Remarks on "Goldwater-Nichols at 30: An Agenda for Updating" (Center for Strategic and International Studies)

HAMRE: Good afternoon, everybody. We are delighted to have you here. It was -- it shouldn't be this cold in April. I can down from New York -- it was snowing in Wilmington. I thought, what the Hell? This is crazy.

But we are to warm up this afternoon and we are going to have an excellent opportunity to talk with Secretary Carter. Thank you all for coming. A brief security announcement -- he has a security detail. They're going to watch out for him. I'm going to watch out for all of you. So if we have a problem, I would ask you to follow my instructions. Our exits are right here behind us. This is the door that's closest to the steps that goes down to the street. If there is a problem out in the front, we're going to go to the back, and we're going to go over to the National Geographic Society. We have an arrangement with them. If there's problem in the back, we are going to the front and over to the national cathedral -- or St. Matthew's Cathedral, count heads and say grace. 

So, anyway, we're going to be fine. But I look forward to -- please follow my instructions. 

Ash Carter is a man I've had the privilege of working with for almost 30 years. We first met when he was at the Office of Technology Assessment, a very long time ago. And I do remember very distinctly once when I interviewed -- he interviewed me, I should say, for a job at then PA&E, and decided I really wasn't to what it took to be a success at PA&E. I do not resent that. 

(LAUGHTER) 

I have no -- since that time, we've had the privilege of working closely together for many years. I'm very honored he's here. He's doing just a spectacular job. With your applause, would you please welcome Ash Carter and thank him for coming.

(APPLAUSE)

CARTER: Thanks very much, John, for that warm introduction, but more importantly, for many, many years of friendship, of guidance, and of wonderful service to our country over some many years, not to mention your leadership of this institution. 

And it's a pleasure for me to be here at CSIS this afternoon. Since it was founded over 50 years ago, the Center for Strategic and International Studies has come to be considered one of the preeminent security-focused think tanks here in the nation's capital. You provide important ideas and scholarships on pressing issues, ranging from matters of defense strategy and budget to America's strategic future in the Asia-Pacific to the growing threats that we face in the domain of cyberspace. 

CARTER: To reviewing the Goldwater-Nichols Act, that makes up so much of DOD's institutional organization. And it is because of that last piece of scholarship that I wanted to come here today. 

As many of you know, I recently issued my posture statement for the Defense Department for fiscal year 2017. The first to describe how we are approaching five strategic challenges: Russia, China, North Korea, Iran, and terrorism. 

It is in this context that I want to speak to you today about some key, long-term, strategic management questions that DOD will be detailing and discussing with congressional defense committees in the very next coming weeks. As a learning organization, the U.S. military and the Defense Department has a long history of striving to reform our command structures and improve how our strategies and policies are formulated, integrated and implemented. 

Indeed, while World War II was still being fought and before the Defense Department was even established, military leaders and policy making officials were discussing how the military services could begin unified and exploring ways to develop stronger policy processes and advice. The result was the National Security Act of 194 and its amendments.

Which, among historic changes, established the position of the secretary of defense, the joint chiefs of staff, and the National Security Council. Later reforms, particularly, Eisenhower-era changes, help strengthen the offices of the defense secretary and gave new authorities to the chairman of the joint chiefs. 

But it was the Goldwater-Nichols act, enacted 30 years ago this fall, that is most responsible for today's military and defense institutional organization. With memories of Vietnam and the tragic Desert One raids still fresh, officials in defense and policy makers again, considered reform. 

And after nearly four years of work, not to mention strong opinions by my former boss, then Defense Secretary Caspar Weinberger, the resulting transformation is what we now refer to as Goldwater- Nichols. It solidified the chain of command, from the president, to the secretary of defense, to the combatant commanders. 

It affirmed civilian control of the military by codifying In law that the chairman of the joint chiefs of staff is outside of the chain of command in order for him to be able to provide vital, objective, independent military advice to the defense secretary and the president. And at the same time, it also strengthened the chairman's role, created the position of the vice chairman of joint chiefs, and centralized the role and voice of the combatant commands. 

And it reinforced the concept of jointness, especially with respect to the careers of senior officers, by requiring them to gain professional experience outside of their service, in order to advance further in their careers. All senior officers know these policies today, for they're integral to career advancement and achievement. And they reflect the reality of how our servicemembers train and fight every day, as a joint force. 

