Testimony by Secretary Panetta Before the Senate Armed Services Committee
Chairman Levin, Senator McCain, members of this committee, it is an honor to for me to appear before you for the first time as Secretary of Defense and to represent the men and women of the Department and our armed forces.
I want to thank you on their behalf for your dedication and for your support, particularly in a time of war, and for your determination to join me in doing everything possible to ensure that they succeed in their mission of protecting America and keeping us safe.
When I testified before this committee as the nominee for the Secretary of Defense, I pledged that I would treat Congress as a full partner. And in the months since, I’ve had the opportunity to consult with you, many of you, on all of the challenges that the Department faces, and I will continue to do so. It’s important to have your guidance and your consult as we deal with the challenges facing our department.
Before turning to the pressing issues of the challenges of the wars in Iraq and Afghanistan, I would like to briefly address the challenge of the defense budget, which relates to, obviously, everything we do.
As you know, the department has been undergoing a strategy-driven process to prepare to implement the more than $450 billion in savings that will be required over the next 10 years as a result of the debt ceiling agreement. While this review is ongoing and no specific decisions have been made at this point, I’m determined to make these decisions strategically, looking at the needs that our Defense Department has to face not just now, but in the future, so that we can maintain the most dominant military in the world, a force that is agile, ready, capable and adaptable.
These reductions will require hard decisions, and those decisions will force us to take on greater risk in our mission of protecting this country. My goal is to try to make those risks acceptable, but that is a reality. The guidelines that I will be putting in place as we move forward on these decisions are the following:
First of all, I want to maintain the best military in the world. Secondly, I do not want to hollow out the force. Every time we have gone through these reductions in the past, the danger has always been that we’ve hollowed out the force. I am not going to do that.
Thirdly, it requires a balanced approach in order to achieve the significant reductions that I’m required to do. So I am going to look at all areas. I’m going to look at efficiencies, reducing overhead, duplication -- there are opportunities -- try to achieve savings -- additional savings in those areas. Procurement, looking at the whole process of tightening up on our contracting, creating greater competition with regards to our procurement area.
I’m also going to look at the compensation area. The fact is that in some of those areas, the costs have increased by 80 percent. Health care alone in the military costs some $52 (billion), $53 billion.
But I have to do it in a way that does not jeopardize the volunteer force, and to that extent, I’ve got to maintain faith with those that have gone deployment after deployment, put their lives on the line. We cannot undermine the commitments we have made to them. Nevertheless, we do have to look at reforms in these areas.
And lastly, as I said, we do have to maintain faith with those that are out there fighting every day.
We are going to have to look at how we turn a corner. We have -- we have gone through a decade of war in which the defense budget has more than doubled, and now we have to look at a decade where we have to prevent war but be able to fight wars and win wars, if we have to, recognizing we have less resources. That’s the challenge that we face as we confront this budget issue.
The department is taking on its share of our country’s efforts to achieve fiscal discipline, and we will. And I want to caution strongly against further cuts to defense as we go through that, particularly with the mechanism that’s been built into the agreement called sequester. This mechanism would force defense cuts that in my view would do catastrophic damage to our military and its ability to protect the country.
I know you share my concern about the process of sequester. It is kind of a blind formula that makes cuts all across the board and guarantees that we will hollow out the force. Working with this committee and others in Congress, I’m confident that we can meet our national security responsibilities and do our part to help this country get its fiscal house in order but at the same time maintain a strong national defense. We do not have to make a choice between fiscal security and national security.
Even as the department grapples with the budget, our most immediate challenges are the wars in Iraq and Afghanistan. My submitted statement goes into more details on the progress we are making and the challenges that remain to achieving our strategic objectives, but let me just briefly address both of these efforts.
