The Military We Need: The Defense Requirements of the Bush Doctrine

June 10, 2005

Unedited transcript prepared from a tape recording.

Proceedings:
MR. KAGAN:  I am Fred Kagan.  I'm a Resident Scholar here at the American Enterprise Institute, and it is my great pleasure this morning to be moderating a panel on an extremely important topic.  For a number of years now, President Bush has been explaining that thewe're a nation at war, and we have felt that there were fundamental changes that had taken place in America's security situation in the aftermath of September 11th.  And it is a very important thing, especially as we have a QDR underway, and a very important one, to consider whether America's national military priorities have changed appropriately in order to adapt to these situations.  And in order to begin the process of answering the question my friend and colleague here at AEI, Tom Donnelly, has written a very excellent short book, "The Military We Need."  Copies are available now outside.  Please take one.  And we're here to discuss this issue, and we have a distinguished panel as well to help us.

We have Michele Flournoy from the Center for Security and International Studies; Dan Goure from the Lexington Institute; and Mike Vickers from the Center for Strategic and Budgetary Assessments.  These are all very distinguished scholars and analysts in their own right.  And they have made their own contributions to this discussion, and we are very eager to hear their thoughts as well.

At 11:00 a.m., we will have a speech by Mr. Ryan Henry, the Principal Deputy Under Secretary of Defense for Policy, and at the appropriate moment I will end the question and answer period, introduce Mr. Henry, and we will move directly to his speech.

So without further adieu, let me introduce Tom Donnelly to tell us about his book.  Tom?

MR. DONNELLY:  Thank you, Fred, and thanks everybody for agreeing to be props in my book sales party, and I look forward to returning the favor by offering you a straw man, which you can suitably set on fire after I'm done.

I'm not going to obviously attempt to go through the entire argument laid out in the monograph in detail.  And, in fact, the monograph itself is rather a general appraisal of the subject.  And it's not intended to be a shadow QDR or my attempt to try to do the level of analysis that the Pentagon is undertaking at the moment, but rather a yardstick, a way to measure what the Pentagon finally produces, and it's meant to be a guide to the perplexed as you might say.

So I have a little bit more interest in trying to connect military means to our strategic ends, and I think that is the best way to think about the challenge that the folks in the Pentagon face.

The President, over the last couple years since September 11th, has articulated, through his speeches and through the written documents like the national security strategy, a really bold new ambitious set of strategic goals for the United States in the PostCold War world; in ways that surpass previous Administrations for their reach and for their specificity.

I won't again review the President's language in detail.  In fact, he also sort of stays at a fairly general level, setting more strategic goals rather than articulated a howto strategy to achieve those, but suffice it to say that trying to preserve a balance of power that favors freedom to transform the political order in the Middle East and in particular to establish liberal democracies in places like Afghanistan and Iraq does represent a fundamental shift in American strategic attitudes and strategic goals.  So in simple terms, the benchmark or the goal line has been set quite a bit distant from past American policies.

And the question is ought that not to provoke some change in American military posture.  Shouldn't the military ends be betteror pardon memilitary means be better fitted to the strategic ends?  And in my judgment, my summary judgment is that that gap which began to open up during the course of the 1990s has gotten progressively wider and wider.

And so what I want to do today is kind of limb [ph.] that basic proposition in a little bit of detail.

Although we have a formal national military strategy document, it, too, I would argue, falls a little bit short of fully defining or fully aligning itself with what I would take to be the implied strategy in the President's doctrine, and I would say essentially there are two important strategic tasks that the United States faces if it does wish to preserve the liberal world order that we've enjoyed in the PostCold War period.

And most of the attention thus far has been given to the project of transformation, political transformation, in the Middle East, but there's also the question of how to shape the rise of China.  We are clearly deeply involved with mainland China economically, but the $64 question or the $64 billion question is how that strategic relationship will develop over the course of years and the decades.  And there's some I think fairly strong evidence and good reason to believe that we need to hedge our bets on that front.

And, of course, because we now live in a globalized world, an Americanized world, if you will, the question is whether problems that we have in the past regarded as simply regional issues are, in fact, just regional discrete issues or whether they tend to blend together within the context of globalization.  Is it possible to be a regional power as we've always, say, regarded China or is it a fact that in order to exercise regional power that there is a global dimension to that, and what are the potential strategic implications if there is a conjunction between the challenges we face in the Middle East and the challenges that we faced in East Asia.

Further, I'm hoping that my book will provoke some discussion about what actual strategies ought to be for these things.  We do have, again, a reasonable definition of what our goal is in the greater Middle East, which itself is an expansion from our old Persian Gulf centric approach to the region of IsraeliPalestinian approach to the region.  The greater Middle East is now a term of art that covers a swath of the planet from West Africa to Southeast Asia.  So simply in territorial expanse, the way we think about the region is much greater than it used to be.

And the question is, you know, how do we go about solving that macro problemwhat kind of strategies are appropriate for it?  Do we want to take, say, to use the old language of the middle 20th century or has a little heart?  Do we intend to take a direct approach to try to deal with the problem, say, of the Arab heartland as our first priority?  Or do we want to take an indirect approach, one that would deal with the periphery of the Islamic World or the greater Middle East and then sort of work its way inward?  Or is there a combination of the above strategies and even more importantly is this something that we can seize and maintain the initiative in?

It's reasonably argued that, you know, the invasions of Iraq and Afghanistan weredo give us the strategic initiative in this region, but as far as I can tell, there doesn't seem to be much certainly explicit discussion in the Pentagon or in the government about how to maintain the momentum, how to retain the initiative and without really offering a solution I think that's a question worth posing.  And, again, trying to translate that into military plans, military requirements would seem to be a top priority for the Pentagon and for the QDR.

Secondly, the question of how to shape China's rise.  Again, the debate between engagement and containment seems to be me to be kind of overtaken by events.  There was very briefly an attempt o combine those two under the term concagement, which was a product of theI think the Rand Corporation in the late 1990s, and that term, although infelicitous, did capture something that was essentially true about our relations with China and the competition with China, and that is unlike the Cold War with the Soviet Union, there are economic imperatives and economic issues that weigh heavily in U.S.China relations and indeed in China's relations with the rest of the region and the rest of the world that can't simply be set aside.  The really sort of handy thing about the Soviet Union is that other than tanks and aircraft and intercontinental ballistic missiles, they didn't make much that anybody wanted to buy.  And that's not the case with China.

Conversely, it is also quite obviously the case that China hasis not a satisfied status quo power.  There are elements of the international system, the international security order, as it exists, that China has doubts and questions and possibly objections to, not the least of which being the status of Taiwan.

But again, to go back to my earlier point, the question is whether China's rise as a great power is simply a regional phenomenon or is it really a global phenomenon.

And when you look at, say, situations like the crisis in Sudan, in Darfur, which would seem to be, at first blush, if nothing else, a moral crisis, a humanitarian crisis, but I would say is also a strategic crisis and a point of great strategic concern for anybody who's interested in addressing the Middle East's political problems of failing and failed and illegitimate currently existing states and the problem of the spread of terrorism and the increasing violence of terrorism is in Sudan complicated by the fact that the regime in Khartoum is essentially a client state of Beijing.  There's something like $500 million worth of oil business that's done between Sudan and the Peoples Republic, and there's a significant arms transfers as well between the Peoples Republic and Khartoum.

So it means that getting a Security Council resolution, for example, is kind of an uphill climb.  And assembling any sort of traditional coalition to address the crisis and assembling a military force, which is I would say certainly a requirement if anybody is serious about intervening in Darfur becomes a rather more difficult thing at the U.N. or just simply in international politics.

So if that's the in macro sense the security challenges that we face, what are the missions for America's armed forces?

Well, as always, and as we have been reminded in since September 11th, the first rule of many nations' defense is to defend the homeland, and that's taken on a variety of new implications and new meanings since September 11th.  I don't want to get into that in extensive detail.  I would say my recommendations are more traditional in this regard in that I would say the challenges that we face are essentially challenges to be met abroad rather than simply to be defended against at home, but allowing for that clearly there needs to be a continuing reevaluation of the role of military forces in homeland missions.

In addition, there has always been an expansive definition of what the American homeland is going back to the Monroe Doctrine and who laid the founding generation, who looked at the region of the Western Hemisphere and particularly Central America as being if not directly part of the American homeland, then certainly part of the perimeter of the American homeland if you will.  So there will continue to be an important role for American military forces in the Caribbean Basin.  There are a lot of problems still in that region, not to least of which continues to be Haiti.  But for American military planners, this remains an important planning factor in a mission that they have to take seriously.

To turn to the Middle East and again without elaborating in too much detail, quite obviously the missions in Iraq and Afghanistan are, to use Secretary Rumsfeld's term, both likely to be long, hard slogs.  Force levels may go up or may go down in both places, but it is instructive in particular to look at the force levels that we've sustained in Afghanistan, which we would regard of the two as the more rapid success.

