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Thank you, Gordon [Gray, President of DOCA]. I'm told that some American consultant once gave a speech in Japan and he was advised that you always begin a speech in Japan with an apology for the mistakes you're going to make, speak very modestly. He began that way, and the entire audience burst out in laughter.

He staggered to the end of the speech rather mortified at what he had done wrong. Afterwards, the company that was hosting him, the CO came up and explained apologetically, we're very sorry, but we told our employees, that Americans always start their speeches with a joke and whatever he says, you should laugh. [Laughter.]

I didn't bring any jokes this morning, and it doesn't really seem like a time for laughing. But, actually, it really is a time for laughing—if the terrorists make us stop laughing that's one more victory, so let's not let them do it. [Applause.]

Thank you, Gordon Gray and John Olsen [DOCA Vice President], for the opportunity to join this group today. Thank you for your leadership of this organization and your past service to our country.

Gordon was in the Navy in the Second World War, and John was in the Air Force during Vietnam. Your service, then and now, the service of all of you, is valued and appreciated. And it's always nice to hear that the service of our men and women in uniform is appreciated.

The Pentagon today is covered around the world with posters, which school children around the country have sent us, reminding us that they support us. There's been an outpouring of huge drawings of flags and handwritten messages of support that brighten the hallways and brighten our hearts.

Our veterans have been busy also, flooding us with offers to serve again, some of them even sending in their serial numbers. We got one letter from a 78-year-old Army veteran who spent three years in the China/Burma/India theater during the Second World War who apparently hadn't had enough—because he said if there's a particularly dangerous mission, send me rather than some young man who's just starting out in life.

We got a letter from an Air Force veteran from the early days of the Vietnam War who wants to do her part and said this about her fellow veterans: "There are no tasks too large or too small. We are passionate about America. We will feel helpless if we are not able to devote ourselves in some meaningful way to our country in a time of need."

I think all of us feel that way. Those of us in the Department of Defense feel privileged that we're able to do something to help this great country, and we feel that we are acting on behalf of a country united.

That's the sort of spirit that triumphed when liberty was threatened in the past and it's the sort of spirit that will lead us to victory again.

The last 50 years, the members of DOCA have embodied that same spirit. You've been passionate about America and your own dedication to something very meaningful to our country—in times of peace and in times of need, like now.

You've been willing volunteers to help the Department by spreading the word about what we do and the kind of people we are, by building support for the noble work of our men and women in uniform. So, on behalf of the entire department let me thank you and congratulate you on 50 years of great achievements.

The fight ahead of us requires the dedication and resolve of all Americans, so your role as educators in your communities about what our country's armed services do is especially vital today. I know it took some real dedication and resolve on the part of many of you to get through those long lines at the airport and come here to Washington today. Your presence here, in and of itself, is testimony to your commitment to help us, and help us spread the word.

Last week at the Pentagon Memorial Service Secretary Rumsfeld said that those killed in the terrorist attack on September 11th at the Pentagon died for two simple reasons: because they were Americans, and because they worked for the Department of Defense. They were in a place of power, but they were part of a country that has used its military power far differently from most nations in history.

We are a freedom-loving people who want to support freedom the world over. And on September 11th, the attack was on that way of thinking, on that way of life. It came from people who do not seek to build a better life, but would destroy those of others.

Today we are fighting a war that is not a war of our own choosing. It is a war of self-defense. As the President said when he announced the first raids on Afghanistan, our mission is defined, our objectives are clear, our goal is just, and I can tell you that in the Pentagon today we are moving forward, ready to do our part.

But perhaps it's appropriate we're here in the State Department. This war on terrorism is a very broad-based campaign that requires the active participation of many different parts of our government. Not just the military—and, in many cases, not even primarily the military.

Shortly after the attacks of September 11th the United States began a broad-based effort including diplomatic, financial, intelligence, military activities, some covert, some overt, to take this battle to the terrorists. International terrorism is a broad network of groups and state sponsors who collaborate with one another. There is no way to deal with the problem of international terrorism than to go after the individuals who are killing thousands of Americans and threatening and terrorizing much of the world. But we are not just trying to pick off individual snakes. We intend to drain the whole swamp.