I’ll begin with Iraq, where our focus has been on ending the war in a responsible way that allows Iraq to become a secure, sovereign, stable, self-reliant nation and a positive force for stability in that region. Today fewer than 50,000 U.S. forces remain in Iraq, and based on the November 2008 security agreement reached with the Iraqi government under the last administration, we are planning to draw down our combat troops in Iraq by the end of the year.
Still, as you know, last month the Iraqi political leadership indicated publicly that they are interested in an ongoing training relationship with the United States in a post-2011 period. As a result, General Austin and Ambassador Jeffrey have been in the process of negotiating with Iraqi leaders as to what their needs are and how we can address that.
We are seriously considering this request, and I want to make clear that no final decisions have been made. We’ll continue to consult extensively with the Iraqis but we will also consult with the Congress before such decisions are made as to what a post-2011 training presence will look like.
I want to be clear that obviously any future security relationship in Iraq will be different from the one that we’ve had since 2003. The United States wants a normal, productive relationship and a close strategic partnership with a sovereign Iraq and with other countries -- similar, frankly, to the partnerships we have with other countries in the region and around the world. This kind of security assistance would be a means of furthering our strategic partnership with Iraq that looks to the kind of future role that can best address their security needs.
But there’s no question that challenges remain there. They have to stand up a consul for higher policies. They have to develop a resolution to the Kirkuk situation and dispute.
They have to pass a hydrocarbons law. They have to promote security efforts to deal with Iranian-supported Shia extremist groups that have been attacking their forces as well as ours. They have to have security efforts to go after the remnants of al-Qaida which still remain in Iraq. And they have to work at a political process that builds a safer and stronger Iraq for the future.
As we’ve moved decisively since 2009 to end the war in Iraq, we have also turned our attention, our focus and our resources to Afghanistan and the effort to build a stable and secure country there that does not provide a safe haven to al-Qaida or to its extremist affiliates. Because of the hard work and the sacrifices of Afghan and coalition forces, we’ve established conditions that are putting Afghans on the path to assume lead responsibility for security nationwide by the end of 2014.
The insurgency has been turned back in much of the country, including its heartland in the south, and the Afghan National Security Forces are increasingly strong and capable. And as the Chairman pointed out, we have made significant progress with regards to our primary mission of disrupting, dismantling and ultimately defeating al-Qaida, particularly with the operations that took down bin Laden and that continue to take down key leadership of al-Qaida and their affiliates.
This undeniable progress has allowed us to begin transitioning to Afghan security control. We’ve done that in seven areas of the country since July. As this transition commenced, we began implementing a gradual and responsible drawdown that is essential to the success of that transition process and lasting security and stability in Afghanistan. And General Allen, who has briefed me just this week again, is in the process of laying out those plans that will provide a responsible transition that will not undermine the security of Afghanistan.
While my overall assessment is that our effort in Afghanistan is headed in the right direction, I think we also have to be clear-eyed about the challenges that remain.
First, as the Taliban lost control of territory last year, they shifted away from large attacks on our forces to greater reliance on headline-grabbing attacks. In recent weeks, we’ve seen a spate of such high-profile attacks, including the attempt to attack the United States embassy and NATO headquarters in Kabul last week and the assassination of former President Rabbani, the chairman of the High Peace Council, this -- just this last Tuesday. At this time of loss, we have conveyed our condolences to the family of Professor Rabbani and the Afghan people. But we are concerned that these attacks, because of the loss of life and because they represent an effort to disrupt the process we have made, must be confronted and cannot be allowed to continue.
Overall, we judge this change in tactics to be a result in a shift in momentum in our favor, and a sign of weakness of the insurgency. While overall violence in Afghanistan is trending down, and down substantially in areas where we concentrated the surge, we must be more effective in stopping these attacks and limiting the ability of insurgents to create perceptions of decreasing security. We are working with our Afghan counterparts to discuss with them how we can provide better protection against these attacks, but the bottom line is that we can’t let these sporadic attacks deter us from the progress that we’ve made.