Right around this time, albeit unrelated to Goldwater-Nichols itself, important changes were made to reform defense acquisition. These were based on the recommendations of the Packard Institution, led by former Deputy Secretary of Defense, Dave Packard. As it happens, implementing the Packard Commission's recommendations was another one of the first challenges I worked on early in my own career. 

As a whole, all these changes were overwhelmingly beneficial, a credit to the work of not only the members of Congress who passed legislation, but also their staffs. John Henry being one among them, I should say. What they put into law has given us generations of soldiers, sailors, airmen and Marines who have grown accustomed to operating together as a joint force.

Overcoming many inter-service frictions of decades before and it has enabled our nation to draw greater benefit from the advice of many valued chairmen, from General Colin Powell during operation Desert Storm, to General Joe Dunford today. This year, as Goldwater- Nichols turns 30, we can see that the world has changed since then. 

CARTER: Instead of the Cold War and one clear threat, we face a security environment that is dramatically different from the last quarter century. It is time to consider practical updates to this critical organizational framework, while still preserving it's spirit and intent. 

For example, we can see in some areas how the pendulum between service equities and jointness may have swung too far, as in not involving the Surface Chiefs enough in acquisition making and accountability. Or where subsequent world events suggest nudging the pendulum further, as in taking more steps to strengthen the capability of the Chairman and Joint Chiefs to support force management, planning, and execution across the combatant commands, particularly in the face of threats that cut across regional and functional combatant command areas and responsibility as many increasingly do. 

With this in mind, last fall I asked the DOD's Deputy Chief Management Officer Peter Levine and Lieutenant General Tom Waldhauser of the Joint Staff to lead a comprehensive department wide review of these kinds of organizational issues, spanning the office of Secretary of Defense, the Joint Staff, the Combatant Commanders, and the military departments; to identify any potential redundancies, inefficiencies, or areas of possible improvement. I'd like to discuss that review’s preliminary recommendations with you today. Over the coming weeks, we will execute some of these decisions under our own existing authority. 

For others where legislation is needed, we will work with the House and Senate Armed Services Committee and implementation, as they consider this year's National Defense Authorization Act. Of course, both committees have their own important reviews underway as well, making this area ripe for working together, something I'm pleased to report we have been doing effectively and will continue to do on this topic. 

I applaud Chairman McCain, Senator Reed, Chairman Thornberry, each of whom I was able to speak to earlier this morning, and also Congressman Smith. I look forward to continuing to work closely with all them in their committees because when it comes to these fundamental matters of our national security, that is what we have to do, work together. 

Let me begin with trans-regional and trans-functional integration and advice. It's an imperative considering the challenges we face are less likely than ever before to confine themselves to neat regional or functional boundaries. Our campaign to deliver ISIL a lasting defeat is one example. As we and our coalition partners have taken the fight to ISIL both in it's parent tumor in Iraq and Syria, and where it has been metastasizing. Our combatant commanders from Central Command, European Command, Africa Command, Special Operations Command have, have had to coordinate efforts more than ever before. Increasingly, I've also brought Strategic Command and Cyber Command in these operations, as well to leverage their unique capabilities in space and cyber to contribute to the defeat of ISIL. 

Beyond terrorism, we also potentially face future nation-state adversaries with widening geographic reach but also widening exposure, something we may want to take into account in order to de-escalate a crisis and to deter aggression. In other cases, we may have to respond to multiple threats across the globe in overlapping time frames. In an increasingly complex security environment like this and with a decision chain that cuts across the combatants commands only at the level of the Secretary of Defense. 

We're not postured to be as agile as we could be. Accordingly, we need to clarify the role and authority of the Chairman, and in some cases the Joint Chiefs and the Joint Staff in three ways. One, to help synchronize resources globally for daily operations around the world, enhancing our flexibility and my ability to move forces rapidly across the seams between our combatant commands. Number two, provide objective military advice and not just for future planning. Three, to advise the Secretary of Defense on military strategy and operational plans. For example, helping to ensure our plans take into account in a deliberate fashion the possibility of overlapping contingencies. 

CARTER: These changes recognize that in today's complex world we need someone in uniform who can look across the services in combatant commands and make objective recommendations to the Department's civilian leadership about to where to allocate forces throughout the world and where to apportion risk to achieve maximum benefit for our nation. And the person best postured to do that is the Chairman of the Joint Chiefs of Staff. We will pursue these changes in line with Goldwater-Nichols's original intent, which to enable the military to better operate in a seamless way while still preserving both civilian control and the chairman's independence to provide professional military advice outside of the chain of command. 

