Good morning. It's a pleasure to be here. I'm honored, Bill, that you invited me to speak before this august group. Tom Luce talked yesterday about how intimidated he was to follow Marian Wright Edelman and Ernie Cortes. I am equally intimidated. Although I must say not as intimidated as I was last year, when I learned that I was following Elspeth Rostow and Max Sherman as dean of the LBJ School. They are formidable people. They built up a wonderful institution, and I am the happy inheritor of their energy, their imagination, their intellectual prowess, and their commitment to service.
Speaking of inheritance, General Butler mentioned his working with Colin Powell. I must tell you about my first conversation with Colin Powell, after I arrived at the Pentagon. As you know, the confirmation process is Byzantine. First the president announces an intent to nominate, and then he formally nominates you, and then you go through the confirmation hearing. So there is a period of what you might call political purgatory. It is the period after which you have been called, but before you have been blessed with the Senate confirmation. And that's a period when you're in the building and you can make a lot of courtesy calls, but you can't make any decisions and you can't really sit in on the important meetings. So I started making courtesy calls on my fellow political appointees and on some of the senior military folks, beginning, of course, with the chairman of the Joint Chiefs of Staff, Colin Powell. And I asked General Powell if he had any advice for someone "parachuting" into the Pentagon. I'd never worked there before. I'd had no real contact with the military since I battled paperwork in Frankfurt, Germany for the U.S. Army as a lowly captain. It was a short and undistinguished career. And he said to me, "Ed, you guys in the Clinton administration are inheriting the finest military force ever assembled. Your job is, just don't screw it up." Well, I thought that was good advice. Lee Butler, in the meeting that he mentioned, later amplified Colin Powell's point. I'll get later to the caution that Lee shared with the secretary of defense, because it has proven prophetic.
Let me begin, however, with a more recent incident. Perhaps little noted, but I think important. That was a very terse exchange, about a month ago, between Senator John McCain of Arizona, a hero of Vietnam, and the current members of the Joint Chiefs of Staff. In the most tense part of that exchange, McCain accused the Chiefs of allowing military readiness to deteriorate and of misleading the Congress about it.
There have been lots of newspaper reports about declining readiness. As a matter of fact, there was a story a couple of weeks ago about a projected shortfall of some 35,000 recruits. Now, in a force where you're only recruiting about 200,000 a year, that's a very big number. I hasten, however, to add that that number is exaggerated, if not outright false. Nevertheless, in the terse exchange between McCain and the Chiefs and in some of the news stories, we are witnessing the early warning signs of a big fight over military readiness. I want to talk for a little while about the history of our recent fights over military readiness, talk about what's really going on, about what we need to pay attention to, and then move on. I hope I can conclude by referring to some of the issues we discussed yesterday, some of the broader issues.
During past twenty years, we've had a major political fight-and in some instances a major substantive fight-over military readiness on the average of once every five years. In fact, it was evidence of declining readiness, a so-called hollow force, that contributed to President Carter's defeat in 1980. We remember, of course, the Iranian Hostage Crisis, that humiliating incident in 1979, and then the attempted rescue, which led to the debacle that we now know as Desert 1, leading to the deaths of eight military personnel when Navy helicopters collided with Air Force tankers in the Iranian desert. That and a number of other factors, contributed to a public sense that the Democrats, of whom Jimmy was the leader, had allowed the force to deteriorate. And it led the then chief of staff of the army, "Shy" Meyer, to write a book called The Hollow Army, talking about all the problems we were having in manning, equipping, and training the force. We were recruiting large numbers of high school dropouts, and as a result were having high attrition rates. This led, to a major aspect of the Reagan campaign and of the first Reagan term: a massive buildup of the military, an increase of roughly a trillion dollars over a period of years in military spending. So that was one debate over readiness, and it contributed to the defeat of the Democrats in 1980.
But, you know, turnabout is fair play. Around 1984 or '85, the then-Chairman of the House Armed Services Committee, Les Aspin, held a series of hearings, with liberal amounts of political theater, called "What Happened to the Trillion Dollars?" The armed forces have some very precise ways of measuring readiness. And by those measures, as we increased spending on defense, readiness went down. There are easy ways to explain that: you put new equipment into the force, soldiers are not trained to use the equipment, and so the commander is required to say, "We are not trained."
