Thank you very much, Bob. I really appreciate that very kind introduction.
And I want to thank you for the invitation to be here and to hopefully give you one of my last speeches as secretary of defense and have a chance to be able to share some thoughts with all of you about the challenges that we're confronting today -- challenges relating to security, but, more importantly, the challenges related to leadership.
It's appropriate that I do this at Georgetown. As the product of Jesuit education, as a Catholic and as a beneficiary, over the years, of your outstanding faculty and staff and your important policy contributions that this university has made in a number of areas that affect people of this country, I'm truly honored to have this opportunity today.
I have had a deep and abiding respect for Georgetown throughout the almost 40 to 50 years that I've been involved in public service. And I have a deep respect for the generation of leaders that have gone forward from this campus to serve our nation.
I just had the opportunity to meet with your cadets, some of the cadets in the ROTC program. As someone who went through the ROTC program at Santa Clara University, and then ultimately served two years in the Army, I can tell you that I have tremendous admiration for those that have made the decision to serve this country in uniform.
Now, the talents of these men and women and innovative programs like Georgetown's new Institute of Women, Peace, and Security underscore, for me, the university's leadership in the study of global security. All of this counts, in terms of helping our country be more secure.
Throughout my career, I've had the opportunity to work closely, obviously, with a number of the university's most distinguished alumni, in particular, President Clinton. And he and I, during the time I was both OMB Director and then as his chief of staff, would spend many hours of conversation talking about his experience as a Southern Baptist getting a Catholic education. He talked about it a lot.
And, also, during my time, obviously, in the Obama administration, I greatly benefited from many of the Georgetown graduates. I had the honor to have someone as my chief of staff, Jeremy Bash, who graduated here from Georgetown, served as my chief of staff at the CIA and followed me to the Pentagon as my chief of staff. And also, someone whose head of public affairs at the Pentagon, George Little, who is also someone who both graduated and later taught here at Georgetown.
These are talented, young individuals who have been at my side every day for the last four years, at both the CIA and the Pentagon, and I am deeply grateful for their work on behalf of me and on behalf of the nation. And I'm deeply grateful to Georgetown for training such extraordinary public servants. And, speaking of extraordinary public servants, I think many in this audience know that there's a Georgetown professor that the president has nominated to serve as the next secretary of defense, Chuck Hagel. And I am confident, and I've expressed that confidence publicly, that the men and women of the Department of Defense will have the kind of advocate that they need as the nation emerges from more than a decade of war.
And lastly, I'm honored to be here, as I said, as a Catholic, and a proud graduate of another Jesuit institution, Santa Clara University. My time in the university's undergraduate law school, in many ways, shaped the rest of my life, as this education will shape the rest of your lives. I remain deeply thankful to the Jesuits for the outstanding education that I received. Having gone through seven years of philosophy and syllogisms and theology and canon law, I have been blessed by all the grace and skepticism that Jesuits can give. More importantly, I've been shaped by, what I believe is their pragmatic approach, to life and to faith and to the issues in general.
It was that education and my Catholic upbringing, particularly as the son of Italian immigrants, that instilled in me the very core principles and values that I carry with me to this day: my faith, my belief in hard work, my belief that you have to give something back to this country, that's what a democracy is all about, my belief in knowing the difference between right and wrong. I can't tell you how important that education was to giving me that sense of conscience that is so important, particularly in public service.
I can remember working for Senator Kuchel and going there, first time, as a legislative assistant and meeting with the United States senator, which was a pretty awesome experience.
And he said to us at that time we were two legislative assistants in those days, one covering domestic affairs and one covering foreign affairs. I mean, today, these guys have 24 or 30 assistants that cover all kinds of things.
But there were just two of us. And the senator said, "I want you to know that you're going to be subject to a lot of temptation in your jobs. There will be people that will try to get to me through you. But our purpose here is to serve the American people.
"And I want you to remember one thing: In the morning, you have to get up and you have to look at yourself in the mirror." I have never forgotten that, because in the end, it is about integrity, being honest with yourself and being honest with others. And it also helped develop my belief that you have to be willing to fight for what you believe in.
More than half a century ago, a young Catholic president said, "Ask not what your country can do for you, but what you can do for your country." And when he said that and I heard him say that, it inspired me to follow those values and to commit my life to public service.
And now some 50 years after graduating from Santa Clara, entering the United States Army as a young lieutenant, this chapter of my career in government is coming to a close. And it's time for me to return to California -- my home in California, in Monterey, to my wife, Sylvia, my three sons, our six grandchildren, and to the Panetta Institute for Public Policy, which is an institute that my wife and I established whose mission is to try to prepare the next generation for a life in public service.
