STAFF: OK. Good afternoon, everybody. I want to thank everyone for joining us for this kickoff event as we roll out President Biden's F.Y. '25 budget request for the Department of Defense.

This afternoon, we have joining us the 35th Deputy Secretary of Defense, Kathleen Hicks, and the 12th Vice Chairman of the Joint Chiefs of Staff, Admiral Christopher Grady. Deputy Secretary Hicks will provide some opening comments and then she'll be followed by Admiral Grady, who will also provide a few comments. Once they're finished, I'll call on members of the audience for questions.

And with that, I'll turn it over to Deputy Secretary Hicks.

DEPUTY SECRETARY OF DEFENSE KATHLEEN HICKS: Terrific. Thank you to Eric, and good afternoon to everyone. It's really a pleasure to be with - here - you here today alongside Admiral Grady to discuss President Biden's Fiscal Year '25 defense budget request.

I'd first like to take a moment to recognize that as I stand before you today, Congress has not yet passed the F.Y. '24 defense budget. So before I begin, I want to highlight how devastating the failure to pass last year's budget request is to ensuring our national defense and global security.

Last year, the department released the most strategy-aligned budget in DOD history. It allocated critical resources consistent with our defense priorities, as outlined in the 2022 National Defense Strategy and the President's National Security Strategy.

We buckled down and did our homework. Our primary goal was to fortify our national defense against emerging and enduring threats to our nation and the international order as we know it.

First and foremost, the F.Y. '24 budget treats our pacing challenge, the People's Republic of China, with the urgency it requires, directing resources to sustain and strengthen U.S. deterrence. It delivers a combat-credible Joint Force, one aimed at deterring and, if called upon, defeating foreseeable and future threats.

And it makes a series of investments in our most powerful and valuable asset, our people, and ensuring that we can recruit, retain, train, and equip them so that they remain resilient, ready, and focused on fulfilling their mission.

Congress's inability to pass the F.Y. '24 budget, holding back much needed funding, hinders our ability to execute that strategy. The department has no way around that reality. Instead, we have been strapped with a series of Continuing Resolutions.

CRs are a significant constraint on our ability to advance our defense strategy, forcing the department to operate with one hand tied behind our back for months out of the year, even as we confront new and evolving security challenges each and every day. We cannot continue this cycle of Continuing Resolutions.

We also cannot continue punting the ball on our supplemental funding request in support of Ukraine in its fight against Russian aggression. And we cannot continue to stall an approved supplemental funding for Israel and humanitarian assistance in Gaza to help contain the spread of conflict and promote regional stability. And we cannot pass up on a critical opportunity to support our allies and partners in the Indo-Pacific with supplemental funding for foreign military assistance and financing.

So we need Congress to come together. The world is watching what we do in this moment. It's tracking whether we can unite and overcome the headwinds facing our national security and our democracy. And our adversaries in particular are observing our willingness to step forward for our allies and partners.

So we must continue to make progress critical to projecting power and protecting our people and our republic, progress that will stoke innovation and bolster our ability to upgrade our systems, acquire new capabilities, and launch new initiatives, progress that increases the resilience and lethality of the Joint Force, progress that advances our multi-domain power, strengthening our ability to deter strategic attacks against the United States, our allies and partners, and progress that enables us to develop capabilities and operational concepts needed to deter aggression paced to the growing multi-domain threat posed by the PRC in the Indo-Pacific.

This progress cannot wait. Our nation must meet its responsibility to our forces to pass on-time appropriations so that these goals can be realized.

This year's F.Y. '25 defense budget request at $849.8 billion would build on and advance generational military investments we've put in motion over the past several years. For the fourth year in a row, our budget furthers our goals to defend the nation, take care of our people, and succeed through teamwork.

Unlike our prior budgets, however, the F.Y. '25 request is capped by the Fiscal Responsibility Act. Because of these statutory caps, and as good stewards of taxpayer dollars, we made smart, responsible choices to work within those limits.

