike bomber. And below that we will use our investment dollars the best we can. Combat rescue helicopter is something we want. We'll see where the budgets end up.

Q: So it's not a given you're gonna award a contract in the second quarter of this year?

GEN. WELSH: I don't think any modernization program we have right now is a given 'til we know what the budget top line is gonna be.

SEC. FANNING: I just want to point out real quick, it's not an option of awarding it this year or killing it because of the pressure we're facing in the near years with the way sequestration lays in. It's an issue of prioritizing and re-phasing. When do we get around to recapitalizing the platforms we need to? It's a a critical platform. It's a critical mission that we provide to the joint fight and it's a sacred trust. And so we take it very seriously.

But in the next few years, investment dollars, for reasons I laid out earlier, are gonna be precious and we're gonna have to prioritize them.

GEN. WELSH: The mission is part of the fabric of our Air Force. The mission is not going anywhere.

Q: A quick follow-up on that very point. There are those who say that the Marine Corps or special operations forces should -- would be better positioned to do the search-and-rescue mission using the V-22 or some other existing platform. Why must this be an Air Force mission? Why shouldn't this be a mission for one of the ground forces?

GEN. WELSH: John, have you had a chance to visit a combat search-and-rescue unit yet? You probably have at some point in time.

Q: Well, I was just talking to a combat search-and-rescue crew member who is -- I asked the same question to.

GEN. WELSH: Yeah. When you're in one of those squadrons, you kind of just get the feel of why this is so important to us. If we're gonna send Airmen, and we send more people in airplanes into enemy airspace than anybody does in a major conflict. I mean, the fact is that if you look at aviation, we've got about 690,000 people who deal with the United States Air Force in some way, shape or form. The other services combined have around 100,000. So in a big fight, the majority of people going across the line in airplanes are gonna be people who are Airmen, United States Air Force Airmen.

If you're going to send people that way into harm's way, there is just a certain sacred trust involved in saying we are going to come get you if there's a problem. And we have a group of people in our combat search and rescue force who will go anywhere and do whatever is required to bring someone home. And I don't know how you logically explain the impact that has on aircrew members.

But just as one who has gone across the line, knowing that somebody was coming to get me, even if it was just to bring my body home, and they were willing to risk their lives to do that, gave me a confidence that I'm not sure I would have had otherwise. The mission is part of the fabric of the Air Force. I don't know an Airman worth the title who would say we shouldn't be doing combat search and rescue. We owe it to them.

Q: Sir, following up on that, I want to ask you, so much of the debate about the A-10 and platforms has been focusing on, you know, close air support. But specifically on combat search and rescue, as you well know, the A-10 has an observational role and is a key component of that mission. And if we're looking at a scenario where we're not gonna get a combat search and rescue helicopter for a few years down the road, what does that say about the mission itself? How are you going to have to reconfigure the hard concept of operations for -- (inaudible) -- part of combat search and rescue sortie, like the people out at Nellis train all the time? If you take those little pieces out, how's the Air Force going to still make that mission whole in the coming few years?

GEN. WELSH: The same way we've made every mission whole for the -- since 1947. We'll adjust. We'll develop new tactics. We'll develop ways of using other platforms to do it. If the A-10 is not available, we'll have to. The mission will continue to get done, guys. It's like close air support. We'll continue to do close air support if the A-10's not here. The mission's not going anywhere. It's part of what we do, and we're really good at adapting to get it done well.

When I flew the A-10, it wasn't nearly the close-air support platform it is today. And a great partnership with dedicated Airmen figuring out new ways of doing business, strong support from Congress and from the Department of Defense, we built a platform that's fantastic over time. That platform's getting old. We've got to figure out how we're gonna do this in the future. It's like the B-52. We can't rely on the B-52 for the next 100 years.

Yes, sir?

Q: Chris Castelli with Inside Defense. Question on the F-35. How concerned or comfortable are you with efforts to address software risks in that program, you know, the biggest challenge? And do you think we're going to see any further delays as a result of software problems?

