Remarks by Deputy Secretary of Defense Carter at the Annual Air & Space Conference and Technology Exposition

Remarks by Deputy Secretary of Defense Carter at the Annual Air & Space Conference and Technology Exposition

            SPEAKER: And please welcome to the stage, the chairman of the board for the Air Force Association, Sandy Schlitt.

            (Applause.)

            MR. SCHLITT: Thank you, thank you, and good morning. We want to get right to it. We're running a little late and we want every minute with Dr. Carter. So on behalf of the association, welcome again. The topic of this forum is U.S. Military Power on the Asia-Pacific Region.

            Our informed speaker assumed his current position as deputy secretary of Defense, the second highest position in all of DOD, on October 6, 2011. Prior he served as the undersecretary of Defense for Acquisition, Technology and Logistics and before joining the administration in 2009, he was the chair of the International Global Affairs faculty at Harvard Kennedy School of Government and codirector with former secretary of Defense, William J. Perry, of the Preventative Defense Project, a research collaboration of Harvard and Stanford, (inaudible) program.

            It's an honor for us to have him with us today. There will be q-and-a; so get me the questions. Please welcome to the stage, Dr. Carter.

            (Applause.)

            DR. CARTER: Well, thank you, Sandy. Thanks for the introduction, for your service to the nation, to this great organization, the Air Force Association. Thank you for CyberPatriot.

            MR. SCHLITT: Thank you, you're welcome.

            DR. CARTER: Great thing.

            (Applause.)

            DR. CARTER: I see Mike Donley here, and let me just say it's an honor to serve with Secretary Mike Donley, General Mark Welsh -- I know Mark was here yesterday -- Norty Schwartz, who rendered such great service to this country as Air Force chief of staff. They couldn't say something that needs to be said, which is what a wonderful job they've done of leading the Air Force these last few years.

            They took over at a tough time and so many achievements stand -- lie behind them now, from the nuclear enterprise, our wonderful tanker effort under way, a long-range strike family of systems, and many, many things that they've done to help our airmen get through, which is what has been a very tough time, a human level, for the force. So I salute you and thank you.

            (Applause.)

            DR. CARTER: And I have so many admired colleagues from the Air Force. I just want to pick out one that I benefit from each and every day, and that is Colonel Stephen Whiting, who works in my front office. I don't know whether Stephen is here or not -- Stephen over there. Now, that is one smart guy.

            (Applause.)

            DR. CARTER: The -- he sees everything. He's the front door, and the rudder man for the front office and he does it with such incredible insight and strategic perspective. It is a remarkable service to the Department. And I know he's just one of many talented people, so many in the Air Force.

            So it's a great honor for me, and for Secretary Panetta and the rest of the front office team, to work really on behalf of the great men and women of the Air Force who've done so much to keep our country safe, whether it's been in Iraq, Afghanistan or everywhere around the world. So thank you, all of you from the Air Force, uniformed and civilian, for what you do for our nation.

            And to the retired community, I know many of you are out there in the audience as well, thank you, also, for what you did, and for your continuing loyalty and support to our Air Force and our Armed Forces.

            And next, to those of you in industry, thank you also. I always say we don't build anything in the Pentagon. We rely on industry to make things for us. And the systems that they provide are second only to the wonderful people we have in uniform what makes our military the greatest in the world. So industry is a core part of everything we do, from providing services support in Afghanistan, to building the equipment we're going to need in the future. So thank you for what you do also.

            Next, thanks to those of you in industry who have hired our veterans. You really have our thanks for that. It's all of our responsibility to help them develop meaningful careers when they leave service. And if you have done so, we really appreciate it.

            (Applause.)

            DR. CARTER: Finally, a happy 65th birthday to the Air Force.

            (Applause.)

            DR. CARTER: Now I'm tempted to sing, but for all of our sakes, I'm going to leave that to Marty Dempsey, who comes a little bit later today and for those of you who know, really can sing. So maybe you can persuade Marty to do that with the usual Irish accent that he puts on his singing.

