Media Availability With Deputy Secretary Shanahan and Under Secretary of Defense Griffin at NDIA Hypersonics Senior Executive Series

MR. SHANAHAN: And he -- to Joe's credit, the reason we're all getting together today is he's like, "Let's -- let's invite the media to the event. Let's make sure it's open and then let's find time afterwards -- we’ll grab Dr. Griffin."

Just he's a -- for whatever reason, he thinks it's really important that you have a lot of information and can write good stories. So.

(LAUGHTER)

So...

(CROSSTALK)

Q: Call me crazy

MR. SHANAHAN: Yeah, yeah. So.

Anyways, good morning.

Q: Morning.

MR. SHANAHAN: How is everybody?

Q: Good.

Q: Doing well.

MR. SHANAHAN: Yeah, good. Thanks for coming over.

I don't know -- Bob, you're the senior guy here. How do you want to do this today? We've got 13 minutes.

Q: Why don't you go first…

Q Keep it short...

MR. SHANAHAN: Yeah, yeah.

Q: ... so if I could ask a short, quick question...

MR. SHANAHAN: Sure, sure.

Q: Then my colleagues will probably have question on hypersonics and -- that’s the topic of the day. I just wanted to ask you a quick one about Space Force, and...

MR. SHANAHAN: Sure.

Q: ... where you are right now in what you discussed with us previously about narrowing down your proposal for...

MR. SHANAHAN: Yeah.

Q: ... for next year, what the Space Force really is, how do you define it?

MR. SHANAHAN: Yes. So the -- I think before we told you there were, you know, two primary options, and there was a variation. But there was really two primary ones.

We're now down to one option. I won't -- I'm really not in a position to disclose what that one option is. But I can tell you that the legislative proposal itself, probably tomorrow, will start to go through the build-in for coordination.

Q: (OFF-MIKE)

MR. SHANAHAN: Yes. Yeah. And if I dare to use an aerospace term, I'd say we're on the final approach.

Q: OK. You can't say whether it's -- it's a force, it's part of an existing department or it would be a new department?

MR. SHANAHAN: Right.

Q: Isn’t that the question.

MR. SHANAHAN: That -- that's the question. That's why -- that's why I said that we're down to the one.

Q: You won't say which one it is?

MR. SHANAHAN: No, no. Not until we fully coordinate. Yes.

Q: And the contents?

MR. SHANAHAN: Right. Soon, right? We'll -- we'll be able to give you an answer soon on that, OK?

Q: Before January?

Mr. SHANAHAN: We'll try. My sense is, with all of your access to other sources, we'll probably be having that conversation. So.

But in terms of maintaining the timeline and -- and doing the work, we're on track to being able to put together the proposal, OK?

Yeah? Hi.

Q: Thank you, Secretary Shanahan. Following up on Bob's question, are we going to see anything specific on the Space Command and Space Development Agency in the coming weeks? What can we expect?

MR. SHANAHAN: Trying to think on how to give you a good answer. I know there's a number of things in the work that are actually out for, you know, signature-type.

But I'm hoping we'll see some decisions on the Space Command by the end of the year. The details around the Space Development Agency, you probably won't see the level of detail and explanation.

Mike and I are in the midst of a -- what was it, a 45- or 60-day exercise?

UNDERSECRETARY OF DEFENSE MICHAEL D. GRIFFIN: Not to exceed 60 days.

MR. SHANAHAN: Yeah. So part of the timing there is against this approach of having a Space Development Agency, we've taken all of the work Mike's team has done in the last year. And we've said, "Where is the synergy? Where is the time acceleration," from using a -- this other development approach -- and then "Where is the cost benefit?"

Because what we want to avoid is a discussion next year that is philosophical. So we want to say that we chose this development approach because it yields these quantifiable outputs and deliverables. Here's how we can develop this space capability sooner, and have real projects to tie to.

And given our bias towards being analytical and quantitative, that's the basis on which we'll also justify the Space Development Agency. So. OK?

Q: Thank you.

MR. SHANAHAN: Yeah?

Q: Mr. Secretary, in your remarks, you talked a lot about resources. And, you know, you said DOE's been building a $733 billion budget, and then you were directed to build a $700 billion budget.