It's important to remember that the military operations of the past couple of weeks are just a part of a broader and sustained effort. We will use every means—economic, diplomatic, financial, law enforcement, and anything else in our power—to end this scourge of terrorism.

Right now in Afghanistan our objective is to create conditions so we can root the terrorists out of that country. We want to make it increasingly difficult for them to freely use Afghanistan as a base of operations. We want to raise the cost of doing business for foreign terrorists who have chosen Afghanistan from which to operate, and we want to make an example of that regime that has knowingly and consciously harbored terrorists in defiance of the will of the international community.

Every target we choose is a carefully selected military target of the Taliban, of al Qaeda. Through our raids, we want to raise the cost of doing business: to raise the cost of doing business for foreign terrorists who have chosen Afghanistan as a place from which to organize their activities; to raise the cost of doing business for the oppressive Taliban regime that tolerates the terrorists and the parts of Afghanistan that they control.

We want to make it clear to Taliban leaders and supporters that harboring terrorists carries a price. We want to acquire intelligence that will enable future operations against al Qaeda and the Taliban not just in Afghanistan, but worldwide, including here in the United States. We want to develop relationships with groups in Afghanistan that oppose the Taliban and the foreign terrorists that they support. We want to make it increasingly difficult for terrorists to operate in Afghanistan. And we want to alter the military balance over time by denying to the government the offensive capabilities that enable it to confront the various opposition forces in the country.

It's important for people in the world to understand that this campaign against terrorists is not a campaign against any race or any religion.

First, we are not at war with the Afghan people. In fact, we are helping the Afghan people to oppose Taliban oppression, to oppose al Qaeda, which is a foreign terrorist influence that exploits and damages their own country. We stand with those Afghans who are being oppressed by the regime that abuses the very people it claims to lead. The same regime that harbors terrorists who have attacked and killed thousands of innocents around the world of all religions, of all races, of all nationalities. The Taliban does not represent the Afghan people, they oppress the Afghan people. The Afghan people never had a chance to elect or choose the Taliban faction.

Second, we do not want to choose who rules Afghanistan. We will assist those who do. We will assist those who seek a peaceful economically developing Afghanistan, an Afghanistan free of terrorism.

The entire world will benefit from a stable Afghanistan and the entire world must contribute to promoting stability in that country when al Qaeda and Taliban are defeated. We also want to create conditions for sustained humanitarian relief operations and we want to make sure that we do everything we can to ease the misery of the Afghan people—the misery that has been imposed on them by the Taliban leadership and by al Qaeda.

For that reason, humanitarian assistance from the first day of our military campaign has been an important part of our effort. We've already dropped thousands and thousands of pounds of food and medicine to Afghanistan and we will be providing much more.

Third, we are not at war with Islam. To the contrary, over the past ten years, on five different occasions, the United States has led armed coalitions on behalf of Muslim people to deny hostile regimes the opportunity to oppress their own people or to oppress others. In Kuwait, in Northern Iraq, Somalia, Bosnia, and Kosovo, the United States took military action on behalf of Muslim populations who were the victims of aggression or of war-induced famine. We are doing the same thing today.

This entire effort, as I said, will be a sustained one. It will probably be a long one and it will involve all of the resources of our country. It will continue until we have successfully rooted out the terrorists. That includes not just the Taliban and the al Qaeda network, but other networks as well. As we've said often, it's important to realize there is no silver bullet that will magically end this problem.

But given the power of weapons available to terrorists today, they have given us no choice but to use all our resources to stop them. I don't think anyone doubts that if these terrorists have even more destructive weapons available to them, they will not hesitate to use them.

This campaign will be, in many ways, like the long struggle of the Cold War—on many fronts, and over a sustained period of time. It will require continual pressure from countries around the globe. But eventually this terrorist network will crumble from the inside. It will disintegrate like a house of cards as we saw in the Warsaw Pact and the Soviet Union. It will disintegrate because it will be starved for support.

