THE SECRETARY'S MESSAGE

During the past decade, the world witnessed rapid and dramatic change. The Soviet empire disintegrated. The Iron Curtain dissolved. The Berlin Wall was dismantled. America no longer was engaged in a global competition with an ideological enemy. Where dictatorship once prevailed, democratic institutions now flourish and market economies are embraced by freedom-loving people throughout most of the industrial world.

The American people have much to celebrate over this turn of events, and there is every temptation to relax and take comfort in the preservation of tranquillity at home and the triumph of our values abroad. The flush of euphoria, however, must be tempered with the knowledge that while the prospect of a horrific, global war has receded, new threats and dangers - harder to define and more difficult to track - have gathered on the horizon.

It is the duty of America's policy makers to comprehend the nature of these threats and devise appropriate strategies and programs to defuse or defeat them. In carrying out this responsibility, it is important that we separate fact from fiction and antiquated assumptions from current realities.

It is a commonly held - but erroneous - notion that America's military establishment and forces are trapped hopelessly in the past, still structured and struggling to fight yesterday's wars.

As we examine how we intend to prepare America's armed forces for an uncertain future, it is important to look at how we got to where we are, and where we are going.

WHERE WE WERE

During most of the Cold War years, the United States pursued a strategy of containing the Soviet Union. In 1985, America appropriated about $400 billion for the Department of Defense (in constant, fiscal year 1997 dollars), which constituted 28 percent of our national budget and 7 percent of our Gross National Product. We had more than 2.2 million men and women under arms, with about 500,000 overseas, 1.1 million in the Reserve forces, and 1.1 million civilians in the employment of the Department of Defense. Defense companies employed 3.7 million more and about $120 billion of our budget went to procurement contracts.

WHERE WE ARE

Since 1985, America has responded to the vast global changes by reducing its defense budget by some 38 percent, its force structure by 33 percent, and its procurement programs by 63 percent. Today, the budget of the Department of Defense is $250 billion, 15 percent of our national budget, and an estimated 3.2 percent of our Gross National Product. We now have 1.45 million men and women under arms, 200,000 overseas, 900,000 in the Reserves, and 800,000 civilians employed by the Department. Today, $44 billion is devoted to the acquisition of weaponry from a smaller defense industrial base employing 2.2 million workers.

In making these reductions, we have carefully protected the readiness of our military to carry out its currently assigned missions. But it has become clear that we are failing to acquire the modern technology and systems that will be essential for our forces to successfully protect our national security interests in the future.

WHERE WE ARE GOING

Our work on the QDR followed a path that led from threat, to strategy, to implementation, and finally to resource issues.

We started with a fresh, unblinking look at the world both today and over the temporal horizon to identify the threats, risks, and opportunities for U.S. national security. In addition, we recognized that the world continues to change rapidly. We cannot expect to comprehend fully or predict the challenges that might emerge from the world beyond the time lines covered in normal defense planning and budgets. Our strategy accepts such uncertainties and will prepare our armed forces to deal with them.

From that analysis of the global environment, we developed an overarching defense strategy to deal with the world today and tomorrow, identify required military capabilities, and define the programs and policies needed to support them. Building on the President's National Security Strategy, we determined that U.S. defense strategy for the near and long term must continue to shape the strategic environment to advance U.S. interests, maintain the capability to respond to the full spectrum of threats, and prepare now for the threats and dangers of tomorrow and beyond. Underlying this strategy is the inescapable reality that as a global power with global interests to protect, the United States must continue to remain engaged with the world, diplomatically, economically, and militarily.

After developing the strategy, we anchored its implementation in the fundamentals of military power today and in the future: quality people, ready forces, and superior organization, doctrine, and technology. We need quality people to operate more complex technology and undertake more complex joint operations. We need ready forces in a world of sudden events that often will demand that our forces come "as you are" on a moment's notice. The information revolution is creating a Revolution in Military Affairs that will fundamentally change the way U.S. forces fight. We must exploit these and other technologies to dominate in battle. Our template for seizing on these technologies and ensuring military dominance is Joint Vision 2010, the plan set forth by the Chairman of the Joint Chiefs of Staff for military operations of the future.

A spectrum of feasible approaches is available to sustain our current ability to shape and respond to the world as we see it now, while preparing the future force for the world of tomorrow. The QDR examined three alternative paths that differed in where they accepted risks and emphasized investment over the near term, midterm, and long term.

One path is to focus more on current dangers and opportunities. This path does not ignore the future, but sees today's threats demanding more attention and tomorrow's threats far enough away to give us ample time to respond. This option would maintain the current force structure exactly as is. But it would also result in less investment in modernization - that is, a greater aging in major platforms, few new systems, and a delay in fully exploiting the Revolution in Military Affairs.

