Charting a Future for U.S. Air Power

U.S. Air Force Secretary Deborah Lee James joins Professor Thomas G. Mahnken of the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University to discuss the role of air power in the defense posture of the United States. James highlights the U.S. Air Force's participation in recent U.S. interventions abroad, the future development of new aerial technologies, and the urgency of long-term strategic budgetary planning.

MAHNKEN: Well, good evening, everybody. My name is Tom Mahnken. And it's my pleasure to welcome you to tonight's Council on Foreign Relations meeting with the Honorable Deborah Lee James, the secretary of the Air Force.

We're going to begin. Secretary James will have some remarks. And then we'll broaden that to a conversation between the two of us, and then broaden it out further to questions and answer and discussion.

So with no further ado, Secretary James.

JAMES: Thank you. Thank you very much, Tom. And also where is Janine? There she is, right there in the front row. Thank you, Janine, very much for inviting me tonight and for making all of this happen.

And thanks to everyone here in the audience who braved the downtown D.C. traffic at rush hour to get here. I did too. You might think that the leader of the most powerful Air Force on earth had some kind of idea on getting here beyond driving over the Memorial Bridge, but I didn't. So that's the way I came as well. And anyway, very, very excited to be here.

And most of all, thanks to CFR for being such a thought leader for more than 90 years in all kinds of issues affecting our foreign policy, international issues generally. And the Air Force really, really values this organization in many ways.

And not to brag, but one of the ways that show our value is that we send some of our top notch officers to be fellows at CFR. And I believe back in 1962 we were the first of all the military services to begin that process. And we certainly are committed to it. Want to keep it up into the future.

And was so happy to be able to be with Colonel Clint Hinote in New York. He's part of your New York office and had the opportunity to do an event up there not too long ago.

Tonight, with your permission what I would like to do is talk a little bit about what it means to have the best Air Force on the planet. And as far as I'm concerned, despite all the stresses and strains, and I'm going to talk to you about some of those, we are the best Air Force on the planet.

I also want to talk about how I think this affects our foreign policy, what our responsibilities are as a nation, and what some of all this means for the future. But before I get to all of the future, let's talk about where we are right now today.

It was just a little bit more than a year ago, and really not all that long after I took office as secretary of the Air Force that we in the Air Force were looking toward making what we were predicting to be a rather orderly transition of our mission in Afghanistan away from combat operations and toward train, advise and assist role.

In other words, we had expected and planned to have a period where a lot of those forces could come back to the United States or back to home base. It was going to be a time where we were able to regroup and reset and retrain.

What we didn't expect at that time, but in fact what we got, was a series of three events. And those three events happened in relatively rapid secession.

And those three things combined placed significant additional and new demands on our Air Force that we simply didn't foresee. So in other words that regroup and reset and retrain strategy that went straight out of the window.

First, in February of last year, the world watched as Russian forces took military action in the Eastern Ukraine.

And then in June, this outfit called ISIL or ISIS or Daesh or whatever we happen to be calling them on any given day that most Americans had never even heard of at that time. This group started a calculated offensive to take ground and to terrorize ethnic populations in northeast Syria and Iraq.

And then the third event happened in August of last year when the CDC warned the world that we might just have an Ebola pandemic on our hands if somebody didn't step up and take charge and take action.

And as a result of all of this, the president ordered the Air Force essentially to help in quite a big way in all three of these areas. And the United States Air Force stepped up big time to do so.

For instance, it took just 14 hours for the first F-15 to show up in Lithuania in response to the Crimean crisis, which of course was part of what is an ongoing effort to reassure our allies in the Baltic region that we stand firmly with them and that we stand firmly with NATO.

And then it was of course U.S. airmen who ultimately broke the siege of Mount Sinjar, began with air jobs. There were also airstrikes involved. And ultimately about 20,000 Yazidis, who otherwise were stranded and surrounded and starving, were able to make their way to be—to get off of that mountain to relative safety. And of course the Air Force has been carrying out the majority of the fight against ISIS ever since.

And then there was the example of the Kentucky Air National Guard's 123rd Contingency Response Group, deployed to Dakar, Senegal in support of Operation Unified Assistance. Their airbase-in-a-box arrived on a C-17 with more than 70 airmen who helped funnel humanitarian supplies and equipment into West Africa to help fight Ebola.

Now, if you notice, all of these examples demonstrate how the Air Force is really a very, very quick response force for our nation.

Now, flash forward with me and of course where are we right now today? We are winding down that Ebola operations. The wind down actually began last month and it's continuing.

We still of course are devoted and continuing to support our European allies. And of course the fight against ISIL continues to rage on.

So that's what's happening today for the United States Air Force, just some of what's happening today.  And what, you might ask, is going to happen tomorrow? What is next? And I can only tell you very sincerely I have no idea. I have no idea.

Because I think these three events really demonstrate for all of us the unpredictability of today's geopolitical landscape. And certainly we get that in the Air Force.

We think, in fact General Welsh and I put out a strategic document last summer where we talked about the most significant threat facing our Air Force in the next 30 years could well be the uncertainty and the rapid pace of change that we're seeing in a number of areas. And will we be able to keep ahead of this rapid pace of change? That is the big question.

