>> yes, you look surprised. >> so thanks, louie. so right now, we can take a little bit of a break. again, the coast guard commandante is scheduled to be around 10:30 and a little bit more than a break, but maybe he will show up early, we still have some breakfast goodies over here, and coffee.

all right, everybody. we've ironed out a few technical difficulties. thanks for your patience. again my name is john donnelly i'm president with reporters and editors and an editor with cq roll call and if you're tweeting it is #mre 2013. to introduce our new speaker is the person who led the charge to -- #mre 2018. and now to introduce our next speaker is the person who led the charge to getting him here, and that's hope hodge secs, the vice president of mre. hope? >> thanks very much. well, it is my very great pleasure to introduce our next speaker, admiral karl shultz. he is new at his post as of june 1, as the commandante of the coast guard, so this is one of relatively few public engagements in front of the media and hopefully it will be the first of many for mre. i believe that for us defense

reporters inside the beltway, we're sometimes guilty of sort of a cynical mission when it comes to coast guard. they're not in the pentagon, they've got a separate budget, and sometimes i think they can be overlooked in coverage for that reason. but in the last year and a half, the coast guard has commanded attention like never before. the service rescued thousands in last year's hurricanes in texas and the caribbean. set new maritime drug inter diction records in regions including u.s. southern command. and played a pivotal role as an international partner in south and central america. and successfully recently made the case for a much-needed new heavy ice breaker in art tick operations. and admiral shultz has really had a role in all of that. prior to becoming the coast guard's 26th commandante, he served commander as the coast guard's entire atlantic area, where last year, he oversaw all

those hurricane operations, for four different hurricanes. and made time to brief the media, and liaison with the president, who said he was very impressed. he also served as director of the department of homeland security joint task force east. which gave him purview over the southern border as well as the caribbean and central america. there is very little he hasn't actually touched in prior roles. he did a tour as director of governmental and public affairs at coast guard headquarters in dc. and previously served at various times as a liaison to the u.s. house of representatives and the u.s. department of states bureau for international narcotics and law enforcement. so if you're looking for a question that will stump him, good luck with that. without further adieu, i would like to introduce admiral shultz. >> well, good morning.

the technical difficulties was because we are a small service, and we came with paper slides i was supposed to hold up and they weren't technologically sophisticated enough to handle that so he we jumped on board and they're going to embrace for d.o.d. modern technology today. thanks for the privilege to be here today. and it is a privilege to be with our department of defense colleagues and the media that tracks and works in that space a little more closely on a day-to-day basis. so john, to you, and hope, really excited that we are here. thanks for broadening the aperture. i hope this is educational. i think there is a lot of things the united states coast guard does that the average citizen doesn't appreciate. and my intention here is to walk a little bit across that today and maybe heighten your awareness and then really look forward to the question and answer period. we are fortunate to be part of the greatest military that exists in the world, across the globe today, and we attract, this is all the services, i really believe the best and brightest that america has to offer to secure a better nation for the next generation, and it is truly a privilege to serve alongside our d.o.d. brethren. i'm a service chief, i'm not

part of the joint chiefs, but the chairman allows the coast guard to sit with the joint chiefs, because we bring some unique capabilities to the american military might picture. we're a unique set of skill sets and i think really, when you cobble them together, that enables us as a nation to really face all challenges and conflicts. and the coast guard, that is really, you know, what i hope today will shed light on. in fact, other nations try to duplicate us. if you look at coast guards around the world, you will see many. we have white ships with orange and blue diagonal racing stripes and if you look a lot of the world's coast guards they tend to be very similar. they may have a white hull with a blue stripe. but i think that's a form of emulation, sort of the greatest form of flattery and i believe and i state with quite strong conviction that i think we are in fact, the world's best coast guard. that is a high standard to maintain. and we're focused on that each and every day. you know, i think what hope talked about, is really been a little bit of our recent sy with our branding. you heard a lot about the coast

guard and our role as first responders. hurricanes florence which michael, sailed the carolinas recently and then the florida panhandle, really appreciate the media's efforts to highlight the work of the men and women of the coast guard, and our inter-agency partners, federal emergency management agency, the defense support of civil authorities, that d.o.d. brings capability against, but there is a human element to those story, i think the media really did a nice job and continues to do a nice job of shedding light on that. our heroic men and women have been rightfully recognized. in this past year. 2017, atlantic basin hurricane season, i think arguably was one of the most significant or challenging in my adult life here, and potentially in the last century. and it really had a, presented an opportunity for the united states coast guard to shine. we searched thousands of people. ships and aircraft. personnel. deployable specialized force capabilities. and we saved over 13,000 lives in this combined 2017-2018 hurricane response effort here.