Another path is to focus more on future dangers and opportunities. This path does not ignore the present, but sees greater dangers over the horizon, including the possible emergence of a regional great power. This path would devote more resources to building the future force. But to do so would also require significant reductions in the current force. This would sharply reduce our ability to shape the international environment and undermine our security commitments to our allies while potentially encouraging aggressors. And most importantly, it would erode our military capability, stress the troops, and put them at more risk in battle in the near term and midterm.

The path we have chosen strikes a balance between the present and the future, recognizing that our interests and responsibilities in the world do not permit us to choose between the two. This approach retains sufficient force structure to sustain American global leadership and meet the full range of today's requirements. At the same time, it invests in the future force with a focused modernization plan that embraces the Revolution in Military Affairs, and introduces new systems and technologies at the right pace.

This approach reallocates resources and priorities to achieve the best balance of capabilities for shaping, responding, and preparing over the full period covered by the Review. As part of that reallocation of resources, we will trim current forces - primarily in the "tail" (support structure) and modestly in the "tooth" (combat power). The result will be a force capable of carrying out today's missions with acceptable strategic risk, while allowing us to stabilize our investment program in order to achieve the future joint force capabilities described in Joint Vision 2010. Our plan puts us on a steady and realistically executable trajectory toward that force. We preserved funding for the next generation of systems - such as information systems, strike systems, mobility forces, and missile defense systems - that will ensure our domination of the battlespace in 2010 and beyond.

Finally, the Department's plans are fiscally responsible. They are built on the premise that, barring a major crisis, national defense spending is likely to remain relatively constant in the future. There is a bipartisan consensus in America to balance the federal budget by the year 2002 in order to ensure the nation's economic health, which in turn is central to our fundamental national strength and security. The direct implication of this fiscal reality is that Congress and the American people expect the Department to implement our defense program within a constrained resource environment. The fiscal reality did not drive the defense strategy we adopted, but it did affect our choices for its implementation and focused our attention on the need to reform our organization and methods of conducting business.

WHAT'S NEW?

First, the shape-respond-prepare strategy defined in the QDR process builds on the strategic foundation of past reviews and our experience since the end of the Cold War. We have determined that U.S. forces must be capable of fighting and winning two major theater wars nearly simultaneously. However, while the Bottom-Up Review focused primarily on that difficult task, we have also carefully evaluated other factors, including placing greater emphasis on the continuing need to maintain continuous overseas presence in order to shape the international environment and to be better able to respond to a variety of smaller-scale contingencies and asymmetric threats.

The QDR has also placed much greater emphasis on the need to prepare now for the future, in which hostile and potentially hostile states will acquire new capabilities. This demands increased and stable investment in modernization in order to exploit the revolution in technology and to transform the force towards Joint Vision 2010. We must fundamentally reengineer our infrastructure and streamline our support structures by taking advantage of the Revolution in Business Affairs that has occurred in the commercial world. We must focus on the future and not the past. Only through such efforts can we realize the cost efficiencies necessary to recapitalize the force.

Second, our future force will be different in character. The programs we are undertaking now to exploit the potential of information technologies and leverage other advancing technological opportunities will transform warfighting. New operational concepts and organizational arrangements will enable our joint forces to achieve new levels of effectiveness across the range of conflict scenarios. We want our men and women to be the masters of any situation. In combat, we do not want a fair fight - we want capabilities that will give us a decisive advantage.

Joint Vision 2010 describes four new operational concepts. Together, they promise significant advantages in any operation or environment, something we call "full spectrum dominance." At the heart of the joint vision is information superiority - the ability to collect and distribute to U.S. forces throughout the battlefield an uninterrupted flow of information, while denying the enemy's ability to do the same.

Dominant maneuver. Having a full picture of the battlefield, advanced mobility platforms, and agile organizations, U.S. forces will be able to attack enemy weak points directly throughout the full depth of the battlefield.

Precision engagement. Precision engagement will enable U.S. forces to deliver the desired effects at the right time and place on any target. Having near real-time information about the target, a common awareness of the battlespace for responsive command and control, and the flexibility to reengage with precision, U.S. forces will be able to destroy key nodes of enemy systems at great distances with fewer munitions and less collateral damage.

Full-dimensional protection. Multiple layers of protection for U.S. forces and facilities at all levels will enable U.S. forces to maintain freedom of action during deployment, maneuver, and engagement. To achieve this goal, full-dimensional protection requires a joint architecture that is built upon information superiority and employs a full array of active and passive measures.