The small force that was the invasion force, the force that toppled and drove the Taliban from power in the first place has been succeeded by a force that's been pretty consistently in the 18,000 or so range for the better part of a year now.  It was on a pretty steady ramp up.  It surged to the 18,000 level just prior to the Afghan elections, and it hasn't really gone down since then.

This is actually a fairly small force.  Afghanistan is as large as Iraq in terms of population roughly speaking, about 25 million Afghans, and American forces are spread rather thinly throughout the country, and, in fact, most of what they're doing is not actual combat operations, although there's a significant level of that and there also continues to be counter terrorism activity there.  But the majority of the force is involved in helping to train first the Afghan National Army and increasingly the Afghan National Police.

So I think it's reasonable to presume for the future that force levels are going to remain roughly in that bandwidth, if you will, and that military planners should just simply accept that actually is a measure of success, not a measure of failure.

Again, I don't want to get into a deep discussion about force levels in Iraq, but even if we are as successful as the most ambitious and most optimistic of us might project, whether we could, you know, draw down to the levels originally anticipated in the invasion plan any time soon I think is certainly a debatable proposition.

Thirdly, of course, there is the question of how to respond to the threat of China, both in East Asia and throughout the world.  Again, without going into it in detail, quite clearly the quality of the force required, say, to defend Taiwan is obviously more maritime and more air power than it is land forces, but again the nature of that challenge is that there needs to be a very rapid response, and the book does walk through in some small detail the nature of the likely scenario or a likely crisis across the Taiwan Strait.  And the one thing that really strikes me is the need to have forces able to respond rapidly or essentially on station to begin with to first of all deter the chance of that happening and second of all to reduce China's opportunity for a decapitating rapid strike against Taiwan.

A couple more things are worth mentioning in the missions category.  Past QDRs, the earliest QDRs, really talked about contingency missions more than, say, the 2001 QDR did, meaning specific contingency measures, meaning that there was a block of forces meant to respond to unforeseen crises.  I would just argue that this is a way of thinking that we need to keep very strongly in the front of our minds or Pentagon planners do because the nature of these contingencies is likely to be more complex than we used to think of them.

First of all, we now understand that particularly in the Middle East that, you know, kicking down the door or actually just removing a despotic regime or striking at one is rather the easy part, and our contingency plans I think across the board now are becoming and certainly I would urgebecome even more so in the futuretake formal account of what we in Iraq have come to call phase four postmajor combat operations.  That does need to be part of our contingency planning.

Secondly, there are new kinds of contingencies that are incredibly stressful:  the contingency involving nuclear arms states, and I'm not thinking simply of North Korea or Iran, but it's reasonable to ask ourselves what we might do in the case of, say, Pakistanit's not as though the Musharaf government is on the verge of launching a nuclear war so much as it is perhaps an assassin's bullet or a revolt away from a situation where we find nuclear materials, nuclear scientists, and other kinds of bad things in an unconstrained and uncontrolled state that might well require an American response.

Finally, and I think one thing we can give some credit to the Administration for is taking the process of transformation more seriously.  There are obviously serious debates about what the nature of transformation is, but it has to be regarded as an ongoing mission for the forces, meaning that there is a part of the force whose job it is to investigate and push the process of transformation that needs to be somewhat set aside from actual ongoing operations that needs to have its own resources, meaning everything from people to dollars, to be able to better define how new technologies and new methods of operation can be integrated into the force.

I have two other issues that I want to conclude very quickly on before I subject myself to the cross examination of my colleagues and friends.  The two other parts of the report that I think are very much worth focusing on are the question of American military posture, meaning not only the domestic base realignment and closing process, which is obviously begun, but much more important the question of our overseas posture.

The Administration I would say has done a very fine job of addressing the issue, but I think the change in the world is accelerating and moving faster than the overseas posture review really accounts for, particularly in the Middle East and in East Asia.  So it's a process well begun, but one that the Pentagon needs to think about far more ambitiously and aggressively, particularly in light of our longterm commitment to the Middle East, particularly in light of the antiaccess technologies that are being proliferated around the world, and thirdly in regard to our requirements in the Western Pacific.

And, of course, at the end of the day, the test of any QDR is really where the money goes and what it buys.  I am told reliably that the current QDR is at least at the beginning casting a wider net and thinking more broadly in this regard.  Having been through a lot of these things since the first bottom up review in 1993, I reserve the right to be cynical about where it's going to come out.  But just because one is required to do, I want to toss out a couple of benchmarks that would matter to me.

First of all, and unfortunately, this QDR like previous QDRs is an exercise constrained by the political judgments about what the defense top line would be.  So inevitably it's going to be a rearranging of the deck chairs kind of exercise, which I think is almost always a recipe for heartbreak.  And in my judgment, very strongly, is that our ground forces, as professional as they are and as fabulous as the job is, both the Army and the Marine Corps are doing on their missions in Afghanistan and Iraq, are just simply too small for what we're asking them to do now and what we're likely to ask them to do in the future.  And I think that current estimations of how much larger the force needs to be are off by maybe a factor of five or so.  So I would think that over the long haul increasing ground force, and I mean Army and Marine Corps, both, in strength, by something in the range of 125,000 is definitely called for.

And secondly, the fire power intensive force is the Air Force and the Navy also needs to be reconfigured for the missions that we face today.  Not only does the Air Force in particular play an important role in supplying and maintaining and supporting ongoing operations in the Middle East, but both the Navy and Air Force are really going to be the key first responders if you will to any crisis in East Asia or Southeast Asia.  And there are a number of things that need to be done in order to address that issue.

First of all, as, again, as I suggest earlier, posturing those forces closer to where they're more likely to be operating and more likely to be the key operators is important.  And secondly, anybody who can look at a map can tell you that East Asia is a big place.  The Pacific is a big place.  So distance is a killer, and we need to transform both our naval forces and our forces to respond to the tyranny of distance.  That means we need to build aircraft that are not only stealthy, that are not only precise strike platforms and are dominant in airtoair combat, but we need to be able to do that at longer range.  We need to be able to project power at greater distances, to hold at risk targets that are far away from our bases not only in the region, but our bases elsewhere.  And, again, as we look to reconfigure our fire power heavy services, that has to be something that matters as much, if not more, than stealthiness or agility or speed or any of the other factors that have driven the designs of the past.

So with that very general presentation, I will turn the microphone to my colleagues and I guess we'll just go down the batting order.

MR KAGAN:  Actuallyyes, I think that's fine.  There are a lot of things that I would love to be able to pick up on in this very important presentation, because I think Tom really is on to an extremely central not only topic but way of approaching the topic of trying to look very, very carefully at the relationship between ends and means, which should be the fundamental function of any grand strategy, and yet is so rarely done well around here, where we focus on one or the other exclusively.

But in the interest of getting to questions, I think I will waive my moderator's privilege to speak and turn the microphone over to Mike.

MR. VICKERS:  Thank you.  Tom asked me rather than directly comment on his book to address four things.  What do I think the QDR really should be about?  What are the big issues that ought to be tackled?  What extent of change is required in our capabilities mix and posture?  What impact should our ongoing wars have on this review?  And then how do we evaluate it when it's done as outsiders?

And then I would add a fifth one which is does this thing really matter?  And I'd like to start with that very briefly.

I'd like to suggest it really does matter; that it's by far the most important of the PostCold War reviews that we've had.  We're, after all, a nation at war.  There's a realization I think inside the Pentagon and out that wethere's a clear need to significantly alter our strategy as well as our capability mix and posture.  There's been some movement on changing the strategy.  There's a new release earlier this year of a 2005 National Defense Strategy.  The central tenets of it say we're oversubscribed in traditional operations.  We need to get a lot better at three other kinds of challenges, irregular, posed by both terrorists and insurgents, catastrophic challenges, mainly weapons of mass destruction, and then disruptive challenges that the pace of change or a rising power could potentially pose to us.

I would also suggest that there's a greater opportunity to do change right now than there has been in previous reviews, and that the ongoing process of change is not getting us there.  The Department's institutional mechanisms for addressing this simply are not producing the change required.

I would suggest that the period we're in right now is very much analogous to the early Cold War.

So first topic, what ideas should animate the QDR?  I think there are really two.  The first big one since we moved strategy more or less in the right direction is reshaping and resizing DoD's capability mix and its posture and how those capabilities are deployed to better address four enduring strategic and operational challenges.  Now, these challenges are trying to take the National Defense Strategy categoriesirregular war, disruptive challenges, catastrophicand turn them into something concrete that planners can do something about if we're going to change capabilities.  The first of these is based on what DoD officials have said publicly is defeating Islamic extremists' networks, terrorist networks all across the globe, basically winning the global war on terrorism.