The second challenge is the difficult campaign we have ahead of us in the east, where the topography, the cultural geography and the continuing presence of safe havens in Pakistan give the insurgents advantages they have lost elsewhere in the country. We cannot allow terrorists to have safe havens from which they launch attacks and kill our forces. We cannot allow that to happen. And we have to bring pressure on the Pakistanis to do their part to confront that issue.
The third key challenge is that we must not underestimate the difficult tasks the Afghans still face in developing governance that can meet the minimum needs of the Afghan people and help them take and sustain control of their country.
I believe we’re capable of meeting these challenges if we keep our efforts focused and maintain our dedication to the fight. We have some tough -- we’ve had some tough days in this campaign, and undoubtedly there are more tough days that lie ahead.
This is a heavy burden that I feel personally now as secretary of defense every time I write a condolence letter. Since taking this office, I’ve been to Dover to receive the remains of those who were killed in the Chinook helicopter crash last month. I’ve been to Arlington, and I’ve been to Bethesda. And in spending time with the families of those who’ve died or have been seriously wounded in the service of this country, there isn’t a family member who hasn’t come up to me and said if you really care about what happened to my loved one, you will carry on the mission that they gave their life for or were seriously wounded for. We owe it to those who’ve paid this price to continue the hard work of doing this right and protecting our country.
I’d also like to close by recognizing the man sitting next to me, Mike Mullen. He has worked tirelessly and successfully to advocate effective operations -- for effective operations in Afghanistan and Iraq. And the strategy that is now bearing fruit owes much of its success to his vision and his determination. I know that all of you and that all of America join me in thanking him for his decades of dedicated service and his extraordinary work on behalf of our country and our men and women in uniform. Mike has set a standard for responsibilities and performance of chairman that will forever be his legacy, and I am deeply grateful for his service and for his friendship.
Thank you, Mr. Chairman.
I want to thank you on their behalf for your dedication and for your support, particularly in a time of war, and for your determination to join me in doing everything possible to ensure that they succeed in their mission of protecting America and keeping us safe.
When I testified before this committee as the nominee for the Secretary of Defense, I pledged that I would treat Congress as a full partner. And in the months since, I’ve had the opportunity to consult with you, many of you, on all of the challenges that the Department faces, and I will continue to do so. It’s important to have your guidance and your consult as we deal with the challenges facing our department.
Before turning to the pressing issues of the challenges of the wars in Iraq and Afghanistan, I would like to briefly address the challenge of the defense budget, which relates to, obviously, everything we do.
As you know, the department has been undergoing a strategy-driven process to prepare to implement the more than $450 billion in savings that will be required over the next 10 years as a result of the debt ceiling agreement. While this review is ongoing and no specific decisions have been made at this point, I’m determined to make these decisions strategically, looking at the needs that our Defense Department has to face not just now, but in the future, so that we can maintain the most dominant military in the world, a force that is agile, ready, capable and adaptable.
These reductions will require hard decisions, and those decisions will force us to take on greater risk in our mission of protecting this country. My goal is to try to make those risks acceptable, but that is a reality. The guidelines that I will be putting in place as we move forward on these decisions are the following:
First of all, I want to maintain the best military in the world. Secondly, I do not want to hollow out the force. Every time we have gone through these reductions in the past, the danger has always been that we’ve hollowed out the force. I am not going to do that.
Thirdly, it requires a balanced approach in order to achieve the significant reductions that I’m required to do. So I am going to look at all areas. I’m going to look at efficiencies, reducing overhead, duplication -- there are opportunities -- try to achieve savings -- additional savings in those areas. Procurement, looking at the whole process of tightening up on our contracting, creating greater competition with regards to our procurement area.
I’m also going to look at the compensation area. The fact is that in some of those areas, the costs have increased by 80 percent. Health care alone in the military costs some $52 (billion), $53 billion.