Focused logistics. By fusing information, logistics, and transportation technologies, U.S. forces will be able to deliver the right support at the right place on the battlefield at the right time. This will enable more effective delivery of tailored sustainment packages to the strategic, operational, and tactical echelons. The overall effect will be to reduce the amount of logistics support while ensuring a more capable combat force.

In sum, we will continue to seek the best people our nation can offer and equip them with the best technology our scientists and engineers can produce. This technology will transform the way our forces fight, ensuring they can dominate the battlefield with a decisive advantage at all times across the full spectrum of operations from peacekeeping and smaller scale contingencies to major theater war. The key to success is an integrated "system of systems" that will give them superior battlespace awareness, permitting them to dramatically reduce the fog of war.

This system of systems will integrate intelligence collection and assessment, command and control, weapons systems, and support elements. It will connect the commanders to the shooters and suppliers and make available the full range of information to both decision makers in the rear and the forces at the point of the spear.

Achieving such capabilities is not an easy task and cannot be done in one leap. It is a step-by-step process involving the development of new technologies, investment in new platforms and systems, new concepts, training and doctrine, and formation of new organizational structures. But these are not just ideas - we have already started down the road and we have tangible results.

The third new element is that our program is going to be fiscally executable. For the past several years our defense program has suffered from unrealized expectations with regard to modernization. Failure to address these fiscal problems would undermine our ability to execute the strategy. For a variety of reasons described in the report, projected increases in funding for modernization have continually been delayed as modernization funds migrated to operations and support accounts to pay current bills. While contingency operations have contributed to the problem, they have not been the chief cause. Failure to address these fiscal problems would undermine our ability to execute the strategy. Therefore, an important corollary to the strategy and force choices in the QDR was a focus on rebalancing our overall defense program, improving stability within that program, and fixing deficiencies within Service and Defense-wide budgets in order to ensure that modernization targets are met.

WHAT'S NEXT - HOW DO WE GET FROM HERE TO THERE?

The first and most visible aspects of our overall plan to rebalance our defense programs are necessary modest reductions in military end strength and force structure. These reductions are offset in part by enhanced capabilities of new systems and streamlined support structures. The savings that will result, combined with the program stability we can achieve from realistic expectations, will enable us to pay for the transformation of our forces required by the strategy. To preserve combat capability and readiness, the Services have targeted the reductions by streamlining infrastructure and outsourcing non-military-essential functions. The result is a balanced, flexible force that has sufficient depth to support the strategy, that matches structure to end strength so that hollowness does not set in, and that will continue to evolve toward our Joint Vision 2010 capabilities.

Highlights of QDR decisions include:

Modernization of our forces depends upon a strong backbone of command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) systems. The important and central role of these systems, and the large resources that must be devoted to them, inspired a hard and sweeping look at our entire effort devoted to C4ISR. The general focus and amount of resources devoted to this effort were determined to be appropriate. We made a similar study of our munitions programs and found that there is a high payoff for the large investment we are making in precision weapons and that the focus of the programs and the scale of effort are appropriate.

The transformation of our forces is an ongoing process. Joint Vision 2010 provides a conceptual umbrella for the other long-range visions and plans developed by the Services and other DoD components, which are outlined in the QDR report. The U.S. military is committed to realizing these joint and service visions of modern warfare and is already taking a number of steps to do so. It is a Total Force effort, involving both active and Reserve component forces. By undertaking efforts ranging from studies and war games to advanced concept technology demonstrations and battlefield experiments, the armed forces are developing and testing concepts and capabilities that will ensure their ability to transform for the future. Brief summaries of these efforts are included in the report.

The final steps in preparing for the future, and ones that are essential to putting our program on a fiscally sound basis, are to shed excess infrastructure and to fundamentally reengineer our business processes.

The downsizing of our infrastructure has fallen behind the downsizing of our force structure, in spite of four BRAC rounds. Since the first base closure round, force structure has come down by 33 percent and will have declined by a total of 36 percent when we finish the reductions under the QDR. During the same period, we will have reduced domestic infrastructure by 21 percent as measured by the replacement value of physical facilities. In essence, our combat forces are headed towards the 21st century, but our infrastructure is stuck in the past. We cannot afford this waste of resources in an environment of tough choices and fiscal constraint. We must shed more weight.

Although the savings from BRAC come slowly and require up-front costs, the savings to be achieved are significant. Last year, we began to receive annual savings beyond the annual costs for the first four BRAC rounds and by 2001, recurring savings will exceed $5 billion every year. The Review found that we have enough excess infrastructure to require the two additional rounds of BRAC for which we will seek authority. Included in the reduction of infrastructure must also be our research and development and test facilities, laboratories, and ranges.

