 Good to see you, sir. Everybody, can we get over here? Yes, sir. All righty. Good morning, everybody. Well, Secretary Carter, I want to give my thanks for you taking the time this morning to come to the US Naval War College at Newport Road Island and answer some hard questions from our officers here who've come to ask those. I want to prime the pump with a couple of questions that we've gotten in order to get the ball going. I know you want to immediately hear from them. Yeah, can I just, first of all, thank you. Wow, thanks very much. I appreciate your leadership of this place, centrally important place to us. And so I'm grateful to you and the dean and all the other leadership. Continuing education, continuing self-improvement is more and more a part of life in the United States and around the world in general. So organizations are finding it necessary to help people stay up, keep up, stay competitive in the course of their career. So what is done here is, to me, centrally important to my force of the future thinking, which is trying to look generations down the line and making sure that we're state of the art and how we handle people as well as state of the art in terms of how we handle work craft and technology and all the rest that goes in. This is a really important place for me, and I'm grateful to have the opportunity to be here. Just wanted to say that. All right, I appreciate that. My first question has to do with a national security strategy. Here at the War College in our strategy and policy court, our senior officers have been looking at long-term competition. And one of the examples we draw from is the British experience with overstretch or overreach in the late 19th and early 20th century. So given our current budget constraints, aggression with Russia, continued conflict in the Middle East, our international terrorism threat, how can we afford what are the costs and the risks associated with continuing a balance or a pivot toward East Asia and the Pacific? Well, the reality is we've got to do it all. And your question is, can we do it all? But let me just remind you what all is, because yes, there's the long-term competitive situation. That's the only word you can use for it, with Russia and China, which is a position they have chosen but one that we need to meet with steadiness and strength and deterrence. And since they're at the higher end and have generally greater geographic reach than others, that is a stretch for our capabilities. But we're investing a lot in them. And the Asia Pacific, especially important, because it's the single place in the world, single region of the world of the most consequence, simply by dint of the fact that it has half the population and half the global economy. So it's going to be a big deal for the United States. Then you get to what I'll call the hardy perennials, North Korea and Iran. And a little bit lower down the line, but still quite worrisome both behaviorally and in terms of capabilities that they're developing themselves or getting from somewhere else. And then you've got ISIL, which we're going to beat, but that takes a certain amount of resources to defeat them. And I'm certain we'll do that. But there's a certain amount of preoccupation that goes with conducting that war and winning it. So those are the five things that are currently on the plate. And then you always have to have in the back of your mind that our historical record is perfect in never having it right what's the next big thing. And so staying agile, flexible, wide area field of view, excellent keeping the edge, all that is essential for what might come down the road. Now, can we do it all? Well, we can do it all. Obviously, talking about resources, you'd always like to have more resources. My biggest concern is not with the right now, but in the years ahead, I think we have the right mindset. We have determination. We have public support. I was at ROTC, at Yale, where when I went to college, I'll tell you, the climate was so different, not for me, but for most of the people I went to school with. And ROTC wasn't welcome, and it was a big deal. So we have the support of our society. We have the fact that we're attracted to a lot of people around the world like to work with us. They like you. Many of them are here. We like working with other people. We're effective partners. We treat people decently. We represent things that other people want and they want to associate with. So we kind of have all the friends and the allies, and our enemies don't have any. Our opponents don't have any, and nobody likes them. Nobody wants to work with them. So we've got a lot of strengths. The biggest concern I have down the road is at this particular moment, in terms of budget and resources, is I hope that we're not going to see the collapse of the bipartisan budget agreement. If we've got to have some budget stability, we can manage within. We understand we're not going to get everything we want. Nobody ever gets everything they want. But we need stability. We need stability to plan. Our industries need stability. Our people need to know what their future is. Our friends need to know that we're with them. Our enemies need to know we're strong. And so that kind of stability. And we had a two-year budget deal which was done in the right way, which is Washington getting out of gridlock, coming together, both parties, putting the whole smear on the table. Not just discretionary spending, but revenues and entitlements. Because remember, they're the lion's share. You can't balance the budget on the backs of us. It's just the money's not there. So it just doesn't work. So you've got to have everything. And there it was. And it was supposed to be a two-year budget deal. Now, six months into it, they're passing bills that call into question whether that is going to collapse or not. That worries me a lot, because on the other side of that is $100 billion of sequester cuts. That's what happens if the budget deal collapses and we go back to sequester. So that's my principle worry. Strategically, we know what we're doing. Obviously, we'd like to have more. We always like to have more. But we can do what we need to do. But I can't pretend that I know we've figured out how to do that with $100 billion less in coming years. That I don't doubt is going to be possible. OK. Well, I'm going to follow up one question, then open