Remarks by Secretary Panetta at the Center for a New American Security, Washington, D.C.

Remarks by Secretary Panetta at the Center for a New American Security, Washington, D.C.

            SECRETARY OF DEFENSE LEON E. PANETTA:  Thank you very much, Michelle, for that kind introduction.  

            I'm always reminded of my father who, as I say to many people, was an immigrant from Italy with my mother, and came over, and then eventually, you know ran a restaurant in Monterey during the war years.  And my earliest recollections were washing glasses in the back of that restaurant.  My parents believed that child labor was a requirement. 

            And then he bought this farm in Carmel Valley, after the war, and planted walnut trees.  And then I remember working in the walnut orchard.  And my father would go around -- when the walnut trees got older, we'd go around with a pole and hook, and basically shake each of the branches.  And my brother and I would be collecting the walnuts underneath the trees.  When I got elected to Congress, my father said, "You know you've been well trained to go to Washington.  Because you've been dodging nuts all your life." 

            And I have successfully been dodging nuts all of my life.  But I listen to the list of positions, and I'll tell you a story.  When events occurred at the CIA last week, my wife immediately gave me a call. 

            She said I hope that there is no way that the president is going to ask you to take that job again.  And I said, no.  I said, been there, done that.  

            Ladies and gentleman, it's an honor to have the chance to share some thoughts with you on -- on some of the issues that we confront at the Defense Department.  

            And I also, if I might, just take this opportunity to -- since we're close to Thanksgiving, to wish all of you and your families, a happy Thanksgiving.  

            Michelle is a dear friend, and a great strategic thinker, and a great public servant.  And I'm obviously sorry to see her leave the Department of Defense, but having been in those kinds of jobs most of my life, I understood the reasons why she felt that, you know she really wanted to spend some time with her family, and she deserves that.  

            But I should tell you that I continue to feel her positive impact throughout the national security community.  She always there.  And it's not only because of her time as undersecretary of defense for policy, which is an extremely important position at the Department of Defense, but also because she is a co-founder of the Center for a New American Security. 

            And you can't walk for long in the E-ring there at the Pentagon, and not bump into somebody from that organization.  In particular I'd like to single out somebody else who came from there, Jim Miller who is now the successor for Michelle in the position of the policy undersecretary.  And he too is somebody that I depend on every day to try to deal with everything from tremendous number of crises that we confront, to the long-term strategic challenges that we also have to discuss.  And so I'm particularly pleased with his leadership, which really follows in the footsteps of Michelle, and his acumen, and his wisdom, and all of the qualities that I deeply appreciate. 

            I spent a lot of time in Washington.  And you meet a lot of people, but it's the people who have a conscience, and work hard at their jobs that are, for me, the most respected people that you can work with.  As we enter a second term for President Obama, Jim and so many other CNAS alumni will continue, I think, to play a very critical role in helping guide the administration's defense and foreign policy.  

            With the election behind us, Washington is turning its attention to the unfinished business, particularly the unfinished business of the current Congress, including how to avoid falling off the fiscal cliff, how to prevent sequestration from happening, and the impact that that would have, not just on the Defense, but on the domestic discretionary budget as well.  And for our purposes, hopefully they will also take the time to pass a defense authorization bill, in order to be able to set some important policy guidance that we need, as we go into this next year.  

            The hope is that, obviously these issues can be resolved before the Congress adjourns.  And obviously we are all hopeful that the leadership will be able to come together, to find a way to resolve these issues.  These are tough decisions.  I've been there, I know how tough they are.  But they can do it.  They can do it.  It will take some risk, but that's part of the game, is that you have to take risks in order to do the right thing.  And I hope they do that.  

            The worst thing that can happen, frankly from my perspective, is if they just kick the can down the road.  All that would wind up doing is continuing to present a shadow over the Defense Department, and for that matter, the rest of government as to what ultimately will happen, and that's the last damned thing I need.  

            The fact is, that when it comes to national security, the challenges and opportunities that we face in the future go beyond the political gridlock of the moment.  They are significant, as we look to not just today, but tomorrow.  

            In many ways -- I've said this, I say it to the troops when I meet with them, I say it to the groups that I speak to, but I believe it – this is an era of historic change.  We are at a turning point after 10 years of war -- over 10 years of war.  We've ended the war in Iraq.  NATO conducted a successful campaign to bring down Qadhafi in Libya.  We are now embarked on, what I think is a good campaign plan to allow us to draw down in Afghanistan, and we have the continuing effort against al-Qaeda. 

            And as we achieve those -- some of those important goals, the United States is moving towards, as I said, the end of the longest period of sustained armed conflict in the nation's history.  

            And I also would like to take a moment to express my pride in the men and women in uniform who have fought throughout that period, putting their lives on the line in order to protect this country.  Were it not for their sacrifices, were it not for their willingness to do that, we would not be able to accomplish what we have, and thank God that they are there, as I often say. 