The second is defending the homeland against not only state actors, but also nonstate actors, and preparing for emerging threats such as advanced biological threats.  There's tremendous pace going on there as well as cyber threats.

The third is shaping the choices of and hedging against the rise of major powers with disruptive capabilities.  It's very important in this area to, without naming names, to look beyond the Taiwan prism.  The QDR is supposed to have a 20year horizon and if any area of these challenges, it's important to take a 20year horizon it's this one.

And then finally, addressing the operational consequences of weapons of mass destruction proliferation.  This ranges from counter proliferation to loose WMD problem, either from a collapsing state or from illegal proliferation as well as largescale power projection against nuclear powers.  Most of the folks that we can imagine fighting these days, that are state actors are going to be a nuclear power or soon will be nuclear powers.

Now, in my judgment, the DoD leadership really has got these challenges just about right from public statements that they've made.

The second issue is really if you look at these challenges is determining the implications of these for the broader national security establishment.  It's not clear where the boundaries lie in homeland defense between the new Department of Homeland Security and the Department of Defense.

If you look at the war on terrorism between the Central Intelligence Agency and the Department of Defense.  You know, our fundamental problem is finding terrorists and messing with them covertly and doing a few other things.  In the war of ideas, should it be the Department of Defense, Department of State, or some other institutions like we created in the Cold War.

And so again, this is not simply a DoD problem.

Now, again, this is very important to do.  It's very hard to do as part of the QDR.  So we'll see what happens there.

My colleague, Tom, turning to his book for just a minute, arrives at a very similar diagnosis I think to DoD senior leadership about what the challenges are.  I would say, though, however, in my judgment the Global War on Terrorism does not equal the Middle East.  We call it global for a good reason.  Our threats emanate as much or more from Europe.  All one has to do is look at where were attacked from on 9/11, and also where the threats, you know, all these color ratings have emanated from since 9/11, and you see Europe figures rather prominently as well as some other countries.

I think Tom is exactly right that the QDR ought to be about strategies capabilities link, but I don't believe that for force planners, it's useful to talk about a grand strategy of bringing democracy to the Middle East.  First, it's not clear to me what those military implications really are.  It's a good grand strategy to have.  We'll bring all elements of national power to bear on that.  But beyond gaining and maintaining stability in Afghanistan and Iraq, two countries out of many, it's not clear what we want the military to do.  I can't imagine we are going to invade and occupy our way to democracy and global security from terrorists.  That strategy simply is not going to work in a six billion population world.  And I would say it's by no means clear that democracy will solve our enduring challenge in the terrorism or Islamic extremist area.  All I have to do there is point you toward the Islamic Diaspora in Europe and look at the problem of nonassimilated minorities.  Why wouldn't you have nonassimilated groups or other aggrieved minorities or subgroups in other countries.  Or look at the Philippines, which, thank heavens, had a wonderful democratic revolution in 1986, and lo and behold, it's one of the area of the Global War on Terrorism that we've periodically worried about.

The next point I would make is that the Global War on Terrorism calls for a global distributive posture beyond the Middle East, beyond concentration in two countries and Iraq and Afghanistan capable of global persistence and rapid response.  And these timelines need to be measured in minutes in a lot of cases.

When you find out where a terrorist is, you got to get him when he's in an Internet caf( within 20 minutes.  So having muscular forces hours away or days away isn't going to help you.

Hence, you need a simultaneous strategy, not a sequential one or a concentrated.  We need to deal both with transnational an intrastate, but clearly also back to the democracy problem.  There are certain countries that matter more than others, and let's be frank about this.  We don't want Pakistan to collapse.  We don't want Saudi Arabia to collapse.  Sure, we want them to become democracies, but our attention got focused, particularly on Pakistan, a lot more sharply after 9/11 than it was beforehand.

And again, I would point back to lessons of Iran.  You know,  we've been to this movie before.  We tried it in 1979 to stand back and watch what happens, and it's been a very unhappy quarter of a century since.

Now, again, our primary Global War on Terrorism problem isn't confined to two combat zones.  It's fundamentally in countries with which we're not at war.  It spans hostile countries potentially that might offer state sanctuary to terrorists.  It spans combat zones, where we have a problem.  But it's all the rest of that stuff that matters.  And how you operate in countries that you're not at war with, of course, is rather different.

Our primary task, therefore, is building partner capacity, strengthening weak states, doing it through low visibility or small footprint means.  And, again, after all, our goal here is to isolate the terrorist.  We don't want to foster what in Islamic circles is known as the defensive jihad.  We're fighting you because you're here.  You're in our face, and that's why we're doing it.  We want their own folks to fight them.

The force planning essence of the Bush Doctrine, in my mind, is point one I think which gets at Tom's China point, we want to maintain military superiority across the board.

But second, it's really not bringing democracy to the greater Middle East.  That is maybe part of our grand strategy, but it's defeating terrorist forward preemotively and with multiple partners, terrorists with global reach, denying them sanctuary.  We want to keep these folks stateless.  We want them not to be able to go into weak states.  We don't want state sponsors.  In my judgment, allowing the Afghan sanctuary to develop was the biggest strategic failure of the 1990s.  It was a colossal strategic failure.

And then while we're doing that, we increase global pressure to constrict and reduce their global reach, and we want to deny them access to catastrophic weapons.

Well, in the minutes remaining to me, what does this mean for force planning?

First, we need to recognize that we're in a protracted war, an irregular war, but a protracted one, one that might last three years.  It might last 30 years.  It can't be treated as a lesser included case, which it has been up until the present time that you basically do traditional operations and then you do the war you're actually in kind of on the sly.

We need new theories of victory.  The way we've planned our force says we're going to defeat or halt someone very quickly within 30 days or so.  If necessary, we'll conventionally change the government of one regime.  Well, just take a look at the world since 9/11.  Does the Global War on Terrorism look swift to you?

Well, it's, you know, three plus years and counting.  Second, is the mechanism we use conventional regime change?

Well, many in the Pentagon argue now we have three decisive wins going on right now, but they're very different.  We have Afghanistan which we overthrew the government unconventionally with a small footprint; Iraq conventionally.  And then there's the global war on terrorism.  We're trying to defeat radical Islam across the world.  And so you need to express these things in different categories than we had before.

Clearly, different forces will be required to do this in different units of account.  If I try to look at the forces that are going to do China versus that doto shape their behavior as well as potentially hedge for a bad outcome down the road, versus the forces that do the Global War on Terrorism.  They're not all the same.  They're very different.  They look as different or more different than nuclear forces and conventional forces did in the Cold War.  Some, as Tom said, are long range, stealthy, undersea warfare forces.  They can help you at the margin in the Global War on Terrorism.  The Global War on Terrorism are special forces, intelligence, infantry counter insurgency forces and others.  So the idea that one size fits all I think is seriously misguided.

Transformation needs to adapt to this.  Our network centric warfare.  We are at the 99th percentile of traditional operations  Getting any better at that isn't going to make ruble in nonnuclear power like Iraq in the first three weeks any more than it already has.  Winning not in four days as opposed to three weeks isn't going to provide us any benefit.

Now, I tend to disagree with my colleague Tom here about however desirable a rise in defense spending is going to be.  I don't think it's going to happen.  I think it's basically the end of this long rise is coming to an end, and it's something we're going to have to deal with.

So what are some of the implications for the services?  I think Special Operations forces and intelligence are the growth stocks in the Department of Defense right now.  The Army and Marine Corps are going to try to move more toward irregular warfare while retaining a significant conventional capability.  But we're probably going to move toward one ground intensive major combat operation, and they're going to devote themselves more to protracted irregular warfare, which I think is rather sensible.

Now, I don't believe that if we had 125,000 more ground troops right now the mess in Iraq would be any different or that it will impact our ability to win it.  I think we are going to win it.  I just think it's a matter of time.  And that's the one thing about insurgencies.

The Air Force and Navy need to move in the two directions that Tom talked aboutreshaping themselves for the Global War on Terrorismthat's things like Predators and [inaudible] combat ships as well as then a rising continental size power who shall remain nameless that requires more longer range and others.

Now, this is a big cultural and financial challenge, particularly for the Air Force.

So how would we know success if we saw it at the end of the day.  Well, I think if you get a new force planning construct that acknowledges we're at war.  This isn't just contingencies; that we're at war and we're likely to remain at war, and here's how I'm adapting to it that would be a big step in the right direction.

If we altered our theories of victory, of how we're actually going to win these wars, and not pretend we're winning them in 30 days or we're conventionally changing governments is the only tool in our tool kitthat would be big victory in my account.

And then as Tom said, if we actually resourced that and shaped our capabilities toward that, well, I'd be happier than a pig in heaven I guess.