The result is a strong focus on executability and necessary emphasis on near-term readiness and people investments, but to be clear, we must grow the defense budget in the out years of our future years' defense program if we want to achieve the goals of the National Defense Strategy, especially in the face of rapid modernization by the PRC.

Now, budgets are statements of priorities, and we used a rigorous process, guided by our strategy, to arrive at the resourcing determinations we've made. That process included close dialogue and collaboration among senior DOD leaders, representing every defense component, military service, and combatant command.

Together, we remained singularly focused on identifying the programs and plans that best meet the demands of today's warfighters and their families while making smart investments in the future. That's vital because since day one, Secretary Austin and I have emphasized the urgency to innovate.

One key focus in innovation is overcoming institutional challenges that inhibit our ability to accelerate delivery of critical capabilities to the warfighter at speed and scale. That's the goal of Replicator, including its first focus area on all-domain attritable autonomous systems and many similar initiatives the department has underway.

So even under the F.Y. '25 cap, we continue to make investments in basic research, advanced technology, experimentation, artificial intelligence, and cyber and space capabilities, and we are committed to robust procurement, sending strong market signals to industry.

Take, for instance, space. Last year, our investments in space capabilities were the largest ever. The F.Y. '25 budget continues the department's commitment to space, investing nearly $34 billion to keep space safe for military, civilian, and commercial operations.

In support of our first-ever National Defense Industrial Strategy, we're increasing investments in casting and forging, more than double that of last year. Other key investments focus on strengthening our munitions and defense industrial base and improving the resilience of our supply chains so that we can deliver what our warfighters need when they need it. For example, the F.Y. '25 budget request makes an historic investment in the submarine industrial base to increase production and reduce backlogs. We'll continue to work together to increase munitions investments, and I appreciate Congress's partnership in ensuring that we have the authorities we need to get the right capabilities in the hands of our warfighters, allies and partners.

Top of their list is multiyear procurement authority, which is a proven and powerful tool to meet immediate threats, support the defense industrial base and surge and maintain munitions procurements. We have awarded our first four multiyear procurement contracts. We've made significant investments in the munitions industrial base and we know that multiyear procurement will be even more effective when we receive appropriations that allow us to move out on these authorities.

Our investments will go toward deepening our relationship with our allies and partners, and these robust investments reflect our nation at our best: sparking innovation, leading with our allies and partners and defending our democracy against those forces that would do us harm.

Our F.Y. '25 budget request also upholds our commitment to our people, the servicemembers, military families and civilians who work tirelessly to defend this nation day in and day out. As Secretary Austin said, our success in defending the nation and maintaining readiness is inextricably linked to their success. That's why this budget focuses on their economic stability and family support, the cores of our taking care of people initiatives. The budget funds must-pay items related to quality of life and quality of service such as a 4.5 percent pay raise for our servicemembers that builds on raises for the past three years in a row, including last year's 5.2 percent pay raise. With this budget, our servicemembers will have received an 18 percent increase in base pay during this administration.

But we know the composition -- compensation -- excuse me -- is about more than just pay; it's about increasing the number of child development centers where military families can educate their children and the number of providers in those centers. It's about the conditions on ships and in barracks. It's about what we're doing to build healthy and resilient communities. And that's why the must-pay items in this budget also include basic housing allowance increases, facility investments in safe, quality family housing to enhance deterrence and improve critical operational infrastructure, making healthcare, healthy food and childcare more accessible, including increasing pay for childcare providers, and building a safer workplace, including efforts to combat sexual assault and to prevent suicide and eliminate barriers to care -- all must-haves, not nice-to-haves that enable our total force to thrive so that they maintain focus on their mission.

And it doesn't end there. We are only able to successfully defend the nation because of the support of the American people. We work to earn and maintain their trust each and every day by being good stewards of taxpayers' hard-earned dollars, and we know that a good measure of trust lies in our progress toward a clean audit. I'm proud to highlight that several weeks ago, the U.S. Marine Corps became the first military service to achieve a clean audit. The level of rigor and discipline and teamwork involved in achieving this milestone serves as a model for teams across the department moving forward and brings us one step closer to achieving an overall clean report by 2027, as required by law.