            One thing I found out when I came from the CIA to the Defense Department is, I have a hell of a lot of great toys at the Defense Department.  I've got great -- I have great weapons.  I've got great ships.  I've got great planes.  I've got great technologies.  But none of that would be worth anything without the good men and women in uniform that serve this country, and dedicate their lives to protecting this country.  That is the real strength of the United States of America.  

            As we transition into this new era, we will have to look at some very important priorities that will take on a greater urgency.  Particularly as we look at the second term of this administration, and look at, what are the challenges that we are going to be confronting? 

            This is not like periods in the past where we come out of a period of war, and the threats kind of diminish.  And then everybody winds up cutting the hell out of the defense budget.  This is this is a period where even as we come out of these 10 years of war, we are confronting some major issues, and major threats in the world. 

            We still are involved in a war on terrorism.  We are still at war in Afghanistan, even as we try to draw down in that war.  We are in the process of trying to implement the Department's defense strategy, at the same time that we are trying to meet our fiscal responsibilities. 

            We are in a period where obviously, the budget situation in this country, the huge deficits that we're facing, the huge debt that's confronting this country, are limiting resources, and will continue to limit resources.  

            I do not believe -- having worked on budgets and worked at the Defense Department -- I do not believe that we have to choose between our national security and our fiscal security.  

            We are, at the Pentagon, implementing a strategy that we put together in order to deal with the fiscal challenge that we are presented.  And the Congress handed us the figure of $487 billion to reduce the defense budget over 10 years, almost a half-a-trillion dollars to reduce the defense budget. 

            Now my approach was to say, wait a minute.  We are not just going to cut across the board.  We are not just going to hollow out the force, as we've done in the past.  Every time we've come out of a war, whether it was World War II, whether it was Korea, whether it was Vietnam, whether it's the Cold War, every time we came out, we just cut the hell out of the budget across the board.  And we hollowed out the force.  We are not going to repeat that mistake. 

            And so for that reason, you know I said to my service chiefs, the chairman of the Joint Chiefs, we've got to sit down and try to develop a strategy for the future that will provide the defense force for the 21 century.  Not just now, but in the future. 

            And then with that strategy, we'll then build our budget around that strategy.  And so, you know the strategy as you all know very quickly:  one, we know that we're going to be smaller, we're going to be leaner.  It's the reality of coming out of these wars.  

            But we have to be agile, we have to be deployable, we have to be flexible, and we have to be on the cutting edge of technology.  

            Secondly, we're going to have to have force projection in the areas where we confront the biggest problems, in the Pacific and in the Middle East.  

            Thirdly, we have to have a presence elsewhere in the world.  

            And to the credit of our military, they've designed a kind of rotational presence, which will allow us the ability to go into countries, to be there, to help train, to have a presence, to work with those countries to develop their capabilities.  And it's something that I've discussed when going to Latin America.  It's something I've discussed, you know in going to the Asia-Pacific region.  And the fact is, we are doing that.  We are doing it in a way that countries respond.  They like the idea that we're there helping them develop their capabilities to provide for their own security. 

            In addition to that, we've made clear that we always have to be capable of defeating more than one enemy at a time, and have the capability to do that.  

            And lastly, this can't just be about cutting; it's got to be about investing.  Investing in space and cyber.  Investing in unmanned systems.  Investing in the kind of capability to mobilize quickly if we have to.  Those are all important investments as well for the future.  And most importantly, maintaining our defense industrial base in this country.  So that we don't -- we are not in a position where I'm forced to contract out the most important defense capabilities that I need.  I can't do that.  I can't just contract those out to another country, I've got to have that capability here in the United States.  

            So, those are elements of the strategy.  We built a budget on that.  We built a budget that looked at every area of the defense budget to analyze, what do we do on force structure?  What do we do with regards to weapons and procurement?  What do we do with regards to compensation, which is a huge area in the defense budget? 

            What do we do in trying to develop the kind of efficiencies that we need to develop at the Defense Department?  All of that was part of our budget.  All of that we presented to the Congress.  But we're going to have to continue to work at that.  

            We have the continuing problem of counter-proliferation.  We're dealing with the nuclear threat in North Korea.  We're dealing with the nuclear threat in Iran.  Those remain unstable, and uncertain regimes that we have to deal with.  We're dealing with the whole issue of cybersecurity.  And I pointed it out, this is an area that now represents the battlefield of the future.  And we're going to have to be ready to deal with that.  We're going to have to work with the private sector, and with other government agencies to make sure that we're prepared to deal with that.  

            We've got the whole challenge of energy security, and that's particularly true for the Defense Department.  With the fuel costs that I have to deal with, with trying to improve our efficiency in moving from one area to another, I've got to be able to be energy efficient.  Not to mention the impact of energy security with regards to our larger security issues. 

            We've got to implement this rebalance now to the Pacific.  Something I talked about on the trip that I just took to the Pacific.  And, you know this is my fourth trip to the Pacific to make very clear that we are going to continue to have a strong force projection in the Pacific.  It's important to our economic security, it's important to our national security to be able to do that for the future.  