            A less well-known fact, and certainly far less celebrated, is that this is also the 65th birthday of the Office of the Secretary of Defense, which was created by the same legislation.

            (Applause.)

            DR. CARTER: Thank you, Mike. Ready for the applause.

            (Laughter.)

            DR. CARTER: People asked if OSD had a cake to celebrate its birthday, but I was told that they don't have a cake of their own; they just take a slice from each of the Services.

            (Laughter.)

            DR. CARTER: You know, in today's world, 65 years is not actually that old. And in that short period of time, the men and women of the Air Force have helped change the world. Your power has allowed the United States to overcome the challenge of distance, collapsing time and space and bridging the gap between where we are and where we need to get to serve the national interest.

            The Air Force delivers personnel and capabilities over lands and oceans, from the biggest city to the smallest FOB; through space and cyberspace, it helps us see the world with clarity, strike with precision and adapt quickly. 

            The Air Force has provided crucial support to the wars of the past decade, first in Iraq, and now in Afghanistan. I've been visiting the airmen in Afghanistan regularly now for 3 and 1/2 years, and I've marveled at their performance. 

            Among its many contributions, the Air Force has brought innovative technical capabilities to bear on all of our operations. To meet urgent needs, the Air Force quickly developed and fielded ISR in every part of the electromagnetic spectrum; and to track everything from individuals to improvised explosive devices; and provided the battlefield communications in the so-called PED to go with them -- weather systems to sustain persistent ISR, and give our forces all the situational awareness they need.

            And our Air Force has run lift operations, for example, out of the Manas Transit Center now for several years, crossing difficult terrain to supply the Afghan campaign, keeping our troops equipped and ready. Our airmen have displayed incredible strengths and heroism through it all as have their families, performing both traditional and very non-traditional missions with great courage and great sacrifice.

            So for the last 65 years, our airmen have delivered critical capability all over the world and at the same time, they -- the Air Force has always committed itself to developing cutting edge, future-focused capabilities to ensure air supremacy in every generation. 

            Because of these core strengths, we know the Air Force will continue to deliver for the United States.

            And the question is which strategic choices the Air Force and the nation will make in the future. And those choices are what I'd like to touch on today, because we find ourselves at this moment in our history at a strategic inflection point as two great forces impinge upon us in defense.

            After 11 years of conflict since September 11, 2001, one war has ended in Iraq, the other, in Afghanistan, has for sure not yet ended, but is transitioning to Afghan lead, thanks to the superb effort of the men and women of the U.S. Armed Forces and also coalition forces. So it's not over, but you can see the beginning of the transition; and therefore, you can see the beginning of the end of the era of Iraq and Afghanistan.

            And while we've been focused on fighting insurgency in these two places and terrorism worldwide, the world hasn't stood still. Our friends and enemies elsewhere have not stood still, and technology has not stood still. The time is coming for us in the United States, really has come, is here now, to look up from the preoccupations we have of necessity had, look around, and look out to what the world will need next to the security challenges that will define our future after Iraq and Afghanistan.

            That's the transition that we face, and that all our services including the Air Force face. And we would need to make this transition no matter what our fiscal situation was, but it -- as it happens, we're subject also to a second great current.

            That second current is the need to keep the United States' fiscal house in order as outlined in the Budget Control Act, which Congress passed last year and which required our department to remove $487 billion from our budget plans over the next 10 years. 

            And we've done that and we've done it the right way, which is strategically. And more about that in a moment, but first, I can't resist also noting that the Budget Control Act also threatens a drastic process of sequestration if Congress does not pass a comprehensive and balanced overall budget plan that the president can sign.

            You've heard about sequester a few times over the last few days, I'm sure. And Secretary Panetta and I have been talking about it since last winter, before many people knew what the word meant, and we've been repeating like broken records, and I think it's been gradually sinking in, here in Washington and around the country, that sequester would be disastrous for defense.

            It would be chaotic, wasteful and damaging to every function of government, not just defense and should not take place. The intent of sequester was to use the threat of cuts to both Defense and non-Defense programs implemented inflexibly and mindlessly to force Congress to enact a compromised deficit reduction plan. It was never designed to be implemented.