Some have recommended the opposite course -- to put the Chairman into the chain of command. But both Chairman Dunford and I agreed that would be eroding the Chairman's objectivity as the principal military advisor to the President and the Secretary of Defense. And we appreciate the CSIS reached the same conclusion in its own review of Goldwater-Nichols. 

The secondary area where we need to make up dates is in our combatant commands, adapting them to new functions and continuing to aggressively streamline headquarters. Adapting to new functions will include changes in how we manage ourselves in cyberspace, in accordance with the emphasis I placed on cyber in my posture statement and that the president made in his fiscal year 2017 budget. 

There I made clear that in each of the five challenges facing DOD, we must deal with them across all domains, not the -- not just the traditional air, land, sea, and space, but also cyberspace, where our reliance on technology has given us great strengths and great opportunities, but also some vulnerabilities that adversaries are eager to exploit. 

That's why our budget increases cyber investments to a total of $35 billion over the next five years, and why we should consider changes to cyber's role in DOD's unified command plan. 

Some of you may know DOD is currently in the process of reducing our management headquarters by 25 percent, a needed step. And we're on the road to accomplishing that goal thanks to the partnership of the Congressional defense committees, which, once again, we deeply appreciate. 

We can meet these targets without combining Northern Command and Southern Command or combining European Command and Africa Command, actions that would run contrary to why we made them separate -- because of their distinct areas of emphasis and increasing demands on our forces in them. And indeed, those demands have only further increased in recent years with each command growing busier. So instead of combining these commands to the detriment of our friends, our allies and, in fact, our own command and control capabilities, we intend to be more efficient by integrating functions like logistics and intelligence and plans across the joint staff, the combatant commands and subordinate commands, eliminating redundancies while not losing capability. And much can be done here. 

And additionally, in the coming weeks, the Defense Department will look to simplify and improve command and control where the number of four-star positions have made headquarters either top-heavy or less efficient than they could be. The military is based on rank hierarchy, where juniors are subordinate in rank to their seniors. This is true from the platoon to the corps level. But it gets complicated at some of our combatant and component command headquarters where we have a deep bench of extremely talented senior leaders. 

So where we see potential to be more efficient and effective, billets currently filled by four-star generals and admirals will be filled by three-stars in the future. 

The next area I want to discuss today is acquisition. Thirty years after the Packard Commission's recommendations led to the establishment of an undersecretary of Defense for acquisition, service acquisition executives and the roles of programming executive officers and programs managers, it's clear we still can and must do more to deliver better military capability while making better use of the taxpayers dollars. 

Six years ago, when I was undersecretary of Defense for acquisition, technology and logistics, DOD began what I call better buying power, an initiative to continuously improve our acquisition system. And under the current undersecretary, Frank Kendall, we're now in the third iteration, Better Buying Power 3.0. And while we're seeing compelling indications of positive improvements, including areas like reduced cost growth and reduced cycle time, there is still a constant need for improvement, particularly as technology, industry and our own missions continue to change. 

One way we're improving is by involving the Service Chiefs more in acquisition, decision making and accountability, consistent with legislation Congress passed last year, including giving them a seat on the Defense Acquisition Board. And giving them greater authority at what's known as milestone B, where engineering and manufacturing development begins. That is, where programs are first defined and a commitment to fund them is made. 

As I've discussed with the Service Chiefs, with this greater responsibility comes greater accountability. The Chiefs themselves and their military staffs will need to sharpen the skill set, which in places has atrophied over the years, to be successful in discharging their new acquisition responsibilities.

And I also expect them to leverage the many lessons they have learned over the last 15 years as operators. Many of them in war where speed and agility are critical to help our acquisition professionals deliver even better capabilities to our war-fighters. Another way we will seek to improve is by streamlining the acquisition system itself. 

This will include evaluating and where appropriate, reducing other members of the Defense Acquisition Board. It’s currently composed of about 35 principles and advisors, each of whom is likely to feel empowered as a gate keeper for acquisition. 

Reducing these layers will both free up staff time and focus decision-making energy on overcoming real obstacles to program success, rather than bureaucratic hurdles. We also intend to reduce burdensome acquisition documentation. For one example, in cases where the Defense Acquisition executive serves as the milestone decision authority, the current process dictates that 14 separate documents be coordinated within the department.