it up to the floor. Since you were talking about budget, over a week ago, you spoke at the Navy's League Sea Air and Space Expo. And you pushed back a little bit on recommendations from the Senate Armed Services Committee in the National Defense Authorization Act with reference to acquisition reform. And given your long service and expertise and acquisition, I wanted to give you an opportunity to amplify, as well as you talked a little bit. If you give us some comments, you talked about the balance with Congress in terms of providing oversight versus micromanagement of defense. Well, first of all, there are some good things in there. And there are many well-intentioned things in these bills. To get to your second point, however, these bills are now 1,000 pages long. They have hundreds of provisions. And in one year, they add boxes to our organization chart. And the next year, they take boxes away. Just on principle, I believe that that kind of micromanagement is not helpful. Lots of reports require that kind of thing. And I think our leadership is the best source of good management ideas. That's why we're here. Like us, they can find another crowd of us. But the management of the place ought to manage the place and not be micromanaged. That said, we've got to work with our committees at the end of the day. They had the final say on our money and on the law. And I appreciate the spirit behind much of what is going on. I understand very well the frustration with acquisition because I share it. I understand the desire to keep pushing us to think about how we're organized and structured. That's fair enough. I'm OK with that. But I do have problems with parts of it. I hope we're able to work this out, but we'll see. The one you specifically reference is a proposal that is not quite clear to me, but has the effect, if I understand it right, of separating research and engineering from procurement, which is sort of like violating the third law of thermodynamics or something. If anything, we have a problem perennially of connecting the research and development enterprise to the production area. The last thing in the world we need is bureaucrat. To me, there's way too much of that. So it was a proposal that was bringing them together further. It would make more sense to me. So I'm still trying to make sense of it. We'll talk to them. We'll try to get somewhere better in that regard. But I couldn't support something that enforced that separation. I just know better. And our history over time, and I've been doing this a long time, as Admiral Howell referenced, I go back to Harold Brown was my first boss, also a physicist, by the way. But in Harold's day, and Harold been director of research and engineering. And that meant the buying guy, too. I mean, it meant it was AT&L. It's just we renamed it over time. So that one I really can't support. And there are other ones that I can't support in there. And I would respectfully appeal to the committees to stick to the big things and not have a lot of little move this around and move that around. It's almost impossible to believe that from that remove, they can have a better perspective on what we need to manage ourselves. That's not that there's anything wrong with them. And it's not that they don't understand many things. But we're right in the thick of it. And I think that our senior leadership, our chiefs, our service chiefs, our service secretaries, myself, ought to have the latitude to organize our environment and not have it organized for us. OK, appreciate that. We'll take questions. I remember to use the mic because this has been broadcast. You have a question there in the middle? Yes, sir. Good morning. Erica Jordan with the Defense Contract Management Agency. In the past, reducing oversight of defense contractors has been less than successful. One prime example will be the future combat systems. Why do you think that increasing their in-value management system threshold will result in better defense contract management as well as reduce it? I'm sorry, increasing. I just missed the last part. In-value management system threshold. Well, first of all, DCMA is a great organization and a very essential one. And I think the question I don't know whether everybody could hear was basically about, I'll put it in these terms, the balance between ceding to the contractor a lot of control over program execution rather than keeping tight control and oversight on the government side. That's a difficult balance. You're right. Future combat systems was an example where we outsourced the systems engineering, configuration control, everything. And that was the rage at the time. Let industry do it. They'll have the expertise to do it. Well, that didn't work almost all the time. It failed. And so you're right. The pendulum needs to come back. Now, not all the way back because I do want there to be shared responsibility and shared expertise in industry. And also, I need to be careful about what we can take on because to be blunt about it, our acquisition system is uneven. Some parts of it are up to that job. And other parts we need to work on and get up to that job. DCMA is an inestimable help in all this, I should say. Say that. So it's something that I think where the pendulum has swung back in the direction of more direct government involvement. But there's a consequence to that, which is we've got to get better at it on the government side. That's the civilian side and the uniform side. And that's related to something else that comes up in the Goldwater-Nickels discussion of acquisition, which is the role of the services and the service chiefs in acquisition. And I think that's very important. That's an area also where the pendulum swung too far. And the service chiefs basically didn't have anything to do with acquisition for 15, 20 years or so, or not nearly enough. And I think that was the pendulum going too far. I'd like to see it get back the other way, but I've told the chiefs, in order to do that, you have to educate yourselves. Because most of you and most of the senior leadership by now in all the services have gotten there, not because of their expertise and acquisition. That was the way it was when I started out in the Cold War. That was the time we never actually did anything. We just got ready to do things. And so over the decades, being good at getting ready to do things was what