            In addition, I now have at the same time, in trying to rebalance the Pacific, I've got a significant force presence in the Middle East to deal with the threats in the Middle East.  We've got a very, very significant force presence throughout that area to deal with any potential threat that we have to deal with in that region as well.  

            And at the same time with all of those challenges, we have to be able to take care of our service members, and our veterans, and our military families.  The sacrifices they've made, they deserve that we stand by the commitments we've made to them.  And particularly in light of the force structure reductions, which are going to take place.  We've got to make sure that we provide them the support system so that they can return to their communities, and to their families, and be able to reestablish their lives.  All of that is out there.  

            All of that are issues that we have to think about, and we have to be prepared, in order to protect the national security of this country, we have to be prepared to deal with. 

            But tonight I wanted to focus on the goal that still remains at the top of the priority list, as it must.  The goal that the president made very clear, that we have a responsibility to disrupt, degrade, dismantle and ultimately defeat those who attacked America on 9/11, al-Qaeda.  

            Since September 11, 2001, our country has worked relentlessly to bring those responsible for the worst terrorist attacks in our history, to justice.  We have made very clear, that we are at war with al-Qaeda.  We've also made clear in going after Osama bin Laden, and dozens of others, that nobody attacks the United States, and gets away with it.  And we have made clear that we will do everything possible to ensure that such an attack never, never happens again.  That means counterterrorism will continue as a key mission to our military, and intelligence professionals as long as violent extremists pose a direct threat to the United States, our allies, and our global interest, we have a responsibility to counter that threat.  

            During my tenure as Director of the CIA, and now as Secretary of Defense, I have truly been privileged to meet, and work with thousands of professionals who have made this fight their fight, who have put their lives on the line for their country, and who have built the most effective global counterterrorism network the world has ever seen.  Their work, I believe has made the American people safer, the United States more secure, and has put al-Qaeda on the defensive.  

            Let me describe some of the progress that has been achieved in this fight against al-Qaeda.  

            First of all with respect to core al-Qaeda in Afghanistan, and Pakistan. And that's where the leadership of al-Qaeda, after 9/11 found refuge.  Our military forces, our intelligence professionals, our diplomats, our development experts have taken the fight to al-Qaeda's leadership –  first, through dramatically expanded counterterrorism operations on the Afghanistan/Pakistan border, and second, through a renewed, revitalized, and properly resourced effort to help build an Afghanistan that can secure and govern itself.  And that's the fundamental mission in Afghanistan, is to ensure that that country can govern and secure itself, so it will never again become a safe haven for al-Qaeda.  

            Over the last few years, al-Qaeda's leadership, their ranks have been decimated.  That includes the loss of four of al-Qaeda's five top leaders in the last two and a half years alone.  Osama bin Laden, Shaikh Saeed al-Masri, Atiyah Abd al-Rahman, and Abu Yahya al-Libi. 

            Through what has probably been the most precise campaign in the history of warfare and by partnering with local allies, numerous other experienced operational terrorists and commanders in this region have been killed, or captured.  This pressure has significantly demoralized and weakened al-Qaeda in terms of their core capabilities.  And it seriously disrupted their active plotting against our homeland.  

            The broader military campaign in Afghanistan has also been central to our efforts to disrupt, and dismantle, and defeat al-Qaeda. And that is why roughly 68,000 American troops remain in Afghanistan today, supporting the ISAF mission, and our Afghan partners. 

            Together they are battling a violent insurgency that seeks to topple the Afghan government.  They have not given up on that effort.  And they seek to be able to return to Afghanistan in order to provide sanctuary for extremists.  If we are to defeat al-Qaeda, that cannot happen.  And make no mistake, we remain determined to prevent al-Qaeda from ever again launching a terrorist attack on America from safe havens inside of Afghanistan.  

            Over the past two years, since the 33,000 surge troops were ordered by President Obama, and arrived in Afghanistan, we have continued to put pressure on the Taliban-led insurgency, and dealt them a heavy blow, and made real progress in building an Afghanistan that can in fact secure and defend itself against that threat. 

            Earlier this month, ISAF conducted an in depth assessment of the insurgency, following the end of the fighting season, and the conclusion of the surge.  By nearly every indication, the insurgency has been significantly weakened.  

            Violence levels, which had increased for five years, decreased in 2011, and 2012.  

            The insurgency has been pushed out of population centers, and strategic areas.  Security dramatically improved this year in most of Afghanistan's largest municipalities, with attacks dropping 22 percent in Kabul, and 62 percent in Kandahar. 

            ISAF coalition casualties have also been reduced, declining by 30 percent this year.  

            These signs of progress are real, and so are the challenges that remain.  This is an insurgency that is resilient, and they will do everything they can to project an appearance of strength to Afghans and to the international community.  The Taliban claims responsibility for the troubling rise in insider attacks.  They have launched high-profile attacks, and assassinations, and they will continue to do that.  But in the face of these tactics, we have been able to maintain strong international unity, and a strong commitment to finish the job.  