Now, have you been directed to build a $750 billion budget? And if so, would that extra funding include more money for hypersonics?

MR. SHANAHAN: We built variations of the $733 billion budget. And against a bigger budget, we've prioritized greater investment in technology, and a number of the programs that Mike put forward in the $733 billion effort.

Q: So your previous work did provide the possibility of getting $750 billion, or just more research in general?

MR. SHANAHAN: Yeah. So when we – and, Bob, you'll appreciate this. When we do the budgeting exercise, we have -- I call it "cut line," but it's like, you either fall below the cut so you don't make it. But those -- those lists and prioritizations are available.

So if somebody says, "Reduce the top line," then we go back to those priorities and -- and make trades. Same way that someone says, "You've got more money to spend," then we'd say, "Well, that project wasn't funded, and now we'll fund it." And we've looked at technology as well as capacity.

Q: So is $750 billion, though, a specific number you're looking at now?

MR. SHANAHAN: We're looking at numbers above the $733. And as you know, we looked at numbers below $733. And I think as everybody recognizes, you know, this is a -- a discussion that'll go on in terms of, you know, what's the right number.

So the process that we have is very robust. I think the -- John, the takeaway that I'd like you to have on the budgeting process is, we really have tried to anchor the line items to the National Defense Strategy, to the degree you can. I mean, that's the rigor we put in place.

So, you know, for the things that we have in there, we can -- there's traceability. So when someone says, "Why did you put this number in place?" We can trace it back to an effect or capacity, a capability we want to deliver that supports the National Defense Strategy.

Q: Thank you.

MR. SHANAHAN: You're welcome.

Q: If I could sort of follow-up on -- if I could follow-up on that question, as you guys kind of looks at these different numbers and setup these different budgets what's in the trade space? Fifty-billion dollars is a lot of money and I'm sure makes a huge difference in what you guys are able to accomplish in terms of adhering to the NDS.

MR. SHANAHAN: Yeah. The easiest way to think about the trade space is you have modernization, readiness and force structure. Those are the three big dials to turn. And so, you can find line items that fall under each of those categories but those are the real -- real big categories.

So at the end of the day, you know, national defense strategy puts a priority on modernization. That's why I said to the woman from Lockheed I was high in confidence on benign technologies. The trick then becomes, you know we talk about force structure -- how much risk do you take given the world environment. And so those -- you know when you look at modernization, how do we fund it at an adequate level? Readiness -- how do you avoid hollowing out a force? And when it comes to force structure, how much risk do you take with your footprint?

Q: And if I could just ask one quick one on Space Force as well? Have you guys met with the president yet on what the desired topline is and if not, when is that going to happen?

MR. SHANAHAN: I haven't briefed the president. I know the president has been briefed.

Q: He has been briefed?

MR. SHANAHAN: Yeah.

Q: Is he onboard with whatever the budget?

MR. SHANAHAN: Yeah, he's given us guidance.

Q: OK.

Q: Could you describe how you think about the split between offensive and defensive hypersonic sides? I take it that both are important. What does the funding look like in terms of current expenditures? Are you prioritizing one of them in near-term versus invest later on?

MR. SHANAHAN: I'll let Mike comment but just one -- he mentioned this earlier and this another bank shot on the Space Force. So when you think about low-earth-orbit constellation it can provide offense and defense capability in terms of tracking.

So in some cases when we talk about, is it offense or defense, sometimes there's really an overlap where it, you know, supports both. There's an offense/defense integration component.

DR. GRIFFIN: I don't have a budget split number for you because I haven't thought about it in that way. In part because that hit on possible the key point about defense, which absolutely requires a space layer that we -- that he was just talking about.

And in the hope that the system is never actually used to respond to a war then, in peace time, what we're using it for is to track all of the things which might be possible targets -- well that's an offensive problem.

If a war should start where we need to negate a hypersonic attack, well then, it's in the defensive mode. It's doing other things -- so how -- how do you account for that? I don't know. I just haven't thought about it in terms of a budget split between offense and defense.

MR. SHANAHAN: How'd we do, Joe?