The United States and the dozens and dozens of countries across the globe that are participating in this effort in one way or another have one goal, and that is to stop terrorism.

At the same time that we are engaged in a major campaign, we in the Department of Defense have the task of thinking about where we may be ten years from now. We had, by law, a requirement to complete something called the Quadrennial Defense Review. It's a review of our long-term defense needs. It was due to the Congress on September 30th, and we delivered it on September 30th. You may imagine that on September 12th, when we looked at all the work we've been doing over the previous months, we asked ourselves whether any of it was relevant any longer. And, in fact, we concluded that it was not only still relevant in spite of the events of September 11th, it was, if anything, more relevant.

I'd like to just highlight for you a few of the major conclusions of that Quadrennial Defense Review because we believe, in certain ways, it reinforces lessons that we learned from September 11th—not just about where we are today or where we will be next year, but where we need to think about where we will be ten years from now. It's a classic observation—that’s not always fair—that militaries are usually fighting the last war. Ten years from now, the war on terrorism will be the last war. We have to be sure that at the same time we fight this war on terrorism we are ready for the next war, the war of the next decade, which is very likely to come from a different direction.

Already in the Quadrennial Defense Review, already before September 11th, we had issued guidance stating that the top priority of the Department of Defense should become homeland defense. We're just really beginning to understand the implications of homeland defense for our military. We never, frankly, envisioned flying several continuous airborne CAPs [combat air patrols] over the United States as we are doing. We never really figured and calculated in our requirements for airborne surveillance aircraft that we might have to devote 50 to 70 percent of those aircraft to providing airborne defense of the United States. That is one of the things we're doing. It's one of the examples of where fundamentally new requirements have got to be evaluated for the Department.

One of the conclusions we've reached in our review this summer is that we, as a country and as a Department, are at the very early stages of figuring out what our requirements might be in responding to major acts of terrorism, weapons of mass destruction. We know now that we have to accelerate that work and get moving with it faster.

A second emphasis in this Quadrennial Defense Review is to emphasize the importance of uncertainty and surprise in our defense planning. Of course September 11th was a surprise, but it wasn't the first surprise and it won't be the last one.

Some people think that the answer to the problem of military surprise is to have better intelligence. There's no question that that is part of the answer, and one always wants to improve intelligence. But as Secretary Rumsfeld has said, the main thing that's surprising about surprise is that we're surprised when we are surprised. We should expect it. We should expect the unexpected. That is one of the lessons of the past.

Surprise has been a fact of military history throughout the years, throughout the decades. We have to have forces that give us the flexibility to respond to the unexpected, not simply to preview and predict the expected.

Sometimes you're going to miss, and when you miss, you need to be flexible, you need to have a range of tools to respond. Forces that are planned to meet just a single very carefully tailored scenario are likely to fail when we are confronted with something we didn't expect. And as I alluded to, the surprise in the next decade is very likely to be something very different from what we saw on September 11th.

Third, the Quadrennial Defense Review emphasizes the importance of contending with what in the Pentagon we call asymmetric threats. That is to say those threats that confront us in areas that are not in the areas of our strength.

September 11th gave us one of the most horrible and most potent examples of an asymmetric threat directed against us—but there are many others, as we can imagine. The basic principle is that people who decide to take on the United States militarily are not going to take on directly our formidable conventional forces. They're going to look for places where we are weak. They're going to try to attack those weaknesses. Our planning has to focus on closing those gaps and on being able to confront those asymmetric threats.

The fourth thing that is new about how we're trying to do our planning, and this may sound very much inside the Beltway, forgive me, but it's a shift from what used to be called threat-based planning. It's what we're calling capabilities-based planning.

The old approach was to say who's likely to attack us and then figure out what they will do. But as you look to a future that is frankly much harder to predict than the future we dealt with during the Cold War, it's much harder to say who will threaten us than to think of what they may threaten us with.