            If it comes to pass, it will inevitably lead to a hallowing of the force, impacting our investments, contracts, and the lives of our service members, our employees and their families as well as all the other agencies of government. The nature of the sequestration mechanism makes it impossible for us to devise a plan that eliminates or substantially mitigates its foolish impacts.

            We're working with OMB to understand this complicated legislation, and we are accessing its impacts. But we're still 4 months from January and I'm hoping, to quote Secretary Panetta, who has a lot of experience in this field, that Congress, both Republicans and Democrats, will exercise the necessary leadership to make sure that sequestration is detriggered, putting the national interest above all else.

            If sequester is averted, as many in Congress wish, under the Budget Control Act, as I said, our base defense budget will not go down, but neither will it continue to go up as it has for the last 10 years. That's the $487 billion difference I referenced earlier, outlined under the Budget Control Act, the difference between what we planned and what we will get.

            So these two forces, one of strategic history and the other of fiscal necessity, led us to design a new defense strategy for the 21st century in a remarkable process this past winter -- that Secretary Donley centrally participated in -- and it was steered personally by the Secretary of Defense, the Chairman, and President Obama. And that was unprecedented in my experience.

            President Obama brought together the leadership of the Department of Defense and others in a series of conversations about the future trajectory of national defense and what to do about this transition from one era to the future. And we made a series of decisions through that process to design a balanced, effective defense strategy taking into account the cuts imposed upon us and building a force for the future to meet our strategic objectives.

            This future force is what Chairman Dempsey calls the Joint Force 2020, and I'm sure he'll speak about it with you later today. That's what we're building towards, from now to 2020, for the era ahead. 

            As Secretary Panetta likes to say, our future force has to be agile, it's going to be lean, it's going to be gutty ready, it's got to be technologically advanced. And under our strategy, it's going to be able to defeat any adversary, anywhere, anytime. That's the future force we need and a future for which the Air Force is well suited. 

            As a first tenant of our strategy, we determined that we need to continue to invest in future-focused capability. We must protect the seed corn of the future. President Obama himself was crystal clear and persistent on this point.

            It's important to be disciplined about this in a time of budget stringency because our newest investments have the shallowest roots. So it's -- easier to tear them up when we need to make cuts, but we can't afford to lose our future technological edge by cutting the seed corn. The Air Force understands this better than almost anyone.

            So we are continuing to not only protect, but increase investments in things like cyber, space, electronic warfare, unmanned aerial vehicles, the Long-Range Family -- Strike Family of systems, all of which are so important to the Air Force and will be so important to our future operations.

            We will continue to invest in Special Operations Forces for counterterrorism, which we've gotten very good at, very good at over the last 10 years and we need to keep being good at, because that mission will never go away. And we will continue our science and technology investments across the board. And I'm working with the Defense Space Council, which Secretary Donley leads so ably. We'll continue to develop our space capabilities further.

            A second tenant of our strategy is our continued focus on the Middle East, which will remain an enduring focus of our national security strategy, but also our so-called rebalance to the Asia-Pacific region where so much of our future economic and security interests lie. 

            I want to focus for a moment on the Asia-Pacific where the United States has played an important role since the dawn of our air power. And looking to the future, the Air Force will play a key role in our Asia-Pacific rebalance. 

            Before the Air Force formally existed, air power helped the United States overcome the sheer geography of Asia. In World War II in an operation known as "the Hump," U.S. Army, Chinese and allied pilots flew hundreds and hundreds of cargo flights from India over the Himalayas into China, some of the most difficult geography on earth, to resupply the war effort.

            The official Army Air Force's history states that "the main 'Hump', which gave its name to the whole awesome mountainous mass, and to the air route which crossed it, was the Samsung Range, often 15,000 feet high." This was an early period of U.S. strategic lift, one of the first air bridges in the history of air power, and crashes were frequent over the Himalayas.