STAFF: Great. I guess we have time for one final -- any last (inaudible).

MR. SHANAHAN: Good.

Q: How far away are you from a workable defensive capability on in hypersonics? Is it years? Something we could ...

DR. GRIFFIN: Well years -- not months, but not decades, OK? So I think we'll have a workable defensive capability by the middle of the decade.

MR. SHANAHAN: But Aaron, the -- the line of questioning that you have there is kind of the way we've been working this scale.

So when -- you know, Mike and I come into the department, it's what should our priorities be, and then how do we put together the right funding, and then how do we get the programmatics so we can really start to get after the -- the timing?

So Mike hit it right, it's years. So we're -- we're now getting to the place where we can start to put together the programmatics and pick dates.

I -- I think that's the most important thing we can do, is get certainty and there's -- there's nothing certain with -- with budgets that go up and down and the -- in the dynamic world, but it's so much easier for the industry to be able to move out when we have more clarity about what we want.

And to Mike's credit, this -- this role that he has is really to kind of get his arms around all of the activities going on in the department. And there's a tremendous number -- and he's done a good job of pulling people together and saying did you know you're doing this over in the Air Force and the Army you're doing it also?

And then he's worked in the department to get the service secretaries to say let's have a united front. And so I think, you know, a year from now, we're going to be able to show you against the portfolio here's what the -- what deliverables look like or here's what IOC's look like or here's what quantities look like, cause that's what -- you know to me, if I was -- you know in industry, it's like how big are you going, you know?

How much capability do you really want to deploy? Is this really a technology demonstrator or are you talking about fielding, you know, real capability and how much of it will, you know, scale up over time and how quickly?

Q: I just had a quick clarification question for Dr. Griffin. You talked about defensive capabilities. Would that include the ability to defend carriers and other naval assets versus, you know, land bases or other land bases and the like?

DR. GRIFFIN: Of -- of course, you know. We -- we need to be able to defend against the threat, against any -- any of our assets.

Q: I had a quick follow up for Secretary Shanahan on the Space Force proposal. We spoke yesterday with the new chairman of -- the next Chairman of the House Armed Services, Adam Smith. He said there's a general agreement that they do not want to pay for more bureaucracy in DOD.

So are you -- are you confident that in this proposal you're actually minimizing bureaucracy and that they're not going to throw that back at you when they see the proposal?

MR. SHANAHAN: I -- I've spent time with -- with his staff and I've spoken with Representative Smith. I think the back and forth will be to explain what's in our proposal and what I feel really confident in is he and I have the same view about bureaucracy, OK?

So I -- you know and -- and less is better and the more detail we can provide on the proposals and people give us a sense of what we need to take out, I'm -- I'm happy to get the red pen out and -- where -- where we've had lots of agreement is going faster and delivering capabilities sooner -- is important.

That's why this work with Dr. Griffin -- so we can say this is the real capability we'll deliver earlier. That's the most important part of the exercise, but the bill -- I think we're all like go big on capability and then minimize, to the best of your abilities, the over -- I -- I consider it overhead.

We need a certain degree of bureaucracy given the -- our size, but the overhead, how do we minimize the cost there? And the staff on the Hill has been very helpful in saying, “make sure you answer these questions on cost.” You know, so.

Q: It sounds like you're going -- you're not going for a separate department, then. Otherwise you'd be maximizing the bureaucracy rather than minimizing it.

MR. SHANAHAN: To be seen, right? Yeah, that's the way to think about it.

Q: OK.

Q: Do you guys have a final number on cost?

MR. SHANAHAN: Not -- not -- not a final number, yeah. Yeah. The -- so if you -- if you said where -- where should we be burning our calories, I want to make sure we're burning them on being able to articulate how we're going to deliver capability sooner than if we have time.

And we have time, it's like -- then spend the time arguing about, you know, how many offices to have or where those offices should be. They're -- they're important, but the most important thing is demonstrating we deliver capability more quickly.

Q: OK.

STAFF: Sir, we should probably be off to your bilat.

MR. SHANAHAN: OK? All right, oh yeah, I don't want anybody to get...

STAFF: Thank you very much.

MR. SHANAHAN: All right, thank ...