We were concerned when we returned after my stint in the first four years of the Clinton administration, going back to California, my sense was that the students that I saw, the students that I was talking to and taught, my sense was that they didn't really appreciate the importance of public service and that they were looking at other areas to be able to explore in their career. And it was for that reason that Sylvia and I thought it was really important to do something to try to let young people know how important it is to give something back to this country.
It is that generation, your generation, that I'd like to try to address in my remarks today. As I leave government, I really believe that we are at a critical crossroads in the life of this nation. We're emerging from a deep economic recession. We're emerging from major wars that occurred in the post-9/11 era. And the hope is that we can bring those wars to an end. We are facing as a nation new opportunities and new possibilities. I really believe that in many ways we have an opportunity to enter a whole new renaissance in the United States, to develop an economy that is creative, that is innovative, that can grow strong in the 21st century, a country that can provide world leadership, can provide the kind of security, partnership in which we can work with other countries to develop their capabilities, to form new alliances, to form new partnerships with countries across the world, so that we can build a family of nations that can help provide security in a difficult world.
But at the same time that we have those opportunities, we face some very real challenges, grappling with a record debt and deficits, threat of global warming, threat of global poverty, of pandemics, of national security challenges like continuing war on terrorism, the instability of Iran and North Korea, rising powers, turmoil across the Middle East, turmoil in north Africa, the proliferation of weapons of mass destruction, and the growing threat of cyberattacks.
How we confront these problems, how we deal with these challenges will, in many ways, determine that future course of America. It will determine whether the United States will be a leader in the 21st century, or whether we will be just another failed empire in history. To succeed, we will depend on the resilience of our economy, the strength of our diplomatic and military institutions, and above all, the effectiveness of our political system that underpins, in many ways, everything we do as a country.
And that brings me to what I see as, perhaps, the most urgent task facing this nation and facing all of us, and that is overcoming the partisan dysfunction in Congress that poses a threat to our quality of life, to our national security, to our economy, to our ability to address the problems that confront this country.
When I think of the current political environment, I cannot help but share a story that another Jesuit-educated member of Congress, and a fellow Italian that I had the honor to serve with, a guy named Silvio Conte from Massachusetts told during the time we were involved in budget negotiations.
This was during the Reagan administration. It was one of the first budget summits. Republicans, Democrats came together with the leadership of the administration -- Reagan administration. We sat in a room in the Capitol, working day-in, day- out. Everything was on the table. We had defense at the table. We had discretionary spending on the table. We had entitlements on the table, and we had revenues on the table, everything. And we were working through it, trying to develop a package. Leadership made very clear that we had to get this done. Every time we thought we were close, somebody would stand up, walk out of the room, didn't like what was happening, and it got tough.
And at one meeting where somebody just got up -- we thought we were close to getting a deal. It was a Senator from Florida, got up, said, "I can't -- I can't -- I can't support this," and he stormed out of the room.
And Silvio said, "You know, this reminds me of the story of the three missionaries: the French, the British, and the Italian missionaries who were in a very remote part of the world. And they were going down this very remote wilderness, you know -- river in their canoe, and the canoe suddenly tipped over. And they managed to make it to shore, only to fall into the hands of a cannibal tribe. And the chief of the tribe looked at them and said, "Look, you got a choice here. You can either jump in this pot of boiling water, or you can take your own lives. Either way, we're going to use your skins for our canoes.' The French missionary, on hearing that, pulled out his little knife, cut his wrist, and said, 'Vive le France!' The British missionary took out his knife, plunged it into his chest, and said, 'God save the king.' The Italian took out his stiletto and started punching himself in the stomach and chest area. And the chief said, 'What the hell are you doing?' The Italian said, 'I'm trying to screw up your canoe.'"
Only an Italian is supposed to tell that story. But these days, the fact is there are a lot of people trying to screw up the canoe.
I used to say to the students at the Panetta Institute, and I still say it when I get a chance, and I say it to you, that we govern in our democracy either through leadership or through crisis. If leadership is there, and there are those that are elected who are willing to take the risks associated with leadership, to make the tough decisions that have to be made, then hopefully crisis can be avoided. But if leadership is not there, if it's absent for whatever reason, then make no mistake about it, crisis drives policy in this country.
Today, crisis drives policy. It has become too politically convenient to simply allow a crisis to develop and get worse and then react to the crisis. I mean, I understand, look, as somebody who was in politics as a representative for 16 years, I understand the mentality. Why do I have to make tough decisions that anger my constituents -- raise their taxes, cut their entitlements? Why do I have to do those decisions when I can simply stand back and allow crisis to occur?
And then in the midst of crisis, terrible crisis, then I can look at my constituents and say, "Well, I had a hell of a crisis I had to deal with, so that's why I had to make these decisions." It's the easy way out.