            As the insurgency has been rolled back, we have vastly improved the capabilities of the Afghan National Security Forces to maintain these gains after most of the international forces will have departed.  Every day, every week, every month, Afghan forces are shouldering more and more of the burden.  2011 -- I mention this time and time again -- I believe marked an important turning point in the war effort.  Because we were able to see Afghan forces become operational, and take charge of security.  In 2012, that process of transition took firm hold across the country.  The transition is now well underway.  We have transitioned an area that involves 75 percent of the Afghan population.  And that population is increasingly secure.  

            As a result, we are on track for two key milestones.  One is that the Afghans will be in the lead throughout the country for security in mid 2013.  And Afghans will ultimately full responsibility for security by the end of 2014.  After 2014, the United States has made clear through a strategic partnership agreement, that we will maintain an enduring presence, and a long term commitment to Afghan security.  And NATO made a similar commitment to a post 2014 Afghanistan at the Chicago summit last May.  

            All of this sends a very simple, and a very powerful message to al-Qaeda, to the Taliban, and to the violent extremist groups who want to regain a safe haven in Afghanistan: we are not going anywhere.  Our commitment to Afghanistan is long term, and you cannot wait us out.  This is important, because al-Qaeda, the Taliban, and other associated forces under pressure in Pakistan, continue to view the rugged terrain of northeastern Afghanistan, especially Kunar and Nuristan provinces, as a viable safe haven.  A relentless, and effective counterterrorism effort, conducted by our Special Operations Forces this year, made clear that we will not allow them to regain that sanctuary.  

            As a result of prolonged military and intelligence operations, al-Qaeda has been significantly weakened in Afghanistan, and Pakistan.  Its most effective leaders are gone.  Its command, and control have been degraded, and its safe haven is shrinking.  Al-Qaeda's ability to carry out a large scale attack on the United States, has been seriously impacted. And as a result, America is safer from a 9/11 type attack. 

            These gains are real, but it is important to point out that even with these gains, the threat from al-Qaeda has not been eliminated.  

We have slowed a primary cancer, but we know that the cancer has also metastasized to other parts of the global body.  

            Two examples of that spreading al-Qaeda presence, are Yemen and Somalia. 

            For years our eyes have been wide open to the growing capabilities of Yemen-based al-Qaeda in the Arabian Peninsula, which has also targeted our homeland for attack, and sowed violence and chaos in Yemen itself.  We have struck back in an effort to disrupt and dismantle this group through a very close partnership with the government of Yemen. 

            By training local security forces, we are building and training a counterterrorism force poised to be the most effective over the long term.  And that force is the Yemenis themselves.  And by participating in joint efforts against key leaders, and key operatives, we have put unprecedented pressure on AQAP, and given the Yemeni people an opportunity to free themselves from the grip of these terrorists.  AQAP leaders who have targeted the United States have met their demise.  Plots have been disrupted, and innocent lives have been saved. 

            But this fight has not been easy.  As Yemen's government became destabilized last year, AQAP attempted to seize the initiative, taking control of several key cities in the south of Yemen.  In the months since, AQAP's advances have been largely reversed through a renewed, and even more effective partnership with Yemen new's government led by President Hadi.  

            Our work in Yemen is far from done.  Dismantling AQAP, eliminating it as a threat to the United States will ultimately require sustained pressure, more U.S. training and assistance, close partnership with the Yemeni government, and the Yemeni people, and steadfast support for political transition.           

            Another country we have made good process in recently is Somalia.  For years, when I became Director of the CIA, it was obvious that Somalia was a failed state.  A failed state where the militant group al-Shaabab controlled large pieces of territory, declared fealty to al-Qaeda, brought about a humanitarian crisis, and plotted -- planned attacks in the region.  But there too, we have seen significant progress, in large part because of an effective partnership between the United States, and the African Union Mission in Somalia.  

            The result of these efforts is an al-Shaabab that has lost more than 50 percent of the territory it had held in early 2010.  And since losing control of Mogadishu in August of 2011, hundreds of al-Shaabab fighters have surrendered to AMISOM forces.  These forces recently took the stronghold of Kismayo, and a number of other strategic towns.  And as a result today, al-Shaabab is diminished as a threat, and we continue to work every day to consolidate these gains against these terrorists.  

            But still our challenge is far from over. Yes, we have decimated core al-Qaeda.  And yes, we have made notable progress against its associated forces in Yemen and Somalia.  And yes, we have reduced the chance of a large scale terrorist attack against the United States.  

            But al-Qaeda -- the al-Qaeda cancer, has also adapted to this pressure by becoming even more widely distributed, loosely knit, and geographically dispersed.  

            The fight against al-Qaeda has taken a new direction.  One that demands that we be especially adaptable and resilient as we continue the fight.  President Obama has made clear, we will fight not just through military means, but by harnessing every element of American power:  military, intelligence, diplomatic, law enforcement, financial, economic, and above all, the power of our values as Americans.  

