attend the Sept. 6 Defense News Conference<\/a>, where he is scheduled to speak.<\/p>\n\n\n\nYou have a series of reviews ongoing, which Secretary Mattis has said will drive the next budget. How are you planning for FY19 without those being complete?<\/b><\/p>\n\n\n\n
As they are doing their reviews, we will meet with them, get regular briefings on where they are on their strategy. I frankly meet regularly with the folks working on the national defense strategy, so that when I am in a budget meeting I understand where they and the secretary are headed. I want to understand where the secretary is going, so when I look at a reprogramming, a congressional mark, a budget add, some other change, I understand \u2018does this support the direction we\u2019re going or is this a challenge to it?\u2019 That will happen even as they are working on the full pieces; when we go through the program build, we will be informed by what they are doing, we will get briefings on the strategy, they will play a part of the process.<\/p>\n\n\n\n
The other challenge is, I don\u2019t know what my \u201918 number is yet. So I\u2019m looking at an \u201918 number which could be all the way down to sequestration level, all the way up to the congressional marks; you\u2019ve got a swing there of about $70 billion in your starting point. I also don\u2019t know what\u2019s going to happen with \u201919, if the caps are still in place or if they are removed. So that level of uncertainty creates a real challenge as you go through this.<\/p>\n\n\n\n
What\u2019s the best way to handle this, then? <\/b><\/p>\n\n\n\n
You build up, you make some reasonable estimates of where you think things are and you aim towards that direction, but you\u2019ve got to give yourself choices along the way. So you say \u2018ok if the world isn\u2019t as we think, we may have to come back and re-look at some of these tradeoffs.\u2019 At the end of the day we will bring those to the deputy and the secretary and say \u2018ok boss, here\u2019s where we are, and here\u2019s the situation.\u2019 You can get closer and easier if the bills are enacted and you don\u2019t have the caps in the way.<\/p>\n\n\n\n
Outline some pressure points you\u2019re specifically looking at for next year.<\/b><\/p>\n\n\n\n
We need to be able to address the full spectrum of threats. When you\u2019re doing a multi-year plan for the future, you can\u2019t presume to know the kind of conflict you\u2019re going to have next. So you have to plan for the full range of challenges. And then in that, there is a series of emerging areas \u2013 people will talk about cyber and others where you just know that those capabilities and challenges are going to continue to grow. And they\u2019re not the traditional lane, so the president elevated [CYBERCOM], that is a reflection of [how] this isn\u2019t going away.<\/p>\n\n\n\n
Anything that could be increased? What about munitions? <\/b><\/p>\n\n\n\n
There\u2019s a lot of areas you always look at. But it would be premature of me at this point to say who I think the winners and loser are. [Munitions], yeah, that\u2019s always an area of [focus]. How many do we have, what\u2019s the capability, what\u2019s the quantity we need to produce? And those are often not just near term but a long term question, which is how many do I want to have and how many do I want to keep?<\/p>\n\n\n\n
This was the readiness budget. 2019 is supposed to be the start of the Trump military buildup. How do you balance that?<\/b><\/p>\n\n\n\n
Well, readiness doesn\u2019t go away. You sustain the readiness and you then start shifting, you may make choices on systems but the readiness of the force you have has to stay a priority. And I don\u2019t think we take a step back from readiness as we\u2019re looking at expanding the capacity and the capability.<\/p>\n\n\n\n
The Pentagon, famously, has never been audited. That\u2019s now part of your mission. Is that the biggest bugaboo of the job for you?<\/b><\/p>\n\n\n\n
I don\u2019t think of it as a bugaboo. I think of it\u2019s as a great opportunity. And that\u2019s part of the difference in how I approach it versus others, which is, I have a chance for someone to come through and look at financial practices and let me know where inside a service or defense agency there is a problem. Which greatly facilitates my job, in terms of where I\u2019m going to spend my time fixing things. I don\u2019t have to guess and poke around. I\u2019m going to get nice, written reports saying these are the issues. We can prioritize them, I can work with that organization on a corrective action plan. I\u2019ve got strong support from the Hill so when people try to tell me \u2018I\u2019m not sure this is a priority,\u2019 I have strong support from the secretary, the deputy and the Hill to say \u2018no, we\u2019re doing this, we\u2019re going to fix this, this is important.\u2019 So from my point of view it\u2019s a major opportunity.<\/p>\n\n\n\n