            Most of the pilots were just out of flight school, yet they and their Chinese partners flew 24 hours a day to resupply the troops. Enemy fighters would attack along the way. In one reported incident, while piloting an unescorted and unarmed C-46, Lieutenant Wally Gayda stuck a Browning automatic rifle out of the cockpit window and fired back at an attacking enemy plane, emptying a full magazine and killing the enemy pilot. In a moment of constrained resources, you fire what you've got, and he did.

            In the Pacific Islands, later in World War II, air power allowed the United States to leapfrog enemy forces and extend a Pacific perimeter defense. The Air Force played a key role in the Korean War, and helped deter conflict in Northeast Asia throughout the modern era. Each Air Force innovation helped the United States to provide security to the Asia-Pacific region.

            And today, we seek to ensure a peaceful Asia-Pacific region too where sovereign states in the region, all of them, can enjoy the benefit of security, and continue to prosper, just as they have for almost 70 years since the valiant efforts of those who fought in World War II. Indeed, part of the reasons states in the region have been able to rise and prosper is due to the pivotal military presence of the United States in the region.

            That's been the secret sauce. It's that which helped provide regional peace and security for all these decades since the Second World War, and we intend to keep it that way. 

            Thanks to that historic security, states in the region have had the freedom to choose their own economic and political future. Our presence helped first Japan and South Korea to rise and prosper, then Southeast Asia to rise and prosper, and now, yes, China, and in a very different way, India, to rise and prosper. Working with all of the countries of the region, we intend to continue to play that positive, pivotal, stabilizing role.

            Our rebalance involves us and the Department of Defense, but it's broader than that. It's a broader government effort and it begins with our long -- our support for our long-standing principles and values of governance, of free and open access to commerce, of a just international order that upholds the rule of law, of open access to all domains, and the peaceful resolution of disputes.

            It includes diplomatic and military engagements across the region, and involves all of our military services. We engage in regional multilateral forums and diplomatic initiatives, we conduct large air exercises with a number of key regional partners, we cooperate on defense exports, with Air Force Foreign Military Sales alone to the region totaling over $7.7 billion in Fiscal Year '12. We're preparing for any opportunity or challenge we face, and developing new operational concepts to continue to succeed. 

            As I have been saying, and Secretary Panetta is saying in Asia these days as he's there, and I've seen a few weeks ago when I was in Asia, we're not just talking the talk of rebalance -- we're walking the walk. And we have the military capacity to do that for two reasons.

            First, as our forces and capabilities are released from Southeast Asia [sic: Southwest Asia], it frees up that capacity for the Asia-Pacific region. But second, we are prioritizing our financial and also intellectual resources to invest in that region. So for those two reasons, we have the resources to carry out the rebalance. Already 60 percent of the Air Force' permanent overseas forces are stationed in the Asia-Pacific region.

            As we come out of Afghanistan, the Air Force will shift additional capacity from Afghanistan for use in the Asia-Pacific. Few examples -- MQ-9s, U-2s, Global Hawks -- all of those will begin to show up or show up again in the Asia-Pacific region, and will be re-tasking accordingly the PED assets from DCGS and so forth that are currently so engaged in CENTCOM operations to the Asia-Pacific region.

            Thanks to the flexibility of Air Forces, the Air Force can allocate space, cyber and bomber forces from the United States to the Asia-Pacific region with little new investment itself. As operations in Afghanistan end, for example, B-1s will become available to augment the B-52s already on continuous rotational presence in the region. 

            But we do have investments to make. We're investing in Guam as a strategic hub for the Western Pacific to support our rotational bombers and other forces in Andersen Air Force Base. We're investing in fuel, maintenance, other infrastructure. I was just there a few weeks ago -- a number of important projects going on there as well as at the -- elsewhere on the island. We'll invest in modern infrastructure and training ranges in the Northern Mariana Islands, those same islands we used so many years ago to leapfrog.

            When combined with deployed units, nearly 60 percent of the Air Force's combat-coded F-22s are located in the Asia-Pacific region. Despite the Budget Control Act, we are making no reductions to our tactical air posture in the Asia-Pacific. In fact, we recently deployed an additional F-22 squadron to Kadena. And we will permanently station the F-35 in the region. Said differently, our newest forces are going to the Asia-Pacific first.