it is not just about the rescues, though. we repaired navigational aid, if you walk back to 2016, hurricane matthew, that bounced up the atlantic seaboard, it was pretty devastating, in haiti, and it took about 40 lives in north carolina, so i do not diminish that that was not in fact, a very significant storm, but that storm created hundreds of aton navigation discrepancies along the eastern seaboard. if you want to find out how important those nav gationle aids are to the economy of the nation, the ports, that was about 36 hours in of responding to matthew, when the governors from florida, south carolina, and north carolina, and virginia, were all on the phone wanting to know when the ports were back open. the ports are that critically linked to this nation's economic prosperity. if you look today, there really is an increasing cre shen doe of demand on the united states coast guard and the threats are not regionally or locally containable. competition, hostile nation states and adversaries wish to do us harm.

they don't respect borders. the homeland is now a sanctuary. as my service secretary, honorable pierson nielson recently kirstjen nielsen, the home game and the away game are no longer distinct. they are in fact, one and the same. so this poses complicated obstacles to national security. and the coast guard is absolutely part of that solution. as challenges to our nation's security prosperity and global influence grow and become more complex, the need for a ready, relevant, and responsive coast guard has never been greater. the demand for coast guard services is unprecedented. from the public we serve, from our own department, from federal, state and local partners, and from the geographic combatant commanders spread across the globe. the coast guard, we are in fact the smallest of the five armed services but we're a global force. with unique authority, and capabilities. and while we respond to disasters, while we rescue mariners in distress, we conduct law enforcement, regulate commerce on our waterways, we also operate 24 hours a day, search days a week, 365 days a

year to keep our nation secure. it is those efforts that are so often overlooked. as an armed force, the piece i want to focus is on the global strategic competition is surging. and i think the national strategy, the national defense strategy speaks to it that. adversaries are becoming more sophisticated. the maritime environment is growing increasingly complex. and the coast guard provides unique solutions across that full spectrum of operations. from security cooperation, up to and including armed conflict. the coast guard, like the department of defense, will continue to operate under secretary mattis's paradigm of cooperate where we can, and compete where we must. we ideally compliment and reinforce our nation's unmatched military hard power. we thrive in asserting american values and influence below the threshold of armed conflict. in alignment with our sister services and the department of defense, we deploy globally to influence behaviors, fortify

alliances, and challenge threats far from the united states soil. as the only armed service and department of homeland security, the coast guard is a unique instrument of national security and power at home. and power abroad. we serve globally on all search continents and bridge the gap where homeland security and homeland defense intersect. and that's an important point. the coast guard seamlessly integrates into today's joint force, supporting as i mentioned all six of the geographic combatant commanders on a near daily basis. we provide the combatant commanders with approximately 40% of all of our major cutter time. that our 210 and bigger ship, lay tech equipped ships and 15,000 patrol boat hours as well as an average of two aircrafts supporting the department of defense missions daily. looking to to the future, i expect increased coordination amongst the armed forces. over the past decade, the coast guard's embarked on a transformation program to recapitalize our cutters, our boats, our aircraft and our support systems. we are committed to the recapization of our fleet.

and i will just call out the national security cutters. the fast response cutters. our offshore patrol cutters. we just recently awarded a contract at the end of september to start building out a fleet of 25 offshore patrol cutter. warter cutters and polar cutters. these new assets are two game changers for our service. our modern fleet combined with enhancements to our aviation assets improve realtime communications and our ability to execute our missions. with these inter operable platforms, would seamlessly integrate in today's joint force. these new capabilities coupled with our inherent authority, skill sets, partnerships, make the coast guard a perfect complement to expeditionary strike forces around the globe and we anticipate more out of hemisphere deployments. the bottom line, the coast guard advances our national security. due to nontraditional threats and governmental issues facing many nation, the coast guard truly is a partner of choice for

both judicial navys and for global coast guards. we shape our country es conduct maritime law enforcement and we establish governance within the international order. our cooperative initiatives come in many forms. regional associations. bilateral agreements. security cooperation activities. those are just to name a few. these efforts foster a more secure maritime environment. for instance, we provide the united states southern command, where i had the privilege of serving as a director of operations, at that co-com, protection monitors and response capability in the western hemisphere. we combat transnational crime while building the interdiction response capabilities of western hem partner nations. almost every ship in the southern command's responsibility is in fact, a united states coast guard cutter. we provide a constant presence of five to six ship, some days as many as nine and ten ship, aircraft, law enforcement teams, with specialized forces, predominantly in the pacific ocean but to a lesser degree also in the caribbean basin, the