As we think about the next decades, we need to think about the kinds of capabilities that might be directed against us. A capabilities-based strategy is one that focuses on the kinds of threats we might face, the kinds of capabilities that we need to have, and the kinds of unique advantages that particularly various new technologies offer to the United States

And, finally, in this defense review, we took a very different look at the concept of risk. Risk is a crucial word in the military lexicon. It's crucial in evaluating your planning, whether you've been able to invest in the right way to reduce risk to acceptable levels. But in the past we've tended to see it in fairly narrow terms, in terms of the risks associated with our current war plans and whether or not we have the forces to execute those plans.

In recent years, it was our conclusion we defined risk too narrowly in terms of those specific war plans without sufficient emphasis on other major dimensions of risk—for example, the risk that we run day to day by deploying our forces all over the world at levels of operation that frequently strain the individuals, strain their families, strain the equipment that they're operating. We call that force management risk, and if that risk isn't managed down to acceptable levels, we won't be able to keep the outstanding men and women that serve in our armed forces today.

It goes without saying, I suppose, that force management risk is going to be a particularly difficult thing to handle now that we're in a crisis period, now that we've already had to notify members of our fleet, for example, that they are going to be on tours that extend well beyond what we would have considered acceptable and normal in peace time. Our men and women in uniform put up with a lot of sacrifice. One of the biggest sacrifices is constant separation from their families. We're going to have more of that now, but I think it's our obligation to the country to do everything we can to mitigate those strains.

At the end of the Cold War the size of our military had been reduced by some 40 percent, but at the same time our men and women in uniform were asked to take on more and more new missions—missions that did not fall within the existing construct of war in Korea or war in the Persian Gulf. This put enormous stress on our forces. They did what they were assigned, but we put off investment in critical areas that exacerbated the mismatch between strategy and resources.

The result was to crowd out critical investments in modernization, in maintenance and infrastructure, and in the procurement of new ships, aircraft and armored vehicles. I think it's fair to say that where we entered the Gulf War ten years ago—after the luxury of, from the Department's point of view, of ten years of fairly heavy investments during the 1980s—we're entering this crisis, this campaign, with armed forces that have been stretched thin under the last ten years, and frankly under-resourced.

We also have crowded out some of the transformational R&D [research and development] that was necessary to field new 21st Century capabilities in personnel, funds for pay, housing and health care, while our forces were deployed all around the globe. Today we're trying to close that gap between strategy and resources as we invest in new resources in a balanced way to address the various dimensions of risk.

That brings me to a final key aspect of the Quadrennial Defense Review, which is what we call transformation. Transformation, that is preparing our forces to be the force of the 21st Century, is about more than our technology. It's about introducing innovative concepts of operation, about organizing and configuring our forces in new and more efficient ways, about adjusting how we train based on the people and materiel, and about improving the efficiency of our day-to-day operations.

We realize that efficiency in the Pentagon is a hard thing to achieve, but it's incredibly important. It's important not just because we need the resources that might otherwise be wasted, we also need to be efficient if we're to maintain public confidence in what we do.

Perhaps the key message I'd like to leave with you today is this. Our nation's men and women in uniform do amazing, difficult and frequently dangerous work. They do it extraordinarily well. I think most of you have had the opportunity to see them in action—in times of war and in times of peace. They are doing that on our behalf today, all around the globe. We're enormously proud of our armed forces. One of the Air Force pilots who took full part in the first day's operations in Afghanistan characterized the spirit that fuels our service men and women in uniform. With regard to the attacks on our soil he said, "It doesn't matter if you're from New York City or Washington, D.C., we're all Americans and we're all in this together."

He's right, and that is what will lead us to victory. Victory, as President Bush has said, will take time. It will be seen and understood when people are not terrorized, when people are free to go about their business and have their children go to school and know that they'll come home in safety.

Fortunately, the members of DOCA can help our citizens have a better understanding of our military, especially when they're undertaking such urgent tasks. We're fortunate that people like you want to make this connection -- citizens who will go back to your communities and help us tell the story of the service men and women to the American men and women they serve.

It's been a pleasure to be with you today. I guess I have time to take just a few questions.

Q: There is a (inaudible) weapons we have. If we need to eliminate one of the legs of the triad, do you have a preference? How will that be (inaudible)?