Reducing these paper requirements in a meaningful way, and pushing approval authority lower down when a program is on the right track will eliminate redundant reviews and shorten review timelines, ultimately getting capabilities fielded to our troops sooner, which are service chiefs and combatant commanders desire and deserve. 

The last major area where we need to update Goldwater-Nichols is in making changes to joint personnel management, as part of what I call the force of the future. In endeavor, I began last year to ensure that our future all-volunteer force will be just as fine as the one I have the privilege of leading today, even as generations change in job markets change. We have taken several steps already, building on ramps and off ramps so technical talent can more easily flow between DOD and America's great innovative communities. Opening all combat positions to women who meet service standards, to expand our access to 100 percent of America's population for our all-volunteer force. 

And doing more to support military families to improve retention, like extending maternity and paternity leave and giving families the possibility of some geographic flexibility in return for additional commitments. Now one of the hallmarks of Goldwater-Nichols is that it made joint duty required for all officers who wanted to rise to the highest levels of our military. In so doing, it led to great advances in jointness across the military services, such that almost all our people know why and how we operate as a joint team. 

It has also significantly strengthened the ability of our chairmen, our joint chiefs, and are combatant commanders to accomplish their joint responsibilities. As we learned over the years what it takes to operate jointly, it has become clear that we need to change the requirements for joint duty assignments, which are more narrow and rigid than they need to be. 

Accordingly, we are proposing to broaden definition of positions for which an officer can receive joint duty credit, going beyond planning and command and control, to include joint experience and other operational functions: such as intelligence, fires, transportation and maneuver, protection and sustainment, including joint acquisition.

For example, while a staff officer in a combatant command would get joint duty credit, an officer in a combined air operation center courting with servicemembers in all different uniforms to call in airstrikes against ISIL, might not. In another case, take two cyber airmen working in a combatant command. 

CARTER: One does cyber-plans and gets joint credit. The other does cyber-targeting and doesn't. And while the logistics planner at a combatant command doesn't receive joint credit, their operational plans counterpart does. So what we're proposing will fix these discrepancies and fulfill the true purpose of Goldwater- Nichols, which was to ensure meaningful joint experience. 

Additionally, we're also proposing to shorten the amount of time required to accumulate joint duty, from three years to two years, so top personnel have more flexibility to take on command assignments and other opportunities to broaden and deepen their careers. 

Now, going forward it's important to make all these updates under the guiding principle of do no harm. Goldwater- Nichols took four years to write and it's been incredibly successful over three decades, to the credit of the reforms it put in place, which are not driven today by a single failure, like Desert one. On the contrary, I'm deeply proud of how people operated in Iraq and Afghanistan over the 15 years. 

So we come at this from a different direction. The updates we make now must not undo the many positive benefits that Goldwater- Nichols has had for DOD. Instead, they must build on it. 

Let me close today on why we're doing this, we it's important that we deal with everyday and that as we do that we take a moment to address the topic of our own organizational structure. We do this because our service members and the nation they protect deserve the best defense department and military that we can give them because they're giving their best day in and day out, all around the globe. 

It's our job here on both sides of the river here in Washington, both sides of the aisle, to come together as Berry Goldwater and Sam Lundy did 30 years ago. To give our men and woman in uniform what they need to succeed, from the right experience to the right capabilities to the right leadership structure to the right strategic thinking. 

As long as we do, I'm confident that they will continue to excel in defending our great country and making a better future for our children. Thank you. 

(APPLAUSE)

HAMRE: I don't want people to think we didn't pay our bill and that's why the lights went out. I mean- because somebody leaned up (inaudible) against the back and I should say you were very gracious about my - being on the Armed Service Committee but we have John Warner over here. 

CARTER: Yes we do. And he's one of the architects. So, I we should say thank you to John Warner. 

(APPLAUSE)

WARNER: Thank you. 

HAMRE: I forgot one technical announcement. At the end of our presentation, I'm going to ask you to just stay here while we get the Secretary out. He needs to get a clear run out to the car. So, very substantive speech. So much - so much we can draw on. I wrote a couple of questions and we were collecting questions from my colleague. 