There are basically three measures of readiness; do you have the people, do you have the equipment, and are the people trained to use the equipment? Consider an acronym, people, equipment, training. PET. It's a little more complicated than that, but that's one way to think about it, and when you have people who haven't been trained to use new equipment, readiness goes down. Nevertheless, that was embarrassing to the Reagan administration. That was a second argument about readiness.
Les Aspin, when he became President Clinton's first secretary of defense, knew that turn about was fair play, and so he immediately inoculated himself against charges of a hollow force. How did he do that? He created, for the first time in the Defense Department, an office in the Office of the Secretary of Defense charged with maintaining readiness. There previously had been something called an assistant secretary for force management. Aspin changed that title and upgraded the position, so there then became an undersecretary for personnel and readiness.
Readiness was a new function for the Office of the Secretary of Defense. You can imagine how bureaucratically difficult that was to carry off. We can discuss some of the details, but they're not really important. What was important was a second aspect of Aspin's inoculation. He decided to establish an outside panel, what he called a Readiness Advisory Committee, consisting of some of the nation's most distinguished retired generals. Who do you suppose he selected to chair that committee? General "Shy" Meyer, the very man who had accused Jimmy Carter of allowing a hollow army to develop. It was a kind of double inoculation and it worked very well, at least for a few years. In fact, we succeeded in 1994-1995 in beating back Congressional attempts to raise the specter of growing hollowness. But McCain's upbraiding of the Chiefs just a few days ago, his charge that the force is deteriorating, the newspaper stories about recruiting difficulties and retention difficulties-all these things suggest to me that we are on the verge of another big fight over readiness. This debate may coincide with the runup to the 2000 election, just as the charge of a hollow army coincided with the runup to the 1980 election. Well, what's really going on? Has readiness deteriorated and, if it has, what are the underlying causes? Let me mention five issues that I think contribute to our concerns about military readiness, and that will figure in the debate. The first is borrowing. The defense budget is very big, upwards of two hundred and fifty billion dollars a year, but there are really only three fundamental things you can spend that money on: you can spend it on people, you can spend it on equipment, or you can spend it on training. The people budget, incidentally, includes health care and child care. The largest and highest quality child care system in the United States is run by the U.S. military. DOD spends about fifteen billion dollars a year on health care, which makes the military the second largest health care provider in the country, behind VA. We run dependents' schools, in which are enrolled every day 80,000 to 90,000 students. Those are mostly outside the United States, spread across twenty-four time zones. So that's the people part of the budget, and if you add all of the pieces together, along with things like family housing, it comes to close to half of the two hundred and fifty billion dollars we spend a year on defense. The rest is divided between equipment and training. And we have a huge training establishment, because what the military does, when it is not at war, is train. In the early1990s we made a conscious and explicit decision to borrow from our equipment modernization accounts, in order to pay for what we call short-term readiness.
That means recruiting high quality people, raising their pay, improving quality of life, and shoring up our training. Remember, the defense budget is declining at this time. We cut the budget by close to 40 percent. So at a time of shrinking budgets, we were disproportionately shrinking the modernization accounts, in order to shift money into accounts for what we call short-term readiness. We thought we could afford to do that because the Reagan administration buildup had bought a lot of shiny, new things. New tanks, new aircraft. That's when some of the stealth weaponry, which actually had begun development during the Carter administration, finally came on line. There also was a buildup in the Navy, in terms of the number and quality of ships. So we thought we could afford to postpone the next round of modernization for a few years. We were explicit about doing that. Toward the end of his term, around 1996, defense secretary Bill Perry began warning that we needed to begin shifting money back to modernization. Right now there are huge debates in Congress and in the Administration over what the modernization shortfall is. Do we need to shift another ten billion dollars a year into modernization, or twenty billion dollars? There are only a few sources for that money. And one of those sources is not increasing the overall size of the defense budget. The topline is not likely to change.