Now, we've seen how quickly changes in technology occur. And of course the same kind of rapid change is happening with adversaries like ISIL an adversary which, by the way, I think is unlike anything that we've ever seen before. It certainly is a trans-regional threat.

So that is to say in military speak, it traverses multiple command plan lines. So it is not only the responsibility of CENTCOM, but also EUCOM and AFRICOM and elsewhere. And certainly our ability to detect where it will pop up next has been less than perfect so far.

Additionally ISIL is cultivating a social following that we haven't seen before. They have this social pull, use of videos and propaganda and messages that has enabled them to recruit young people from the West to fight on their behalf.

Consider the case of Michael Wolfe, a 23-year-old from Austin, Texas, who allegedly planned to travel to Syria until of course the authorities nabbed him at the Houston airport.

Then there were the three teenagers who flocked to Syria from the United Kingdom, allegedly desiring to train as ISIL fighters.

We even had a week or two ago a former airman, someone who had been in the Air Force some 20 years ago, allegedly try to join ISIS.

And then of course just last week the terror group Boko Haram pledged their allegiance to ISIL. So to me that means just like a disease that is spreading, ISIL now has the potential, the real potential to infect sub-Saharan Africa.

So the bottom line is ISIL is globally distributed. It's without boundaries. And I think it's likely to be a generational threat. That is to say we will likely—it will likely be with us in one stage or another for more than one generation.

Now, to counter all of this of course we need to have a whole of government approach of which the military is one component. It's a very important component. But we need a whole of government approach.

And for the military we have to of course be able to project power around the globe and across boundaries wherever this threat pops up. And of course, once again, that's where we come in as the United States Air Force.

Now, let's think back over the last 13 or 14 years during the time where we were conducting the Wars in Iraq and Afghanistan. The Air Force was very, very involved, but I would submit for most Americans it seemingly was operating somewhat in the background.

Again providing outstanding support, but there wasn't a whole lot of fanfare or drama because Iraq and Afghanistan I think were largely viewed as ground wars. They were ground wars.

But believe me that the troops on the ground could not have operated as they did had it not been through many of the capabilities that the Air Force brought to the fight. It's just that it wasn't as visible, I would say, in the media.

People frequently don't realize it, but the Air Force of course brings an entire range of military capabilities that allow us to reassure our allies, defeat our enable an awful lot of what goes on across the board in our joint force. Certainly this time around we're much more visible out in front in the Middle East.

So one obvious capability that we bring is strike. Since Aug. 8 in the fight against ISIL we have executed approximately 70 percent of the more than 2,800 strikes that have occurred in Iraq and Syria. We've also found the majority of the approximately 3,800 ISR sorties, Intelligence, Surveillance and Reconnaissance. This is another huge capability that the Air Force brings to the table.

Moreover, the Air Force has led the way in air refueling by flying about 95 percent of the nearly 7,500 tanker sorties that have been essential to the range and persistence of operations. So aerial refueling is another capability, and that's part of our mobility forces.

All told, if you wrap all this together we have flown approximately 60 percent of all the sorties that have been flown supporting operations in Iraq and Syria.

Now, I think that there's good news in this terrible tragedy called ISIL and the fight against ISIL, it is that I think that air power is having a very significant effect. We are degrading ISIL, and that of course gives our senior leaders and strategists time to work the next important phase of the strategy, which of course involves training of the Iraqi army, the training of the elements within Syria and so forth. So air power alone is not the only part of the equation. But it is making a big difference.

In Iraq and in Kobani, Syria, airstrikes and resupply efforts helped Iraqi and Kurdish forces to retake and hold key territory.  In Syria we have hit ISIL command and control centers. That means buildings. logistics sites that basically is training camps and vehicle staging areas.  And revenue sources. Hit them at the oil production. Hit them at the oil refineries. All of which is making it harder for ISIL to sustain itself as a fighting force.

Yet the part of the Air Force that doesn't get quite as much news coverage is perhaps the most important. For when you think about air power, I think we naturally think about airplanes. But the Air Force applies air power effects not only through the air—that's of course the airplanes—but also through space and cyberspace. And each of these domains, air and space and cyberspace, gives America's Air Force and America's military very distinct military options. But the real secret sauce is the synergy amongst the three. And that's what really makes the U.S. dominant in many of these capabilities.

Certainly our combatant commanders call on space and cyberspace capabilities each and every day, and so does the American public. So this is another thing that I think frequently people don't realize.

But if, for example, you came here tonight using a navigation system in your car, you may not have realized it, but the U.S. Air Force enabled you. And if you went to the ATM earlier today and got out some cash for this evening's event, well once again, the U.S. Air Force helped to enable that.

Now, in the future we have to continue to be able to adapt and innovate to be able to confront threats like ISIL. We're going to have to devise new tactics, techniques, new procedures. And we always have to try to move more quickly than others.

I've talked quite a bit about ISIL now. I don't mean to be exclusively focused on ISIL. But after all, that is the fight that is at our doorstep right now so it's top of mind for most of us.

But I want you to know we're also trying to project into the future and think about what that next fight would be, particularly what that next higher end fight would be.