We also need to take advantage of business process improvements being pioneered in the private sector. Over the past decade, the American commercial sector has reorganized, restructured, and adopted revolutionary new business and management practices in order to ensure its competitive edge in the rapidly changing global marketplace. It has worked. Now the Department must adopt and adapt the lessons of the private sector if our armed forces are to maintain their competitive edge in the rapidly changing global security arena.

The Department has made much progress already in overhauling the defense acquisition system - with full support from Congress. Those efforts are paying significant dividends, permitting us to get far more for each dollar we spend than previously. We have also achieved savings through streamlining our organizations and business practices - replacing cumbersome and expensive systems for minor purchases, for example, with simple credit card operations. However, we need to go much further and deeper, and we need congressional support.

We are examining the best opportunities to outsource and privatize non-core activities, but many of those opportunities are restrained by regulations and practices built up during the Cold War. We need to deregulate defense just as we have deregulated many other American industries so we can reap the cost and creativity benefits of wide-open private competition. A guiding principle of the American government is that the government should not perform private sector-type functions, and this should also be true of the defense sector unless a compelling military need is demonstrated.

I have established a Defense Reform Task Force to review the Office of the Secretary of Defense, Defense agencies, DoD field activities, and the military departments and to look for ways we can consolidate functions, eliminate duplication of effort, and improve efficiency. The Task Force will consult with Congress and with business executives who have successfully streamlined their corporations in recent years. It will also work closely with the National Defense Panel, the independent, congressionally mandated board that is reviewing the QDR, and with the Vice President's National Performance Review. I have directed the Task Force to submit its report and findings to me by November 30, and I will act on its interim findings as appropriate.

Many of the Department's current institutions and infrastructures enjoy significant political support for their local economic contributions. However, the primary test must be their contribution to overall military effectiveness. We must act now if we are to have the resources to invest in modernization in the midterm and if our support capabilities are to keep pace with our military capabilities in the long term.

This approach reflects both the spirit of the Administration's efforts to reinvent government and the commitment of Congress to focus government on core functions. As a former elected official who has witnessed the difficult transformation in communities affected by base closure, I fully appreciate the anxiety and, indeed, trauma that often is involved. But ultimately, we need to decide what is more important:

These are stark choices - and while we must make changes wisely and with compassion for the civilians who have given years of faithful service, we must also keep faith with the men and women of the military services. Over half of them have known only an armed force steadily shrinking in size. There is great uncertainty about the future. Yet, they perform magnificently as they serve our country abroad and at home. We must take care of them and their families and ensure that we have given them the best tools to do the jobs we ask. If we take care of them, they will take care of us.

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The report describes in detail the process we followed, choices we made, our reasons for making them, and the benefits and risks inherent in each. The report is laid out exactly as the Review progressed, beginning with a description of the global environment in which America operates. It reaches conclusions on the best strategy for achieving our national goals, and it describes a series of integrated options by which that strategy could be executed. It also analyzes the fiscal environment in which those options had to be considered. From our choice among those options flowed a series of structural and programmatic decisions required to implement the strategy.

The strategy and the plan presented in this report will give us the military capability and forces we need throughout the 1997-2015 time frame and beyond. The plan balances the needs of the present with the challenges of the future. Our program provides for the forces to deal with present threats, while also making available the resources to transform that force to one capable of seizing the opportunities and dealing with the threats of 2015. That transformation already has begun as outlined in the Joint Staff and Service vision plans and is being tested in ongoing warfighting experiments.

The plan we have outlined is an integrated whole. It is based on our strategy, but we cannot carry out that strategy without sufficient resources. Those resources exist within the Department's budget, if we wisely utilize them. Doing so requires tough choices and changing the way we do business. It will require legislation in some areas and congressional support. Most of all, it requires joint effort, focused on the goal of protecting our nation as a whole and not the interests of any region, industry, or special interest. If we are not willing to do business in new ways, we need to face up to that fact and be prepared to pay more for less impact. Or, we can decide to do less and be less as a nation.

The Greek rhetorician Gorgias spoke of the great challenge of choosing when the choosing is most difficult, "to speak or not to speak, to do or leave undone," and to do so with "the indispensable virtues - prudence and firmness - one for choosing a course, the other for pursuing it."

America begins the new millennium as the sole superpower, the indispensable nation. The responsibilities are heavy and the choices difficult. But with those responsibilities and choices come enormous benefits and opportunities. This report sets forth the Department of Defense's vision of what lies ahead as our nation embarks upon a new American Century - both the dangers and the possibilities - as endorsed by the President as Commander in Chief. It is not enough for us to speak; it is time to decide. The next generation will judge us for our actions, not our words. Working with Congress and, by extension, the American people, we have chosen this course with prudence. We must now pursue it with firmness.

/signed/

William S. Cohen
Secretary of Defense

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