And I understand that it's one way to govern -- by crisis. But make no mistake about it, there is a price to be paid. And the price to be paid is that you lose the trust of the American people. You create an aura of constant uncertainty that pervades every issue and gradually undermines the very credibility of this nation to be able to govern itself.
My greatest concern today is that we are putting our national security at risk by lurching from budget crisis to budget crisis to budget crisis. When I was nominated to be the 23rd secretary of defense, based on my own experience dealing with budget issues as chairman of the House Budget Committee. I was director of the Office of Management and Budget. I knew very well the Department of Defense had a responsibility to be able to do its part in dealing with the fiscal crisis in this country.
Every budget summit that I had been a part of in the Reagan years, in the first Bush years, during the Clinton administration -- every budget summit, we knew that defense had to play a role in trying to be able to control our deficits. Soon after I became secretary, I was handed a number of $487 billion, almost a half-trillion dollars, that I was to cut out of the defense budget. It was contained in the Budget Control Act, and I was required to be able to get that number of savings over the next 10 years.
After a decade of blank-check spending in the Department of Defense it was important of us, the leaders of the department, the chairman of the Joint Chiefs, the service chiefs, the service secretaries and myself, who strongly believe that we had to meet this challenge of reducing the defense budget. But we have to do it in a way that did not simply hollow out the force.
We've come out of every other period, every other war, we made a terrible mistake of hollowing out the force. Coming out of World War II, coming out of Korea, coming out Vietnam, coming out of the Cold War the attitude was cut out defense. And so it was cut across the board. And it hollowed out the force, made us weaker. So we said, we cannot repeat that mistake.
And the best way to do that is to then establish a strategy. What is the defense strategy we want in order to create the force that we need? Not just today, but in the future, the force of the 21st century. And how do we do this in a way that also meets our commitments to our servicemembers and to our families, so we don't break trust with them?
So our effort then was aimed at developing a defense strategy for what we needed in the 21st century. And during the course of my first six months as secretary, we worked together as a team. I had everybody in the room, something that, you know, was not exactly that prevalent in the past. Military over here, civilians over here, and not that often did they come together to really work to resolve policy. And my approach was, I have to be able to work as a team if we are going to be able to take on this challenge.
And to their credit, they did that, both military and civilian leaders. And we consulted with the president, we consulted with the national security team at the White House as we went through this. And everybody endorsed policy and strategy that we came up with. It has five key elements.
The first is that we know we're going to be smaller and leaner coming out of these wars. We are going to be smaller and leaner as a force. But we can be, as a force, agile, flexible, quickly deployable, and at the cutting edge of technology. That can be an effective force for the future. Yet we can be smaller. But agility, flexibility, the ability to move fast when crisis happens, that's what distinguishes the United States' defense policy.
Secondly, it was important for us to project power into the Pacific, and into the Middle East. Those are the key areas where we have some serious problems. North Korea, Iran, we need to have a power presence in those areas, because that's where the greatest potential for conflict was.
Third, we need to maintain a presence elsewhere in the world. And so what was developed was the idea, an innovative idea of rotational deployments where we would send our forces into countries, Latin America, Africa, Europe, other places, to train, to exercise, to work with that country, to develop their capabilities, to develop new partnerships, new alliances, so that they can become part of this security force for the future.
Fourthly, we have to maintain more than one enemy at a time. If we're in a war in North Korea, and at the same time the Strait of Hormuz are closed, we have to be able to respond to both of those conflicts. To be able to confront an enemy and ultimately defeat an enemy on both fronts. When we have that capability, maintaining that capability was important.
And lastly, this can't be about cutting. It has to be about investing. Every time we've gone through budgets -- used to do this in the Clinton administration, yes, you -- you cut -- find savings, but at the same time, you establish priorities. Budgets are not just numbers. Budgets are about priorities. And so what are our priorities that we have to invest in for the future?
So we made the decision we have to invest in things like cyber, in unmanned systems, in special operations, in space, all of which will help us be on the cutting edge of the future. Invest in new technologies. Invest in the ability to mobilize quickly. Invest in the ability to maintain, as I said, that decisive technological edge in the future and maintain our industrial base in this country -- our defense industrial base.
The last damn thing we need if we face a crisis is to somehow contract out that responsibility to another country. So we have to maintain the core industrial base that we need. The skills that are essential to our ability to maintain a strong national defense.
So that strategy established priorities. It reshaped the force to deal with the challenges not just today, but of tomorrow.
Let me just mention one area where I believe we need to be ahead of the game, and that's in the cyber area.
As I said, we face a number of threats: North Korea, Iran, terrorism, et cetera.
One of the great threats we face today is the threat from cyberattacks. We have got to have the capability to stay ahead of this new challenge in the face of what I believe is a growing threat to our economy and a growing threat to our critical infrastructure.
