MODERATOR: Ladies and gentlemen, we have the honor of having (inaudible) in our (inaudible). (Inaudible) -- as an Army officer, as a representative from the state of California, as the White House chief of staff, as the director of the Central Intelligence Agency and now as our 23rd secretary of defense. Please join me in welcoming the Honorable Mr. Leon Panetta. Sir.
SECRETARY LEON PANETTA: Thank you very much. Really it's an honor for me to be able to be here and to say thank you for your great service. I wanted to come by and really take the time to look you all in the eye and say what great unsung heroes you are.
I see, you know, the great work that you do. When I go to Bethesda and meet with the wounded warriors there, every one of them remarks about the care that was done here and the fact that in many ways you've helped save their lives (inaudible).
And so there is -- there's very, very little tribute that sometimes is given to all the great work that you do, and I'm here to pay tribute to it, to say thanks, because you guys are really performing God's work here in what you do.
And I -- you know, I have a special feeling for all the nurses in the crowd, because my wife is a nurse. I met her -- I actually met her before she was a nurse. It was when she was going to nursing school. And we got married after she graduated from nursing school. And she's been taking care of me ever since.
And you know (inaudible) I can't tell you how important those skills are, and I know firsthand how important they are. The care -- I mean, you know, you're among the first people that the wounded see, and you're the first eyes they look into. And that amounts to a lot. And if there's some love there and there's some caring there, I can't tell you how that -- how important that is to the healing process, to be able to have that.
And so clearly all of you, in what you do and the care that you provide, you are healers and you know healers going back to the time of Christ are the most respected individuals because you've helped heal those that carry these wounds .
And so again, my thanks to all of you. And also we have an opportunity to celebrate the 111th anniversary of the Nurse Corps.
SEC. PANETTA: All right. And I know a lot of services are represented here.
Just a few words about kind of generally more apt, this is -- this is a key turning point in terms of where we're at. It's a turning point as we come to the end of 10 years of war. We ended the war in Iraq. We're in the process of bringing down the war in Afghanistan, you know. And obviously just came out of Libya as far as the NATO operation, having brought down Gadhafi. And you know, it isn't, is an important turning point, and when you add to that the fact that we are now facing a tough budget. The Congress passed a bill that required that (inaudible) reduce the defense budget by $487 billion over 10 years. A huge task, a tough challenge.
But one thing we decided -- I mean, there were four things we said in the report. Number one, we want to maintain the strongest military in the world. We run the strongest military and we want to maintain that.
Number two, it's all about the force. In the past, when we've drawn down, we just cut across the board, and I won't do that here, because when you cut across the board you weaken everything, and that's the wrong way to do it.
Thirdly, and along with everything else on the table; look at all the areas in the defense budget.
And then fourthly, we said we can't break faith with the troops and their families. We've got -- we've got to make sure that those that have been asked to deploy time and time again, those that have been asked to sacrifice time and time again -- that we're -- that we remain true to you and to the benefits that were promised you.
So we met -- the service chiefs. We all came together. We looked at a strategy. Our point was, let's develop a strategy for what we want the U.S. military force to look like not just now but in 2020. And it took some time, but we worked as a team. All the chiefs -- service chiefs worked together. And we basically developed a strategy that emphasized five areas that we thought were important to the future. And then based on that strategy, we made the budget decisions that we came with.
The key points were, number one, we are going to be a smaller and leaner force. We're going to probably draw down (inaudible) as a result of drawing down in these wars. But we knew we were going to have to be leaner and smaller, but we want to be agile, we want to be deployable, we want to be able to be flexible, we want a force that could move quickly and also be on the technological edge, to have a technological advantage -- that was going to be important for the future.
Secondly, we knew we would have to rebalance the forces based on where we thought problems in the world would arise. And for that reason we're going to maintain a key presence in the Pacific, our Pacific power that's a place where obviously problems could develop in the future. And so we're going to have a great forward presence there, with the Navy and with the Army, with the Marine Corps and with other elements, the Air Force as well.
We'll do the same thing in the Middle East, because the Middle East is place where there are potential problems in the future. And so we'll maintain a large presence in the Middle East as well.
We'll also maintain a presence elsewhere. We felt it was important the United States maintain our presence in other key parts of the world. That goes for Europe. Europe is important to us. Even though two of our BCTs are going to be drawn down, the fact was that those two BCTs weren't here in Europe to begin with; they were fighting in Afghanistan.
So we're going to keep two BCTs here in Europe and then we're going to add a third BCT where we'll take the battalions and rotate them in and out of Europe to do exercises and training and to be able to help the mission. So we are going to maintain -- we're going to maintain a very strong presence here in Europe. As a matter of fact, I think the level goes from about 43 or 44,000 to 37,000. That 37,000 represents more soldiers than almost any place else the world. So we're going to -- we're going to maintain a presence here. That's important.