We will continue to improve our performance and optimize our processes, practices and systems across the department to deliver the nation's warfighters and taxpayers as effectively and efficiently as possible.

This budget advances our nation's defense in the face of an historically-challenging strategic resource and operational environment. Our military readiness depends on our ability to pass timely appropriations, F.Y. '24, F.Y. '25 and every year thereafter. So I cannot emphasize this enough: We need predictable, adequate, sustained and timely funding, full stop. We cannot afford any more lost time- time that we cannot buy back. So we urge Congress to work together to pass this budget request and last year's, and the national security supplemental too, with the requisite urgency that our nation's defense demands. With the right tools and timely resources, we can meet all of our well-established defense priorities and outpace our competitors, as we've so carefully planned, and together, we will.

Thank you.

ADMIRAL CHRIS GRADY: Thank you, Secretary Hicks, and thank you for your leadership. So on behalf of the chairman and the Joint Force, welcome here to this briefing today, and it is a privilege to represent the 2.1 million total force soldiers, sailors, airmen and Marines and Guardians as we discuss the Department of Defense's fiscal year 2025 president's budget request. Like our F.Y. '23 and '24 submissions before this, we are approaching the F.Y. '25 budget request with our National Defense Strategy and our National Military Strategy at the front of our mind as our North Star.

Now, our $849.8 billion budget prioritizes national security through integrated deterrence, campaigning and building enduring advantages to ensure that the Joint Force is able to defend the homeland, deter strategic attacks and aggression, all while positioning the Joint Force to prevail in conflict, if necessary. Our strategy-driven approach is focused on the security challenges of today, while also modernizing the Joint Force to meet the challenges of tomorrow, delivering on the strategic discipline that is at the heart of the National Military Strategy.

For integrated deterrence, the F.Y. '25 budget requests funds critical to investments in our national enterpri- -- nuclear enterprise -- and missile defense, along with space capabilities which will allow the Joint Force to address key modernization priorities, while also ensuring that we build the capabilities to support critical kill webs, and it continues to invest in priority areas that will enable the department to strengthen our cyberspace activities and to expand our long-range fires capabilities.

To support campaigning, the department is investing in readiness initiatives for operations, training and maintenance, while also prioritizing exercises and experimentation that will allow the Joint Force to support our critical theaters, including INDOPACOM and Europe. We do this through investments in things like missile-defense resilient communications and interoperability initiatives, so critical with our allies and partners.

The Joint Force also looks to build out our enduring advantages. This includes investing in our people, the center of the universe. It is also a means for us to continue to fund innovation through Replicator and other efforts. Meanwhile, supporting the defense industrial base and supply chains using multiyear procurement authorities reduces costs and provides a consistent demand signal to our industry partners. 

As we still await the FY '24 appropriations, I want to reiterate that the Joint Force is best positioned to maintain and build on our enduring advantages when we receive sufficient, timely, sustained and predictable funding. And a return to predictable and routine resourcing will help ensure that the Joint Force continues to meet the nation's national security needs. 

Our current strategic advantage gives us confidence against any adversary. But our competitors and our adversaries have not stopped advancing their capabilities, so we must continue to adapt, advance and innovate at speed and at scale across all domains, prioritizing China as the pacing challenge and Russia as an acute threat. 

Our strategy-driven budget does exactly that. It recognizes the need to invest in key areas to translate the National Defense Strategy, the National Military Strategy and the Joint Warfighting Concept into operational capabilities required to deter our strategic competitors. While resourcing our strategy and making the necessary investments, the Joint Force can and will remain the most capable force in the world for decades to come. 

So, thank you for joining us today. Madam Secretary, thank you for your leadership and your words today. And again, it is my distinct privilege to be here and represent the commitment and the dedication of our entire Joint Force.

STAFF: Okay, now we'll go to questions. Tara Copp from A.P. 

Q: Hi, Secretary Hicks. I wanted to first ask about Ukraine. A senior defense official who briefed us in advance of this budget said the DOD is actually about $10 billion in the hole when it comes to Ukraine. And I wanted to get your thoughts on how do you replenish that? How do you get the munition stocks back to where they need to be without a supplemental and if we go into another C.R.?