We are literally the target of thousands of cyberattacks every day thousands of cyberattacks that are striking at the private sector, strike at Silicon Valley, strike at other institutions within our society, strike at government, strike at the Defense Department and our intelligence agencies.
And cyber is now at a point where the technology is there to cripple a country, to take down our power grid system, to take down our government system, take down our financial system and literally paralyze the country.
That is the reality. And so, for that reason it is extremely important that we do everything possible to develop the technical capabilities to operate effectively in cyberspace.
Over the last two years, we've done that. We've invested a great deal. And we will do that in the future. We're going to invest more in cyber, to try to give us the capability to be able to protect our critical infrastructure against the kind of imminent and destructive cyberattacks that I just talked about.
But to do that, frankly, we're going to need legislation. We've asked for legislation from the Congress to try to give us the tools we need -- the legal tools we need so that we can develop a partnership with the private sector to be able to confront these challenges.
And I hope that ultimately Congress will take that step. That's an important step to trying to be able to defend this country from those nations that would use a cyberattack to weaken us.
With the defense strategy that we established put in place, our hope is that we can deal with a wide range of threats, and do it in a way that meets our fiscal responsibilities.
I don't think you have to choose between protecting our national security and protecting our fiscal security as well.
But this strategy and our ability to effectively confront the security challenges that I talked about is at a very serious risk, not because of our capabilities, not because of what we can do, not because of the strength of the United States. We are the strongest military power in the world.
That's not what creates a serious risk. What creates a serious risk today is the pervasive budget uncertainty that threatens our security and threatens our economic future.
Since the Budget Control Act was passed in August 2011, Department of Defense, other agencies in the government have been living under this serious cloud, this shadow. The shadow of sequestration. This legislative madness that was designed to be so bad, so bad that no one in their right mind would let it happen.
For those of you that have ever seen Blazing Saddles, it is the scene of the sheriff putting the gun to his head in order to try to establish law and order. That's sequestration. For more than a year and a half, the Joint Chiefs of Staff and I have been extremely vocal about our deep concerns about taking another half-trillion dollars out of the defense budget in an across-the-board fashion that fits every area, and that guarantees that we hollow out the military. Across the board cuts that would deeply damage our national security.
Today we approach another trigger for sequestration, March 1. And the Department of Defense is again facing what I believe and what the service chiefs believe and what the chairman of the Joint Chiefs of Staff believe is the most serious readiness crisis that this country is going to confront in over a decade. President Obama, obviously many leaders in Congress, share our concerns. There isn't anybody I've talked to on Capitol Hill that doesn't think this is crazy. No one that I've talked to doesn't think that this a dangerous tool to impact the country.
The president, as you know, has been pushing hard to get a big deal established that would control the deficit problem. He's proposed a comprehensive plan. If you do a comprehensive plan, if Congress does a comprehensive plan, it would de-trigger sequester. That was the whole point of establishing the sequester.
Let me also remind you -- I talk about security -- let me also remind you that sequester does serious damage to the non-defense side of the budget as well. It's not just defense, it's education, loss of teachers, it's child care. I think the estimate is that some 100,000 children will be kicked out of Head Start. It's about health care, 700,000 women and children will no longer receive nutritional assistance. It's about food safety, it's about law enforcement, it's about airport safety. It's about a number of other programs that support our quality of life in this country. And our quality of life is important to our national security. All of this would be the consequence of an arbitrary legislative mechanism so onerous, so onerous that it was designed not to take effect, but to force the right kind of action.
The president yesterday issued a stark warning about the consequence of sequester of these deep and indiscriminate cuts, and urged Congress to at least half a smaller package of savings and tax reform that could delay sequester. I strongly support those efforts. We cannot allow this to happen. But it is difficult to believe, frankly, that Congress would simply stand aside, stand aside, failed to make the decisions necessary to resolve this crisis, and allow the defense, economy, and quality of life of America to be irreparably damaged.
But time and time again, we have postponed action and instead have fallen into a pattern of constant partisanship and grid lock and recrimination. And not only have they failed to come together around a big plan to reduce the deficit, they've also failed in their basic responsibility to pass appropriations bills, how we fund the government each year. We are operating on a C.R. today -- continuing resolution -- on appropriation because they failed to pass appropriations bills.
You know when the last time is that the Congress passed all of the appropriations bills in time? 1994. 1994. That is a basic responsibility to be able to fund the government.
My fear is that there is a dangerous and callous attitude that is developing among some Republicans and some Democrats, that these dangerous cuts can be allowed to take place in order to blame the other party for the consequences. This is a kind of "so what?" attitude that says, "Let's see how bad it can get in order to have the other party blink."
I've seen that attitude before. It was the same attitude that led to a government shut-down in 1995, same attitude. "Let it happen. The other side will blink, even though it's going to hurt people, even if -- even if it's going to hurt our citizens, even if it's going to hurt our security. This is a good way to make the other side blink."