            So the Air Force will play a significant role in our rebalance of the Asia-Pacific with -- along with all the other services. And Secretary Panetta and I are very focused on managing that rebalance and delivering on our commitments. I could say much more about that in the investment area, and maybe will say more on the questions.

            A third tenet of our strategy is to strengthen our global alliances and develop innovative partnerships to support our national security objectives. Our allies and partners are a force multiplier for us. And our goal is to strengthen their capabilities so that they can operate effectively and share the security burden with the United States.

            So, for example, the Air Force is working with Australia to establish a rotational presence there, and cooperating with Australia as it has for a long time on space capabilities. As Secretary Panetta said this week, we're working with Japan as well as South Korea to strengthen our regional missile defense posture. And we're reforming our export control system to better serve our foreign and industry partners.

            For each of our strategic initiatives we have had to make careful investment decisions in light of our fiscal responsibilities. We've had to weigh costs and measure benefits. We're investing in capabilities we need for the future, like the new stealth bomber, the KC-46 tanker, more cost-effective space assets, and a host of ISR platforms.

            To do so, we have had to let go of some unneeded and overlapping capabilities, and make difficult calls on under-performing programs to make way for new capabilities and better-performing programs. Across the department, we're implementing the Better Buying Power initiative for acquisitions. 

            Over the last 10 years, we in the Defense Department got used to an ever-expanding budget. But now we have to learn to do more without more. Better buying power helps us adapt as an organization, and it helps us keep faith with the taxpayer while sustaining our technological edge. Under Better Buying Power we've established affordability requirements for our programs on a par with performance requirements. We're managing programs for what they should cost, not self-fulfilling historical estimates of what they've cost in the past.

            In choosing future contracts, we will look favorably on performers who control costs and demonstrate exemplary performance, as so many of our partners in industry do. We're removing obstacles to effective competition, and diversifying our suppliers to identify lower cost options. We're aggressively managing the more than $200 billion we spend annually on services, like IT systems and transportation.

            Past performance will matter more in future procurements. We welcome your ideas on how DOD and industry can be more efficient to benefit the nation and the war fighter. The Air Force has been a departmental leader in Better Buying Power, and maintains an enduringly positive relationship with its industry partners. The Air Force has done pioneering work in services acquisitions, appointing the first program executive officer for services.

            And it should also be congratulated for innovative approaches to the long-range strike family of systems acquisition, fixed price development on the tanker acquisition, several recent improvements in space acquisitions, both space craft themselves and launch, and many, many others. The Air Force understands that in order to invest in future-focused capabilities, acquisition management matters.

            The men and women of the Air Force have done incredible things for the U.S. and international security, from deterring nuclear conflict, to flying over the Himalayas and Central Asia to keep our forces supplied, to keeping the skies safe over the U.S. homeland. 

            Sixty-five years ago this year, Chuck Yeager broke the sound barrier. And in the last two decades, Air Force innovations led the way to civilian use of Global Positioning Systems, better weather forecasting and enhanced cyber security.

            What we do at this moment of dynamism today will determine the next 65 years -- an important measure. We must maintain the long view, and make balanced, strategic decisions about the future. Courage, service, innovation, strategic thinking -- these qualities are the hallmark of the Air Force and they will guarantee your future success. Thank you very much for all you do for this great country.

            (Applause.)

            MR. SCHLITT: Thank you, ladies and gentlemen. We have no shortage of questions. Some guys are out trying to buy a cake for DOD now. I don't know if we'll have it -- have it in time. You may have heard, sir, that General Bogdan made some comments yesterday regarding relationship between our department and the contractor, not necessarily healthy. Could you share us your views on that?

            DR. CARTER: Yeah, absolutely. I mean I've tried to be -- and Secretary Panetta feels the same way -- very open in our relationships with our industry partners and we tell it straight. And I respect our program manage. Chris Bogdan is a tremendously able program manager who brings a lot to the Joint Strike Fighter program as he did to the tanker program.