deep reaches of the caribbean base en is. with these assets would he patrol an area larger than the entire united states and i would sigh an equivalent paradigm would be patrolling the united states with five police cars. that's how vast that region is. and the adversaries are pulling further out, out west the galapagos, and that area of the united states is almost expanding to be the size of the north american continent. in the western hemisphere, south of our border our governments are facing tremendous strain through to drug fueled violence throughout the region and the drugs terrorizes sinds, causing many to flee safer havens and those safer havens are typically here in the united states. search of the ten most dangerous countries in the world, measured by annual homicide rate, and that is a number that looks at how many murders per hundred thousand citizens are at our southern neighbors or spread across our southern neighbor's geography. recently the "washington post" ran an article that discussed the current murder crisis in

latden america. 400 deaths a day. spread across latin america. and the caribbean. noting this violence truly triggers the immigration crisis we're seeing. transnational criminal networks prosper off this instability. in fact, they rival legitimate fortune 500 companies. raking in some $64 billion, 64 billion, annually. as they market their illicit commodities, american families, communities are torn apart, when those drugs arrive on our streets. the nefarious push-back is a threatening rule of law here at home. and the american safety. not only at our back door, but in our living rooms now. a maritime boarder to the south is exploited by these organizations who invoke fear and violence as part of their daily business models. your coast guard, with a push forward strategy, is a sentinel on the front lines of this hems feerk fight, combining these networks needs a four based presence and draws on the unique

global authorities to attack illicit trafficking where it is most vulnerable at sea, both in force. and large quantities of drugs captured at sea reduce the violence when those drugs reach the central american corridor, and advance to the united states. the image behind me is a self-propelled semi submersible submarine that. submarine was carrying 12,000 pounds, six tons of cocaine. these are vessels are hard to detect but with the modern fleet and int grate the intelligence we are sbuptding drugs. and boat loelts of cocaine off ecuador, and columbia and panama, are the most efficient means for dismantling the transnational criminal networks. by removing cocaine in bulk, we prevent the smugglers from reaching the shores of guatemala, el salvador where loads are broke p up and become almost undetectable in the transport forward to the united states. this is critical. it is truly as i nentialed, disassociates the violence from the drugs when we interdict

large quantities at sea. the coast guard working with the international partners conducted the most aggressive campaign undertaken in recent history, targeting criminal networks within the united states and far from our borders. over the last three years, we removed over 1.2 million pounds of cocaine. 1.2 million pounds. and we delivered almost 1800 smugglers to the department of justice right here in the united states, for prosecution. and the evidence obtained at sea helps our homeland security investigations, drug enforcement agency, and federal bureau of investigation partner, open a window into this vast and cancerous world, providing us with key intelligence and enabling our partners to target and dismantle major krcriminal networks that complete the interdiction cycle. these criminal networks undermine social order. they increase violent crime, sew seeds of illegal migration and directly contribute to historically high and increasing drug-related deaths. drug overdoses are now the leading cause of death here in the united states.

outnumbering firearms, motor vehicles, and homicides. costing more american lives, more than 70,000 last year, on an annual basis, more lives are lost than during the entire vietnam war. the impacts of this menace are wide ranging and truly costly to the nation. the white house council of economic advisers recently raised its estimate of the drug epidemic's annual cost to over $500 billion. without question, unequivocally the criminal organization selling drugs directly threaten our national security and our american way of life. patrol of our borders is an essential element of national security. and the coast guard pushes out those borders, thousands of miles away. from our coastline. promotes regional stability. and reduce pressure on our southern border. beyond the western hemisphere, the coast guard plays a critical role in ensuring open, prosperous and inclusive world order. in collaboration with the u.s.

indo pacific command, we are encouraging cooperation to maintain free and open seaways. we're expanding and deepening our network of allies and like-minded partners throughout the region to enhance maritime governance, and bolster stability, by building partner capacity and theater security cooperation. the coast guard helps mature other nations inherent capabilities, to police their own waters, and supports cooperative enforcement of international law, strengthening free and open access to maritime sea lanes of communication. for example, we support the ozzie nations developing their own coast guards and actively combat predatory operators that offer little long term benefits to nations they supposedly claim to assist. wherever the coast guard deploys, we bring rule-based orders to the maritime commons, and provide an example to countries around the world. with our department of defense partners, we just concluded a successful 2018 rin-pac, the world's largest multinational naval k3er exercise.