GEN. WELSH: Chris, I don't know what we're gonna see. I'm confident we're going to get the software versions in place we need to declare IOC in 2016. I'm pretty confident we're going to go there. The program executive officer agrees with me on that.

There is concern about the budget impacts on the R&D for the software development of the future packages. We need to continue to develop software after 2016. That's not the final version we need in the airplane to be fully operational and capable in the airplane. And so that's the one we're watching most closely. That's where the program office is spending the majority of its time focused.

I'll tell you this, the software development to this point has actually been pretty good. This is a complicated airplane with lots of software integration problems that we haven't had in other aircraft. It doesn't have the same problem that the F-22 did, but it's often compared to the F-22 when it comes to the software integration. The difference here is that much of the software in the F-35 is integrated, actually, at the sensors and then just brought together for display. It's not where we had a central processor in the F-22 where all the data came together in one place and we did all the data integration in a central processor. It's a different design, which will help a little bit in the data integration part of this.

But software -- the company, I think, will tell you that they're worried about -- they're always worried about software. They're worried about having enough good software writers, enough software engineers. This program will -- that will be one of the demands that we have to focus on for the rest of the program. It's not gonna be easy.

Q: (inaudible) -- you more a budget, QDR question. When the QDR is done, when the budget is out early next year, do you think we're gonna see any examples where the services have collectively got together and thought through ways to reduce redundancy in terms of military capabilities?

GEN. WELSH: Certainly hope so. We've been trying to do that. I'll give you an example. ISR is a good example. Because of the demands of the conflict in Afghanistan, we've gotten into every service performing organic ISR support -- meaning, Air Force provides ISR support for Army maneuver units.

The Army -- if you talk to Ray Odierno, he'll tell you that they are developing their own ISR capability to do organic support for maneuver brigades, for example. That's what their Warrior Alpha program is all about. That's what they're looking at the medium altitude multi-sensor platforms to be able to provide direct support to their maneuver units on the ground, which frees up the Air Force, then, to focus on providing the ISR platforms and capabilities at the operational strategic level to inform the theater commanders, the joint task force commanders.

So we do the higher-level ISR collection against a different set of priorities than the direct support maritime and -- and ground component ISR platforms that are supporting those forces. That allows us to get out of things like 65 orbits of medium-altitude RPAs that provide direct support to ground units.

Q: What about a situation where you have two services essentially doing the same thing, and one of those will stop doing it?

GEN. WELSH: That's what I'm talking about.

Q: Yeah.

GEN. WELSH: That's what we're doing right now. We're doing the same thing with Predators and Reapers the Army is doing with Warrior Alpha. We need some capability to do that. Air Force Special Operations Command will maintain that capability. We need the ability to support the units when required, because we bring a capacity to the fight the other services don't bring in the air domain.

I mentioned the numbers a minute ago. We bring capacity to a big fight. That's what the Air Force provides you. The other services' aviation arms are incredibly good at what they do, but what they do is organic support, whether it's close-air support, organic ISR support, whatever it might be. Our job is to provide that on a theater scale. So we'll need to augment that a little bit, but certainly not to the level we are right now in Afghanistan.

If we want to build an ISR enterprise to provide the operational strategic support a theater commander needs in the Pacific or in a different kind of fight, in the Central Command AOR, then those commanders will tell you what we have right now are not the sensors they need. They need a different type of ISR package.

So for us the problem is how we take some of what we're doing now and then reshape that force into something that's more beneficial to combatant commanders writ large. And that's gonna require downsizing what we have, reinvesting into new things.

Let me go in the back here, Jeff. Let me come back down.

Yes, sir?

Q: Brian Everstine, Air Force Times. To follow up on that ISR question, what would that mean for the future of manned ISR, specifically, the MC-12 program and a possible move of that program to the Army?