We're doing it this way because we don't need speeches, which is what tends to happen when we ask people to address from the floor. So I've got some good questions and I'd ask other people to submit them. Just hold them up and we've got people to come and get them. Let me just start Secretary because you talked about a new cyber command and this is a complicated thing. Probably any future war we fight will probably begin in the cyber-space really. How do you see that we integrate the physical fight that's kind of led and planned and coordinated by regional combat commanders with a Cyber Command? How is that going to work?

CARTER: Well that is the question and that's the reason why we're looking at this struggle. We have a Cyber Command today and I have given Cyber Command in the counter-ISIL fight really it's first war-time assignment and we're seeing how that works out. 

What that means is, to bring the fight to ISIL, in Syria and Iraq. What does mean? It means interrupting their ability to command and control their forces, interrupting their ability to plot, including against us here and anywhere else against our friends and allies around the world. Interrupting their finances, their ability to pay people, their ability to dominate the population on whose territory they have tried to establish this nasty ideology. All that, we can approach in part through cyber. 

Now, you ask the question what does that have to do with the CENTCOM, which is the geographic combatant command? And indeed, what it means is that CYBERCOM is in the service of that geographic commander, but it's more complicated than that, as you well know, John, because it's really not just CYBERCOM, now there's AFRICOM, I mentioned that. There's EUCOM involved, as you remember – we see what happened in Brussels. 

And so we're increasingly finding the problem not just of interregional integration, but of regional functional integration. The lines as clean as we could make them. That's perfectly reasonable. You've got to divide up the pie somehow. But once you've done that, you may need to make sure the slices are able to work together and you haven't artificially created barriers. That's what I'm looking to the chairman for, that's the change I'm really --

Now, the reality is I look to Joe Dunford for that every day anyway. So as a practical matter, I've got to have that. And I depend upon his professional military advice and his being in constant contact with all the COCOMs and integrating across them. But that's the role I want to make sure I clarify and strengthen. And I don't think that was as apparent to people back in the day. But the world has gotten more integrated, and so we've got to get more integrated too. 

HAMRE: Secretary, let me ask you, because you've opened up this question, about the power geometry in the Pentagon. Obviously the -- nobody questions the primacy of the secretary, but then there's the question of how important and how powerful is the chairman, how important, how powerful are the service chiefs, how important, powerful are the combatant commanders. What is your view about the right balance of this power challenge?

 

CARTER: Well, I look to each of them. I don't personally and I don't think institutionally, we look at them to -- they have different principle responsibilities, but I look to the whole crowd to help in every respect. 

Let me give you an example. This afternoon, I'll be going with the whole gang, all the COCOMs, all the service chiefs, service secretaries, the senior civilian -- over to meet with the president. We'll spend the afternoon with him, then we'll have dinner with him. Tomorrow, we'll spend all day together talking about everything from budget and programs through the wars and contingency planning and the whole deal. 

So John, let -- I'll just each of the ones you named. The service chiefs I look at to be multidimensional. And they are. I mean, these are fantastic people. I've had a whole bunch of compliments, by the way -- this is kind of an aside but it's worth saying -- since I became secretary because I've had to name almost all the joint chiefs and the combatant commanders. And people say to me, wow, you have really great guys, and I said you're right. Aren't they amazing? 

I said but I've got something else to tell you, which is if I had given you my second choices, you'd say the same thing to me because the bench is so deep. These are incredibly gifted people. They didn't get there for no reason. And so I look at the chiefs to operate as the Joint Chiefs helping the chairman provide professional military advice on operations. 

I look at them to help manage with their service secretaries their individual services. I look at them to take care of our people because that, more important than anything else, makes our military the greatest. 

The combatant commanders, you know, necessarily, are kind of focused on their day-to-day duties, but they -- increasingly, I need to hear from them about what they need. So they play a role that probably wasn't as apparent early on, in what we buy and how we organize, train and equip. And so I actually ask our people -- they all have responsibilities written in the statute and they have those -- but I ask the senior people to do it all. And most of them, in fact, without exception, they're capable of doing that. 

But it -- but look. You know, this is a huge set of responsibilities. So the idea that you -- I look around the room and there are, you know, 20, 25 people, and I always say, look around the room, gang. It's just us. And when you look at it that way, it doesn't seem like a very large group of people and you're glad to have all the help you can get.