As you make progress on the audit and get more reliable financial information, there are cool things you can do with data analytics. You use data analytics to analyze databases to find trends and patterns. If it\u2019s reliable, then you can use that to drive a lot of changes. You can switch from looking for errors by sampling to just searching for the errors\u2026. I think there is a lot of good opportunities coming out of the audit. Part of my goal is pushing the audit forward so we can get those findings, and then using that process to help drive change.<\/p>\n\n\n\n
The Overseas Contingency Operations (OCO) account has been controversial in recent years. Should the Pentagon continue to use it?<\/b><\/p>\n\n\n\n
Absolutely. OCO is a way of looking at the costs that relate to overseas contingencies that aren\u2019t part of the core base operations of the department. It\u2019s useful for analysis, it\u2019s useful for planning. The challenge we\u2019ve had with OCO is the budget caps. I\u2019d think in the absence of the budget caps people wouldn\u2019t have a problem with OCO. They would understand it for what it is and we could budget to the level of operations and what the budgets are and everyone could agree on them. It\u2019s the presence of the caps that has created this sort of distortion, and I think that is what people tend to react to. So I don\u2019t think OCO is the issue. I think the caps are what\u2019s driving some of the challenges around OCO.<\/p>\n\n\n\n
If the caps were replaced, should OCO still be used?<\/b><\/p>\n\n\n\n
It should be used. People have to understand the challenges the caps create. But the use of OCO, as a way of tracking that kind of expense and keeping it separate, is very valuable.<\/p>\n\n\n\n
Both Secretary Mattis and Chairman Dunford have said they need 3-5 percent growth, year over year, to keep the military ready. How firm is that requirement?<\/b><\/p>\n\n\n\n
We\u2019re going to see what the end state is as we get further down. What we start with is, what are the military requirements, what is the strategy? We\u2019ll build that up first. Part of the point I make internally is, it\u2019s not about the number. At the end, there will be a number and that\u2019s what everyone will write too, but it\u2019s not about the number, it\u2019s about the strategy, it\u2019s about the military capability you need. Based on this, now we\u2019re not talking about is it [five percent or three percent]. It\u2019s \u2018do you want this number of ships, or that? This amount of presence or this?\u2019 Then you\u2019re making very specific, informed tradeoffs among capabilities that have a consequence for the number, but you\u2019re not driven by the number. However much I like dollars \u2013 and I like numbers and that\u2019s my bread and butter \u2013 in my view that\u2019s what follows the decision making and informs the decision making, but it shouldn\u2019t be the driver of decisions.<\/p>\n\n\n\n
So what decisions drive where that 3-5 percent goes?<\/b><\/p>\n\n\n\n
When [Mattis] walked in, he looked at sequestration and he said this is tremendously destructive, and he was very concerned about the level of readiness in the force. So step one is, we have to restore readiness and that includes spare parts, that includes filling skill set vacancies, that includes stopping the end strength drawdown that was underway. So that was the basic building block, that was a lot of the changes in \u201917 and some of what\u2019s in \u201918. Then you start shifting to balancing the force, increasing capability and lethality. So if you get those increased, then you\u2019re able to do the type of buildup that the president called for in terms of returning the strength of the military.<\/p>\n\n\n\n
If you don\u2019t,, you end up with tradeoffs of risk, and where do we take risks as we draw down. [That\u2019s] assuming you\u2019re talking about slight differences [3 or 5 percent]. If you\u2019re talking about sequestration, you\u2019re not talking about that range of choices. Now you\u2019re talking about something vastly more destructive; and going backwards, now you\u2019re not able to maintain the end strength, you\u2019re not able to maintain the readiness. If you\u2019re talking about sequestration versus those range of numbers, now you\u2019re in a totally different world and you\u2019re going backwards in terms of capability and you\u2019re entering the type of environment that the secretary warned so much about.<\/p>\n","protected":false},"excerpt":{"rendered":"
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