            Al-Qaeda has long sought to operate in areas beyond the reach of effective security and governance.  After being left on the sidelines of the momentous changes that swept through the Arab world last year, they are now seeking to take advantage of the transition period, to gain new sanctuary, to incite violence, and to sow instability. 

            We know that al-Qaeda, its affiliates and adherents are looking to establish a foothold in other countries in the Middle East, and north and west Africa, including al-Qaeda in the Islamic Maghreb, and the Boko Haram group in Nigeria.  

            The international community, and our regional partners share our concern about Mali, where al-Qaeda affiliated groups are now taking control of territories in the north, and pose an emerging threat.  

            We are also concerned about Libya, where violent extremists and affiliates of al-Qaeda attacked and killed innocent Americans in Benghazi.  With respect to that attack, let me be clear, we will work with the Libyan government to bring to justice those who perpetrated those attacks.  

            To protect Americans at home and overseas, we need to continue to pursue al-Qaeda wherever they go, whatever form they take, wherever they seek to hide.  We must be constantly vigilant.  We must be constantly determined to pursue this enemy.  

            But what will it take to achieve the end of al-Qaeda, or at least the beginning of the end? 

            First, it will be essential to finish the job that we started, and that we must complete in Afghanistan, and we are on track to do that.  As we and our NATO partners agreed at Lisbon, Afghans need to responsible for their own security by the end of 2014.  This transition is our goal, and it's the Afghan's goal as well.  But it will require continued commitment by the international community, and the United States in order to help the Afghan forces achieve that goal.  We have come too far, we have invested too much blood, and treasure not to finish the job.  There are no shortcuts, nor can we afford to turn away from this effort when we are so close to achieving success in preventing al-Qaeda from ever returning to this historic epicenter for violent extremism. 

            Second, we will need to maintain pressure on al-Qaeda in Pakistan, on AQAP in Yemen, and on al-Qaeda-associated forces in Somalia.  That means degrading senior leadership, dismantling their organizational capabilities, remaining vigilant, to ensure the threat does not reconstitute, and working to build the capacity of our partners, including Pakistan, to confront these shared threats.  Despite challenges in the bilateral relationship between the United States and Pakistan, one area in which our national interests continue to align -- continue to align, is defeating the terrorist on Pakistan soil that threaten both of us.  We remain committed to pursuing defense cooperation based on these shared interests.  

            Thirdly, we must prevent the emergence of new safe havens for al-Qaeda elsewhere in the world that could be used to attack the United States, or our interests.  The last decade of war has shown that coordinated efforts to share intelligence, to conduct operations with partners, are critical to making sure that al-Qaeda has no place to hide.  We will expand these efforts, including through support and partnership with governments in transition in the Middle East and North Africa. 

            This campaign against al-Qaeda will largely take place outside declared combat zones, using a small footprint approach, that includes precision operations, partnered activities with foreign special forces operations, and capacity building so that partner countries can be more effective in combating terrorism on their own.  

            Wherever possible, we will work through, and with local partners, supporting them with the intelligence and resources they need in order to deter these common threats.  For example in Mali, we are working with our partners in Western Africa who are committed to countering the emerging threat to regional stability posed by AQIM. 

            Fourth, in support of these kinds of efforts, we have to invest in the future, in new military and intelligence capabilities, and security partnerships.  Our new defense strategy makes clear that the military must retain, and even build new counterterrorism capabilities for the future.  As we reduce the size of the military, we are going to continue to ramp up special operations forces, which have doubled in size from 37,000 on 9/11, to 64,000 today.  Special operations forces will grow to 72,000 by 2017.  We are expanding our fleet of Predator and Reaper UAVs, over what we have today.  These enhanced capabilities will enable us to be more flexible, and agile against a threat that has grown more diffuse. 

            We are also continuing to invest in building partner capacity, including through Section 1206 authority to train and equip foreign military forces.  Our new Global Security Contingency Fund has been very helpful in placing new emphasis on cultivating regional expertise in the ranks.  

            Which brings me to the final point, that too often takes a backseat to our operations against al-Qaeda.  What do we do to prevent extremist ideologies from attracting new recruits in the future? 

            Over the past decade, we have successfully directed our military, and intelligence capabilities at fighting terrorism.  And yet, we are still struggling to develop an effective approach to address the factors that attract young men and women to extreme ideologies, and to ensure that governments and societies have the capacity, and the will to counter, and reject violent extremism.  

            To truly end the threat from al-Qaeda, military force aimed at killing our enemy alone will never be enough.  The United States must stay involved and invested through diplomacy, through development, through education, through trade in those regions of the world where violent extremism has flourished. 

            That means continued engagement -- continued engagement in Pakistan, and following through on the commitments we have made in Afghanistan to their long term stability.  Secretary Clinton has also outlined a comprehensive strategy for North and West Africa, combining security assistance, economic development, strengthening democratic institutions, advancing political reforms.  