A: We're in the midst of, I really, I would say coming close to the end of a fundamental relook at our nuclear posture and in the context of what is really a new world, a world in which Russia is no longer a potential enemy—indeed, is more a potential ally. At the same time, it's a world in which more and more countries have nuclear weapons. Those capabilities are growing. And of course the Russians still retain very large numbers of nuclear weapons.

What the President is trying to work out with President Putin is a new framework for dealing with our nuclear forces, with the whole issue of missile defense and with respect to anything as specific as the legs of the triad. I think what is going to be emerging as increasingly important is that we've tended in the past to think of our nuclear forces as how they can respond to a nuclear attack, not necessarily out of the blue, but in a fairly short period of time.

More and more I think we need to think of them as a way to manage uncertainty and to deal with a world ten years from now that may be much better than the world we face today or may be much worse. To have not something that is rigidly set in stone or enshrined in a treaty that exists between the U.S. and Russia, but that thinks about some of those new actors and how we and Russia together can best (inaudible), and that's a vague answer. It's deliberately vague. But I think the objective is a very clear one. It is a very different world. I think frankly it's a world in which I'm certain today we can manage with much smaller nuclear forces than we have. I think the President has made that clear. We all believe that. But it's also a world in which it's extremely important, to go back to my earlier theme, to be prepared for the unexpected. Not to have a nuclear posture that is so focused on one particular way things can go wrong. We can only imagine some of those possibly different, possibly more complicated ways (inaudible).

Q: (inaudible)

A: Some of the problems of the intelligence community I think have been inflicted on it by some of the things people who are saying why aren't you more capable today, but (inaudible) past.

Clearly, we have known, I think, for quite a few years... I was on the commission that Harold Brown headed some six or seven years ago to evaluate the roles and missions of the intelligence community. I was on the commission that Don Rumsfeld headed three years ago to evaluate the ballistic missile threat against the United States. And every context I've had over the last eight years or ten years, the conclusion has been we need more human intelligence. Our technical capabilities are spectacular, we can read license plates from space, but we can't read Saddam Hussein's mail, we can't get inside the closed meetings of the al Qaeda. It's those very risky, difficult spies, it goes under the acronym HUMINT for human intelligence, but it means the dirty and dangerous work of putting people in places where they can get things that you can't get by technical means.

Our technical means are spectacular. We constantly work to improve them. But I think the single biggest gap is in human intelligence, and it's a gap that we've been working hard to fill already over the last three or four years. Director George Tenet has put a big emphasis on it. I think it's going to get a much bigger emphasis now. I think you can understand in an elementary way—you don't create a trusted agent inside al Qaeda by having somebody who may look like an Arab or may be an Arab turn up one day and say, gee, I'm volunteering, I'm here from the CIA and I'm here to help you. I mean these organizations have very systematic ways to root out exactly the sort of people that we want to get in there so you've got to do it over a long period of time, and it's going to take time. We have to do it.

I'd say one other thing about our intelligence gap, and it goes, take it back to your communities. We don't do a good enough job educating Americans in the kinds of languages that we need to know in order to understand some of these people. We today have far more useable information, think useable information in Arabic or Afghan or Farsi than we have people who can translate that stuff and decide whether it's useable. We had more published public Chinese literature on their military planning than we have trained Chinese linguists who can read that material and tell us whether it really says something or not. That is an area where I think as a country we need to make a bigger investment in educating young people to learn those languages. We need them badly.

Q: ...ballistic missile defense (inaudible) in space. How about a (inaudible)? Will you put that in perspective for us?

A: Let me say first of all, to me it is simply crystal clear that, of course I was convinced before September 11th, I admit it, but I think the events of September 11th make it clear that we need missile defense. The people who say well, but look, we were attacked by something other than a missile, that's right. We also need strong counter-terrorism measures. But to put your head in the sand when some of these same countries are investing so heavily in ballistic missile capabilities and for a reason... It is again, one of those asymmetric capabilities where we have no defense, where it's one of the places they think they can attack us. And by the way, if you go back ten years to the Gulf War, ballistic missiles is the only area where Saddam Hussein had an advantage that he retained right to the end of the war. It's the only Iraqi capability that we weren't able to deal with effectively. And that was a fairly primitive, short range missile.