the coast guard sent one of our flag ships, the national security cutter berthoud to serve as commander of task fort 175, and a maritime security response team west, based out of san diego, to provide our best tactical solutions and contributions to that exercise. and currently, we are in the operational planning phase for a long range patrol supporting the indo-pacon commander in 2019. 24 in this role the coast guard will build maritime mart ner capabilities and expand emerging relationships in the western pacific, so provide that foundation for an adaptive and stabilizing framework, to counter gray zone operations in the region. looking over to central command, in u.s. central command, our 110 island boats and advanced interdiction teams conduct maritime security operations on the arabian gulf. we have been there since 2003. and patrol boat forces southwest asia. we commit six cutters to support the navy fifth fleet commander, the naf-cent organization that falls under

central command. our unique access to foreign territory seas and ports furthers national security, cooperation, and access. over the last two years alone, coast guard patrol boats have conducted, in that region, 731 security borders. this is a volatile region. we supported over 35 joint exercises, preparing our gulf cooperation council in the arab state partners and coalition forces to deal with the increasingly dynamic threat environment. and just this week, i spoke to the cent-com kmabder who indicated he relies on those highly capable coast guard forces to provide critical maritime security in that dynamic region. for the coast guard, to continue meeting this demand, these cutters will need to be recapitalized. those ships are more than 30 years old. fortunately the congress has recently recognized those critical services and provided funds for the first two of those six vessels with new 154-foot fast response cutters. and now they're going to truly

up our game. and we need to continue that effort. we need the funding for the four additional vessels to fully compliment our capabilities in the region. additionally, our maritime engagement team support the central commander's theater campaign plan, through security cooperation, engagement on maritime law enforcement tactical techniques and procedures. >> from 2010 to 2015, the maritime engagement team trained components from 40 countries. these efforts include joint inter operability and strengthen maritime security around the region. so men and women in the arabian gulf and others 1500 miles south of the border and still more in high latitudes in the arctic, the united states coast guard, enhanced maritime doe nane awareness and facilitate modernized governance structures and promote broad partnerships to meet security and safety needs in this vital and emerging

region. while we focus on creating a peaceful collaborative environment in the polar region, we are respond tock the impacts of increased competition, in these strategically important high latitudes. for more than a century, the coast guard's been a vis im u.s. presence in the arctic. ensuring security and sovereignty for american resources. but our current role has never been more crucial. the artic holds vast scours and the maritime geo strategic relevance is on the rise. an estimated 13% of the world's undiscovered conventional oil resides there. as does 30% of undiscovered natural gas. and one trillion worth of minerals, set to be derived from the arctic's sea floor. the berring sea alone holds more than 50% of fish and shellfish annually consumed or harvested by the united states. moreover, the arctic has critical shipping laning flchlt 2017, a record 9.74 million tons of goods were transported on the

northern sea route above russia. and that number is only going to increase. looking south, for six decade, the ant arctic treaty has been the cornerstone of governance promoting international cooperation, ensuring nonmilitarization in suspending territorial claims number the next three decades, several crucial elements of this treaty will come up for renewal, including the current ban on commercial drilling. the region is believed to have an approximate 200 billion barrels of oil. and numerous mineral deposits as well. in addition to being the largest single repository of fresh water on the planet. with the increased activity in the ak tick, the impending renewal of the key components of treaty, monitoring footprint, the future is now in the polar regions. as a nation, we are behind the power curve. our sustained presence is imperative in ensuring our nation's security, asserting our sovereign rights, and protecting our economic interests today, and well into the future.

our near competitor russia derives 20% of its gross domestic product from activities in the arctic. and is building up original soviet bases already in place in antarctica. additionally russia continues to expand its already robust fleet of polar ice breakers. according to a 2017 congressional research service report, russia has a total of 46 ice breakers. including search nuclear-powered vessels, and a steadily expanding their fleet with 11, that's 11 ships under construction. and don't forget china. they're also investing in the region. they're present, china's playing the long game to reshape the global balance of power. declaring itself a near arctic state, china recently issued its own arctic policy. and is attempting to establish access and characterize the region as a global commons. they're investing significantly in the arctic. including the russian lng project under the amal peninsula, and the region was officially incorporated into their one belt, one road

initiative. additionally hooin is a growing presence in antarctica with five bases. with one ship under construction and plans announced for another, china's influence in the high latitude regions is only increasing. the coast guard builds and trust and prevents conflicts among countries with interest in the polar regions through diplomacy, cooperation oopgs formal and informal. through mechanisms such as the arctic council and the arctic council forum, the north pacific coast guard forum and the international maritime organization and bilateral relationships. however diplomacy and cooperation are empty without the right player time domain awareness. this means presence. and presence in the arctic equates to influence. our nation currently has two operational ice breakers. one heavy, one medium. and that heavy, the polar star's more than 40 years old. with only one heavy operational polar ice breaker we're quickly, not quickly, we are well behind, other nations.