Now, when I say a higher end fight, what I'm talking about is a fight against somebody who can actually shoot back and possibly bring us down out of the air or out of space. Someone who can interfere with us in ways that the enemy on the ground in Syria and Iraq simply cannot. So this could be a near peer competitor, could be someone who isn't quite near a peer, but who possess anti-access/aerial denial capabilities.

And of course many countries around the world these days have forms of air defenses, including sophisticated surface-to-air missiles. So any of this could present us a very contested environment in the future. So we need to be able to prepare and prevail in those sorts of environments as well. It's not an either-or proposition for us, we have to do both the lower end as well as the higher end types of missions.

Technology offers a great deal of promise for more capability that will help in these sorts of environments. And here I'm talking about everything from the promise of hypersonics and directed energy and quantum computing, as examples. There are others as well.

We know potential is there. We just don't always understand exactly what these capabilities that we're exploring today might do for us in the future. But it's one of the reasons why we're firm that we need to keep our S&T spending at a reasonable level.

Recently General Welsh announced a deep dive, which will closely examine technology and capabilities that are most needed to ensure air dominance in the year 2030. So this is after the F-35 is fully deployed and operationally. But it's always looking beyond.

And a lot of people assume, well it's the next aircraft after F-35. It must be a new aircraft. To which I say, not so fast.

This is a very exploratory effort. It's just the beginning. It could well be a family of systems. And let's make sure that we are exploring all of the domains, air, space and cyber, in order to bring that air dominance 2030.

To remain the world's greatest air force we must master those capabilities. And we need to continue to be better at them. Of course always two or three or four steps ahead of the potential enemies.

We also have to keep focusing on our partnerships, and I mean partnerships with allies, partnerships with think tanks, with academia, industry and of course very important partnership with Congress.

There's no question we're operating in a much more globalized world with partners and allies that engage with us in good faith. And of course these partners expect us to be the world's greatest air force, and expect us to contribute to operations like the fight against ISIL in a meaningful way.

And by the way, on the first night of airstrikes in Syria there were several of our Middle Eastern partners, including the UAE, that joined in that very first night of the fight. They did so, I believe, because of the strong partnership that exists between our countries, but because of mutual interests. We both had mutual interests here.

Another big deal I would say was the fact that Major Mariam al-Mansouri led the UAE's first airstrikes against ISIL. I remember the UAE ambassador said at the time "do you want a society that allows women to become ministers in government, female fighter pilots, business executives and artists? Or do you want a society where if a woman doesn't cover up in public she is beaten?" So to me that was a pretty clear rebuke of ISIL's ideology and a sign that the UAE stands squarely where we stand on this matter.

In any event, we remain fully committed to the long-term goal of fostering international relationships and supporting ongoing security efforts with partner nations around the globe. And we're also committed to not sort of taking that title that I'm so proud of, the world's greatest air force, for granted.

We have a collective responsibility, I feel, as an aerospace nation to set ourselves on a course for continued success in the future.

Ladies and gentlemen, I would submit to you that the American people, through their contributions of tax dollars and sweat and tears, have built and maintained this great Air Force. And thousands of airmen over the decades have devoted their careers, and in some cases their lives, to defend America's interests here and abroad. And the airmen of today carry on this legacy.

And I mentioned earlier those three surprises of the Ukraine and ISIL and Ebola. And when those three happened, everybody around the world was calling for more Air Force, more of the capabilities that we could bring to the table.

And when you lumped on all of those needs associated with those three urgent requirements, again, more strike, more air lift, more ISR, more space. When you took all of that and you put it on top of our total force, meaning our active duty, our National Guard, our reserve and our civilian employees.

Which oh, by the way, that total force happens to be the smallest Air Force we have ever been since literally our inception in the year 1947, which was a shocking statistic the first time I heard it.

At the same time we are the smallest in terms of people, our aircraft are the oldest that they have ever been. So the average age of our aircraft now in the Air Force is 27 years of age. And there's a whole lot of aircraft that are a whole lot older than 27 of course. In fact, 12 fleets of aircraft qualify for antique license plates in the Commonwealth of Virginia. So that's another important one. We've got to modernize our Air Force.

If that's not enough for you, half of our combat Air Forces today, half are not sufficiently ready for that high end fight should we have to fight it. So half have not had what our commanders consider to be the necessary amount and proper types of training to make them comfortable that we're sufficiently ready for a high-end fight.

So you put all that together, the three new things that happen. And then don't forget we've got our longstanding commitments in Europe and in the Pacific and elsewhere. You can kind of put all this together and see why our Air Force is the busiest it's ever been, certainly the busiest that I can remember in the 34 years that I have been an observer on the scene with respect to defense issues.

So I think today we are literally standing on a precipice. On the one side is an acknowledgment that our allies and partners and the American people expect us to be the best in the world. They expect a lot out of us. On the other side of that precipice is this thing called the sequester. And what that sequester could do to us. And what it would do to us is it would render us as being a force that is not able to meet the Defense Strategic Guidance.

So we have a strategy. The strategy says that we have to essentially be able to defeat an adversary in one part of the world while simultaneously, if necessary, deny a separate adversary in a separate part of the world their objectives, while all the while defending our own homeland. And again, all three of those things would be happening simultaneously. That's what our strategy says that we need to be able to do. And I'm telling you that if we have to live with sequester we're not going to be able to do it, period.