And, when they did it in 1995, it badly hurt the American people. And it created a political backlash that damaged those who were blamed for that crisis. Same damn thing is going to happen again if they allow this to occur. Those that do not learn the lessons of history are bound to repeat the mistakes that were made. And we are about to see that happen again.
If Congress doesn't act, and the Department is forced to operate, as we will be, under a year-long sequestration and a year-long continuing resolution, let me tell you what will happen. We will have to abruptly absorb in a period of about six months -- remember, we're in the fiscal year, started October 1st, we've got about six, seven months left in the fiscal year. If sequester goes into effect, we'll then have to absorb those cuts in that latter part of the year. We'll have to absorb $46 billion in sequester reductions. And we'll be facing a $35 billion shortfall in operating funds for our active forces.
That's a reality. That is a reality. Make no mistake, if these cuts happen, there will be a serious disruption in defense programs and a sharp decline in our military readiness. We have already begun an all-out effort to plan for how to operate under such a scenario. But it's all -- also very clear that there are no good options.
Department and each military service are moving ahead with near- term actions. We have got to reduce the spend rate that we're in now. Because we assume, silly us, that we would get a 2013 appropriation, what we requested. And so we're operating on this hope that 2013 appropriations bill will be passed. It hasn't been passed. So we're spending according to that.
And now, if we're spending at this rate and we suddenly have to hit reductions, we're going to have to be able to take those deductions where? We've got to protect the war-fighters in Afghanistan. We've got to protect our force projection in the Middle East. There's only one place that comes out of, and it's readiness. And that's what will happen.
We've already implemented, tried to slow down the spend rate. We've implemented hiring freezes. We've curtailed facilities maintenance. We're laying off temporary and term employees. We're looking at putting 46,000 jobs at risk.
But we're also being forced to contemplate what will happen if the sequester goes into effect. That's just happening based on the fear of what we may face. If sequester happens, let me tell you some of the results:
We will furlough as many as 800,000 DOD civilians around the country for up to 22 days. They could face a 20 percent cut in their salary.
You don't think that's going to impact on our economy? You don't think that's going to impact on jobs? You don't think that's going to impact on our ability to recover from the recession?
We're going to cut back on Army training and maintenance, putting about two-thirds of our active brigade combat teams outside Afghanistan at a reduced readiness level. We've got to cut back on their training. We're going to have to cut back on the ability to support the troops who are not in the war zone. So what happens is we put more stress on those who are in the war zone.
We're going to have to shrink our global naval operations with a reduction of as much as one-third in our western Pacific naval operations. This whole idea about trying to rebalance will be impacted.
We'll cut the Air Force flying hours and weapons system maintenance, putting flying units below acceptable readiness standards by the end of the fiscal year.
This is not a game. This is reality. These steps would seriously damage the fragile American economy, and they would degrade our ability to respond to crisis precisely at a time of rising instability across the globe -- North Africa to the straits of Hormuz, from Syria to North Korea. We would have no choice but to implement these kinds of measures if Congress fails to carry out its basic responsibility to the American people.
This is no way to govern the United States of America.
This budgetary crisis creates uncertainty. It creates doubt and most importantly from my point of view, it undermines the men and women in uniform who are willing to put their lives on the line in order to protect this country. It puts at risk our fundamental mission of protecting the American people. And worst of all, as I said, it is a self-made crisis.
A basic fact of life is that the Department of Defense can't do its job without the partnership of the Congress. We cannot do it without Republicans and Democrats who are willing to work with us to protect our national security. In a world of responsible politics, members of Congress elected by the American people should never take a step that would badly damage our national defense and undermine our support for our men and women in uniform. And yet today, we are on the brink of seeing that happen.
And even if Congress acts again temporarily to prevent the effects of this crisis, and hopefully they will do that, but I have to tell you, if they only kick the can down the road, it continues the long shadow of doubt about whether the fundamental problems we face can really be resolved. That is a high price -- a very high price that could be paid as a result of governing by crisis.
And as I said, the ultimate result of that is to lose the trust of the American people. This is not just a bad joke. This is not just a bad joke. And it isn't a bad joke that Congress now has the lowest ratings it's had in recent history.
So, what I would like to urge is that the leaders of Congress do what's right for this country.
I know the political system now is immersed in sound bites. They're immersed in money. They're trying to raise money for elections.
I mean I looked at one example in a recent article where a campaign group was talking to new members of Congress. And they suggested that for a typical member four to five hours of their day should be spent calling prospective donors, with only three to four hours spent conducting the business of the people. With so little time, it's no wonder that members of Congress don't get to know each other, don't develop trust in each other and, as a result, don't work together.