            These regions are undergoing a -- an historic transition that offers many in the region hope for a better future.  But these changes, unless influenced by the international community, could result in greater turmoil.  The American people were outraged by the loss of Ambassador Chris Stevens, and three others in Benghazi.  They were emissaries of peace, and friends of Libya.  And the Libyan people have turned against the violent extremists who killed them.  

            Of course we will be vigilant, and we will posture our military, and intelligence forces to prevent, and if necessary, respond to threats of violence against our interests throughout the Middle East and North Africa, including threats against our embassies, and consulates, and our diplomats themselves. 

            But to truly protect America, we must sustain, and in some areas deepen our engagement in the world.  Our military, intelligence, diplomatic, and development efforts are key to doing that.  After all, we are confronting a number of challenges in the Middle East and North Africa.  At some point, we must find ways to peacefully resolve the war in Syria, the conflict between Israel and the Palestinians, and the destabilizing threat from Iran.  And every -- every time and over time we also must address the religious, economic, and cultural differences that create tension, and that are exploited by extremists. 

            Still as our country emerges from a decade of large-scale conflict, and confronts new fiscal constraints here at home, I frankly worry that our political system will prevent us from making the investments in diplomacy, and development that we need to ensure we protect America's interests in these volatile regions of the world.  

            These investments, unfortunately, lack a constituency in the Congress at a time of great fiscal pressure.  Indeed we face the prospect of budget sequestration that would be devastating to national security, not just because of what it does to our national defense, but also for what it does to these programs that support diplomacy, and enhance our quality of life. 

            Our men and women in uniform know too well what sacrifice is all about for the sake of our nation.  For more than a decade after we were attacked on September 11, they have fought, they have bled, on distant battlefields, and they have made our country safer.  If we turn away from these critical regions of the world, we risk undoing the significant gains they have fought for.  That would make all of us less safe in the long term.  

This is not a time for retrenchment.  This is not a time for isolation.  It is a time for renewed engagement, and partnership in the world. 

            After Iraq and Afghanistan we are entering, as I said, a new and different era with a multitude of different threats and challenges.  The United States military must prepare for these challenges, and we will.  But America must continue to lead this fight against al-Qaeda.  Our partners demand it, the threat demands it, and our fellow citizens demand it.  

            On September 11, 2001, the United States was thrust into a war that we did not ask for, nor did we seek.  Over 11 years later, we have fought back with a vengeance, to make clear we will do whatever we must to make sure 9/11 never happens again.

            We have made America safer, but we must not rest until we have made America safe, today, and tomorrow.  Thank you very much. 

            Thank you. 

            MODERATOR:  Secretary Panetta has graciously agreed to take a few questions from the audience.  When I call on you, please tell me or tell us your name, your affiliation and remember to ask a question, very short, ask a question. 

            Right here with the red sweater on first.

            Q:  Hi, my name is Kristy Kaufmann.  I am the executive director of the Code of Support Foundation, which is a nonprofit dedicated to bridging the civilian-military divide. 

            But, more importantly, for this discussion, I'm also an 11-year Army wife.  We've talked a lot about the mental health challenges that are facing our troops and our families. 

            You know the numbers as well as I do.  We're losing a serviceman for every 24 hours, 18 veterans a day and I personally know three Army wives that have killed themselves and we're not really having that conversation. 

            I bring this up to you because I really do believe this is a national security issue.  It's not just a moral obligation.  We've never spent this much money.  

            We've never created this many programs.  We've never had this unprecedented effort to try to stem the tide of suicides and some of the mental health challenges that we're facing.  

            I wanted to ask you about a different strategic approach to the problem.  I feel like we need someone with a direct line of report to you, as Secretary of Defense, at the O-10 level, that this is their only job. 

            It's not a -- you know, General Chiarelli did a terrific job, but he was the vice chief of staff of the Army and there's a precedent -- there are precedents for this.  

            I mean there's Dodd Starbird during the Vietnam War was tasked by General McNamara... 

            MODERATOR:  Wait... 

            Q:  I'm sorry.  

            MODERATOR:  OK. (off mic) 

            Q:  The point is I feel like we have a lot of efforts going on that aren't connected.  And if we had a leadership connected just to this, it could probably make a huge difference in our lives.  Thanks. 

            SEC. PANETTA:  Yes.  Thank you very much for that question.  I mean, you know, the Defense Department is a big bureaucracy.  I got 3 million people and, you know, they're very dedicated people, they're very dedicated professionals. 

            But, oftentimes, the ability to focus on a problem and be able to deal with, you know, suddenly it requires that they've got to change direction and, suddenly, understand that they're dealing with something that's serious and a threat. 

            And that's the way I feel about, you know, the mental health problems that are impacting on our forces.  You know, look, part of this is the impact of over 10 years of war and the stress that's involved in deployment after deployment after deployment after deployment.           

            Part of it reflects the stress in society generally.  I mean, you know, in many ways, when you look at our suicide rate, the fact is that, you know, if you look at the general society, there's an increase in suicides as well. 