and these regions, given the strategic geo strategic importance, we absolutely got to up our game. the coast guard cannot meet the nation's needs without the necessary tools. and that starts with the polar security cutter. we recently renamed our new heavy ice breaker acquisition, the polar security cutter, to denote its future assurance of national security, and economic interests in these polar regions. i talk about polar security acquisitions through a lens called the 631 approach. we plan to build six ice breakers at free throw least three of which are heavy but we can't be in the high latitudes the way the nation needs us to unless we get after building the first one now. and that's the one. and it affirms the coast guard's role in providing assured access to the pole lar regions for decades to come. if we don't own the environment today, our competitors absolutely will tomorrow. cyber. when we talk about keeping our

nation secure, we can't overlook cyber. our world relies inextricably on information technology. cyber crime costs are expected to saddle business with a whopping $8 trillion price tag just over the next five years. the demand for cyber knowledge and oversight is no longer over the horizon. it is upon us. the coast guard in alignment with the department of defense provides tremendous value in the cyber domain because of our broad authorities as a law enforcement agency. a member of the national intelligence community. and as an armed service. we operate across the full spectrum of dot mill, dot-com and dot-gov domains and leading the international maritime organization on cyber security standards. our ports and waterway, the explosion of technological innovations create opportunity for efficiencies, but also great vulnerabilities and supply chain management, automation, and integrated it systems. the coast guard is leveraging our long established relationships across the america ports to effectively counter

these cyber security threats. our nation's security as i mentioned is inextricably linked to our prosperity. the u.s. has one of the largest deep waerts port systems in inland water ways in the entire world, providing the nation tremendous competitive advantage. the marine transportation system, or mts, as we refer to it, contributes over 4.6 trillion to our nation's economy on an annual basis. it sustains 23 million job, and directly supports 90% of our domestic trade. the nation's waterways are the life blood of our economy. and by far, the most efficient means of transporting the goods that keep this economy moving. case in point. one barge on our waterways is equivalent to 15 rail cars. or 58 trucks on our highways. when you think about it, those numbers are staggering. our just in time economy would be devastated by a well executed attack on our ports and waterways. that is why it is a national

security imperative that we protect this asset. and the men and women of the coast guard have a critical role in keeping our waterways and in turn our nation, safe, secure and flowing efficiently. in fact, two weeks ago, we released our maritime commerce strategic outlook. our ten-year vision for sustaining america's maritime economic prosperity. it emphasizes three lines of effort. facilitating lawful trade and travel. modernizing aids to navigation around mariner information system. and transforming work force capacity and strengthening partnerships. similar to the other armed force, the coast guard's faced significant budget challenges in recent years. we've lost purchasing power. about 10% worth. just in the last eight year period. we've deferred maintenance. we have a strained and undersized work force. and our needs to rebuild the military readiness are ever-present. all of our services, the coast guard and the five department of defense services have faced

severe readiness challenges. as ready as soon as my top priority. fundamentally the key to coast guard success has always been our people. the cornerstone of readiness. our diverse work force of active duty, reserve, civilian, and auxiliary. our men and women answer the call in disaster. they are deployed abroad in the defense of our country. they protect our sovereign interests in the polar regions. they secure our borders. and they thwart dangerous criminal networks. and they are here in the homeland protecting and facilitating the trillion dollars of economic activity i spoke to. the coast guard intersects two of our nation's most important strategic goals. rebuilding our armed forces and protecting our nation's border. you would think given the in cell return on investment for the united states coast guard we would have no trouble securing a budget that will meet the needs of the service and improve that readiness but our annualized appropriation for operations for support is not keeping pace with our current acquisitions. the national security presidential memo raised operating and support dollars

for the defense to the level of 12% in fiscal year 2017 and 18. however the coast guard rose about 4% in that same period of time. this is one of the challenges of being an armed service outside the department of gens. the coast guard's facing less than a 2% increase in the o & s part of our budget for fiscal year '19 and we are one of those agencies yet to be given a budget operating under continuing resolution. we were short-sighted in the past. and didn't make these needs widely known and i take some responsibility for that as a senior leader, but we have to advocate now for that critical operations and support funding to maintain, train and equip our people and assets in the future. it is crucial that we receive an annual increase at the level of about 5%, and that operation supports out of our budget to improve readiness and meet mission demands. we must find ways to garner support for our capital asset funding maintaining about a $2 billion floor annually. this is absolutely required for