So the strategy will have to be rewritten. And I don't know exactly how that would work, but if we can't do it, we're not going to say that we can. So—and there's no question in my mind that our partnerships would suffer as well if this were to go into effect.

So General Welsh and I continue to call upon Congress. The other military leaders are doing the same thing, that we must lift sequester. We need to go with the types of budget levels that we have in our FY 2016 budget. And for the Air Force that is a swing, dollar wise, of $10 billion. So the FY 2016 budget for the Air Force is $10 billion more than what sequestration level funding would give us.

That extra $10 billion will be able to—will allow us to meet the most pressing needs of our combatant commanders. Not all needs, but the most pressing needs of the combatant commanders.  And it will also allow us to make what we considered to be our most important investments in support of our top priorities, which are—here come the priorities. There's three of them.

Number one is taking care of people. So there's a lot in this budget that I could talk about with respect to people.

There's a lot of good in there for people. But I'm just going to call one to your attention. And that is we have got to stop this downsizing that we have been going through over the better part of 20 years in the U.S. Air Force. Enough is enough. We are as low as we should go. And if anything, I'm of the opinion we should probably gone too far.

Which is why we're calling for a slight upsizing of about 8,800 and that would be some to the active duty, some to the Guard and some to the Reserve. We are looking to put more missions in our Guard and Reserve, but the fact is we are short all across the board.

And so if we get this modest plus up, it will help to alleviate some strains in our nuclear enterprise, in the cyber world, and in the world of maintenance where, as I have traveled around the Air Force it seems like we are short everywhere when it comes to maintainers.

The second priority is we have to get the balance right between the readiness of today and our modernization for tomorrow. Now, General Welsh and I consulted very closely with the combatant commanders about these particular matters, particularly the readiness of today.

And you ask any of the combatant commanders out there if you have an extra dollar of Air Force money where do you want us to put it. And they will each tell you the same thing. And that is ISR, ISR, ISR. That is without question the number one desire of our combatant commanders.

So as a result, this budget and that extra $10 billion is allowing us to ramp up our support in the ISR world. So that would include support for 60 steady state combat air patrols, as well as we would be extending the life of the U-2 and the AWACS programs.

We'll also support vital space programs, strengthen the nuclear enterprise. We're going to fund flying hours to the maximum executable level. We'll be investing in weapons system sustainment and we're also going to ensure that combat exercises like the red and green flag series of exercises remains strong and robust. And by the way, those are very important for helping train our people for that possibility of a high-end fight.

And when it comes to modernization, strengthening the nuclear enterprise remains our number one mission priority, so this budget doubles down in that regard.

We'll also ensure to our budget that our top three individual modernization programs, which are the KC-46, the F-35 and the long-range strike bomber. Again, all of which will help in the future with those high-end threats, that those will stay on track.

And lastly, the third priority is what we call Make Every Dollar Count. And this is a really, really important one because of course we understand that ultimately we are stewards of the taxpayer's dollar.

And we can't afford to waste a single dollar of it, we simply can't. Times are too hard. Budgets are too tight. We have to "Make Every Dollar Count." So we have a whole series of initiatives designed to do just that.

So it's—we have a series of acquisition initiatives we call Bending the Cost Curve, designed to hopefully bring down the cost of some of our systems. Instead of paying more and more to get less and less we need to bend that cost curve in the right direction.

We're trying to build affordability into the new systems that are just getting off the ground. We're driving toward auditability of books in the Department of Defense and Department of the Air Force.

We're trying to maximize energy savings, reduce headquarter spending. And again, there are more initiatives as well. But making every dollar count is our third priority, and that's extremely important to us.

So, there's a lot of good in this budget. But I'm not going to stand here and tell you it's perfect. It's not. There were still hard choices that had to be made.

So for example, we are proposing, once again, to retire the A-10 aircraft over time. We're proposing to slow the growth in military compensation. And there's some other factors in there as we. None of which are popular proposals.

We're just coming off of our four posture hearings, and I can tell you, these proposals are not popular. But what we've tried to explain to the congressmen and to the senators and to the staff who support them is, as unpopular as these two things might be, hold onto your hats because if sequestration returns it's going to get way, way uglier, much more ugly very quickly.

So under sequestration our Air Force, in addition to retiring A-10 and in addition to slowing the growth in military compensation, we would have to divest possibly the U-2, the Global Hawk Block 40 and the KC-10 fleets.

We would have to perhaps reduce our MQ-1 and -9 by up to 10 orbits. Ten orbits, by the way, just so you understand what that's about, that's like the equivalent of what we're flying over Syria and Iraq today. So it would totally upend and we'd have to rearrange all of the remaining combat air patrols.

We would have to defer up to 14 F-35s, cancel the adaptive engine program, which is showing very promising results toward energy efficiency and future engines. And then of course we would have to reduce people investments, readiness investments, space, cyber, nuclear and some of that important science and technology funding.

So in short, sequestration would basically threaten all of these areas. Nothing would be completely immune. And as I testified before Congress, particularly if sequestration hits readiness hard, it could well cost American lives and future operations. And I just think we can do better in this country. And we've got to keep pressing that point.