HAMRE: Secretary, you talked about a more complex world. We get a radical Jihadist element that is waging a more conventional fight in Syria and Iraq, a more insurgency set of activities in Northern Africa -- of course that's in a different command, the Africa Command -- is attacking our allies in Paris and Brussels. It suggests by what you said, that you're going to have put a greater emphasis on the Chairman to be the integrator of these challenges. Could you amplify on that? 

CARTER: Yes, sure. I'll give you a few examples. 

For example, ISR, problems around the continents. Somebody has to decide everyday what we look at where. And that changes day to day, and we try to move things from theater to another, that has tremendous consequence. And so the answer, each CO-COM naturally has a tendency to say, "I need it all. I desperately need it all." It's human nature and it's what want. They want to do everything they can to accomplish the mission but we don't have an infinite amount of stuff.

So there needs to be a global integrator of that. That is not made clear. It's made clear in the original - it's made clear that the Chairman is the principal military advisor to me and the president. I respect that and very much want that. But it doesn't say, he is the one who is supposed to be everyday, and periodically as we move forces around, giving me that advice on where things ought to be and how they are to be used. That is self-evidently required in today's world and wasn't part of the initial conception. 

Now, as a practical matter, everybody knows that I look to Joe Dunford to do that. But I think it's worth writing it down because there will be others who will come along later. And it's important to clarify that, that is a requirement that a President and a Secretary of Defense will make of a Chairman Joint Chief of Staff's in today's world. 

HAMRE: I have a couple of questions here about the battle against ISIL. 

There have been some very encouraging press reports about the momentum in the field against ISIL, and yet also there is a metastasizing threat. Would you share with us how you are currently looking at this? 

CARTER: Yes well, we have got to get these guys beaten a soon as possible which is basically where I'm coming from. We are looking for every opportunity we can take to do that. Of course, our overall strategic approach is not only to defeat ISIL, but to keep them defeated. That means you also have to look ahead to the next stage and who is going to keep the peace afterwards, which is why we try to work with local forces where they can be made capable and motivated, which is difficult in some places but that is a necessary part of the strategy. 

But we're doing more everyday, and John, we're looking for opportunities to do yet, more, because we need to get this over with. So I'm confident we'll defeat ISIL. I have no question in my mind about it, but the sooner the better. 

That has us looking at every conceivable way that we can do that. That's why I mentioned cyber, for example. Now that, years ago, even a few years ago wouldn't have occurred to a Secretary of Defense. Say, "let's get cyber in the game," but here we have real opportunities, these guys are really using this tool. And we need to take it away from them, that in addition to everything we do in the air, and on the ground, and so forth. 

So yes, we are accelerating it. We are gathering momentum. But I want to see it over with, first of all, in Syria and Iraq and then, everywhere around the world. 

HAMRE: Secretary, I'm not going to drag you into American politics, but it has been startling to hear candidates talk about how NATO is no longer relevant. I know you met yesterday with the Secretary General. How important is NATO now for our future? You described a very challenging world and where does NATO fit in all of that? 

CARTER: I'll tell you that in one minute. 

Since the raised the former subject, let me just say once again I said on a number of occasions. And I really mean this both on my own behalf and on behalf of everybody else in my department. I know this is an election year. We have a tradition in this country, which is that we in the Defense Department stand apart from that. So I'm going to be very careful about ever addressing anything as part of the political debates. Still less do I  want any of our uniform personnel put in that position. 

So I just need to preface anything I say on that basis. I did meet with Secretary General Stoltenburg yesterday. In fact, he was in town, he met with the president. And also, last night, I had dinner with him and Secretary Kerry and National Security Advisor Rice and we were talking about the things that NATO is doing and can do going forward. 

And if you think about NATO, John, as you know, and you and I did this, NATO waged and I would say, was successful in ending the Cold War in a peaceful and principled way. And there was a lot of question at that time, what's going to be next? And then the Balkans came and NATO turned out to be instrumental in that. Afghanistan, NATO turned out to be instrumental and remains that way in that and in many other ways around the world.

And today, we're looking to it for two particular things which are very necessary. One, is to stand tall against the Russian -- the possibility of Russian aggression in Europe, which I'm sorry to say, has become again, something that we need to be concerned about that we weren't for a while. And I regret it, but I -- it is what it is. 

And also the possibility of so-called hybrid warfare, you know, the little green men phenomenon. So, hardening our friends and allies against that. And then secondly, helping us in the counter-ISIL fight. Now, you might say, why? All the NATO members are individually members of the counter-ISIL coalition. 