made you proficient in your service. And so acquisition executives rose to the top. That nodded, and there's nothing wrong with this. But we've had a more operational set of decades. And so we tend to have more operators at the top. And so these guys need to get in the game. But I'm telling you, you need to be humble about what you really understand. We need your understanding of what the requirements are. We need your management and leadership acumen. But you're also going to have to understand how to manage big programs, how to deal with technology, and so forth. And that's not something that is in your background. Next question. They're in the back. Yes? Sir, good morning. Ashley Pap, despite my new England draw line from the Royal Australian Navy. Most of us are about to embark on the perhaps the next phase of our careers at very senior levels. Some of my compatriots are about to be promoted to admiral, of course, when they get back. But you talk about half the population and half of the trade in Asia, the Western Pacific. We're seeing, though no one has figured out the algorithm yet, we're seeing a new model of pushing the boundaries of a global rules-based order, particularly by Russia, through the Ukraine, et cetera, and in the Black Sea. And then China in not only the South, but the East China Sea and further out into the Blue Continent. What's the tipping point that forces the international community to say, hey, that's enough without boxing an adversary into a corner where they have to come out swinging. We're about to go and live very complex and volatile environment where the ones are gonna have to untangle these threads that are becoming more and more tightly twisted. What's your advice for perhaps your countrymen and also your allies on where that needs to go, where that tipping point exists when saying enough is enough, doing something about it? Good question. First of all, let me just salute our Aussie friends everywhere around the world, including at this very moment. In the places you know about and a number of places we can't talk about here, but you probably individually know about, we're like this with the Australians in so many ways. And it's a country that like the United States who has great credit regards itself as having a responsibility for the global order. And then that gets to your question. Then there are some who evidently don't either wanna challenge that or have an intensely self-absorbed view of how to conduct themselves internationally. And in their very different ways, Russia and China fit that general description. My view is that just looking at the leadership of those two countries and their current inclination, this isn't gonna change soon. And now it's having the effect of isolating them because everybody, you're talking Europe, it's the NATO side and in the Asia Pacific almost all countries are reaching out. And look at Vietnam and the United States just in the last few days with the president. Why is that? It's because they know that stability and security is what's created the Asian miracle. And that it could be threatened by this kind of instability and they wanna be on the side of keeping a system that has the trade values and the human values that have made that part of the world work. So I think you gotta look at this as a long, I don't see there being a barring something, sort of some sort of instability in those two countries which I also don't see happening. Given the current leadership, I think this is gonna be the trend for quite a while and we need to be in it for the long term. So this is gonna be a long campaign of firmness and gentle but strong pushback for probably quite a number of years in both places. Now I also believe that the internal logic as was true with the Soviet Union over those many decades and again a different situation but only similar in this respect. The internal logic which suggests that this isn't really what's in the interest of the Chinese or the Russian people in the long run but that will prevail at some point but that's almost academic at this point because their leadership is way on the other side of that equation right now. So I think we have to brace in for the long run. That's certainly our approach. Our rebalance isn't a couple year thing or do this for a little while and try it out kind of thing. This is a long term commitment. After all we've been at it for 70 years. And we'll stay at it because we have been the pivot to all military power in the region and the linchpin of security and stability in that part of the world. We're gonna keep it that way. That's what the rebounds is about for a long time. Okay last question over there in the back. Good morning Sir Major Dylan Patterson from the Air National Guard. A couple years ago your predecessor former Secretary Hagel was here not at the War College but he was speaking to a group in the industry and he made some comments regarding the proliferation of advanced weapons into adversaries of both state and non-state actors. When you look at some of those weapons a lot of it is unmanned systems, stuff in the cyber domain and the nature of development in that area seems to be a lot faster along Moorslock progressing every 18 months, two years as opposed to building capital ships which take years and years to develop. An example might be Nigeria where we have some students here from Nigeria that are procuring unmanned systems from China instead of us. So when we look at the ability for competing defense systems to develop stuff very fast how does our process whether it's the PPBE process or our defense foreign military cells recognizing that's probably Secretary Kerry's question but if you answer that I won't tell him. I don't understand his line. It's actually both of our questions. How do we align our acquisition and development process and getting that to our partner nations so our equipment, our tools and our partner's tools can keep pace with an adversary? Good question. Two things. First of all, we're too slow and that's a problem and if you really want to go after acquisition you don't take research and engineering and separate it from acquisition. That was my point earlier. They've got to come together faster because the future is going to go to those who are agile, creative up to date, competitive. And yeah, there are some things like capital shifts that naturally go on longer