Hopefully I've given you a sense of why the Air Force is in such demand, and why the threats we face today and may face tomorrow mean that we can't take air power for granted. There's just simply no other military that can influence and shape adversary and partner actions the way that we do. And so we're working on these partnerships each and every day.

We have two—as we sit here this evening we have two exchange officers working hand-in-hand with the Jordanian air force, which is yet another great partner in our fight against ISIL. One is an aircraft maintenance officer. The other is an F-16 instructor pilot. These are just two examples. There are many of these partnerships.

This—we have a duty—I have a duty to make sure that I do everything in my power to ensure that we remain the very best air force on the planet. And again, this means we need to permanently lift sequester.

But more importantly, it also means that we have to try to capture and utilize the great minds and the great partners that we do have, including all of you here tonight and the CFR. And join together in what we are calling an aerospace nation to help forge the path ahead.

Our big conference every year is the Air Force Association, which always occurs in September. And at the next AFA we'll be talking more about what it means to be an aerospace nation. That conference, by the way, will be here in Washington as well.

And certainly as we march toward that, at the conference and beyond, we want to continue to work very closely with CFR and have your ideas and counsels and continue with the conversation.

So once again, I thank you so much for inviting me here this evening. It's a great pleasure. And look forward to your questions. Thank you.

(APPLAUSE)

MAHNKEN: Thank you for that comprehensive overview of the Air Force, Air Force operations, readiness, force structure, modernization and of course the budget.

I know many members of the audience have questions primed. Before we turn to them, though, I wanted to—I actually wanted to ask you maybe a little bit of a different type of a question than you're used to getting, and that you'll likely get in the next few minutes.

But I actually wanted to ask about a little bit about you and what you—if you would share a little bit about your path and how you got to where you are now.

JAMES: I certainly would love to do that, yes. So my path was kind of a zigzag-y path. In fact I have what I call my Top 10 Lessons Learned in Life, and my number one lesson learned is be prepared to zigzag because life throws you curveballs and it doesn't always work out as you think or as you plan.

So for me it all started, my great passion as a young person through high school, college and graduate school was international affairs. And so my dream was I wanted to be a diplomat. I wanted to be in the State Department.

And I first went to Duke and I studied what was called comparative area studies, which was the closest thing they had to international relations. I went on to Columbia. I got a master's in international relations. I was an exchange student in Argentina, so I became fluent in Spanish. I even had a few internships kind of related to my field.

So I thought wow, what a resume for a young 22-year-old. So how can I lose, I thought. So I moved to Washington and applied to the State Department and sat back and waited for that acceptance letter to roll on in, because of course there was no Internet in those days.

And guess what? Instead I got a polite, but nonetheless I got a rejection letter. So for whatever reason they didn't pick me. And it was absolutely devastating.

As a 22-year-old it was by far the worst thing that had ever happened to me in my young life. And I thought I have just wasted years. What am I going to do now?

So after being depressed for the better part of a week I guess, I finally pulled up my socks and got with it because I had to have a job, right. Here I'd moved to Washington. I had to have a job. And so I started applying elsewhere.

By the way, I did want to be in policy. I did want to be in the government. So I sent out all kinds of resumes and got lucky.

I was accepted into a program called the Presidential Management Intern Program, which today is called PMF, Presidential Management Fellow. And got a job with the Department of the Army.

So that was my very first sort of non-internship job. It was the first real job out of school. And that allowed me to rotate to other organizations. And before you know it, one thing led to the next.

I got a job on the Hill. I became part of the Clinton administration and was in the Pentagon in the 1990s. Then I got out and went into defense industry.

Long story short, I've had a 34-year career. It has all been focused on defense. One hundred percent of it has been about defense. And it really all started with what felt like at the time a great, big failure.

But this is why I always tell young people in particular, you just never know. You never know what you can be passionate about. And you just have to be kind of open minded and be prepared to walk through that door when the door opens. So.

MAHNKEN: Thank you for that. There's a lot of wisdom in that. Thanks very much.

Now, I'd like to open it up to questions, to invite the audience to join in the discussion. Please wait for the microphone and speak directly into it. Stand, state your name and affiliation. And most importantly, keep questions and comments concise to allow as many attendees as possible to speak. And as a reminder, this session is on the record.

So, questions? Sir in the red sweater?

QUESTION: Thanks. Hi, secretary. I'm Pat Host from Defense Daily.

JAMES: Hi, Pat.

QUESTION: Did you guys submit an unfunded requirements list? And what's on it?

(LAUGHTER)

JAMES: The chairman of the committees did in fact request one, and that of course is the chiefs' list. It's not my list. In other words they do ask the heads—the military heads of the services, not the service secretaries. So I can tell you that one has been put together and it is being you know circulated and so forth, and it will be submitted soon.

Now, I also read—I forget whether it was you, Pat, or somebody else wrote something in one of the morning media outlets that purported to have certain of the lists and so forth, and so—it wasn't you. OK. So whoever—you know, whoever that was, I'm not even sure if that was the correct thing or not. But it's not yet gone, as far as I know, but will be going soon.

MAHNKEN: Sir? Microphone coming.

QUESTION: Charlie Battaglia here with the Principi Group, and I was a former executive director at the 2005 BRAC Commission.