As I said, I've spent most of my life in Washington. I'm not naive about the messy realities of governing in our democracy. I've been there.
It's become somewhat of a cliché for members of Congress, like myself, to kind of harken back to the good old days, where there was bipartisanship and consensus.
Make no mistake, governing has never been easy. From the budget battles in the Reagan administration to the government shutdown, I have witnessed divisions and partisanship and gridlock. They are the enduring features of a political system, but they can also be a crutch for leaders to use to avoid their responsibilities.
I'm proud to say that during the time I served in the Congress, I did witness a lot of what Congress did at its best. Despite the partisan differences, there was a bipartisan group in leaders in the Congress: Tip O'Neill, Bob Michel, Howard Baker, Bob Dole, George Mitchell, Pat Moynihan, Tom Foley and so many others -- who worked at that time with a Republican administration to enact bold budget compromises.
We sat together in budget meetings. We put everything on the table. And we ultimately found compromise. It is that spirit of leadership and cooperation that ultimately led to a balanced budget and a surplus.
Ultimately, we all have a responsibility to hold our elected leaders accountable and to fight for the kind of country that we want to have.
We must never forget that our democracy has survived because it was born in the crucible of public service. The preamble of the Constitution says "We, the people," not "We, the government," not "We, the Republican Party," not "We, the Democratic Party, but "We, the people of the United States in order to establish a more perfect union, in order to establish justice and domestic tranquility and common defense and promote the general welfare and secure the blessings of liberty do ordain and establish the Constitution of the United States." "We, the people."
No matter what I've done in my career or where I've gone in life, I've always remember that I had the opportunity to live the American dream.
The son of Italian immigrants, the ability, like millions of others, to have the opportunity to be able to succeed at what you wanted to do, and who had parents who like millions of others came to this country no skills, no education, no money in their pocket, but the hope of capturing that American dream.
And I asked my father why he did it, why would you travel all those miles to come to a strange country, my father said that it was because my mother and he believed that they could give their children a better life.
And I think that is the American dream and it continues to be the fundamental bond that we all share as Americans.
We will make whatever sacrifice is necessary to give our children a better life, a quality education and a more secure future.
There's one thing I've learned in life, it's that this future is not guaranteed. You've got to work for it, and you have to fight for it.
I will end with a story that I've told many times, because it makes the right point, of the rabbi and the priest who decided they would get to know each other a little better. So one evening they went to a boxing match. They thought if they went to events together, talked to each other, they would learn about each other's religion.
So at the boxing match, just before the bell rang, one of the boxers made the sign of the cross. And the rabbi nudged the priest and said, "What does that mean? The priest said, "It doesn't mean a damn thing if you can't fight."
We bless ourselves with the hope that everything's going to be okay in this country. But very frankly, it won't mean a thing unless you're willing to fight for it. So my message to you, the students in this audience, is that doesn't mean a thing if you are not willing to fight for the American dream. The dream that my parents had. The dream of giving our children a better life. The dream of maintaining a government of, by, and for people. That torch of duty is now passing to a new generation, and with it passes the responsibility to never stop fighting for that better future.
Thank you, very much.
God bless you. And God bless the United States of America.
Okay, I'll take a few questions.
Q: Thank you, Secretary Panetta, for coming to Georgetown University and talking to us.
My name is (inaudible). I'm in the security studies program here in the School of Foreign Service at Georgetown. And I'm taking a class on U.S. defense budgeting, so at Georgetown we do care about these issues, and we share your concerns as well.
In -- in the defense budget -- budget of 2013, I understand that 19 percent of the budget is being represented for personnel account and about 26 percent is for procurement, and 40 percent is for O&M account, for operations and maintenance, which if you look at all the different accounts for which the budget is requested, if there any sequestration or cut, automatic cut across the board will affect seriously the manpower, the modernization, and also the readiness of the military.
I've reviewed a lot of documents -- the defense budget documents for many years in the past, and I don't see a way how we can cut the defense budget or how -- I don't see a way how the sequestration will occur and not affect these three crucial defense-related areas.
And now knowing that only around 4 percent of the -- of -- of national -- of the GDP is being constituted by the base budget -- defense budget and a bulk of the, you know, GDP's being...
SEC. PANETTA: We agree on the facts. What's your question?
Q: Okay, right. So now I -- I -- this is a puzzle for me. Like, how can you do something to -- I guess my question is like -- this is really a puzzle. How can you cut -- how can you balance the budget...
SEC. PANETTA: Make this work?
Q: How can you balance the budget without either cutting the defense budget or the mandatory account -- cutting from the mandatory account, from Medicare -- like Medicaid...