            Part of it due to family stress, part of it due to drinking, part of it due to drugs, part of it due to financial stress and there are a whole series of issues that play a role in creating this kind of pressure. 

            And, look, the fact is that when it comes to mental health, I wish there were a simple silver bullet that could deal with that problem.  But it is complex and there are a number of factors that are at play.  But that means that we have to devote every resource we can to trying to deal with that.  

            And I think it is important for us to be able to increase the amount of mental health professionals that deal with this problem, that can provide counseling, that can provide guidance, that can understand what needs to be done. 

            We also, frankly, need to increase peer awareness of what's going on so that they can spot the problems and be able to deal with it. 

            I mean one of the things I found is that we have got to -- we have got to be able to have those who are at the platoon level, at the squad level, leaders who are looking at their -- you know, the people that they're responsible for, looking into their eyes, seeing the potential problems and getting ahead of it and being able to respond. 

            And, obviously, all of this will require additional resources as well in order to respond.  I do believe -- I mean I appreciate what you're saying.  I do believe that to create focus on a problem like this does require that we do everything possible to make sure that it is -- it's not an issue that we talk about today and forget tomorrow. 

            So one of the things I've done with the Chairman of the Joint Chiefs and all the service chiefs is I said we've got to continue to stress this issue and we've got to continue to look at it. 

            And what I've done with my under secretary responsible for this area is to say I want regular reports on what's going on with regards to this area. 

            I want to know what's happening.  I want to know what we're doing to confront it.  I -- you know, frankly, the person who's responsible is me and I've just got to kick ass and make sure that something's done about it and I will. 

            But I also have to make sure that everyone else is responsible, that service chiefs for each of the services are doing exactly the same thing.  (Applause.) 

            MODERATOR:  Yes, right here. 

            Q:  Mr. Secretary, thank you for... 

            MODERATOR:  Can you tell us who you are, please? 

            Q:  Yes.  Tom Goldberg with Lineage Technologies.  I'm actually residing next door. 

            But, in any case, thank you for all of those tough nuts that you've had to crack and all of the hard work you put into solving so many of the problems we face. 

            In 1998, working over at NSC, we dealt with Y2K and discovered that we had to outsource a tremendous amount of our solution sets that brought us backdoors and other things that we harvested a result of those exercises. 

            You've come out with an instruction that was actually initiated by Ms. Takai and Under Secretary Kendall two weeks ago yesterday, which we very much applaud, having to do with supply chain integrity. 

            What I -- what links these two events together in my mind is this:  In 1998 and 1999, we lacked the resources in the United States to solve the Y2K problem. 

            Today, we have divergent policy directives not intentionally so, but that deal with the matter of either reducing the cost of services that the department has to buy through the efficiency memo, essentially juxtaposed to the need for this expertise... 

            MODERATOR:  I think we've got the background.  If you could ask the question, thanks. 

            Q:  OK.  Forget that.  The question is can you marry the efficiency memo and the new instruction on supply chain so we don't lose the talent that resides now within the department, much of which is older men and women who will leave and we will lose their capabilities. 

            SEC. PANETTA:  Thank you for that.  Yes, I think we've got to continue to emphasize this area because, you know, we are, as you say -- look, expertise in this area is, you know -- is something that is not easy to come by. 

            And you've got to build it.  You've got build people who know the systems and have to understand what's involved with it.  And, you know, It's something that just generally in government service we build tremendous expertise only to have it move on and then we have recreate it all over again. 

            And, frankly, that's a terrible mistake.  What we've got to do is to build expertise and, then, to continue to hopefully inspire people so that they continue at it. 

            This is an area -- look, the whole are of dealing with computers, of dealing with the threat that we faced as we turned the century, but also just dealing generally with the whole cyber-world that we're now involved with, this is an area that demands tremendous expertise and tremendous capability. 

            Fortunately, at NSA [National Security Agency] we've got some -- we have some tremendous experience.  We've got good people that are involved in it, but, very frankly, if we're going to stay on the cutting edge of what's happening with regards to the changes that are occurring, we have got to invest more in that area. 

            I've got to have the very best.  And, you know, Keith Alexander's a bright guy and he's a capable person, but I've got to make sure that behind him are young people who understand what the hell this is all about and can guide us in order to ensure that we protect this country in the future. 

            This is a complicated area.  It is not easy.  And, frankly, what's most disturbing of all is that every time, you know, I try to get help from the Congress, they kind of walk away from this issue. 

            They just refused to pass, in the Congress, legislation that would assist us in dealing with the whole cyber-arena.  I have got to have -- I have got to be able to have the private sector working with us when it comes to these issues, to develop that kind of partnership. 

            And, unfortunately, I can't have the private sector help us provide information on what's happening out there unless I protect them from lawsuits and protect them from litigation. 

            That's the whole point of trying to develop this legislation.  And I can't, for the life of me, understand why it's so damn hard for Congress to do the right thing on this issue. 