I haven't heard you mention BRAC yet today. But if you get—I'm going to ask you two parts. If you got relief from sequestration, does that preclude the need for a BRAC as far as you're concerned?

JAMES: No.

QUESTION: You still need that.

JAMES: We need a BRAC.

QUESTION: OK. And you're now claiming you need—you got about 30 percent excess capacity infrastructure?

JAMES: That is correct.

QUESTION: OK. What does that equate to on number of bases?

JAMES: I do not know, and you should not assume it means we have 30 percent excess bases. That's probably not what it means. But we do have, we think, about 30 percent excess capacity.

So a capacity analysis is when, for example, they would go out and survey all of the runway space in the Air Force. And then they would say OK, do we have excess or do we have about the right amount of runway? Same way with kind of office space environment. So think of that as capacity. But back to your original question, we need a BRAC no matter what.

So now let me just speak as a business person. I know there's plenty of business people in this room. I don't care if we're spending $1 billion or $2 billion or $3 billion too much each year on excess capacity - I don't want to spend $0.10 too much on excess capacity. It just doesn't make sense. We just need to free up as much as we can free up and plow it back into readiness and modernization and people.

QUESTION: Well, as someone who follows this very, very closely, I agree with you 100 percent. You need relief.

JAMES: Yes. Thank you.

MAHNKEN: Sir?

QUESTION: Tom Davis, U.S. Army, retired. I wish I'd have known you back in 1994 when we were arguing over the Army budget, going over components of the Army, given your first job it might've been good leverage.

(LAUGHTER)

QUESTION: Question I had, you mentioned very briefly in passing about the modernization needs for the nuclear force. And I haven't been involved in nuclear weapons in my past career.

I was just wondering, what exactly are the steps that you've been taking to modernize particularly the ICBM leg of the force? And what other steps have you taken to kind of deal with some of the problems that you've been having in the nuclear mission over the last few years?

JAMES: Yes. So there's probably no subject area that I have worked more on personally over the last year than the nuclear enterprise. So there is a lot of steps that we're taking.

I'll say to modernize the force. But to me you know it's people. It's readiness. It's modernization. It's all of these things together. And it's really trying to shift the culture.

So let me just talk culture you know for a moment or two. So you know in the wake of the cheating incident that just happened last January, and at least for me, my introduction to our top nuclear base is when I went out there and talked to the people.

So I talked to the commanders on the ground, of course had gotten greetings in Washington before I departed, and also talked to some of the airmen kind of in these focus group environments. It became pretty clear to me that this was a different type of culture.

This was a culture that seemed a lot more micromanaging to me than what I had seen elsewhere across the military. You know and the military you're usually about empowering people to make decisions, within limits of course. But it didn't seem that way at all in the nuclear force.

It was an environment in which there was such a focus on test, test, test, evaluate, evaluate, inspect, inspect. And if you weren't testing or evaluating or inspecting, you were practicing to get ready for the test and the evaluation and the inspection.

Instead of it being a culture of training and continual improvement—and then, OK, you get some evaluation. So that also seemed off to me.

So, essentially the top thing that we're doing, the number one thing is we're trying to shift that culture so that we do get to a more of a thinking of empowerment, a thinking of meaning this is my job and I'm charged with going out and doing it. I don't have to go to higher headquarters for every last little thing.

It also needs to be a culture of continual improvement where it is OK in a training environment to make a mistake on a test. It's not going to end your career. Believe it or not, it was not quite that way before.

When it comes to people I mentioned undermanning. We're shifting 1,100 people to the nuclear enterprise to address some of that undermanning that had been occurring there.

And by the way we're doing essentially robbing Peter to pay Paul because we're taking those people from elsewhere in our Air Force. But we got to make priorities, and this is priority number one, to make sure we get this right.

When it comes to I'll say readiness, sustainment, we put a bunch of money into things like spare parts and the upgrading some of the facilities and things like this which go directly to what's happening today in the nuclear force.

And then in terms of modernization, there are additional monies. By the way, money's not everything. But money's important.

So in the FY 2016 budget, as well as the accompanying five-year plan that goes with it, we have about $5.6 billion more in nuclear than what we reported a year ago. So that's what a year has done. It has caused us to shift about $5.6 billion more toward nuclear.

And on modernization, there's monies in there for the Ground Based Strategic Deterrent. That's of course the follow-on to the current ICBM force. There's of course long-range strike bomber monies in there. There's long-range standoff weapons, which would be the next generation after the outcome weapons.

So there's quite a bit in there from modernization as well. All told, as I said, it's about $5.6 billion more. So we really are treating this now as number one, and I think, doing a better job of putting our money where our mouth is.

MAHNKEN: Thanks.

Michael Gordon? Yes. Sorry, right there.

QUESTION: Hi. Michael Gordon, New York Times.

You rattled off a number of statistics about sorties that had been deployed against ISIL, Daesh, whatever you want to call them. But really the most challenging part of the fight is ahead with the campaign in Mosul, whether it's the spring, the summer or next fall.

How can you effectively employ air power in that kind of urban environment with Kurdish forces, Iraqi forces without some kind of JTAGS or air controllers on the ground? Can air power be used effectively that way? Or is this a case where politically there're political impediments to using air power the way you'd like to see it used?