            We are and have been for some time, all of us, the whole government and industry team wrestling with the question of cost-control in the Joint Strike Fighter. In the development program in the transition to production, which we have been trying to manage and adjust, we made several adjustments too over the last few years for a variety of reasons -- this is a very difficult time and the life of a program of that scale and complexity, the transition from development to full-rate production.

            We have been trying to anticipate the ownership costs of the Joint Strike Fighter and make sure that we begin managing them now. And to do that we need a government industry team that can work together. And we've got to have that. And I think Chris was saying he's got to have that on the Joint Strike Fighter program and I'm with him a hundred percent. That is what we need and I think that's what we'll get.

            We want the Joint Strike Fighter -- I don't think the secretary and I could have been clearer about that -- we want it in all three variance. It's the centerpiece of our tactical air modernization program. But at the same time we have to control costs there. And that means doing what we're doing which is sitting down together and scrutinizing every element of the cost structure of that program as we have to do for all of our other programs as well so that we can continue to have them for the amount of money that the country is giving us.

            MR. SCHLITT: So does the department have a position on industrial mergers? As we look forward there's been lots of discussion BAE EADS right now.

            DR. CARTER: Good -- another good question. We do. And I published that about 2 years ago or so and it has not changed. We understand -- I'll just give you the high points of it -- we understand that our industry needs to be technologically successful, needs to be dynamic, it has to be financially successful because it has to exist in the capital markets like other companies.

            That's our system. We don't make everything in the government. These are private companies and they need to be successful. And in the main, our industrial policy is to allow and encourage companies to make individual business decisions on the basis of what is economically sensible because what's economically sensible for them is going to deliver good value and productivity growth to the Department of Defense.

            We do have some limits on that having to do with competition and security concerns and so forth. But that's our general approach. We look at each transaction one at a time. We will do that. I certainly understand that in the news -- and we've heard informally one of the many transactions being talked about, the EADS-BAE transaction. And when we are presented with a proposal or some thinking on that regard -- on that one, we'll take a look at it.

            MR. SCHLITT: Sir, this morning in a what we call a CEO breakfast we had a number of our major contractors there. We discussed a little bit about technology transfer and the limitations and the foreign partners, so that ability to be able to lower cost as they just talked about. Tell us your views on that and are we going to get some relief?

            DR. CARTER: Yeah. Yes. That is a very important nut to crack, a very hard nut to crack. The -- let me just sort of start at the top, which is our exports are a twofer for us. They are obviously good for our own defense production because they expand that production and therefore make our own procurements more economically efficient. But they also serve our foreign policy interests because as I said earlier, they help others to do for themselves what we would otherwise need to do for them or for their region. So they're a good thing.

            And I think that starting with Secretary Gates and really Secretary Clinton, President Obama, now Secretary Panetta, all the senior leadership and myself also, are frustrated with the outdated nature, I guess you would say, the export control system and with the way it is designed, which has so many hands in the pot that it takes an extraordinary collective and simultaneous act to get anything done.

            And that is annoying and impairing. And we are under pretty clear instructions, and have been for the last 3 years in the department, to clean up our act. And I will say that within the department I think we have done a great deal over the last 3 years to get our processes aligned and get the fast common-sense answers to export controls questions. Where I cannot give you much optimism at the moment is elsewhere.

            I think we're all fine -- the Commerce Department, the State Department and the Defense Department aligned in our general views. But then you have Congress which has views of its own. And so this is something we just have to keep hammering away at. And I'm dogged, and Secretary Panetta is pretty dogged within the walls of the Department of Defense. And we can do it and have done a lot there.

            It's a lot harder when you get outside and it's -- turns into missionary work for us and not something we can direct and manage in the way that we can inside the building. So I think it is very frustrating but it's very important work not to give up on. And we won't.

            MR. SCHLITT: Okay. I have a question here from General Kehler. It says, "Are we organized properly in the cyber defense arena? Are we going to have a separate DOD" -- because it's not really true, sir. But it is a question.

            DR. CARTER: I'm sorry, say it -- 

            MR. SCHLITT: "Are we really organized properly in the cyber defense arena? Will we be looking towards a separate cyber command going forward?"