So we have to work on it, but I would also caution against people thinking that we have some ready-to-deploy space-based shield or that this is going to be as some would like to describe it, some 1980s notion of Star Wars where we will lay in space and rapidly shoot down thousands of incoming warheads. If we had it, it would be nice, but we're nowhere close to that.

One of the points that Secretary Rumsfeld makes constantly is that it's going to take a long time to develop even a primitive defense capability for this country, and the threat is coming at us faster than our ability to deal with it.

So what we're starting is an effort to investigate a whole range of technologies and that includes ground-based interceptors of the kind some of you may have seen tested back in the summer. We tested a spectacularly successful test. One bullet traveling, I've forgotten my numbers now, I think about 16,000 miles an hour hit another bullet traveling about the same speed, direct hit, direct collision. People say oh, but this test was rigged. Well every test is structured to test certain parts of what you can do. The mere fact that we can do it is a huge step forward.

We're working on lasers, particularly the so-called airborne laser which would intercept missiles in their boost phase rather than in space. That's still some distance away, but it's promising.

We're looking at a variety of sea-based interception systems. Finally, we are looking, but it's further down the road, at the possibility of space-based systems. It's so far down the road that my answer to your question would be we're not ready yet to be able to do that kind of thing, and we're trying to walk before we run. We're really in the walking stage.

Q: You talked about under-resourcing the last decade. (inaudible) manning levels in military manpower, more toward hardware? (inaudible)

A: Well actually one of the biggest deficiencies we have is in our infrastructure. When you're given a budget that doesn't cover what you need to cover, and probably those of you in business have encountered this as well, the easiest thing to put off is maintaining your property for a year. You do that for one year, you don't notice it. You do it for two years, you barely notice it. You do it for ten years, and you have barracks that are rotting, you have asbestos that's coming out of the walls, you have very, very serious problems. There's a big investment required to fix that, and we're trying to move pretty smartly to do it. Actually we are getting, as you know, a lot of support from Congress that was harder to get earlier so some of those problems may be fixed faster.

The problem of aging equipment is a very serious one. We really stopped building new aircraft for most of the last ten years. Again, that leads to a cycle where the aircraft get older, they break down more often, it's harder and more expensive to get the parts, you get into a cycle that's called a death spiral because it just keeps going downhill.

I think we're going to start to address that. We have some major decisions underway about procuring new aircraft. We've already made the decision to go ahead with the F-22. These are expensive systems but we need them. We need them because of their capability. We also need them because our existing systems are old.

I think we've done actually a pretty good job, though you can never do enough, over the last three or four years in getting military pay and benefits, especially health benefits, up to a reasonable level. But of course we have to keep working on that.

Then there's the whole issue of manning levels, which I alluded to. I think the biggest single strain on our men and women in uniform is the family separation problem. Senator Inouye who's a decorated World War II veteran, as you know, he lost an arm in Italy, commented to me after visiting one of our military hospitals. He said when I was in the military hospital practically every one of us was a single male. Now you go to military hospitals and they're full of families. It's a different military that we're supporting. It's a volunteer military. And I don't know the percentages, but it's very high -- most of them are leaving kids and wives or husbands behind when they deploy overseas. The only way to really ease some of that burden is to have a big enough force so that people rotate through those kinds of assignments at a reasonable pace. We call it managing PersTempo, personnel tempo, and OpTempo, operations tempo. And obviously it's going to be a huge challenge right now. But when people say, gee, why can't you manage with a smaller military, they said before September 11th at least, in a time of peace. The answer is, even in a time of peace we have American forces deployed in 50 or 60 countries around the world, people spending enormous amounts of time at sea or deployed in places like Bosnia or Korea, and to maintain the base that supports those people, we need, we estimate, three or four people in the force for every one that's deployed to manage those (inaudible).

Thank you very much. Thank you for all you're doing. And keep up the great work.