Sobut it does require investment and not just divestment.  In other words, we're not going to get there by a smaller or but similar budget trimmed military.

With that, I turn it over to Dan.

MR. GOURE: Thank you.  I am going to, in fact, use Tomhis book as my foil, in part because he sort of dangled the bait in front of me when he sent me a copy of the book, he said, I'm sure you'll find a host of big fat juicy targets in here.  So how could I not go that route?

First, I really want to compliment Tom on this work.  It is an argument; right?  It's not a detailed CBO, CRS kind of study, and we desperately need to have that kind of argument, and you know, if we're going to start, well, it would start here about all these issuesnational security, defense strategy, and the relationship to the demand for forces and services.

I think this is an important part of that discussion.

Now that I praise Tom, let's proceed with the burial.  Part of my problemmy problem with this is, though, Tom is really a tiger in wolf's clothing.  While he commends the Bush Administration for much of its basic work in the National Security Strategy, the National Defense Strategy, he sort of implies that they wimp out when it comes to accepting and acting on the practical implications of their policies.

Basically, the argument here is that we ought to be doing more.  Tom would do the Bush Administration one better.  So that the argument here is not simply about providing security for the nation under the classic definition of national security strategy.  It is really about, in part, at least, preserving the pax Americana, the unipolar moment, for as long as possible.

Now, achieving this goal requires a number of different things.  Clearly, military advantage is one, but there are many ways to do that.  More particularly, it requires this effort to transform the greater Middle East, and to manage China's rise to power.

The other thing that he sort of argues and Mike picked this up as well is this notion of a nation at war and how that should inform the QDR in our thinking.  As I see it defined by the National Defense Strategy, the QDR terms of reference, we're not a nation at war.  Tom is at war.  The Army is at war.  The military may be at war, but the nation is not.  And that is a fundamental disconnect as we go into this process.  I think it suddenly informs the QDR decision making the way they sort of set this all up.  I mean the language used in all these documents really doesn't reflect the realities on the ground, the realities of an enduring Global War on Terrorism.  It's really kind of muted statement among all the other issues, goals, attributes and the like.  In fact, on those terms, I think that the outcome of the QDR really can be argued has been predetermined.  We could sort of do the topology of this.  Right now, when you take the four threats, the National Defense Strategy and its description of goals and attributes and all the rest, the QDR focus areas and the six IPTs.  If you sort of set that up, you've got sort of the Rubik's Cube, the box, and you could really figure out what parts are where by the number of times there's allusion to a specific mention of C4ISR or SOF or whatever.  I mean you can really figure out who gets mentioned and who doesn't.  It's going to be a good barometer for who gains and who loses.

So I mean I tend to differ over this notion of sort of pax Americana and extending the unipolar moment I thinkit's awfully difficult to define and to know what that is.  It's hard to chase that idea in terms of actual practical things to do.  In policy terms, you know, it's a fun exercise.

I also think that extending the pax Americana to the extent we can is more about making us desirable to others as an ally than it is about making others desirable to us; that is, reshaping them in a mold.  I mean this is sort of I guess where I bridge between Tom and what Mike was saying about how do I treat the greater Middle East, those key states in the greater Middle East.  You might talk about being desirable to others as an ally.  Yeah, we'll talk about the, you know, elements of power.  I am not talking about a lower American profile.  I'm not talking about a kinder, gentler America.  I'm thinking specifically in military terms of having capabilities that, in part, are relevant, connectable to the threats, nearterm, longterm, big and small, internal, external, that a lot of these countries have= interest are facing or will face.

I think it also means figuring out how you're going to gain new allies, create new alliances.  Frankly, the gain in the next 20 years is not about how you reshape NATO for the Global War on Terrorismboring.  Been there.  Done that.  Whatever.

It is about how we deal with people in the Middle East.  How we deal with South Asia.  How we form a relationship with India.  What do we do about Vietnam?  If Korea unites, you know, it's a different game and it's particularly a game in South and East Asia that we'd better be thinking more about, and frankly I don't think we are.

All right.  But even if you agree with sort of the political strategic premises of the argument that Tom makes, ours proposes the right one, I mean which you advocate in the QDR for achieving this aim, and this is the right time to go down that road.  And I would argue to you that on both counts the answer is no.

My chief concern with the kind of arguments we have hereI mean not Tom's alone.  Other people have advocated more Army and the like is that it's just enough force to get the nation into real trouble but not enough to do the job.

The military requirements for security strategy premised on transforming the greater Middle East are certainly immense, as Tom readily admits . I suspect they're much greater than he suggests, particularly if you don't allow the Army to pursue its current transformation plan; that is, you go back to a heavy Army, long logistical trail, heavy only Army, long logistical train and all the rest.

You're going to need something much larger in that case.  We'll not 100,000 to 150,000, but double or triple that number.

Now, you know, I'm at some point willing to sort of say that's the reality.  A nation at war.  The greater Middle East needs to be dealt with.  I mean if we're going to follow that route, then let's, you know, be real serious about it.  How you there?  Wait and I'll talk about in a few minutes.

But let's decide that you want a military that, well, is at least the size it was in 1990.  We had 18 divisions.  We hadwhat was ityou know, 34 technical fighter wings.  All that kind stuff.  You know, that may be the right place to go back.  And it may be that if we go back to something that size it doesn't have to be all that transformed.  It's just so big.  It just rolls right over just about anybody for at least a period of time.  The other thing is I think Tom is more certain about the challenges we face than I am.

Yeah, there's a rising China problem, but with the rest of itI'm not even sure how that works out.  But with the rest of it, I think we have a real global problem.  So organizing a military that is too specific to regions is not a good idea nor is it a good idea to focus it on current problems.  I mean if we've learned anythingthe cycle time for problem sets is about five years over the last 20 years.  You know, we suddenly discovered every five years, oops, it wasn't we thought it was or the priority order shifts greatly, which means you need a military that really is both mentally agile, but also structurally and physically agile as well.

But let me go further and sort of argue that even if that's the case, and it's a different policy that we ought to be pursuing than what's argued here, I think that to large extent, the prescription offered is wrong.

[END OF TAPE 1, SIDE A; BEGIN SIDE B.]

MR. GOURE: [In progress.] The argument about the Army.  The Army is, in fact, moving in the right direction.  All right.  It's moving in the right direction for having to be a global force with a requirement at one end to be able to conduct at least a serious maybe twoin joint terms, two serious landcentered campaigns.  But, if you're not doing both of those, provide a significant fraction of the capability for a whole host of other missions in unknown places at times that cannot be predicted.

The combination of elements in the Army's transformation plan.  Are we setting the force and making that part of an ongoing cycle process.  Going to modular design, rebalancing the active and reserve components, stabilizing the personnel, these are necessary options even if you're going to be doing the greater Middle East, because I'm going to be cycling through.  If it's not Iraq, it will be a combination of Saudi Arabia and Syria.  It will be Central Asia then to West Africa.  The forcesI can't have forces for all these areas.  I cannot locate my forces in a particular region and hope that nothing breaks out in a different region and have to move them.  The forces essentially really do have to be to a large extent interchangeable, connectable, modular.  I can construct higher formations as I go depending on the situation.

So I also think for example, that it is important to complete the Stryker Brigade conversion, introduce FCSthese are elements that can be brought to deployment, where the whole program makes any sense is a different story.

The Army must become more strategically deployable and operationally agile, even to do Pax Americana but more if you are thinking that it's a little more uncertain than that.

I would also add, for example, logistics transformation.  I mean whether it's a long trail, a short logistics tail, it needs to be transformed.  And by that I mean from factory to foxhole, we need to figure out how to do it in ways that doesn't take a mound of paperwork out of DLA or AMC oractually, they've reduced that burden.  But still, the cycle times are way too long for getting things done.  We need to have some major changes there, and it has public private partnerships.  And I think, for example, one issue which the QDR ought to address, but it's going to be buried in the IPT on Business Practices is the role of the private sector.  Whether it's, you know, contract warriors or log cap [ph.] and Halliburton or the guysthe people coming out from the depots, both government personnel and contract civilians to do forward repair work, all that stuff needs to be addressed much more fully because guess what?  That's where we now have a substantial portion of our militarily relevant support infrastructure.  It's not in uniform, and it's not even American in a lot of cases.  All right.

To get there, those kinds of [inaudible] will take time and resources, and I don't think thatin fact, I would argue strongly againstdiverting the focus to a massive build up in numbers, even over a period of time.

And I've also actually not sure we could get there.  All right.  The size or the Army, even to the level that Tom proposes in a reasonable period of time, much less to something larger which I might advocateTom cites Chief of Staff Schoomaker's concerns on this subject.