And then, for Admiral Grady, I wanted to see if you could just talk to us about the readiness impact of having yet another C.R. on ship availability, on squadrons getting flight hours, the real-life impacts that you see in the forces.  

DEPUTY SECRETARY HICKS: So, thanks very much on the issue of the supplemental, and in particular, the $10 billion replenishment that would be provided for under that supplemental. We don't foresee a likely alternative outside of the supplemental funding or having that money added into an appropriation bill in order to achieve the replenishment that we need. So, we are absolutely laser-focused right now on making the case to the American people about the need for that supplemental, about the $50 billion roughly of investment that flows back to the U.S. economy and supports businesses, large and small, throughout the country. 

And also helps warm up our industrial base for our own warfighters so that they can get the munitions they need in a timely manner when crises arise.

Q: So, what happens if you don't get the replenishment? You don't get the $10 billion? 

DEPUTY SECRETARY HICKS: We don't get the $10 billion, we would have to find other means. We - right now, we're very much focused on the need for that supplemental. 

ADM. GRADY: Yes, continuing resolutions are always a challenge. And certainly, it requires us to make difficult decisions going forward. You're very familiar with things like new starts and how it might impact personnel initiatives or shipbuilding and ship maintenance, s you point out. Munitions production, replenishment, those kind of things.

As to our ability to maintain readiness, as the Deputy said, readiness and what we need to fight tonight remains at the forefront of our budget deliberations this year. And I'm pretty confident that we will be able to maintain things like flying hours and ship depot maintenance going forward. We have to keep a really close eye on it though, because sometimes that becomes a bill payer. Thanks to the Secretary and the Chairman, that has not to this point. And we'll watch it very closely.

STAFF: Sure. We'll got to Mike Stone from Reuters next. 

Q: Thanks. Madam Secretary, I don't see a line in this budget for Replicator. Can you tell us what's going to be spent this year, next year on project Replicator?

And for Admiral Grady, can you tell us the top two things that China should take note of in this budget? There's a huge increase for instance, in long-range anti-ship missiles. Are there other things that we should look at as sending a signal to deter China?

DEPUTY SECRETARY HICKS: Sure. So, as I've said publicly before, the level of effort spending to think about in Replicator in FY '24 is around $500 million, and then in FY '25 it’s around $500 million. That's sort of the sum total of what we anticipate. This is a Pathfinder. It's largely about reducing barriers inside our system in a process that the vice chairman and I run. 

But obviously, there are dollars associated with getting the actual thousands on the 18-, 24-month timeline out the door. It is my fervent view that follow on to that is the significant investment potential that is not about Replicator. That is about what the services are going to be able to do on autonomy once we're able to lower those barriers through that initial investment. 

ADM. GRADY: So, I think any adversary should look at the budget and notice at least three or four things. The first is the continued sustainment of funding for the nuclear enterprise and the reprioritization and modernization of the Nuclear Triad, that shows you our strong commitment to the importance of that mission area.

Secondly is space. The Deputy Secretary talked about that. And as we think to the future and where we're going to win, I think it would become one of our great asymmetric advantages along with the undersea. So, I would look hard at what we're doing in space. And then I guess the third one would be the readiness that I just talked about, 147 billion out of 849, that's a big chunk of money in readiness. So, we are ready right now, for a fight tonight.

STAFF: Okay, Tony Capaccio, Bloomberg. 

Q: One quick (inaudible), there's $500 million for Taiwan, it’s the first time ever on a PDA. Can you talk a little bit about the rational for it? Is it a message to China? And why $500 million versus some other larger figure?

And for Admiral Grady, as the head of the JROC, were there any that - the joint requirements oversight council, were there any investments that your - you pushed in the '25 budget to reflect lessons from the Ukraine war that the United States needs to counter?