SEC. PANETTA: No, I got it. I got it. I got it. Look -- there's -- look, understand that the federal budget has certain parameters. And that if you're serious about trying to reduce the deficit -- serious about trying to reduce the deficit, which now is, you know, almost a trillion dollars plus, and try to reduce the national debt, that there is no way you can do that without putting everything on the table. You've got to put everything on the table.
Now, you know, obviously, you know, as you do that, you're going to establish some priorities, but you have got to find savings. You know, the entitlement programs right now represent almost two-thirds of the federal budget. About a third is discretionary spending. There's no way you can move towards a balanced budget and not put all of that on the table.
And -- and we, you know -- every budget summit that I've been a part of -- as I said in the Reagan administration; in the Bush administration we spent two months out at Andrews Air Force base walking through this; in the Clinton administration, putting together that budget. We had to achieve savings in the entitlement area. We had to raise additional revenues. And we had to take reductions on discretionary spending. We established a cap on discretionary spending.
All of that has to be part of the package. All of that has to be included if you want to be able to put together a budget deal that will solve this problem.
Look, we went through this before. This is not new. Republicans don't want to raise taxes, don't want to cut defense. Democrats don't want to cut entitlement programs or discretionary spending. Politically, that's where both parties are. But to get a deal, both have to make compromises, both have to be willing to give in order to put that large deal together.
In that past, that's what's happened. Republicans were willing to compromise, Democrats were willing to compromise, and the result was we ultimately balanced the federal budget. We did what we had to do. And, dammit, that's what -- that's what has to be done now. That's what has to be done now.
So, you know, look, defense has to play its role. As I said, it's part of the budget. It's part of discretionary spending. But to put the package together that you have to have in order to ultimately resolve our deficit issue, all of those areas have to be included in a deal.
SEC. PANETTA: Next question.
Q: Good morning, Secretary Panetta.
SEC. PANETTA: Good morning.
Q: My name is (inaudible). I'm a freshman here in the School of Foreign Service.
SEC. PANETTA: Great.
Q: So my question is concerning cyberattacks. You mentioned that cyberattacks currently pose an extensive threat to U.S. critical infrastructure, the public sector and the private sector. Do you envision that cyber warfare, such as Operation Olympic Games and the use of the Stuxnet virus, will be a viable and important part of future U.S. defense policy?
SEC. PANETTA: I think that -- I mean, cyber technology -- and, you know, all of you are so -- so aware of this. The developments that have taken place in the cyber arena have been incredible over these last 10 years. I mean, you know, I -- I'm a guy who worked with a typewriter, for Christ's sakes.
And, you know, what I -- what I'm seeing today in terms of what the developments on -- on cyber has -- you know, has been incredible.
And then, you know, I -- I have -- I have to say, working at the CIA, working at the -- at the Defense Department and seeing the kind of cutting-edge technology that is being developed, there -- there is no question in my mind that part and parcel of any attack on this country in the future by any enemy is going to include a cyberelement to it; that that's going to be part of the weapon that will be used to cripple us in the event of -- of an attack.
I -- and -- and I have to say the United States, as part of our strategy, looking at how we will go after an enemy, we -- we consider the importance of cyber and the cyber element as part of that.
So, yes, we are living in that world. I mean, I -- I have said this and I believe it, that it is very possible the next Pearl Harbor could be a cyberattack; that you could, in fact, cripple our, as I said, our power grid system, our government systems, our financial systems with a cyberattack, and it would have one hell of an impact on the United States of America. That is something we have to worry about and protect against.
Q: Thank you very much.
Q: Good morning, Mr. Secretary.
SEC. PANETTA: Good morning.
Q: I'm an international student from Japan.
And, as you mentioned, a lot of international threats, I would like to ask you opinion on the island dispute between China and Japan. Recently the Japanese government have revealed that the Chinese vessel had lots of weapon targeting radar on Japanese navy. And I want to hear your opinion how serious the issue is and what kind of position the United States is willing to take.
SEC. PANETTA: Well, we've -- I just was in that part of the world within the last few months and had the chance to go to Japan and visit with my -- my counterparts in Japan and discuss their concerns, and then went on to China to talk with them about the concerns as well.
I mean, I -- I -- I believe that, I mean, especially the Senkaku Islands and the dispute over that, that territorial dispute is one that concerns us a great deal. Because it's -- it's the kind of situation where there are territorial claims that could ultimately get out of hand and, you know, one -- one country or the other could react in a way that could create an even greater crisis.
And so we urged, obviously, both the Japanese and Chinese to exercise good judgment here and to try to work with each other to try to resolve these issues peacefully.
We are, you know, in -- in the Pacific. This is a big region. And part of our reason to rebalance to the Pacific is because we think that in many ways our -- our future economic security, our trade relationships, our security relationships are going to be critical in that part of the world. And we have great allies in Japan and South Korea, other countries that are working with us to deal with the challenges.