If we have a difficult time meeting today's recruiting goals, imagine the problems associated with multiplying that by five or 10 or whatever.  Then there are the costs, which we tend to underestimate, the real costs of creating the infrastructurethe training base, the housing and other infrastructure base, buying the weapons, storing the weapons, training on the weaponsall that for these larger or different forces, whether it's a battalion in a brigade or new brigade or a new division and all of the rest.  I mean so, as I'm fighting the warwarsI'm going to have to start pulling skilled people out of that to be the mentors, trainers, and all the rest for these new forces.  There's a relationshipyou know, clear relationship, direct proportion between number of new people, number of new units, and the old guard that has to come in to get the new people up to speed and all the rest.

With respect to the Navy, Tom sort of likes the way it's going but wishes they could get there faster.  Now, I tend to disagree.

I'm concerned that the Navy has lost its way in its effort to have two different forces in one.  To really kind of split itself.  I don't think it can be done.  I don't think it can be done for the Army, which is why their transformation is a way of not splitting the Army and being able to cover the waterfront.  Whereas, I think we're in danger of losing the comparative advantage.  One of the I think the terms which has been thrown around by this Pentagon and probably will appear in the QDR is this notion of overmatch.  I think it's a horrible term.  Right.  I think overmatch is advantage.  Advantage is a good thing.  You give up advantage very reluctantly and only when you are sure that not only does it not matter today, but it won't matter for the next couple of decades.  And that's not the case that we have here.

The blue water capability is where the United States Navy has its advantage.  It's also the water blue water capability that allows us in effect to control global trade, and, as a result, we ought to be focusing on that.

So I think the problem for the Navy it's just not going to be big enough, no matter what it wants to be.  That's partly its problem on budgets.  It's also partly a shipbuilding and ship yards problem.  I think the focus needs to go back to and the Navy needs to sort of address in the QDR things like attack submarines, Marine prepositioning.  If you want to be this agile force, if you want to operate in the Middle East, if you want to support an Army that's going to be out there for whatever purposes, mine or Tom's, then you ought to be thinking about also how the Navy contributes to that through sea basing and other things.

And finally, on the Air Force.  I think we're more in agreement here than not compared to the other two areas.  I would argue, for example, more for the importance of air dominance early in the conflict certainly because of substantial adversary, but just in general, and hence the need for the F22.  I mean you lose air superiority, and it doesn't matter what your Army looks like, and it may not matter what your Navy looks like and whether you're brown water or blue water or green.  So I think that's terribly important.

I think we do need to expand long range precision strike, invest in advanced UAVs to deal with either intelligence issues, communications issues, or strike issues.  All those are important.  The other thing, which doesn't get much mention and it's in the wrong place in the QDRit's gone into the business practices IPT rather than into force structure or enablersare the questions of transport, air transport, and tanker support.  I will argue to you again if kind of structure determines the answer, it was shoved to the less important side of the house, to business practices, and, therefore, they're not going to get the attention that they deserve and they are obviously critical force enablers.

I'll mention three other things just really, really briefly.  One is military space, the future of military space.  Actually, it's the intelligence side, but it's also the military side.  It needs to be addressed.  We arethis comparative advantage we are in danger of losing.  That's an industry issue.  It's also an infrastructure issue.

The second question of nuclear weapons.  Right.  We are on the brink I thinkif you look at North Korea and if you look at Iranif things go a little badly, and they seem to be heading that way, of having to confront hostile nuclear armed adversaries.  We're going to be back next couple, five years, in thinking about nuclear war business, and it's going to have to be in a very different context for these kinds of states in those regions than it was when it was the Soviet Union.

And last SOF.  SOF has been in the QDRs and frankly in military planning the lesserthe kind of thewas it the redheaded stepchild of the military.  So we speak about it in these kinds of glowing terms.  They're going to increase the size of it.  We're going to give it more stuff.  I think that's the wrong approach.  I think it's time to bring frankly SOF or SOF practices back into the tent, back into the fold, it doesn't mean you shouldn't have a SOF command, but we tend to sort ofthere's other guys who do those strange things in weird and interesting places where you can catch all kinds of diseases.

If this is a global war on terrorism, if we're going to have to deal with all these uncertainties, if we're going to have to hunt down loose nukes, we better focus centrally on them and frankly at that point, they can't be set out there as theircompletely as their entire separate military in effect.  And if the QDR is going to do one thing different, it's not the number o divisions, it's not how many F22s.  It's how you deal with SOF that's going to be I think an important strategic issue.  I leave it to that.

MS. FLOURNOY:  Well, I'm here batting clean up, and I am cognizant of the fact that you actually want some time for questions, so I will try to be brief, since a lot of the ground has already been covered.

I want to just start by applauding Tom for opening up the strategy debate.  The going assumption in this QDR is we've done the strategy.  It's done.  It's complete.  This is not a review of strategy.  But I actually think there are some very important issues that we as a nation should be debating at the strategy level and not only in fora like this, but particularly on Capitol Hill, where the debate is almost completely absent.

So while I don't agree with every word in Tom's book, as he might have guessed, I do really applaud the effort to open up the debate on strategy, because I still think there are a number of key issues that need to be hashed out.

I was asked really to focus my comments on the QDR, what are the key issues, how do we judge its success, and let me just say as a veteran of many of these also, I'm actually very thankful that I'm not a veteraninvolved in this so that I can stand on the sidelines.  But QDRs always are a victim of, you know, extremely high expectations.  They are meant to solve all of DoD's problems now and forever, and they never do.

That said, and there's a lot ofI should just saythere's a lot of rumblings in the press reports right now that this QDR has taken on a life of its own.  It's become bureaucratized so it's not going to come to anything and so forth.  I find that I think while that the process has certainly taken on a life of its own with a number of studies and study groups and so forth supporting the IPTs, I think we can't allow it to come to nothing.  This QDR really does matter for a number of reasons.

First, it matters for Secretary Rumsfeld.  This is a Secretary of Defense who came in talking about transformation.  He is very much concerned, as he should be, as any Secretary of Defense should be not only about current operations, but about his legacy and his stewardship of the force.  And if he wants his legacy to be something other than Afghanistan and Iraq, he's got to make this QDR be the vehicle for leaving his mark on the Department in terms of really implementing the transformation vision he's talked about.  So I think that's one reason why this matters.

The second reason why this matters is post9/11, postAfghanistan and now that we'reand in the midst of Iraq, I think there's a tremendous consensus across the Board that we really do need to transform.  Transform isn't this thing that this group of people like Mike Vickers and Andy Krepinevich used to talk about, and it's being imposed on the Department.  This is religion now across the board within the Department, and I think there's a genuine belief and acceptance of the basic premise of the QDR that we're over invested in the traditional and we're under invested to deal with the nontraditional and that needs to change.  So I think there's opportunity there.

Third is tremendous fiscal pressures.  Despite, you know, what Tom would argue and even people like me would argue that we should revisit the DoD top line.  We are a nation at war.  It's not going to happen under this President and this Administration.  So the fiscal pressures are enormously serious.  And I would say that we're really facing the makings of what I call the perfect storm within DoD.  We have runaway personnel costs.  Personnel costs have more than doubled in the last five years, and they are severely constricting the discretionary spending of the Department.

We have growing difficulties, as we're seeing particularly with the Army, in recruitment and retention, which means the costs of personnel will go up even farther to keep and attract quality people.

We have extremely high operations and maintenance costs because of current operations.  That's also exacerbating the wear and tear on equipment, which is driving up recapitalization costs.  Suddenlywe had a recapitalization problem before we even started these operations.  Now, that we're actually increasing the wear and tear on equipment, that problem is becoming even more acute.  And, oh, by the way, what we've been talking about stays, we still have this huge challenge of transforming the force to be able to handle the much broader rangeto be dominant not only at the high end conventional end of the spectrum, but across the spectrum of operations with irregular warfare, with dealing with catastrophic threats, disruptive challenges and so forth.

So all of this adds up to a lot more program than budget, and the need to make some very, very tough choices, both to meet a very high level of demand in the future that's likely to be sustained and a much more diverse array of demands than the military has had to deal with in the last several decades.

The most disturbing thing to me when I look at the QDR is that we do not have a decision making methodology in place that really is risked based.  That's about the allocation of risk, where you cannot do it all.  We cannot doeverybody'sthis panel's wish listthe internal wish list within the resources we have.  So how are you going to make the choices?  How do youwhere are you going to decide to minimize risk?  And where are you going to decide to accept or manage risk.  And how are you going to make those decisions?

The Administration has some language and its own internal guidance about using risk and making decisions, but in terms of operationalizing that to a real framework for making choices, that's not in place.  And that concerns me greatly because I don't know how you make these hard decisions without having that kind of conceptual basis on which to proceed.

I was going to rehearse for you the argument about why I think future demand is going to be very high and very diverse in the future, but I think the other panelists have already done that.  So I'm going to skip over that in the interest of time.