DEPUTY SECRETARY HICKS: So, on a Presidential drawdown authority for Taiwan, we were provided authority in the '24 NDAA, I believe '24. And so, this was our first opportunity- the '25 budget- to be on cycle to put forward funding in support of that authority. We believe $500 million is executable. It represents a strong downpayment on the authorized level. And, obviously, fits what we need to fit within the Fiscal Responsibility Act cap, so that's how we got to the amount there. 

What it will do for us is allow us, just as the replenishment for Ukraine allows us, it provides that backfill for the services for anything that we provide to Taiwan. We then would be able to look at how to keep ourselves ready in those same areas. So, that $500 million will allow us to backfill ourselves for items that we might provide to Taiwan. 

ADM. GRADY: Yes, lots to learn from what's happening in Ukraine right now. And as you know, the JROC takes a look at all of those things, and they make recommendations based on capability gaps that we might assess. We don't necessarily direct funding, it can't direct funding, but we identify gaps in which then can be - that can lead to requirements. I think too that I would point to you are both manned and unmanned systems. And particularly in the unmanned systems, how we deliver effects on the battlefield whether they're ISR, so sensing on the battlefield, or then delivering kinetic and non-kinetic effects.

Both of those then are something I think we're really learning in the situation in Ukraine. And by the way, it isn't just in one domain, it's across all domains to include the maritime.

Q: (Inaudible) funded any investments in this budget you could point to reflecting what you just said?

ADM. GRADY: Yes, I think what -- if you were to look at the work of the Joint Counter UAS Office\ and the work that they're doing to -- which is also playing out in the situation in the Middle East, you can see where those requirements are translating into how we think about that bite.

STAFF: Luis Martinez from ABC please. 

Q: Thank you, Madame Secretary. Chairman Rogers is already out with a statement saying that while this budget keeps up with the Fiscal Responsibility Act, he says it's not keeping pace with inflation as a topline for our adversaries. I'd just like to get your thoughts on that because he's looking forward as to future that actually the way this budget is structured right now puts us at a disadvantage in the future. 

And Admiral, I'd like to ask you about the Red Sea operations. What is the current burn rate for operations there because if you already have, let's say, more than 200 uses of million – excuse me -- 200 uses of missile anti-missile assistance, how -- how are you able to replenish that in the future given all the other constraints that you're under for Ukraine as well?

DEPUTY SECRETARY HICKS: So the Fiscal Responsibility Act is the law. We also think it represents an opportunity to get timely appropriations. And as I commented here, that's our priority. On time adequate, appropriate appropriations. The back and forth over topline inevitably will occur over the course of the coming congressional cycle. 

We obviously look forward to engaging Congress. But I just really have to stress what we believe in this department, whatever can get us to actually a bipartisan agreement that produces appropriations is high priority for us. So if that's the FRA, and as I said it is already the law, that is absolutely fine with us.

I will also stress, as I said in my comments, we believe we need out-year growth that that FRA for 25 we can make the strategy work as long as we can realize that out-year growth, particularly for some of the longer term investments that we have to grow capabilities, for example, after 2030. Capabilities that would produce after 2030.

ADM. GRADY: Yes, thank you. The situation on the Red Sea is a dynamic one, as you know. I'm sure you've been following it. You talk about the munitions expenditure rate, so certainly something that we watch very closely. Very proud of the work of your Joint Force at sea and what they are -- been able to do to protect shipping and really to back up the international rules-based torder there and freedom of navigation.

But as to the burn rate at sea, we won't get into the specifics of, you know, what we're shooting and how much. Suffice it to say, I'm very comfortable that we have enough of what we need and that we are learning organization. And so as we apply the concepts of defense and depth, it isn't always an expensive SM2 missile taking shot at a UAS. We've learned how to use other systems and have rapidly adjusted to this concept of defense at depth. And that's what gives me great confidence that we'll be able to sustain that as long as it takes to change the calculus over there.

STAFF: We're about out of time so I think we're going to wrap it up right there. I do appreciate everybody for coming coming and I want to thank Deputy Secretary Hicks and Vice Chairman Grady as well. Thank you very much.

DEPUTY SECRETARY HICKS: Thank you all.