the security of our nation. the fact is, everything the coast guard does relates to the security and the prosperity of the united states. right in line with the national security strategy, which states, and i quote, to succeed against the growing threats we face, we must integrate every dimension of our national security, and must compete with every instrument of our national power. we need to stop thinking in terms of defense spending and nondefense spending. we need to start thinking about security and nonsecurity. because many of the asymmetric threats to our security today are real. and they are here. we are no longer looking over the horizon. with 90% of the coast guard funding classified as nondefense discretionary, the coast guard, a military service, has to fight or funds against all other nondefense discretionary requirements. and we are the only service trapped under budget control act limits. moreover, our defense operations funding has not grown since 2002. stuck at 340 million. yet we're spending more than, or approximating a billion annually

on defense-related operations. so in closing, as one of the five services the coast guard is the first responder, a law enforcement agency, a maritime regulator, a member of the intelligence community, the first and foremost an armed force. with our bias for action, our operational agility, we will continue to lean into answer the nation's call. we fill a unique role, complimenting our sister services in the department of defense. together, your armed forces are on the front lines every day. safeguarding the security and prosperity of our great nation. as we have for the last 228 years, we will continue to adapt to emerging national demands and the dynamic international environment. we're proud of our legacy of service as america's coast guard. we will build on that legacy and we will rise to meet the challenges facing us as we do, ready, relevant, and responsive coast guard to our nation, our department, and the combatant commanders across the globe. so thank you for the opportunity to be here this morning.

>> so as the introducer, i will take the privilege of asking the first question, and then i will, well, i might take a maternal privilege and ask questions for two today, but i will start things rolling and then we will wrangle out here. so you mentioned the state we're sort of in with the heavy ice breaker, i know the polar star just came out of dry dock, and is getting old, i believe it is 42 years old now. >> it is past getting old. it is old. >> so my question is, with the new polar security cutters coming online, do you anticipate a gap between when the first one will be ready to operate, and when it will become absolutely crucial to take the polar star completely offline? >> so short answer is, we're hoping to get that first polar

security funded here in the 2019 budget. the president's budget included $750 million line item. we all know the 2019 budget outside of the department of defense, i think it is hhs, remain under a continuing resolution. so i've stated i'm guardedly optimistic those funds will be there. in terms of the gap that you asked about hope, the polar star. we are keeping the polar star alive, we hope to be able to bridge that gap until the first polar security cutter, actually, it has to be a couple polar security cutters, because right now the polar star on an annual basis goes down to mcmyrtle and breaks into the ant arctic to support the operations in the south pole. so that remains a one mission challenge for that 40-plus--year-old cutter. so the first polar security cutter will probably actually take over that mission. it will be a second hull that will enable us to push more, i talked about presence equal influence, more presence up to the arctic, and actually be working in both latitudes. so the short answer is, i think we can bridge that gap.

we are going to enter about a four year, five year extended what we call a service life extension program to get polar star across that gap period. if we get funds here in 2019, for that first polar security cutter, i'm guardedly optimistic we can put that thing in the water around 2023, early 20 24, and have it out doing operational missions within a year, year and a half period from there. thank you. >> i'm just curious, you have such a story, i mean drug interdiction, port safety, the arctic challenges, what happens when you go up to the hill and spend time up there? what's when you testify or meet with members individually, and they see everything that you do, and how much bang the american taxpayer gets for the buck, what's the response about, from the members, about increasing your budget?

thank you. >> yes, thanks for the question. i think having spent a little bit of time working legislative stuff for the coast guard, maybe seven of the last 15 years, i think on capitol hill, the coast guard almost to the member, on both chambers is very much appreciated and understood. but what, where it becomes challenging, we do sit in that discretionary, nondefense part of the budget, so we're competing with a lot of other national priorities. we have an array of 11 statutory missions. so it is not an easy re-bullet elevator speech when you talk about your coast guard. so for the alaska delegation, they're very interested in the emerging, or the realt of the arctic today and the coast guard is inextricably woven into the fab lick of alaska. other places of the country we don't rescue people from land-based locations. in alaska, in remote area, the coast guard is sometimes the only folks who get to people and get them to higher level medical care. there are different relationships across the 50