Let me just sayturn to the question of how do we judge whether or not the QDR is successful?  I'm going to say there are four big questions or four big metrics if you will that I have in mind when I'm going to evaluate the QDR in the end.

First is has it put in place a force that can meet nearterm demands without breaking the force?  You know, have we resourced the force adequately to deal with what's on our plate now and in the nearterm future again without breaking the force?

Second is it adequately resourcing the force for the future, both in terms of the level demand and again this diversity of demand, thinking about transformation across the spectrum of operations, not just at the high end, but transformation to support irregular warfare, fighting terrorism, dealing with WMD, and so forth.

Third is the force sustainable?  Can we actually recruit, retain the quality of the people that we need in the force that we've outlined?

And finally is the program sustainable?  Can we afford this?  That's a very tall order without changing the top line.  But that's ultimately.  Those are the four key questions that we have to use to judge the outcome of this QDR.

Now, with those in mind, let me just highlight a couple of my pet issues, the things that I want to see within that context.  I agree with Mike.  We need a new metric for sizing and shaping the force, for deciding how much is enough.  1421, the old metric is overtaken. I agree that we need new theories of victory.  We need to talk about the range of operations in different terms, but we have to have some conceptual basis for sizing and shaping the force, and again it comes back to making some judgments about where you're going to reduce risk or accept risk.

Second is does the results of the QDR reduce the strains on the force?  And I am very concerned that we are at risk of breaking the U.S. Army, and while I do not subscribe to 120,000 increase, I do subscribe to a more modest sort of 30,000 or plus increase in the size of the Army if we could recruit and retain it to try to relieve the strains longterm by building the size of the rotation base.

I think another issue we have to look at in this regard is the use of the Reserves and the Guard again broadly speaking, but again particularly withfocusing on the Army, if we're going to rely on them as a more operational force, how do we resource the appropriately to do that?  How do we manage them appropriately to do that and so forth?

Allies and partners.  I hear the rhetorical shift emanating from the Administration that this is all about building capacity of partners.  They've been listening to Mike.  And I think that's absolutely right as a theme, but I want to see what does that mean?  You know, what kind of investments are you going to make to truly enhance allied capabilities in the War on Terrorism and for other missions.  So I think that's a very important area to watch.

And finally, something that Mike also touched that's really broader than the QDR, but, you know, part of the challenge of this QDR is DoD is having to address the question of what it needs to doa range of missions from homeland security to combating WMD, to combating terrorism, to stability and reconstruction operations, which are fundamentally interagency in character.  And when you look at the challenges we're facing and to the extent we've experienced operational failure, they've been predominantly not DoD but interagency in character.  And so DoD is having to do this, you know, review in sort of a larger vacuum.  We need interagency concepts of operations for these missions.  We need clear assignments of roles and responsibilities.  We need alignment of agencies roles, authorities, and resources by the way.  You've got one department on steroids, which I like to see.  I like to see DoD on steroids, but everybody else is also on life support.  We need to put some other departments on steroids to deal with someat least parts of them to deal with some of these situations.

So I mean I think in the end, for all of you who areI see some military folks in the roomyou may be surviving the current QDR and you may hate what I'm going to say next, but I really think that ultimately we need to evolve to a point where we do a quadrennial national security review on an interagency basis so that really gets at these interagency roles and responsibilities and so forth and then that's a basis for DoD answering the questions it's trying to address.

So in the interest of time, let me stop there and say again you know I think the likelihood is that this QDR, like all others will be sorely disappointing.  But I agree with thewhat has been said earlier that this QDR more than many others in the past really needs to try to meet expectations.  It is too important to get wrong.

MR. KAGAN:  Well, thank you, Michele, and thank you all of the panelists.

I'm going to turn this back to Tom in just a second to respond to these things, but I can't resist making a point or two, especially since I'm the one up here who by the strangest of coincidences just happens to agree with most of the things that are in Tom's book.  And one of the points that I would like to make that I think is very important to bring out is that as we are in an era of uncertainty, and I think that's very clear and I think Dan made that point very well, but I don't agree with Dan's recommended solution to it.  I think an era of uncertainty requires larger forces because I think one of the things as you enter as you deal with military uncertainty what is most important, one of the things that's most important is to have a reserve, a real reserve that is capable of responding to unforeseen contingencies.  And I think it is very easy for us to underestimate the sorts of challenges both conventional and unconventional that we are likely to face.

One of the things that I thought Tom brought out very well in his book is that so far we have been able to deal with our enemies one at a time, and they have been extremely ineffective to the very limited extent they've been trying in coordinating their activities against us.  That is not necessarily going to continue to be the case indefinitely, and there are many opportunities for strategic partnerships among our enemies which would face us with circumstances that could easily task and overtask even our conventional forces, excellent though they are.

There are very few occasions on which I like to quote Stalin, but this is one of them.  "Quantity has a quality all its own, and you simply can't get away from the fact that however excellent your forces, if you don't have enough to maintain a reasonable reserve for unforeseen contingencies and you are in an era of uncertainty, the likelihood of coming to disaster I think is much higher."

And with that I will turn it over to Tom for his own defense.

MR. DONNELLY:  Well, thanks for getting me started, Fred.  Actually, I would just want to sort of highlight two themes that I thought my colleagues brought out that do underline not only the fact of uncertainty, but sort of the breadth and depth of uncertainty.

Dan's question about are we at war or not is an interesting one, and I guess part of myone thing that makes it interesting is that if you look at what the Administration says or what the President says and then you look at what the government does, it's quite possible to interpret that question in radically different ways.  So if we can't answer this fundamental question are we at war or not and are weyou know, everything from whether we're devoting sort of an adequate level of our national treasure to prosecuting it, if yes and no are both acceptable answers according to the government, then now that's planning and uncertainty.

There are also questions about the quality of this war.  I mean Dan in arguing that the Global War on Terrorism is not really a war opens himself to the question well, so what was the Cold War in that regard.  The Cold War was not, you know, marked by big battles every day.  There were some fairly large conflicts, such as Vietnam, and part of the critique of our performance in Vietnam was that we sort of didn't answer that fundamental question are we at war or not.  But again, if that question is still out there, it makes figuring out your defense requirements that much more difficult.

Secondly, there's clearly a question about the quality of what the Global War on Terrorism means.  I would take a fairly expansive definition of it to include the kinds of global antiterrorism activities that Mike highlighted.  But I would also again simply describing what the de facto policy of this Administration has beenmake the case for again a longer term goal of political transformation in the specific region, but a really large region.

If you just look at what we've done since September 11th, we've conventionally invaded and occupied two countries.  We have also conducted a large number of antiterrorism sort of SWAT team like special operation forces kinds of activities, but, you know, if you just sort of look atreplay the film of the last couple years, it does include two pretty large conventional style operations.  They've become counter insurgency operations, but they began with, you know, let's created like invasions, you know, using that idea in the broadest sense.  They've been followed up by stability operations; you know, pick your term of art, but, you know, any way you look at it, it has been pretty big.  It has involved a lot of people, and it's been going on for a long time.

We may not want to do that that way again in the future.  But when you're a military planner, you have to ask yourself is this never going happen to me again.  Arguably, we didn't want to do it this way in the first place or do think we shouldn't have done it this way.  But to retain the capacity to do it in large scale, longterm way does seem to me to be a fundamental planning factor.

So do you want to go to questions next?

MR. KAGAN:  Yes, we have

MR. DONNELLY:  Before I give these guys another chance to throw spit balls?

MR. KAGAN:  We have a limited time for questions, so I would ask you to observe three rules.

First of all, please wait until you have a microphone.  Second of all, please identify yourself, and third of all, please be very brief in asking your questions and that means please ensure also to be asking a question and not making a statement.

MR HEARN:  Yes, David Hearn [ph.] with Defense Today.  On the QDR, at the end of the day or at the end of the QDR, even if Michele's fear that it turns out badly or it turns out not to be true, if it turns out to be brilliantly well thought out, sooner or later you have to move from the Pentagon to Capitol Hill.  And we have seen Dan mentioned the Raptorit's gone from 750 to 300 some to 277 to 170 Rumsfeld mentioned the other day.  We've seen the Navy asking for four ships instead of you know six instead of the eight this year.  We've seen an attempt to kill the C130J.  We've seen a shambles in tanker replacement that Dan mentioned.  So the question is this:  if Congress isn't willing ultimately to provide the money and put their money where their mouth is on defense, in that case is QDR irrelevant?  Is there basically a political and fiscal aspect to this beyond just the military?

MS. FLOURNOY:  I guess I'm not willing to concede defeat that quickly.  You know, this is a classic case of failure to do preparationadequate preparation of the battlefield.  [Inaudible] battlefield team, the Capitol Hill.