But I have to do it in a way that does not jeopardize the volunteer force, and to that extent, I’ve got to maintain faith with those that have gone deployment after deployment, put their lives on the line. We cannot undermine the commitments we have made to them. Nevertheless, we do have to look at reforms in these areas.
And lastly, as I said, we do have to maintain faith with those that are out there fighting every day.
We are going to have to look at how we turn a corner. We have -- we have gone through a decade of war in which the defense budget has more than doubled, and now we have to look at a decade where we have to prevent war but be able to fight wars and win wars, if we have to, recognizing we have less resources. That’s the challenge that we face as we confront this budget issue.
The department is taking on its share of our country’s efforts to achieve fiscal discipline, and we will. And I want to caution strongly against further cuts to defense as we go through that, particularly with the mechanism that’s been built into the agreement called sequester. This mechanism would force defense cuts that in my view would do catastrophic damage to our military and its ability to protect the country.
I know you share my concern about the process of sequester. It is kind of a blind formula that makes cuts all across the board and guarantees that we will hollow out the force. Working with this committee and others in Congress, I’m confident that we can meet our national security responsibilities and do our part to help this country get its fiscal house in order but at the same time maintain a strong national defense. We do not have to make a choice between fiscal security and national security.
Even as the department grapples with the budget, our most immediate challenges are the wars in Iraq and Afghanistan. My submitted statement goes into more details on the progress we are making and the challenges that remain to achieving our strategic objectives, but let me just briefly address both of these efforts.
I’ll begin with Iraq, where our focus has been on ending the war in a responsible way that allows Iraq to become a secure, sovereign, stable, self-reliant nation and a positive force for stability in that region. Today fewer than 50,000 U.S. forces remain in Iraq, and based on the November 2008 security agreement reached with the Iraqi government under the last administration, we are planning to draw down our combat troops in Iraq by the end of the year.
Still, as you know, last month the Iraqi political leadership indicated publicly that they are interested in an ongoing training relationship with the United States in a post-2011 period. As a result, General Austin and Ambassador Jeffrey have been in the process of negotiating with Iraqi leaders as to what their needs are and how we can address that.
We are seriously considering this request, and I want to make clear that no final decisions have been made. We’ll continue to consult extensively with the Iraqis but we will also consult with the Congress before such decisions are made as to what a post-2011 training presence will look like.
I want to be clear that obviously any future security relationship in Iraq will be different from the one that we’ve had since 2003. The United States wants a normal, productive relationship and a close strategic partnership with a sovereign Iraq and with other countries -- similar, frankly, to the partnerships we have with other countries in the region and around the world. This kind of security assistance would be a means of furthering our strategic partnership with Iraq that looks to the kind of future role that can best address their security needs.
But there’s no question that challenges remain there. They have to stand up a consul for higher policies. They have to develop a resolution to the Kirkuk situation and dispute.
They have to pass a hydrocarbons law. They have to promote security efforts to deal with Iranian-supported Shia extremist groups that have been attacking their forces as well as ours. They have to have security efforts to go after the remnants of al-Qaida which still remain in Iraq. And they have to work at a political process that builds a safer and stronger Iraq for the future.
As we’ve moved decisively since 2009 to end the war in Iraq, we have also turned our attention, our focus and our resources to Afghanistan and the effort to build a stable and secure country there that does not provide a safe haven to al-Qaida or to its extremist affiliates. Because of the hard work and the sacrifices of Afghan and coalition forces, we’ve established conditions that are putting Afghans on the path to assume lead responsibility for security nationwide by the end of 2014.
The insurgency has been turned back in much of the country, including its heartland in the south, and the Afghan National Security Forces are increasingly strong and capable. And as the Chairman pointed out, we have made significant progress with regards to our primary mission of disrupting, dismantling and ultimately defeating al-Qaida, particularly with the operations that took down bin Laden and that continue to take down key leadership of al-Qaida and their affiliates.