One of the really interesting aspects of all of our debates over defense is that there has not been in Congress, and there has not been from any presidential candidate in the past three election cycles, a recommendation for a tremendous increase in the defense budget. So we are going to be dealing with a number in the two hundred and fifty billion dollars range over the next several years. I do not believe whoever runs in the year 2000 will advocate a tremendous increase in the defense budget, so we're simply talking about shifting money around from the people accounts into the modernization accounts. And there are only a few ways to do that. One is you can reduce your force structure. We're now projecting a force of around 1.4 million people on active duty, between 700,000 and 800,000 in the reserve components, and we are reducing the civilian component to a little over 700,000 people. DOD employs about half of the civilians who work for the federal government.
Lee mentioned the plan to reduce the size of the Defense Department by 30 percent; that was to reduce the size of the active component from the roughly 2.1 million people that it had reached during the height of the Reagan buildup down to about 1.4 million. The latest review, the Quadrennial Defense Review, proposes cutting it slightly lower than that.
In one of my first conversations with Secretary Aspin and then Deputy Secretary Perry, I walked in with a graph which displayed the size of the defense establishment over a period of about forty years, from the Korean War, through the Reagan buildup. As you might imagine, the size of the topline went up and down at predictable periods. One of the things that did not appear to change throughout was the size of the civilian component. In peace and in war, the civilian component of the Defense Department remained around a million people. Perry and Aspin looked at that chart and they said, "There's something wrong here. How can you have an active military that's going up and down like this, and yet the underlying civilian infrastructure, which is supporting it, remains constant?" He was perplexed at how that could happen, and he quickly adopted a principle, which was to reduce the civilian component proportionate to the reductions in the military component. That led us, over a period of time, to say we'd reduce the civilian component about 30 percent. This is on top, incidentally, of the reductions that would have been brought about as a result of the Base Realignment and Closure (BRAC) process.
We worked for a few months over how to do that, and the result was a memo that I think is still referred to, spittingly in the Defense Department, as "The Infamous Dorn Memo." We probably received more nasty comments about that than we received about anything we ever did. Gays in the military, putting women into fighter planes, nothing produced as many unkind comments as that infamous Dorn memo. And it didn't take me very long to figure out why.
One of my first public appearances, after being sworn in, was to go out to visit a submarine repair base at the north end of San Francisco Bay. Mare Island, it's called. At its peak, Mare Island had about 12,000 civilians and a few military. Mare Island was on the BRAC list. It was scheduled to be closed in three years. It was my task to go out to Mare Island, enter a hanger filled with 5,000 very surly union members, and explain to them why they should be so happy that we won the Cold War. This was a tough sell, and it is a tough sell because military people and civilians view a closure of a base in very, very different ways. When you close a military base, the military people simply move on to another base. They're reassigned. But the civilians are kind of stuck. You're not simply talking with the civilians about finding a new way of making a living, you are talking about finding a new way of life. Keep in mind that these are bases that have spawned communities. The city of Vallejo at the north end of San Francisco Bay was essentially spawned by the Mare Island Submarine Base. That base had been in the Navy since before the Civil War, so several generations of families had been tied to it. Telling those folks that you are going to change their way of life is a very big deal, so I came quickly to understand why I got those nasty cards and letters.
We had borrowed heavily to pay for readiness, and the question was how are we going to recover. Let me mention a second issue, overstructure. To paraphrase Ronald Reagan, the Defense Department is too big and it costs too much. All the bases are not needed, but, after four rounds of BRAC, large numbers of Congressional districts have been affected, and resistance to more base closures has grown very large, so much so that in the Defense Reauthorization Acts for the last few years, Congress has inserted report language, discouraging the Secretary of Defense from proposing the closure of more bases. We are just beginning to see savings accrue in the range of four billion to six billion dollars a years, as a result of a series of closures that began a decade or more ago. Projections are that we can double those savings if we make more closures. But Congress has said, "No."
There's another bit of pressure on the defense budget, and that comes from contingency operations. We think about the big ones. We know about the Persian Gulf conflict. We remember Somalia and Rwanda, and so on. At last count, however, the U.S. Military had engaged in more than thirty major contingency operations since the end of Desert Shield/Desert Storm. That is a lot of activity. Now, the effect of that on readiness, of sending these troops abroad, is mixed. There is a direct effect on costs, however, because those contingency operations are costing us an extra $3 billion a year. That is the projected cost this year of the Bosnia operation alone, as a matter of fact.