I mean this is a QDR that's inclusive enough to include our closest allies and yet we're not havingI'm not aware of any very senior level or sustained discussions between departmental senior leaders and senior leaders on the Hill, who will ultimately be voting on whatever the review produces.  I think that's a mistake.  I would like to see those consultations happening now to inform senior leaders on the Authorization and Appropriations Committees of both sides to, you know, be aware of the thinking behind the QDR, some of the tough choices, enlisting them in the process so that they are not completelyit's not completely alien to them when it comes in.

Now, this is not a particular strength of our current Secretary, at least it hasn't been in the first so many years of his tenure, but, you know, old dogs can always learn some new tricks; right.  So I think this is an area where they will make a very bad mistake if they don't start engaging the Hill very seriously now.  I mean it's already late.  I would have started earlier, but I think it's still recoverable.  But it's going to be very hard because bottom line is, you know, there's a tremendous sense of urgency within the building that things have to change.  There is no sense of urgency on Capitol Hill, and that gulf will get this whole processit risks gutting the whole process unless it's addressed.

MR. DONNELLY:  I would like to put a footnote to that having been on the congressional end of at least one [inaudible].  So much of the advantage lies in the executive branch in these things and this is possibly a critique of the legislative branch.  It's very difficult forand has been difficult I would say since Les Aspen's day for the congressional defense establishment to do genuine strategic assessment.  That capacity hasyou know, even if Les Aspen was the exception to the rule and maybe I didn't agree with everything he said, at least he was engaged in a strategic dialogue and that capacity in the Congress in both Houses has just simply atrophied.  It doesn't exist.  So Michele is quite right that Congress is going to have toeven if this is a modest QDRmore likely going to have to choke on some things that they don't fully anticipate.  Again, I would just see the advantage to be very strongly with the executive branch in this struggle.

MR. SCHIFERSON:  Josh Schiferson [ph.], Simpson Center.  It seems that there'severyone is talking about there will be an aspect of transformation in the QDR.  That's given almost.

Is there a consensus as to what transformation will entail?  Is it going to be technological?  Will it be some combination and how is such a definition come about?

MR. DONNELLY:  Well, I mean it's one of the problems is that transformation has been disconnected from strategy.  You know, it sort of entered into the Department's thinking in the late 1990s and was seen largely as an opportunity.  It was a way to leverage information technology to make ourselves better.  But it was done in a vacuum.  That morphed into network centric warfare.  But then you've got to say well, how does it fit?  I mean clearly we're getting better at joint integration.  We're getting better at precision warfare.  We're getting betterwe have stealth.  We're exploiting space for tactical and operational purposes.  And we're able to connect things.

But is that relevant to the challenges we face?  And where it's notyou know, again, all the conventional transformation of the world doesn't help you when there's a thing called the nuclear revolution.  You know, so, like Stalin said, we're in extreme danger.  We've got to get this stuff real fast and let spies in the United States help them a little bit with that.  But, you know, once you understand what it is you have to do, you'd better get on with it.  All the, you know, more of the wrong stuff isn't going to solve that problem for you.  And so I think there are competing views.  There are folks who look at transformation in terms of, say, a rising China.  There are folks who look at it purely in terms of irregular warfare.  There's this baseline thought that all we have to do is just make the Department better in various areas and, you know, never the twain shall meet and that's one of the things that has to get sorted out.  But I mean I think, for example, if you look at a lot of things, if you measure things in classes, the future combat systemif it worksis a nice technological leap.  It's also irrelevant to the problems we face.

One of the things it does best is it kill folks at a distance in the open.  Well, guess what?  We've solved that problem.  We don't need the Army to do that.  We need the Army to do other things.

MR. SIDEN:  Hi.  I'm Nat Siden [ph.].  I'm going to ask a question for myself and that is considering the importance of globalization and economic power, is it time to start thinking about having the authority, either the U.S. or the democracies or the U.N. or some other way to actually control and interdict shipping to have limited or total blockades?  In other words, projecting power against economics as opposed to killing people.

MR. DONNELLY:  Again, when you look at the posture and say one of the things we don't want to have happen is catastrophic terrorism.  We don't want somebody.  We have a hard enough time finding weapons of mass destruction when they exist in reasonably known locations.  As soon as you move away from that location and you introduce uncertainty or the thing starts to get on the move, your ability to have forces to intercept it rapidly or more importantly to find it is an immense challenge.  And that challenge grows as you move from nuclear to biologicalyou know, where the signature changes substantially.  And so one of the big issues right now is what kind of navy and air and ground posture would give us this distributed global presence, because clearly you can't afford, you know, tons of big expensive things that would allow you to interdict the movement of things or shape some of the economically destructive acts that might prevent those beyond WMD, and we're just starting to grapple with that problem.

MR. KAGAN:  I see that Mr. Henry is here.  We'll take a few more questions until 11:00 a.m., and then we will roll immediately into his presentation.  So there will be no break.  Two more questions in the rear?

MR. HAIMONS:  Michael Haimons [ph.], [inaudible] Defense Attach(.  If I understand and read correctly, then Mr. Donnelly says Europe is nearly irrelevant to the U.S. now and we do not share the same interests.  Of course, as you can understand with my background I see it differently, but I hope that you can also see it differently.  I think we've been closer for at least 50 years and I think even moresome [inaudible] even 200 years.  And I think that really Europe does face the same challenges and it has been said also in the national defense strategy that the U.S. cannot solve the countering the terror on its own, and you need allies, and I just think you can find them and will find them in Europe also.

MR. DONNELLY:  Yeah.  I confess to a certain amount of hyperbole in the formulation of that statement.  However, here's what I would say:  in the narrow version of the counter terrorism war, I think there is a fair degree of agreement and a fair degree of cooperation and intelligence sharing and so forth.  But where there seems to be far less agreement is what should be done political in the region, in the Middle East, and there does seem to be a fairly fundamental divergence of view on that, witness not only Iraq but Afghanistan, where, although that's sort of held up as the posture child of NATO cooperation and transatlantic cooperation, the reality on the ground at least my view of it is having spent some time there recently is that there's really much more divergence than agreement.

And then finally, there's a question of China.  I mean we did luckily avert a falling out over the arms embargo issue lately.  But the fundamental divergence about what to do about China that's growing in military power I think was underlined by the fact that we had a crisis in the first place.

So when you're talking about the two things that are strategically most important to the United States, the political future of the Middle East and the military future of the People's Republic of China, it does seem to me that there's a pretty substantial strategic divergence there.  I'm not saying that it could never be turned around.  But we do have now fairly substantial, you know, past experience to look back on, and simply to accept that because we were once close allies, we will always be such I think is misleading for both and there are others who may be more suitable allies going forward.  So it's not to say that we wouldn't like to be allies.  And we need all the help we can get in variety of these missions, but I don't know how else to read the experience of the last couple years.

MS. FLOURNOY:  If I could just add a footnote to that.  I see things a little bit differently.  Although we certainly have to acknowledge differences over particular issues in recent years, I think when you look at the fundamental values and interests underyou know, that are held in Europe and in the United States, there's still a great convergence and great potential for cooperation to deal with common threats in the future.  We also see some countries, not all unfortunately, in Europe, but some like the Netherlands making tremendous strides in creating more deployable forces and so forth.  I think Europe will remain in the future a very important partner and a place where we can go to get additional military capability to work with us to solve common problems.  So I think it would be much to our detriment to sort of write off Europe or to not put a great emphasis on working with Europeans to build capabilities and to reopen an strategic dialogue to try to regain some common sense of a way forward.

MR. DONNELLY:  I would also saywhen I talked about Europe, I probably made the mistake of reading too much from French and German attitudes, and, you know, so I come willing to distinguish one European from another.

MR. KAGAN:  I think that about runs us out of time for the panel.  Please join me in thanking our excellent panelists for this good presentation.

[Applause.]

MR. KAGAN:  It is now my great pleasure to introduce Ryan Henry, the Principal Deputy Undersecretary of Defense for Policy.  Mr. Henry spent 24 years in the United States Navy.  He was a naval aviator.  He served as an aviation squadron commander, congressional staffer, a test pilot, and a technology warfare architect.  He is a graduate of the United States Naval Academy of the National Defense University.  He has worked at a wide variety of places that have excellently prepared him for his current position, including SAIC, CSIS, and he is the coauthor of the Information Revolution and International Security and has written extensively on very important topics.  So we look forward very much to hearing Mr. Henry's thoughts on the QDR and the future of the United States military

MR. HENRY:  Well, I look forward to the opportunity to discussing with you a little bit on what some of our thinking is going into the QDR from the Department of Defense, and then I thought I might just take the first 10 minutes or so, lay out some thoughts, and then open it to you for the particular questions you might have, and it sounds to me like you've had a lively and enriching discussion so far.  So I hope to be able to contribute to that.