GEN. WELSH: Well, I think that's all part of the discussion, Brian. And I think that's gonna play out here in the discussions for the next three to four months. I think we should look at every option possible. Who needs the platform? And how -- how can we -- how can the department best use it?

The Air Force doesn't feel like we have ownership of these things and nobody else can use it. If it's a good platform, we ought to share it. If it's more useful for a mission the other services are prioritized on, we ought to be having that discussion, and we are in a number of areas.

Q: And following up, going back to the budget agreement and possible relief coming, what tangible impact could that have for Airmen, and specifically, I'm asking about flying hours, upcoming Red Flags, and weapons school classes.

GEN. WELSH: When I talk about readiness, there's two pieces of it. One is individual readiness, meaning pilots are flying enough, our security forces are trained well enough. It's about you being individually, and as a unit ready to perform the job you could be asked to do.

But readiness for the Air Force kind of has another implication to me, and that's what you're talking about. It's what makes a difference between our Air Force and other air forces. It's not just size, it's also capability. A lot of air forces have airplanes. They all have weapons. They all train to use them. But the difference in the United States Air Force is the way we train, the level of sophistication in our training, the difficulty of our training, which is what makes our force so good when real contingencies and conflict arise.

Red Flag is integral to that. It's what creates Ph.D. levels warfighters for the Air Force. The weapons school creates our actual Ph.D.s, who then trains the rest of the force.

Last year, we had to cancel Red Flag exercises. We canceled weapons school classes. That cannot continue. And this near term mitigation that we can do with this relief, which will help us make sure that doesn't happen.

Jeff.

Q: I'll do my best to use the term "RPA" instead of "drone."

When -- when you talk to people in the RPA community, there's a sense that once Afghanistan -- after the 2014 drawdown, there's not gonna be the need for RPA pilots and sensor operators, so fewer Airmen are going to be taken from manned platforms and moved to RPAs. And they may even curtail the 18X career field. I'm wondering if you could talk about whether there will be kind of a reduction in the RPA community following 2014.

GEN. WELSH: I don't think so. The RPA career field is gonna change because RPAs are gonna change. We're at the right flyer stage of RPAs right now, and over the next 50 years, it's gonna look dramatically different than it does today.

But the United States Air Force is gonna be in the middle of that change. We're not walking away from remotely piloted aircraft. Nor are we at a point where we're gonna go to 100 percent of our air frames being remotely piloted.

And so we will slowly evolve over time into the missions best suited for RPAs. We're in some of them now. We will develop others. We're gonna evolve in the type of systems that we operate. We're gonna evolve in the training of the people who -- who do the operation of those systems.

We're still going have an RPA force that's significant. You know, it's not the majority of our force, but it's not gonna shrink. The number of people flying certain types of systems may change and they'll be flying different types of systems.

But we're not getting out of this business, Jeff, any -- we're just not getting out.

Eventually, this is gonna kind of explode on us nationally. And then it's gonna get really exciting.

SEC. FANNING: And there's no -- there's no evidence from the combatant commanders that the demand for this is gonna decrease, even as we pull out of Afghanistan. Quite the opposite.

Q: (off mic) number of caps may drop from 65 to 45. Does that mean you're gonna need to pull fewer people from manned aircraft into --

GEN. WELSH: No, it means we will reinvest the money we save from that into a reshaping of the ISR enterprise, whatever that ends up meaning. And we're looking at all kinds of options for that.

GEN. KODLICK: We have time for two more questions. Jim?

Q: Sir, both -- and, Mr. Secretary, both of you travel a lot to the bases, and -- and you meet, again, thousands of Airmen. I'm just curious, are they -- are -- the questions that you get from them, are they worried about a hollow force happening? And -- and what are their concerns, specifically, to you when you speak to them?

SEC. FANNING: Yes. They're very smart. They know what's happening to the Air Force, what's happening to the military. And they see better than any of us the impact that readiness is having, because they're not training, they're not flying, they're not able to maintain some things to the level that they'd like to. So they do worry about that. And they worry about what their future is going to be in the Air Force.