Lee mentioned the meeting in 1994, when there was a big discussion of contingency operations and of their effects. I believe Secretary Perry was chairing that meeting, and Lee said, "You know, Mr. Secretary, the military has a can-do attitude. We can do anything you tell us to do. We'll salute sharply and go off and accomplish the mission." But Lee said, "You have to think about what that is costing us underneath, about the things we are borrowing, the things we are not doing, in order to pay for those operations." And he said, "Please, don't push us too hard." Well, there is evidence that the force, or portions of the force, have been pushed very, very hard, as a result of these contingency operations. Equipment is wearing down, people are wearing out, families are beginning to fall apart. The contingency operations therefore are the third concern. There's a fourth concern, a rather ironic one. As a result of the dramatic scaling back of defense spending, we have entered an era of what can only be called honest budgeting. When you're spending three hundred billion dollars a year, as we were doing during the Reagan buildup, you can afford a little slack. When you have that slack, Congress can afford to move a little bit of money around. This year, for example, Congress moved around a billion-and-a-half to two billion dollars to pay for favored projects. One of the favored projects throughout the 1980s and into the 1990s has been C-130s for the Guard and the Reserve. C-130s are these big, four-engine prop cargo planes. Why did Congress keep buying more C-130s, even though DOD insisted they weren't needed? Because the planes are manufactured in Marietta, Georgia, part of Newt Gingrich's district. And because the chairman of the Senate Armed Services Committee, Sam Nunn, was from Georgia.
Well, everybody knows how that game is played. What McCain wanted during these hearings was for the Chiefs to say, "The defense budget is inadequate. We need more money." Instead, what the Chiefs said, is, "The budget that we sent over was adequate. What produced a problem was Congress' decision to move the money around to pay for things we didn't want." You might imagine that that answer infuriated John McCain. What he said to them was, "You've allowed readiness to deteriorate, and you've misled us about it." But he really was thinking is, "You guys know how the game is played, and you didn't give us the slack we've come to expect." That is the point of frustration: in an era of constrained budgets, and thus more honest budgeting, there simply is not that slack.
The fifth problem with readiness has to do with a sustained economic boom. We allowed conscription to lapse in 1972 and since 1973, have relied on an all-volunteer force. The all-volunteer force had a rocky start, but it has proven to be a great success. The quality of people is high, and even more importantly, the people who are there, want to be there. They have volunteered.
We are now, however, entering into a new challenge. This will be the first time we have tried to maintain an all-volunteer force in a full employment economy. That is going to be a major challenge, and that is why people are suggesting, or predicting, major shortages in personnel in the coming year or so. It's likely that 35,000, which you read about in the newspaper, is a bit high, but there will be shortages and there's a serious question about how we're going to deal with that, particularly since the propensity of youth to enlist is not high. Enlistment propensity has been declining for twenty, twenty-five years. It began to decline especially at the end of the Cold War, probably because engaging in peace-keeping operations and humanitarian operations simply does not have the same cachet, the same sense of urgency, as defending the Free World against a Soviet monolith. That decline, incidentally, has leveled off a little bit during the past year. How do we know that? We conduct surveys every year. We survey about 10,000 sixteen- and seventeen-year-olds, call them on the phone, and find out whether they are interested in joining the military. We find out why they're not interested in joining, and we adjust our advertising on the basis of what they tell us about what might interest them about the military, what turns them off about the military. The propensity decline seems to have been arrested, but it is at a very low level. Only about 12 to 15 percent of American youth say they might be interested in joining, so the recruitment challenge remains a daunting one.
Where are we going? I mentioned the five things that we've got to deal with: the borrowing, the overstructure, the contingency operations, the problem of getting Congress to adjust to an era of honest defense budgeting, and the challenge of recruiting and retaining a high quality force during a sustained economic boom. Those are the kinds of issues that you will see raised during what I expect to be a debate over deteriorating readiness, and the charge that this Clinton administration is "soft on defense."