There are a set of common challenges here -- and I said this to the Chinese leaders as well. We've got a set of common challenges here. One is our ability to respond to disasters in that part of the world -- the ability of these countries to be able to react when a disaster takes place. The ability to deal with the threat of missile proliferation, particularly in North Korea, and the threat that that represents to the security of that region. The ability to deal with piracy; the ability to deal with cyber issues; the ability to deal with the kind of economic issues that all of us have to be a part of to -- in order to provide security; the ability to deal with territorial disputes.
That's why I thought the ASEAN nations are a really critical new kind of alliance that we ought to continue to support and encourage to address those issues.
But to the Chinese, I basically said, "It is in your interest -- it is in your interest to work with other countries to resolve these issues. Because if your interest is in a -- in a Pacific region that can be peaceful and that can prosper in the future, you have to be part of that."
It cannot be a China that threatens other countries. It cannot be a China that threatens, you know, to -- to go after their territories and create territorial disputes. They have to be part of the family of nations in that region, working together in order to ensure peace and prosperity.
I -- you know, I sense in the new leadership in China that they recognize the importance of -- of trying to develop that kind of communication. I urged them to -- to -- that we should discuss cyber issues. I urged them that we ought to discuss missile defense issues. And -- and they indicated that they were willing to engage in those kinds of strategic talks.
But I think it is going to be very important for them to know that the United States, Japan, Korea and other countries in that part of the world are going to do everything we have to do to promote security and prosperity, and that they should be a part of that, not against it.
Q: Good morning, Mr. Secretary. First of all, I want to thank you for your lifetime of service and leadership.
SEC. PANETTA: Thank you.
Q: My name is -- (inaudible). I'm second year in the master of science for foreign service and in a master of public policy. I'm also an Army veteran and currently a member of the Maryland Air National Guard.
SEC. PANETTA: Good for you.
Q: You addressed the political crisis and the economic crisis in this country. And in your speech, you also talked about "We the people." I would like to bring light to a social crisis currently. There's, on average, members of the military commits suicide at a rate of 22 deaths per day, which is about one -- one death every 65 minutes.
I would like to know what can the Department of Defense and our lawmakers do to effectively -- effectively address that crisis, that social problem. And also say something about homelessness among veterans.
SEC. PANETTA: Yeah. It is -- it is one of the most tragic issues that we deal with right now in the military is the -- is the growing rate of suicides that are taking place. And in some ways it reflects the growth of suicide in the general society. You know, part of this -- there is no question in my mind that part of this is related to the stress of war over the last 10 years, the fact that we have deployed people time and time and time again; time away from their family, time away from the ability to kind of -- to get their feet back on the ground to be able to reboot themselves into society. So -- so a lot of that, I think, is -- is due to that stress.
A lot of it is due to, as we've determined, stress in the general society: financial problems, family problems, drinking problems, drug problems. All of that contributes to the growing rate of suicide.
I think there also is kind of a, you know -- I guess I say this in part as a Catholic, but the fact is that people somehow don't associate with suicides as being the wrong way -- the wrong way to deal with the problem. I mean, that was something I was raised to believe, that you -- you just don't do that. You have to confront what -- what -- the challenges you have to confront. But today there seems to be an attitude that, you know, suicides are way out. And they aren't. They aren't.
So our -- our challenge here is how do we -- how do we try to deal with that. And what we need to do -- I mean, we're doing this, but we need to do more -- is we've got to build a support system for those in the service. We've got to build greater capabilities in dealing with mental health care issues so that we understand that. We've got to have better professionals who can identify those problems and provide assistance.
Frankly, we also need to educate the force. You've got to have peers who are working alongside of you who can identify those problems; someone that looks like -- you know, that they've got problems, that they're having a difficult time, to identify that and make sure that that person gets the help that they need.
You know, it's -- it's like everything else. You know, all of us need to be aware of it. All -- all of us need to be part of the answer to be able to make sure that doesn't happen. But this -- this is something that, you know, we're -- there is no silver bullet. There's no silver bullet here. I wish there was.
It means that we have to operate on every front to deal with this. We've got to be able to make sure that we deploy people in a rational basis so that they're deployed into, you know, a combat area, but then they have period of time when they can -- they can get their lives back together again and do it rationally. That has to be done.
We've got to provide the support system. We've got to provide health care system. We've got to be able to educate the force to understand and to recognize those kinds of problems. All of that needs to be done if we're going to address this.
Most importantly -- most importantly, I think we just have to convey a message to those men and women in uniform that we treasure -- we treasure those who are willing to put their life on the line. We are not going to take them for granted. That's a message we have to get them.
Q: Thank you, Mr. Secretary.
SEC. PANETTA: Okay, is that it?
All right, thank you all very much. Appreciate it.