            MODERATOR:  OK, for the last two questions, we're going to have a competition on who can frame the question most concisely. (Laughter.) 

            Tony, you're the first contestant. 

            Q:  When the Pakistan strategy was first rolled out in 2009, it was called Af-Pak.  There were a lot of concerns from lawmakers that the United States was hinging too much of its Afghan strategy on Pakistan. 

            Realistically, what chance will the U.S. strategy have to succeed in 2014 if more of the safe havens aren't dealt with more stridently than they've been to date? 

            SEC. PANETTA:  Look, in many ways the success in Afghanistan is dependent on having a Pakistan that is willing to confront terrorism on their side of the border and prevent safe havens. 

            You know, I -- look, I think that right now the ability to develop a security force in Afghanistan that is able to provide security, that can establish, you know, operational capability to confront threats on the Afghan side of the border is extremely important to the future. 

            We need to have -- you know, we're building this 352,000 ANSF [Afghanistan National Security Force] force.  That is extremely important to our ability to make the transition and to have an Afghanistan that can, in fact, provide security. 

            And that's going to be an important key.  But to able to succeed in Afghanistan is also going to require -- I mean the threats I see that we've got to worry about in the future are the following:  Number one, we have to have an Afghanistan that can govern itself, that can move away from corruption, that can, in fact, have the capability to provide the kind of governance that you need in order to be able to truly secure that country and govern that country for the future.  That's an area that I think demands a lot more attention for the future.  

            The other is Pakistan because of the safe havens in Pakistan.  And the ability of terrorist groups to move across that border and to attack in Afghanistan and, obviously, the challenge that that represents. 

            You know, obviously, we can take them as they cross the border.  We've been going after them operationally when they do that.  But the problem is that when they move back and escape into a safe haven, it makes it very difficult to complete the job. 

            So in order to really have a secure Afghanistan, ultimately Pakistan is going to have to take responsibility for taking on these terrorists and eliminating the safe havens. 

            MODERATOR:  Last question. Over here. 

            Q:  Don Loren, former deputy assistant Secretary of Defense for Homeland Security, sir.  Thank you for joining us. 

            Sir, what can and will you do in the next administration to break the logjam and get the convention for the Law of the Sea ratified? (Laughter.) 

            SEC. PANETTA:  This may require tanks and bombers and planes. (Laughter.) 

            This is really one of the -- I have to tell you one of the most disturbing things that, you know, -- I talk about, you know, the -- one of the national security threats is the question of whether or not the leaders we elect can, in fact, govern and can, in fact, deal with the challenges that face this country. 

            I mean when I go abroad -- I just came back, you know, from Asia and I was meeting with the ASEAN [Association of Southeast Nations] defense ministers.  And one of the defense ministers said, you know, it's great that you're rebalancing to the Pacific, but can you sustain that when you have a Congress that is prepared to do sequester or walk off a fiscal cliff? 

            And I said, you know -- I said that issue whether our Democracy can truly function and have leaders that are prepared to make the decisions that have to be made in order for this country to govern itself is I think, you know, the issue that will determine ultimately whether we have national security. 

            And it's the same way with the Law of the Sea.  I mean I go to the Asia-Pacific region.  They are having territorial disputes over these rocks out there -- (Laughter.) -- and, you know, I mean obviously it's about the resources that are offshore of those rocks, but they're having these disputes over these areas. 

            And, you know, one of the arguments I make is wait a minute, you know, we have to maintain freedom of the seas, we have to maintain, you know, navigation rights. 

            And some of these countries look at me and say, you know, what are you talking about?  You haven't even approved the Law of the Sea Treaty.  How can you tell us what the hell to do here? 

            And they're right.  They're right.  I mean, you know, we are the only industrialized country that has not approved that treaty.  The only industrialized country that has not approved that treaty. 

            In order for us to have credibility to be able to argue about freedom of navigation, maritime rights, that's essential.  

            In order for us to deal with the challenges that we're facing as a result of global warming in the Arctic and the potential of the Northwest Passage and the potential for resources out there, we -- you know, there are countries that are making claims there and we can't even engage with those countries because we haven't approved the Law of the Sea Treaty. 

            It is an outrage.  It's an outrage that we have not done that.  Now, I think there are good members up in the Senate who agree with everything I've just said. 

            But they're constantly running into a wall because, for some ideological reason of a few members up there, this has become an issue that they're going to fight and they're going to stop as best they can. 

            But if this country is to provide leadership in the 21st century, if we're to do what we have to do in trying to guide countries so that they, in fact, are able to protect their interests and be able to engage in the kind of commerce and economic development that's important for the future, if we're going to be a part of that, then we have to be credible. 

            And that means that we need to pass the Law of the Sea Treaty.  I hope that that -- I hope that ultimately happens.  I mean -- coming out of this election, I guess my prayer -- my prayer coming out of this election is that leaders on both sides recognize that the one message the American people sent is for the leaders of this country to do their job and govern this country.  That's the message they need to understand. 

            Thank you. (Applause.)