Unfortunately, I'm not confident that we will hear a debate over the more fundamental question: What do we need to be ready FOR? We've gone through several major reviews of defense policy during the past decade. Around 1990, Colin Powell produced a review which led to what he called the Base Force. Les Aspin produced what he called a Bottom Up Review, which led to a need to have a force capable of fighting two nearly simultaneous major regional contingencies. We just went through a Congressionally mandated Quadrennial Defense Review, which essentially confirmed the need to size the force to fight those two major regional contingencies. I have serious reservations about the nature of the threat that leads us to maintain that size force. But it seems to me that we have not structured the force to deal with a couple of external threats. I think Hans Mark talked about them yesterday. One, or course, is terrorism, which can be external or, as we've learned from the Oklahoma City bombing, internal. The other is the kind of issue we are dealing with today in Bosnia, which might be described as tribalism. A ten-division army cannot deal with either of those threats. Nor is a twenty-wing Air Force capable of dealing with the kind of threat that can be carried around in a suitcase. It is possible to wreak considerable havoc in a metropolitan area with chemical or biological agents that can be secreted in very small amounts.
There's also another threat, which George Kozmetsky has talked compellingly and eloquently about, and that is technological terrorism. There are also some other internal threats. Marian Wright Edelman, Tom Luce, and Ernie Cortes talked eloquently about them yesterday-increasing wage gaps and the possibility that even in a full employment economy, we may be confronting the existence of a permanent underclass. Having been back at the University of Texas for a little over a year and watched some of the effects stemming from the Hopwood decision in Texas and Proposition 209 in California, I worry about the resegregation of our institutions of higher education. And more fundamentally, I worry about the same thing that Marian worried about yesterday, the loss of moral compass and of a spirit of selflessness.
One of the most rewarding things to me about working in the Defense Department for four years, was working with and in behalf of a million and a half people dedicated to selfless service. I had an interesting exchange in the fall of 1994, which I think captured that spirit. I visited with several enlisted men from the 10th Infantry Division just after their return from Somalia. You may recall that in September of 1993, a dramatic and deadly fire fight in the crowded streets of Mogadishu resulted in the deaths of nineteen U.S. soldiers. The scene, televised worldwide, of a soldier being dragged naked through those dusty streets, created the perception in the United States that that mission had been a disastrous failure. It led to the firing of Clinton's first secretary of defense, Les Aspin. So when I met these soldiers, I wanted to find out how they felt about Somalia. I walked up to a young sergeant, six-foot-two, slender, ramrod straight, with close-cropped hair, and a deep southern drawl, and I asked him what he made of his tour in Somalia. And he said, "Well, sir, all I can say is 'God bless America.'" I listened to the drawl, I looked at the demeanor, and I thought I knew where he was coming from. I expected he was going to talk about what a waste of lives and people that mission had been. I expected him to say how glad he was to be back in the United States, where he could drive down the street and get a Big Mac anytime he wanted and not worry about the locals spitting on him or killing him. I expected him to talk about the treachery and the lack of gratitude that he had experienced at the hands of the Somalis.
But that's not what he said. He said, "Sir, they sent us over there to keep people from killing one another, and we did that. They sent us over there to deliver food, to keep people from starving to death, and we did that. They sent us over there to build roads and to build clinics, and we did that." He said, "Sir, we fulfilled our mission." He went on to say that we were the only country that had both the resources and the moral will to come to the aid of strangers. He was enormously proud of what he had done and enormously proud to be a soldier. It was a moving moment, one of several I experienced.
However, I worry a great deal about the distance-the gap-that continues to grow between the men and women who serve in the military (and who also serve in some of our voluntary programs), and the larger population. I worry about the moral distance between the selfless service that they exemplify, and the self-centeredness that we continue to see in the rest of the population. I'm delighted to be at the LBJ School because there, also, we see young men and women dedicated to serving people. But those students come in the hundreds. They are a small group in comparison to the tens of thousands in the rest of the university, who may not share those feelings. That is one of the things that I would like to see us discuss. Incidentally, it is one of the things that President Clinton challenged us to discuss and consider during his first election campaign. Unfortunately, that spirit seems not to have grown in recent years. I'd like to see it revived. I don't have any magic remedies. We can't force universal service. The people who are serving, who dedicated themselves to military service or AmeriCorps, are a very small and selective group, but their spirit is inspiring, That's the spirit that we need to try to restore in larger numbers of people. I don't know how to do it, but I hope, together, we can think of a way.