JAMES: Let me take a crack at that. But of course you know I'm not one of the commanders that sort of makes those decisions.

But the president's proposal to the Congress on the Authorization of Use of Military Force that of course is still being debated does leave the door open, I think, for small numbers of personnel on the ground, such as the JTAGS and other forms of combat controllers.

So—and I certainly know that General Dempsey has talked about should he believe that that is necessary he wouldn't hesitate to recommend it. So I add all of that up together and I say that at least there is that open willingness to review that when the time comes. So that's one thing.

Having people on the ground is certainly a good element. It helps direct the firepower. But of course we haven't had that very much. And we've been doing it much more through the ISR assets.

You get into an urban environment, as you point out, Michael, it's a lot more complicated. So I know that the top leaders are watching these matters literally on an hour-by-hour basis. We'll see how it goes as we get closer to the time.

MAHNKEN: Sir, in the back?

QUESTION: Yes, ma'am. Ben Fernandez, a PhD student at George Mason.

You had—a few weeks ago Dr. Davidson wrote a really good blog that talked about the four myths driving defense policy. The first one I thought was very good, which talked about the Maserati method, which basically said that in many cases we look at exquisite platform.

We focus on those exquisite platforms even though most of the time a lot of our requirements don't require those exquisite platforms. And those of course are very expensive.

You talked about retiring the A-10 and it being an unpopular category. And it definitely saves the Air Force billions of dollars. I'm curious about the strategic reasons for not retiring one of these three bombers that when you look at operational costs, costs much, much more to operate.

And if you were to replace some of the activities that they have with say an A-10, you could also save billions of dollars, if they're used consistently. It definitely depends on your operational words (ph).

But so when you have that savings to the Air Force budget structure, if you were to retire something else, as well as potentially large savings in overseas contingency operations funds, which—and you have three of them, a fourth on the way, what's the strategic rationale for taking the A-10 out instead of one of the bombers?

JAMES: The bombers actually were looked at. So before the Air Force arrived at the decision to propose retirement of the A-10, they looked at a host of other options.

I'm saying they. It wasn't we yet because this all was happening the year before I arrived on the scene. But the bomber force was one of the specific options looked at.

But from an operational standpoint the other thing they'll look at is what are we already short on? And the requirements of the Air Force under the war plans and whatnot already suggest that we're short in the way of a bomber force.

So that, coupled with the review that they did, sort of eliminated the bomber elements. I've been asked before, well the B-52s are even older than the A-10s. And that's true.

But again, the B-52s have this niche capability. They have this niche requirement that they fulfill. And we are overall short on the bombers.

With respect to the A-10, of course this is an important close air support aircraft. Close air support is a mission. And the A-10 is an aircraft that performs that mission.

There are other aircraft that perform that mission, that have been performing that mission over the last 13-14 years in Iraq and Afghanistan. I believe it's something like 80 percent of the missions during that period of time in Iraq and Afghanistan, of close air support missions were done by the other aircraft that do close air support. And 20 percent was done by A-10s.

So to me that's proof positive that there are other aircraft that do it, that do it well. So we just have to continue you know explaining this story to the Congress. And hope that we make some headway with it.

It has been said from time-to-time that we don't care about the troops on the ground, that we don't care about close air support. This is just absolute—it's absolutely not true.

And General Welsh, of all people, is a former A-10 pilot. He has a son who is a ground troop, he's a Marine. It's just simply not true.

Its' a scared mission. We will always cover it. We've got it. We've got it. And even if the A-10 was retired, we would continue to cover it.

MAHNKEN: Yes?

QUESTION: Secretary, good evening. Thank you for your time this evening.

You talked a little bit about the importance of partnerships. Would you please clarify or speak in more depth about how the three surprises have affected the Air Force's contribution to the U.S.'s rebalance to Asia?

MAHNKEN: I'm sorry. Would you state your name and affiliation?

QUESTION: Oh. I'm sorry. Gina Jones, Department of Defense.

JAMES: The rebalance to Asia is alive and well, and it is happening. Some people say well, shouldn't it be happening faster? Well, I don't necessarily think so. And I don't necessarily think it was ever envisioned that it would happen just like that.

Rather it's designed to be a gradual series of choices and a gradual series of actions that involve a number of things, which over time will be put together and called the rebalance to Asia.

By the way, the United States Air Force, I mean we're already, we feel, very much an Asian power, if you will. It's approximately 60 percent of our forces are already based in the Asia-Pacific region. So that's already a big slice.

So just a few other examples of what's happening, I mean we're making basing decisions that are increasingly looking toward the Asia-Pacific region. W e are doing more and more exercises with those allies. We are shifting additional resources to place like, still the United States, but Hawaii and Alaska, again looking toward the Pacific region.

So there's a lot going on. And just as a reminder, the rebalance to the Pacific, it has a military component. But there's that economic. There's diplomatic. It's a whole of government approach. It's not just about military, though. Obviously that's what—that's our piece of it.

MANHKEN: Henry?

QUESTION: Thank you, Madam Secretary, for the chat this evening. My name's Henry Nuzum from SEACORS Holdings.

And over the past 15 years China's short and medium-range conventionally armed ballistic missile force has blossomed to a couple thousand.