time scales but unfortunately a lot of the reflex of our acquisition system is to operate on that kind of time scale which as you point out is completely inappropriate when it comes to things like drones when it comes to things like cyber. And so that's a very big preoccupation of mine and it's the central reason why you see me pushing so hard to connect us with the tech community and rebuild those bridges that were so strong when I started out in this business between the technical community in the country at large and the defense world. That was a union bred in this country in World War II. It lasted for a few generations thereafter including mine and now it's just not a natural thing. People they don't know us and our problems they don't know how to work with us as easily. We have to, but it's also no longer true as it was when I started out that all technology or most technology of consequence originated in the United States and originated in the defense or government environment. That's just not true anymore. So we have to have a different model where we're connected. That's why you see me on Silicon Valley up in Boston out in Austin and so we're trying to get the most vibrant parts of our tremendously innovative country harness to the United States. Now these guys want to do it. You talk to them, they're patriotic. They care about, I mean in the main, they care about the country and the world. They know they can't, that everything they do has no meaning if there's no security. They're people who like to make a difference. They like to do things that matter. They like to do things that are consequential and they know that what we do is consequential. So I find the uptake is really great but I've gotta work real hard on that and I urge all of you to do the same. We just can't sit back and expect that it's all gonna come to us anymore. That's long in the past and we can't expect that we can do things on 10 and 15 year time scales. The export control system I don't even want to get started on. There's so many, oh, that's a nice word, to archaic aspects of that system, it makes your head hurt. And so you're right, so we're frequently behind and it would be better given that country X is gonna have a certain system but it would be better if they got it for us because at least we'd be in there and it would be part of our partnership and so forth but to stand back and say, well, we don't wanna do that. So we're gonna let somebody else sell the identical item into that, I don't mean any sense to me, that's cutting off our nose just by our face and yet we do that again and again and again. So it's a serious problem and I did when I was AT&L, a number of things to speed us up. We're still too slow but we're a lot faster now. We have basically fast tracks for stuff but then we do wait for the diplomatic approval and I respect my diplomatic colleagues and their views and so forth but the results here don't add up, they don't make sense, it's not a sensible system but I think that is in all fairness secondary to our need to pull our own socks up and get faster and more agile. Otherwise we are gonna be left behind, we can be generations behind just believe me, there are areas right now where we're way behind, we're trying to catch up or two or three generations behind and the enemy, just take ISIL for example, ISIL's quite agile in the net, they're barbarians but they're good with the internet. Now we're trying to eliminate that capability from them, that's what I've got cybercom doing which would be our first real cyber campaign in Iraq and Syria and take that freebie that command and control freebie away from them and make that part of crushing them in Iraq and Syria but you know, 10 years even, certainly 20 years ago, that wouldn't have been an aspect of the conflict, it's gotta be an aspect of the conflict now and we gotta get in the game and be good at it. All right, well thanks for taking time today, you have any final comments before? Well, I just to say how much I appreciate that the, yeah, I don't know what it feels like to you all to be here in terms of your overall careers but I'm gonna tell you how it looks to me and this is to my international friends as well, to the international people here, thank you for being with us, we don't take it for granted, I think at our best, working together, we represent the civilized, no other way to say it, world, protecting itself, protecting its people, letting them do what they deserve to do which is live their lives and dream their dreams and have peace and that is a wonderful thing so thank you for those who are not American here for being with us and for the folks from the American military and our civilian counterparts as well, all our DOD family. Your being here represents your awareness that in today's world, we're never out of school, we're never out of school, this idea that you graduate from school when you're 16 years old or 20 years old and then that's it and you live with the rest of your life, that's gone now, everybody needs to be constantly and learning constantly changing because we all individually need to be competitive as well as collectively be competitive so I need people that have that edge because I need the best because in the end of the day our military is the best in the world because our people are so good and I can't count on people like you generation after generation after generation. I've got to work hard just like I have to work hard at connecting the technology base, I have to work hard at connecting to the population and getting them to join us, getting once they've joined us to stick with us and when they've decided to stick with us, continuing to give them opportunities to grow and change, assume more responsibility by having more capability, that's what this place represents us, it's an extremely important institution to me, it's a highly successful one and I look forward a little bit later, I'm gonna try to learn from you what your scholars and what you're thinking can provide me in the way of advice but it's principal purpose is to educate people who are already highly successful and give them that sort of extra jet pack to go further and it's extremely valuable, it's an incredible part of improving the readiness and the prowess of our force so congratulations on being here. Well thank you very much for the interview. Thank you. Thank you.