This QDR, as Michele was saying, probably has some opportunities that maybe we didn't necessarily enjoy in the past.  One of the things we havethis is the first QDR where the nation will have been at war so that puts some constraints and some definitions on what the tasks are ahead of us.  And it appears to us this Global War on Terrorism that we're engaged is a long war, one that very reasonably could extend through the nominal life of what the QDR is look is supposed to be which is two decades.  And so that shapes the thinking and the thought processes a bit going into this.

We also have the experience of having been at war for three plus years and that has been a change confirming experience for just about everyone in the Pentagon.  A lot of the debates that might have existed in previous QDRswhat's the value of air power?  Do you have to have it combined with land power?  Can you win a war alone by air power?  Those debates are over.  The inherent value of jointness.  What sort of value added do you get out of that?  Between Afghanistan and Iraq that's very, very clearly been demonstrated.  Network centric.  If I have a discretionary dollar, do I want to invest it in a platform or do I want to invest it in the network.  I think universally throughout the Department at the senior decision making levels, those debates are over with.  And so that is one thing that will reallyreally helps us along.

Another thing that we have learned is the inherent value of adaptability in the force and that whatever you build a system for, there's a high probability when you actually go to use it, you'll be using it in some other way or mechanism or modality than you thought you might.  I mean we did regime change in Afghanistan principally with special operating forces who are on the ground riding horses.  I mean that's a throwback to the 19th century.  But they were coupled in with precision guided munitions, many times dropped from aircraft than were older than the pilots flying them.  So it's being able to bring those forces together in a very adaptable manner that there's a large premium on.

Some of the other things that are different we think is this is the second term in the Administration.  A leadership team is in place.  It's a very strong leadership team and it's one that's not only worked through the war but day in and day out works closely together.  The relationship between the Secretary and the Chairman and the Vice Chairman of the Joint Chiefs of Staff is remarkably close.  I mean they spend four or five hours a day together working issues versus the few hours a week that might have been the case in previous Administrations.  And that has been extending to the Secretary's leadership team, which pretty much is composed of his direct reports who would be the Deputy and the Chairman and the Vice Chairman, but also the three service secretaries, the four service chiefs, and the five undersecretaries.  And they meet together almost weekly for about 90 minutes in something called a strategic leader review group or SLRG.  And they tackle the really difficult issues that are enterprise wide across the Department.  And the strategy which I believe was mentioned somewhat today.  There is a defense strategy that's been put out.  That was something that was put together and hands on developed by that leadership team, just as the terms of reference were that are going to be guiding this QDR.

So that's the cohesiveness of the leadership team is different and it allows us to put together a quadrennial defense review that is genuinely leadership driven.  And it's my understanding you had a little discussion of what the structure of this QDR is, but it is the leaders, the Secretary's direct reports, that are specifically defining the scope, the issues that will be addressed, how they'll be addressed, the formation of what the outcomes will be, and they will be the ones that will be the advocates for that within the process.

And finally, we think that we have some new tools that we have available to us to do analysis that we didn't have in the past.  We have the approach to capabilitiesbased planning, which was a thought process in the last QDR and a realization, and we had to move away from threatbased planning, but now we actually have tools with which we can approach that.  And a significant one is one that's been worked in the Joint Staff for the last four years of operational availability is the title on it, but it is one that allows us to look at capabilities of our forces, how do we employ them, and the difference that they can make.

So those are some of the things we think that we have different going for us that perhaps didn't exist in previous QDRs.  We think this is an important time as we look out over the history of the country the last century, we can look at the inner war years where critical decisions were made that built us the capability to give us a lot of the success we experienced in World War II.  We can look at postWorld War II, the '50s, where we came to grips with atomic power, and how we were going to transform the force to be able to adjust to that.  That was another period, and then in the '80s, when we looked at competitive strategies and how we could develop a capability that would put significant pressure on the Warsaw Pact and the Soviet Union and may have had a significant contribution to them realizing that militarily, they just weren't going to be able to compete.

Here we sit three and half years after the 9/11 events.  We think we understand what the Global War on Terrorism.  The Administration will be coming outhas been mentioned a few times in the press.  Their reviewing the strategy we have and focusing on a viable strategy with which to prosecute this war.  We understand that it's going to be a long war, and we're coming to grips with what the difference that's going to mean in the type of force that we have.

By the same token, there are other challenges we had out there, as Michael is pointing out.  We do have emerging powers and powers that are at strategic crossroads.  The United States is at a strategic crossroad in how we develop a capability to pursue the Global War on Terrorism.  The EU is, as they formulate what sort of entity they're going to be, and obviously there's been some movement here in the last couple of weeks.  The Atlantic Alliance and NATO as it starts to transform itself and to be able to gear itself to be doing out of area of operations.  There are also countries that are [inaudible]

[END OF TAPE 1, SIDE B; BEGIN TAPE 2.]

MR.     :  So I thank you very much for your clear presentation.  I have a question.  Yesterday, Congressman Hunter has said from the House Armed Services Committee that he thinks he needs a second QDR, which they will perform based on threats instead of capabilities.  Do you think the outcome of the second QDR will be different and how are you going to discuss this item with the House?

MR. HENRY:  Well, we've had an awful lot of time to think about threat versus capabilitiesbased planning and obviously we've made the decision in the Department of Defense that the approach that gives the American people the best outcomes is to be able to do capabilitiesbased approach to the problem.  But we look forward to working with the Congress.  We've kept them informed each step of the way.  We periodically brief them on what's going on in the Quadrennial Defense Review, and we'll look forward to cooperating with them on this.

This review has been much more inclusive than we've done in the past.  We've reached out to people on the Hill.  We've reached out to our allies in consultations and participation in some of the idea developing processes that we've gone through.  The decision making will purely be the Department of Defense, but as far as the generation of the ideas, we're looking forward to cooperating with everyone and the House Armed Services Committee will be one of them, and I think that they may be having hearings and such that we would look forward to participating in.

MR. BROWNLEY:  Don Brownley [ph.].  Excuse me.  Don Brownley from Aerojet.  The defense industry obviously will be interested in how the QDR manifests itself in where the money is spent for hardware obviously, and it's probably premature to provide general areas of where that might be.  But if you can't provide kind of general areas of where you think expenditures would be in hardware, research and development or something, can you give us an idea of when that might be available or when those kinds of things will be coming out?

MR. HENRY:  Yeah.  Six February 2006, when the report goes up to the Congress, those guidelines will be laid out.  One of the advantages we have in this QDR is we're actually matched up with the resourcing process, both the budgeting process and the programming process.  And so as we go along, where feasible, we will be teeing up decisions for the President's budget for '07 and then the defense program for '08 and beyond, and be able to cycle in some of the strategic guidance that we have into those documents.

But as far as specific decisions and the QDR will address capabilities and the type of capabilities we need to have.  From that will flow specific decisions and where specific dollars are allocated in different areas.  But that will be done within the standard resourcing process.

MS.     :  An Yung [ph.] from New [inaudible] State TV.  I have two questions regarding China.  When you talk about the Global War on Terrorism, or on your terrorist list, and maybe there's I guess one group from China, which is the Chinese government.  I'm very happy to see you put that on there.

But my questionmy first questionis are you aware that there is a book around which has been around for a while and recently translated into English.  It's called Unrestricted Warfare.  It was written by two colonels from the People's Liberation Army, and was used as a textbook and basically it advocates quite extreme means in warfare when a weak state facing a strong state.  Are you aware of this, and do you think it will have anyyour evaluation of this willdefinition of a terrorist.

The second is actually for Chinese from mainland China the ideas and mentality reflected in that book is not unfamiliar to us because we were brought up in this kind of communist cultureunfortunately.  But recently, have you noticed that millions of people in China are publicly denouncing that.  They are quitting from the communist party.  As a result of that, they finally realized that we have to denounce it for the sake of their own conscience.

Do you think China without communistswell, what's your evaluation of China without communism?  Will it be easier for it to deal with it?

MR. HENRY:  Well, let me deal with the first one.  Unrestricted Warfare.  I have not read it.  There are some people that work with me that have.  And they found that there were some interesting aspects of it.  There are people that are participating in the QDR that are familiar with that.  I personally don'thave not read it and don't have a working knowledge of it.

To the degree that China moves closer to a democratic country isthat'sthose are choices obviously of the Chinese people.  The President has said that he thinks that democracy is a key positive force in the world and that the more democracy we can have, the better that will be for the community of nations and the longterm stability.  And I would stand behind what the President said.

Other questions.  Well, thank you very much.  I appreciate the opportunity to come by and talk to you today.

[Applause.]

MR. KAGAN:  Thank you very much, Mr. Henry, and thank you all for joining us to discuss this important topic.  Have a nice day.