So you say, what difference does it make having NATO as NATO in the counter-ISIL fight? And the difference where it can add value and that's the reason why I was talking the secretary general about it, yesterday, is that for a lot of the smaller countries, it's hard for them to do anything on their own and to join something ad hoc. 

But if they get into a NATO structure, it is easier for them to make a contribution. We're looking for all the contributions we can get. We're going to lead the way here, but always, we want others contributing. And NATO is a mechanism for doing that. So, that is what we were talking about yesterday. So it turns out, that even after its founding mission was, so to speak, accomplished, there have proven to be lots of ways where we and Europe have found it not only possible, but necessary to come together. And I guess, one last note on that is, you know, you can't take for granted that -- you know, one of the reasons I think we do so well as a military -- I'm just going to brag on the institution here a little bit -- is, you know, as I said, first and foremost, it's people. 

Second, that it lives in the world's most preeminent, innovative society. So it's always the first with the most, including in this domain and that's good. But the other thing is what we stand for. I don't just say that. And my evidence of that is that we have a lot of friends and allies. Why is that? It's because they like what we stand for. They like our people. They love working with American servicemembers. 

They think they conduct themselves well. They are not only competent, but they conduct themselves. I'm very -- and I think it's a great credit to these young men and women how much liked they are to work with. You can look around the globe and you say, where is it that we deeply share values to which we are very committed, and Europe's a place like that. 

So something that brings us together, protecting something we share, is pretty important. So for all those reasons, we had lots to talk about yesterday. 

HAMRE: Secretary, you’re out testifying these days on your budget. You got a bit of a reprieve this year because it was a two- year agreement. But there program of record is larger than the budget caps that are in law. Your successor is going to have to wrestle with a very difficult problem. We don't have enough money to do the things we have to do. What do you say to the American people? 

CARTER: That we need to come together, as we did in the two-year wave, behind the bipartisan budget agreements. The only way and you know, I can't do much about that as Secretary of Defense -- but as a citizen and if you have your eyes open, you know that --well, as Secretary of Defense, what I do know, is our biggest strategic risk is the collapse of a bipartisan budget agreement going forward, the restoration of the sequester caps. We know we're in real trouble if that happens and that's been a consistent in my testimony. We've got to avoid that. 

We've got to reprieve. I'm extremely grateful for people coming together, very grateful that it was possible to come together. What we need to keep doing that, we all know John, we can do the math. You can't balance the books on the backs of discretionary spending. And so, you have got to get in the other parts of the budget. 

Now that's much bigger than somebody who has an executive branch responsibility, even a vital one like mine can influence but that's the way it has to be. And if we get back to sequester, we're in real trouble. So for me and the rest of the Department, our biggest strategic risk resides in the possibility of the collapse of bi- partisanship and a restoration of the sequester caps. We're in real trouble if that happens as you know. 

HAMRE: Thank you. 

And I'm so, there's a personal comment. I'm very disappointed at this presidential debate that it isn't more about our national security obligations. It's a very big disappointment. 

Secretary, I know you're going I know to Asia a couple of times this summer. We've got continued island building in the South China Sea. There are lots of questioning in the region. Where is America? Is the pivot real? Can you share with us your thinking here? 

CARTER: Sure, we have a new phase of re-balance used in the posture statement. 

So we're doubling down on some our investments both qualitative and quantitative in the Asia Pacific region, for the simple reason that it is the single region of most consequence for America's future. Because it's where half of the world's population, and half of it's economic activity, and its absolutely essential and it's important there, as everywhere else that there be a system of peace and stability. 

Now America has been and American military power has been a critical ingredient of that for 70 years and in the rebalance, we want to keep that going. Now it's going to have to be different of course because different -- the dynamics is different but we have been instrumental to an environment if you think about it, John. We're --first, Japan rose, there was a Japanese miracle then there was a South Korean miracle, then there was a Taiwan miracle, then a Southeast Asia miracle. Then today, an India, and a Chinese miracle. All of which is great. 

You can't take for granted that the environment in which everybody was able to rise and fulfill themselves in their own way. That's been good for everybody but again, this is a region that has no NATO, where the wounds of World War II are still not healed. So you can't take that for granted. 

You mentioned --and the South China Sea is just one example of that. 