What I see from this summer, from everything we've done to Airmen in and out of uniform, is a concern that the budget situation is keeping them from contributing to the mission the way they want to.

Even during the furloughs some civilians certainly complained about the impact that it had on their pocketbook, but far more than that, civilians were telling me, "I can't do what I need to do, what I want to do for the Air Force in 32 hours a week."

So I think they worry about their inability to contribute to the mission the way they want to as individual Airmen, and they do worry about the impact that's having on the Air Force.

GEN. WELSH: If you're a pilot or an aircrew member, and you're sitting inside your squadron building and you're looking out the window at the airplanes that you're not flying at all, I think you probably believe we're pretty hollow right now.

Now, Air Force wide, that's probably not true yet, but in that squadron, it certainly feels that way. And so I think we have to be concerned about that, Jim. That's the readiness issue we face. We've got to figure out how to solve this so that that's not the picture we're dealing with, because that will have an impact over time on our overall ability to fight wars and our overall ability to keep our people. It's a huge concern.

Q: Are you seeing problems with retention --

GEN. WELSH: No.

Q: -- yet?

GEN. WELSH: No, we're not.

GEN. KODLICK: -- (inaudible) -- for the last question, then we'll give the chief and secretary a chance to close.

Q: Hi. -- (inaudible).

General Welsh, you traveled to China earlier this year, and it's been about three years since they tested an RJ-20 stealth aircraft. In the last three years, how much do you know about this capability and their intentions?

GEN. WELSH: Don't really know much about their intentions at all. I think we're getting a picture of the capability over time. We'll see. It's not gonna be that long 'till they field it, and we'll get a much better picture of its capability.

One of the great things about this business is it's kind of filled with realists, almost the ultimate realists. So when it appears, we'll see what it does.

And in the meantime, we'll do everything we can to figure out what we'll need to compete with that type of capability. Because it won't just be China. Once they field it, the Russians are fielding a platform, others will field it. It's the capability -- the technology that we're worried about, not any particular country that has it.

GEN. KODLICK: Gentlemen, closing comments?

GEN. WELSH: Thank you again, for telling the story.

The Air Force is actually in pretty good shape. Our people are still pretty excited about what they do. They're very proud of who they are. They believe what they do matters, both -- they personally believe that and they think in the view of the nation, they believe that what they do still matters.

So they're motivated. They're strong. They're gonna keep doing this job as well as they can.

Our job from here is just to make sure they have the things they need to do - their jobs and they're not distracted by everything they hear.

Right now, that's what I hear more than anything else, and that's what's kind of concerning me.

My number one concern is when I go out and talk to airmen, I don't get questions about how do we get a better weapon, how do we get a better airplane, how do we get a better this. I get questions about the retirement plan, sequestration. You know, it's -- it's all the details of money. I don't want them worried about that. We'll do everything we can to take care of them in that regard. The -- the nation is not going let them down in -- in those ways.

But we'll come to agreements that make sense over time. They just need to keep focused on the job, because they're incredibly good at that.

SEC. FANNING: Yeah, thank you all, and happy holidays.

I echo what the chief says, there have been a lot of variables playing out over the course of the year and there are still a number left to play out that are bigger than the Air Force, bigger than the Department of Defense.

And -- and what I pledge to the Airmen that I see around the Air Force is, we will make the decisions that we can as quickly as we can, as transparently as we can to get the Air Force back to that new normal so that our Airmen in and out of uniform can -- can focus on the mission and get past these distractions that they shouldn't have to deal with that have been forced upon them in the Air Force through all of this budget and political uncertainty.

So we're looking to see some of these variables play out and some of the things that are unfixed to become fixed so we can start planning what the Air Force will look like for the future and give a sense to Airmen what their role is in that Air Force.

So, again, thank you all for you're doing. And have a great holiday.

Thanks.