            DR. CARTER: Well, we are looking at a separate cyber command as Bob Kehler knows very well. And that may be something to do in the future. That by itself is not, by any means, the whole of everything that we need to do in cyber. 

            Cyber has kind of three parts to it, two of which we can get our hands on, including by moves -- managerial moves within the department, a third which is harder to get our hands on.

            The first is defense of our own networks. There are networks -- all bets are off in terms of what authorities we can bring to bear on it. But it's still technically very challenging. And I have my concerns about the security of our networks and the integrity of our networks and we depend upon them abjectly today in everything we do.

            Second is offense, and that is developing cyber weapons as weapons of war, doing the intelligence preparation of the battlefield for their employment, and planning for their employment. Again, that's something we can do within our own walls, and are doing and Bob knows this perfectly well. 

            The third part is protecting the nation at large from cyber attack. That's -- gets a little harder, because we're -- we only play a role in a larger cast.

            First of all, there are other parts of the government that have capabilities and responsibilities and we work with them. But the most important thing is that most of those networks are not owned or controlled by us. They're owned and controlled by private entities who typically fail to invest or under-invest in their security.

            And when we offer to assist them in protecting them, we run up against a lot of barriers that we're slowly trying to knock down and reason our way through and so forth, like Antitrust issues. When we provide information to company A, do we have to provide the same information to company B. If company -- can company A provide information to company B, or does that violate the antitrust laws.

            Can company A provide information back to the United States or is that providing personal information to the government that is on their networks. These are all tough problems. Should we require private industry to control and strengthen its networks or is that the heavy hand of government regulation. 

            So when it comes to dealing with these issues of safeguarding the nationals -- the nation's -- the nation as a whole from cyber attack, we're working our way through all these issues, my own view is, way too slowly.

            And we're still vulnerable. And the pace is not adequate. We were hoping for some legislative relief for this summer that we didn't get out of the Congress. And you know, I hope this isn't going to be one of these situations where we won't do what we need to do until we get slammed.

            MR. SCHLITT: All right. Yes, sir, two quick questions then -- strategic choices. Are you satisfied that our budgets are being protected in research and development for innovation and technology transfer and advances over the next few years?

            DR. CARTER: I think we can protect the budgets adequately. I think our challenge in our science and technology programs is getting something out of them that actually ends up fielded. This is an age-old story -- but any of you who've been in the defense technology business as I have for a long time -- that's the principal frustration. Now, you can do a lot of R&D and we could spend a lot of our -- on R&D that never goes anywhere.

            MR. SCHLITT: Right.

            DR. CARTER: And so the trick is to align the R&D, the innovation that we do with the vision of the future that we have. Having a strategy helps you with that. Obviously having the money helps you with that. But there's nothing automatic that connects those two. You got to work at it hard.

            MR. SCHLITT: Okay. One last question, sir, and we have so many. So as you look forward in the ISR arena in the next 5 years, 10 years in regard to technology, automation, integration, where do you see all that going? I mean, will these -- will ISR be different?

            DR. CARTER: Well, ISR for sure will be different and obviously remotely piloted aircraft will be an important part of the future. I would say that the piece of the puzzle that needs the most work right now, and we are working on quietly but working on, is trying to extend some of the capabilities that we have developed so wonderfully for Iraq and Afghanistan to circumstances where we would not have the command of the skies that we have in Iraq and Afghanistan.

            So I'd like to have the same kind of ISR -- wondrous, multi-spectral, ubiquitous, on-demand kind of ISR -- that our forces in most parts of Afghanistan enjoy today, available in an environment where the air threat wasn't essentially negligible like it is now. So that's probably the biggest pivot that we need to make.

            MR. SCHLITT: Sir, I wish you could be with us all morning. I mean the questions are great, the audience is really interested -- not possible. So thank you so much for spending what time you could. And we have for you a Combat Reader: Historic Feats and Aviation Legends personally autographed by Walt Boyne and the other authors.

            DR. CARTER: Thank you. Appreciate it. Thank you, all.

            (Applause.)