First, what challenges does this present for our Pacific posture? And second, what measures might mitigate this capability, whether building a reciprocal swift conventional strike system?

Or diplomatic effort to depict conventional ballistic missiles as destabilizing, and that they exacerbate the current Asian arms race. They create difficulty in distinguishing from a nuclear launch. And they may provoke preemptive attacks during crises.

And asked another way, conventional pride in modification yesterday, hypersonics tomorrow, what now?

JAMES: You may have heard our deputy secretary Bob Work, who is kind of leading the charge on searching for the third offset. If some of you have heard that speech.

So, just as nuclear weapons gave United States great advantage decades ago, and then the precision-guided munitions and stealth and some other things that began happening in the 1970s and 1980s. That was kind of the second offset strategy that set us apart. Well, we're on the hunt for that third offset strategy.

We don't yet know what it is, but certainly the ballistic missile threat that you indicated there is very worrying. A lot of thought, lot of effort is going into trying to figure out next steps to counter that.

If you're not careful, we can spend ourselves off of the map, right, to try to protect against that. But through other creative mechanisms and technology we're hoping to figure out a different way. But we don't have all the answers yet, all the solutions. But it's very worrying. And we're on it.

MAHNKEN: Ma'am?

QUESTION: Andrea Shalal with Reuters.

I wanted to ask you about, given your experience in both sides of the fence, what you think the department can do to accelerate its embrace or its openness to commercial providers to lure in some of these very innovative companies like Google and Apple that are currently a little bit hesitant to do business with the department and with the Air Force. Thanks.

JAMES: I don't think—I don't believe in kind of a big bang theory here. I don't think there's one or two or three things that we're going to be able to do which will fundamentally shift this picture and suddenly attract in commercial providers who heretofore have not been doing business with the Department of Defense.

I could be wrong. But I don't know what those one or two or three things would be.

Instead, I think it's more incremental changes. It's test programs. It's pilots. I mean you know we have a couple things we're trying and bending the cost curve in our umbrella initiatives.

So that's my take, Andrea. I just don't think that there's one or two or three different things.

Now, of course I know the chairman of the House Armed Services Committee has introduced a bill. And I have not read that bill in detail yet.

But I've read some of the descriptions of it and I think his effort is on target. Meaning he's trying to remove some of what I'll call the bureaucracy, you know some of the requirements that we place on ourselves, we place on industry to do business.

Now, some of that I think will help. But again, I'm of the belief that it's not going to be a single one, two or three-shot deal. It's going to be incremental things here or there. And it's going to be a much more gradual process.

MAHNKEN: Right there. Ma'am?

QUESTION: Good evening, Madam Secretary. I'm Kendra Gaither from Carnegie Mellon University.

I wanted to stay in the pivot to Asia so to speak. Recently the youth ambassador of Korea was attacked, as you know, by someone who was part of a group that had a concern about the military presences in Korea, and how that it affected the Koreas and there'd been no threats against the U.S. ambassador to Japan and the consulate in Okinawa.

I'm curious as the Air Force has such a significant presence in that region, and these folks though belie the concerns that have existed for some time about the U.S. presence in these countries.

How do you manage those strategic partnerships in these countries where the populations may be a little less excited to have our continued engagement there?

JAMES: I was recently in some of these countries. And my belief is that the overwhelming majority of people don't feel that way. In other words, I think we are very welcomed by the overwhelming majority of people in Korea. I would also say the same for Japan.

Now, Okinawa is a bit of a different case. I did not realize fully until I was there that Okinawa in some ways to Japan is like maybe Hawaii is to the mainland U.S., meaning it's a beautiful island.

There's all kinds of opportunities for tourism and the like. And yet between the Japanese military and the U.S. military, we are occupying a very large part of that space. So, that's kind of a special case.

But if you put that aside for a moment, we are welcomed by those societies. But with that said, there's always threats because there's always a minority of people who don't feel that way, and an even smaller minority within that minority who are willing to resort to violence. And so that's why you know people always have to stay attuned to security concerns as best as we can.

I'll give you one other. And that's the recent posting by ISIL of the 100 or so military personnel. Now, people said oh—or they said, I think, we hacked into the computer systems. Well, that's not true. This was all open source information.

We try to remind our airmen at all times, be careful. You know have fun with social media, use it as a communication platform, but don't put your whole life story out there. Be careful. You know and we have a handbook where we provide guidance on that and suggestions.

So yes, it's a dangerous world because of the minority of people who are always going to maybe resort to violence.

MAHNKEN: Great. We've got time for just one more question. It'll be right here. But before we take it, I just want to remind everybody that this meeting has been on the record.

So, sir?

QUESTION: Madam Secretary, Alan McArtor, Airbus Group.

As you seek to bend the cost curve and remain air dominant, do you think you've created an environment where international systems are competitive or will be competitive for either aircraft, missiles or space?

JAMES: I think we could probably do better. I think we do have certain competitions where our countries based overseas or rather companies based overseas do better than others. But I think we can probably do better. There's work to be done there.

MAHNKEN: All right. Well, thank you, Madam Secretary, for your comments.

Thank all of your—for your discussion. And please join me in thanking Secretary James.

(APPLAUSE)

JAMES: Thank you very much. Thank you.

END