Thirdly, it's important that as we -- as we rebalance, as we focus on troops elsewhere -- and by the way, with regards to Latin America and Africa, we're going to have a rotational presence where we move guys in that are able to train and advise and exercise, and do it on a rotational basis. We do -- we do that with the Marines. We're going to do it with the Marines in Australia. We do it with the Marines elsewhere. We do with it our assault forces, special operations forces. And the Army is going to develop that kind of capability as well. So we'll do that in Africa. We'll do that in Latin America. We'll do that here, as well, in Europe. So we will maintain a presence throughout the world, because we need to do that for our own security, and to develop the kind of partnerships and alliances that are going to be working for our security.
Fourthly, we've got to be able to defeat any enemy, any adversary, anywhere in the world. And we could face more than one adversary at one time: We could be fighting a land war in Korea, and suddenly Iran moves to close the Straits of Hormuz. We've got to have the capability to be able to confront each adversary, to not only deter them, but defeat them. And we can do that with the force that we've put in place.
And the last point that -- is that we have to invest. We can't just -- it isn't just about making the cuts; it's about investing: investing in new technology, investing in special operations, investing in unmanned systems, investing in multi-mission systems, investing in space, investing in cyber, investing in a -- in a capability to mobilize quickly; which means that we need a strong Reserve and a strong National Guard for the future, and we're going to need to maintain our industrial base. So those are all key elements.
And in addition, we have maintained and kept faith with the troops. We need to -- even though, I have to tell you, compensation is an area that's grown by 90 percent in the military over the last 10 years. And so I've got to look at how we can control those costs in the out years because if I don't, they'll eat up our ability to maintain the force structure, and I can't allow that to happen.
So what we did was this: On compensation, we said, no pay cuts for anybody; I'm not going to do any pay cuts. And for two years, we're going to have allot full pay increases. But then, in the out-years, what we're going to do is reduce the level of pay increase, so that we can get some savings and control some of those growth costs in the future.
Secondly, with regards to health care we're not (inaudible) our Wounded Warriors, the health care for you and your families. But with regards to retirees -- not junior retirees, but elderly and more high-ranking retirees -- we're going to charge more for fees, for copays and for other costs; so now we can help cover some of costs in health care. Health care costs me about $50 billion a year in the military right now.
And then lastly, on retirement, we decided we wanted a commission to look at retirement reform, but we've made clear that it would not impact on any benefits of those who are currently serving. You will be grandfathered in; you'll be protected in terms of your benefits. And if anything, it'll affect only those that come in in the future, if there are reforms that are enacted. But in that way, we can try to achieve some savings in that area.
So those -- that, very briefly, is just a quick summary of the budget decisions we have made. The most important thing is that in the end we are unified, we feel very good about the strategy we're putting in place. We think it meets the needs of the future. We're going to have to continue to confront threats in this world. You know, we're fighting a war in Afghanistan; you've got Iran; you've got North Korea; you've got turmoil in the Middle East; you have cyberattacks that take place; we've got powers that are trying to undermine other countries. We have got to confront those threats.
And I am assured that we will maintain the strongest military in the world. Why? Not because of the technology, not because of the weapons, not because of the warship and the tanks and the planes that we have; but because of you. You are all the very best weapons that we have, because you are the men and women in uniform that serve this country. And I can't tell you how proud I am of those that serve. You guys put your lives on the line and, in my book, you're all heroes.
So I thank you for your service. Thank you for being who you are and what you do, because in the end, it is not only about protecting our country; it is about making our country better for our children. And that in the end, is probably the greatest role of all. If we can give our kids a better life, then, dammit, this is all worthwhile. Thank you very much again for your service.
MODERATOR: Sir, thank you. Thank you for being here and thank you for your service, anybody that serves in where are you and where you are going and so thank you very much for taking the time to do that for us.
Sir, every day at Landstuhl is special. This is an especially special day, because we're going to celebrate the 111thbirthday of our Army Nurse Corps.
There are a couple of traditions here at Landstuhl. And when we celebrate anything, we all celebrate. It is the 111thbirthday of the Army Nurse Corps, but we're going to celebrate with all of our nurses: the Army, Navy, Air Force, civilian, our local nationals, and our Red Cross volunteers.
And the other tradition is that the oldest -- well, excuse me, the most senior officer -- senior officer who is Colonel Jeff Ashley who is our deputy commander for nursing, and our most junior Army Nurse Corps officer Lieutenant (inaudible) will join you in the cutting, please.
SEC. PANETTA: All right, great.
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