This undeniable progress has allowed us to begin transitioning to Afghan security control. We’ve done that in seven areas of the country since July. As this transition commenced, we began implementing a gradual and responsible drawdown that is essential to the success of that transition process and lasting security and stability in Afghanistan. And General Allen, who has briefed me just this week again, is in the process of laying out those plans that will provide a responsible transition that will not undermine the security of Afghanistan.
While my overall assessment is that our effort in Afghanistan is headed in the right direction, I think we also have to be clear-eyed about the challenges that remain.
First, as the Taliban lost control of territory last year, they shifted away from large attacks on our forces to greater reliance on headline-grabbing attacks. In recent weeks, we’ve seen a spate of such high-profile attacks, including the attempt to attack the United States embassy and NATO headquarters in Kabul last week and the assassination of former President Rabbani, the chairman of the High Peace Council, this -- just this last Tuesday. At this time of loss, we have conveyed our condolences to the family of Professor Rabbani and the Afghan people. But we are concerned that these attacks, because of the loss of life and because they represent an effort to disrupt the process we have made, must be confronted and cannot be allowed to continue.
Overall, we judge this change in tactics to be a result in a shift in momentum in our favor, and a sign of weakness of the insurgency. While overall violence in Afghanistan is trending down, and down substantially in areas where we concentrated the surge, we must be more effective in stopping these attacks and limiting the ability of insurgents to create perceptions of decreasing security. We are working with our Afghan counterparts to discuss with them how we can provide better protection against these attacks, but the bottom line is that we can’t let these sporadic attacks deter us from the progress that we’ve made.
The second challenge is the difficult campaign we have ahead of us in the east, where the topography, the cultural geography and the continuing presence of safe havens in Pakistan give the insurgents advantages they have lost elsewhere in the country. We cannot allow terrorists to have safe havens from which they launch attacks and kill our forces. We cannot allow that to happen. And we have to bring pressure on the Pakistanis to do their part to confront that issue.
The third key challenge is that we must not underestimate the difficult tasks the Afghans still face in developing governance that can meet the minimum needs of the Afghan people and help them take and sustain control of their country.
I believe we’re capable of meeting these challenges if we keep our efforts focused and maintain our dedication to the fight. We have some tough -- we’ve had some tough days in this campaign, and undoubtedly there are more tough days that lie ahead.
This is a heavy burden that I feel personally now as secretary of defense every time I write a condolence letter. Since taking this office, I’ve been to Dover to receive the remains of those who were killed in the Chinook helicopter crash last month. I’ve been to Arlington, and I’ve been to Bethesda. And in spending time with the families of those who’ve died or have been seriously wounded in the service of this country, there isn’t a family member who hasn’t come up to me and said if you really care about what happened to my loved one, you will carry on the mission that they gave their life for or were seriously wounded for. We owe it to those who’ve paid this price to continue the hard work of doing this right and protecting our country.
I’d also like to close by recognizing the man sitting next to me, Mike Mullen. He has worked tirelessly and successfully to advocate effective operations -- for effective operations in Afghanistan and Iraq. And the strategy that is now bearing fruit owes much of its success to his vision and his determination. I know that all of you and that all of America join me in thanking him for his decades of dedicated service and his extraordinary work on behalf of our country and our men and women in uniform. Mike has set a standard for responsibilities and performance of chairman that will forever be his legacy, and I am deeply grateful for his service and for his friendship.
Thank you, Mr. Chairman.
Customs and Border Protection (“CBP”) is in the process of re-examining its approach to the applicability of transaction value in the context of post-importation adjustments. Specifically, CBP is asking the public to provide comments on the broadening CBP’s interpretation of what constitutes a “formula” for purposes of using transaction value, thereby allowing post-importation adjustments. In order to permit the orderly administration of these upward and downward post-importation adjustments, CBP is considering modifying prior rulings in order to allow the transaction value basis of appraisement in these circumstances, provided that the importers use the reconciliation program for declaring the value of the affected importations.