states and the different regions of the country but i would say almost whout exception the congressional interests support the coast guard. it is very favorable when i go up there. i try to articulate the importance. the 2018 om 0 ny bus funded the capitalization efforts higher than $2 billion. i talked about a $2 billion floor going forward. with those kind of funds we can continue our recapitalization program, ships, recapital lie zazing airplanes. where we haven't been as successful is on the operating side of the budget. so when you tie the building of a national security cutter, which happens at hii, in mississippi, and you tie that to, you know, former senator cochran's congressional clout as a senior appropriator will, is momentum there and you maintain momentum. on the operating side, you really can't tie to that to an industry base in a state across the country, we find it a little

harder to advocate for those dollars. yes, sir? >> i'm rick burge es from sea fire magazine. since canada has recently legalized marijuana, do you anticipate some day maybe having to interdict drugs comes across the great lakes, or on the ocean seaboards? >> so to be frank with you, we have been working, drugs going across the canadian border for my entire coast guard career to some degree. there is illicit activities that go across that northern border, it is marijuana, sometimes south to north, it is cigarettes north to south, it was a bunch of different things. so we've actually been involved with that, with our homeland security investigations, and our cmp partners. >> we have a program with the rcmp, where we have a ship router type exchange. we are working that northern border. i think the legalization where it gets a little trickier for my border patrol colleagues, cvp

officers at the checkpoint, on the federal level, marijuana is still an illegal drug here in the united states so how do you work the land border aspects but we've been working the cross border. what do i think changes here with legalization? i'm not sure yet. we have to watch and see how that unfolds. >> thank you. >> yes, sir? >> sidney freedberg, breaking defense. i wanted to learn a little bit more about your work in paycon. you mentioned rimpac and the task force command role which i think is interesting itself, that the ship was able to do that technically, in terms of the crew's skill but generally, what are you doing in the pacific, especially south china sea, with, you know, partner nations, to try to, as you said, push back below the level of use of military force? >> sure, i appreciate the comment. and the question. today, and you know, we've been,

for previous years, we're doing international training, with the vietnamese, vietnam is doubling down on the development of their coast guard. vietnam has a very unique geographically strategic situation there, sitting adjacent to china, and we're helping them develop their coast guard, i mean they're developing a very fast pace. we're partnering and train welcome the indonesians and other regional partners there. so that is one aspect of it. the indo-pay-con commander is requesting some capabilities here. and in this current fiscal year, and i'm not going to to get into the reaches of that here for security purposes but we're looking to respond to. that how do you take those unique authorities at the coast guard, as a law enforcement agency, and sending a white hulled coast guard cutter, there is different access that a coast guard might have than sending a gray hull combatant.

and how do we use that to maximum leverage in that theater? do i expect we will be doing foreign operations? i don't know. once we turn the ship over to the commander, that ship is available for his use. but my suspicion is if we were to send a ship there, they would leverage the unique authority, capabilities, training of our men and women, to have an influence in places like oceana here, where i mentioned, you know, small island nations, with large exclusive economic zones, derive their protein source, they derive their economic, most of the economy from the seas, how do we help them protect their sovereign interests? i think those are the roles that i expect the coast guard to be used in the region. >> you can use the -- >> i would say the coast guard cut ser a war ship. but i would say there is ally partners and others that are supporting that. that will be the discretion of the indo-pay-con commander, where we descend a vessel there,

you know, they will see that as best as they see fit in advancing the theater campaign plan and regional strategy. >> hi, sir. military.com. as you mentioned, there has been a buildup, or the interest of where the chinese intend to put bases or installations all over the world. and i'm wondering, if your drug interdiction operations in the south com region, specifically the caribbean, have you been moirning or seeing any sort of -- monitors or seeing any sort of slow buildup or the intent from the chinese to build up and pre-position in those islands? >> so i think, you know, harkening back on my time at u.s. southern command and my recent time as the atlantic forces commander, i think we clearly see chinese influence in the hemisphere. you look at china ship holdings on the north and south parts of the panama canal, i think you look at the peace ark, the chinese version of a hospital

ship operating in the hemisphere. clearly there is interest there. whether there is investments in the latin american content, like other parts of the world. -- latin american continent, like other parts of the world. >> megan ecstein, u.s. naval institute news. on the arctic region, i noted it has been sort of assumed that the polar security cutter would be sort of the primary u.s. presence up in that region. the navy right now has an aircraft carrier north of the arctic circle for the first time in a while. and so i was wondering, as you develop the polar security cutter, if you're comfortable with the level of command and control and communication between the coast guard and the u.s. navy, or if there will have to be some sort of development alongside the ship to actually be able to collaborate with the navy up in those regions? >> yes, we focus on being inter operable and optimally connected with our navy and our defense partners on things we do. clearly, we as a $12 billion organization, sometimes have to make choices that are right-sized to our budget, but i