Now, there are a number of countries that have claims in the South China Sea and some of them are pursuing military activities, China is not the only by far and away particularly over the last year. China has been the most aggressive in that regard. 

President Xi --we're talking about this just a few days ago, we'll see whether China keeps the word that it made last time President Xi was here about military activities. But we for our part are reacting and we're reacting as part of the rebalance unilaterally. But the most important thing, is countries in the region are reacting and that is why we are being asked so much more to do so much more.

You're right, I'll be traveling out in the region. What will I be doing? I will be working with other countries who want to do more with the United States, particularly in the area of maritime security. They want to do that because the want to keep a good thing going out there and we're committed to that. We will do that. 

HAMRE: You mentioned India before, India's been an awkward partners for years but increasingly, getting close. I know you have devoted time there. Your thoughts? 

CARTER: Yes well, I do spend a lot of time on it. 

I think the word I've used with respect to the United States and India is destiny. Here are two great nations that share a lot: a democratic form of government, a commitment to individual freedom and so forth. So I talked about values earlier on. And India is a place where it's - sure it's a different culture. It's actually many cultures, all -- but, like us, it is a multicultural melting pot determined to work together. 

So we have a lot in common, in spirit. And we also have a lot of common interests geo-politically and geo-strategically. One of them is to keep a good thing going, as I said, in the whole Asia-Pacific, or Indo-Asia Pacific region. And so we're looking to do more with India. Indians are, like many others, also proud. So they want to do things independently. They want to do things their own way. They don't want to do things just with us. They want to do things themselves. So all that's fine. So we're not looking for anything exclusive. What we are looking for is a closer relationship and a stronger relationship as we can, because it is geo-politically grounded. The specific things we are doing with them are twofold. One, is, you know, we have the rebalance so to speak, westward from the United States. They have act east, which is their strategic approach eastward. 

And these are like two hands grasping one another and that's a good thing. Second, we have a -- our defense technology and trade initiative, John, which is an effort to work with India and to do something they want to do. Which is, they want to improve their technical capabilities of their own defense industry and their own defense capabilities. But they don't just want to be a buyer. They want to be a co-developer and co-producers. So, they want that kind of relationship. 

That very much -- and that's what we are working with them on. And that matches very much up with Prime Minister Modi's "Making India Initiative." And so, we are very much aligned in terms of what the government there is trying to do strategically and economically and what we want to do with them defense wise. 

So, we have a whole lot of stuff to do. And when I go over there, we got a whole bunch of things that we will be announcing at that time. And I want to announce beforehand, but are new milestones in this relationship.

HAMRE: We're coming to the - into the hour secretary, but let me just shift very different to say, a lot of concern about our dependence on space and the increasing vulnerability of space assets. How are you thinking about this? 

CARTER: Space is a great strength of ours, but it is a vulnerability, and you have to think through vulnerabilities. And when you have them in your military system, and it works like that. I mean, a satellite is a fixed part in essence right, I mean, in orbital mechanics terms, it is a fixed target. You know where it's going to be at all times.

And remember, there is no terrain to hide in. You can't dig a hole or anything up in space. So there you are. And so. it is an inherently vulnerable situation. That said, there are things you can do electronically and in terms of orbital maneuvers and so forth, to make it difficult for anybody to interfere with your function and we are doing that. 

But at the same time, you have to ask yourself what are you going to do if, as we do with all of our military capabilities. What if it is disrupted? What if it's destroyed? What do we do then to make sure that we can accomplish something like the same functions in some other ways, as you would say, operate through.

So we are looking both at defense, if you like and operate through. And one thing I'll note for you John, that you are probably aware of, but others don't though because you know so much about what's going on in the department. I asked -- and we set up a couple of years ago, an operations center. The first time we've had one. I'll be there, I guess, in a couple of weeks, in Colorado Springs to see how they're doing. 

But who's job is very specifically to do that. I mean, the phrase is fight the constellation. But if you know what that means, it means protect it in so far as that is possible, from disruption or destruction and then think through what you will do if, despite everything, the enemy has some success against that constellation, what do you do next to make sure we have a good, operational answer to that. 

HAMRE: I have had the privilege of watching this remarkable intellect for almost 30 years, 35 years. And Ash, thank you for being here.

CARTER: Thank you John.

HAMRE: Being that we are at the hour and we have to let you go, would you all please join me with your thanks? 

(APPLAUSE)

HAMRE: Thank you.

CARTER: Thank you.