believe that national, or excuse me, i believe the polar security cutter will have the ability interopbly with our naegs, wherever they -- navy, wherever they find themselves in operations across the globe. >> have you looked at what that would look like with the ice breaker alongside navy warships. >> right now, we've been singularly focused on bridging, getting that polar star maintenance-wise down to the area every year and working on it. and we are working on an project office and the navy has been very helpful with the first polar security cutter. with their more extensive experience buying large capital assets ships that help us drive down technical risks, cost risks, schedule risks, it is a terrific partnership. they have been supportive of our efforts. so it is a joint collaboration. before we, you know, spent the first dollar on the polar security cutter. so i look forward to that

continued collaboration and cooperation. >> good morning, sir. thank you for doing this. i'm susan catski, i'm an independent defense journalist. i've seen a fair amount of what you do while covering hurricanes for people magazine, and i'm listening to what you're saying and the message i get from when i do my coverage, listening to you that you're very busy and you're betting busier. so can you talk a little bit about any challenges you might have with man power, or recruiting? >> sure. the coast guard is about a little less than 42,000 active duty men and women in uniform. and we got a reserve force, reserve component that is about 6200. we're authorized at 7,000. one of the areas that concerns me is our reserve component. the numbers. one of the things i need to focus on, you know, the remaining portion of my four-year tour, really growing the reservists.

up to that authorized level. at one point, 10, 15 years ago, we actually had authorization to go to 10,000. we never got above 8100. but when you look at the battle rhythm of these atlanta basin hurricanes and it is storms we have a c-130 flying out looking at the region out there, for the super typhoon that just went through, so we're not just looking at atlantic basin storms. we've been dealing with that part of the globe. hurricanes approaching hawaii here recently. we are busy. i would say that there is actually an unprecedented level of demand on the coast guard. so you know, from a force numbers standpoint, as we field some of these new capabilities, we have, you know, some measurable growth in the out years, i've taken the baton from my predecessor, we're working on a force planning construct, we've done some man power analysis, man power requirement submissions to the hill on number, and you know, arguably, your coast guard could be a bigger coast guard. but we got to put that in a

series of choices, budget decisions, residing within the department of homeland security, and i've got to right-size my budget to sort of what our allocation of that $48 billion plus or minus homeland budget is. in terms of recruiting, we're drawing tremendous talent. we're running about 3800 young men and women through our recruit training center in cape may, new jersey. back in 2012 time frame, we throttled that down to less than 14, 1500, in the sequestration years. so we're at the highest level of recruits we've pushed through. the caliber of those recruits is fantastic. the brand is strong. you know, i talk about mission ready total work force. and when i talk about a ready coast guard, that is a handshake agreement with me and the young women who come in that we're going to be an organization that looks like america, that has professional opportunities, growth opportunities, i need to focus on, with the blended retirement here, that's in effect for our newest coast guard men and women, and you know, they're going to have

choice, and the 20-year model of yester-year, to earn the benefit of retirement in the military it is a different model now and with unemployment at 3.7%, plus or minus, we're in a competitive space. but our brand is strong. we're getting great young men and women. and we need to make sure we treat them right. we've got to show them an exciting pallet of missions and compliment to their families their health care those kind of things. i think we're in a good place but i suspect on my watch i will be laying the brickwork for the practical reality of blended retirement eight stten years no where the men and women today are looking at a year 12 whether they stay and we offer a kicker of four more years and then take the skills or jump to the private sector and i want to be an employer of choice. and i don't expect everyone to stay in the coast guard but i want our brand, our commitment to them as part of the armed

service to really make that a difficult decision. >> oto sea power magazine. and this is the largest coast guard for china, fairly heavily militarized, and some accusations that they have been using their coast guard more to enforce their claim to total control of the south china sea. what's your level of cooperation or conflict with the chinese coast guard? >> so the chinese coast guard was moved, positioned under the people's liberation army navy here, in the not too distant future, so that was an interesting move, and we do enjoy a level of cooperation with china. this past summer, we actually had collaboratively working, we had a chinese ship rider on board of one of our large endurance cutter, what we call the alex haily, and she was operating a few hundred miles off the coast of japan, encountered what we call a high

seas drift net operation. this is the types of nets they put out 9 1/2 or so kilometers of netting and they haul up and ravish everything from the ocean's floor and illegal under u.n. resolution. high seas netting is two and a half kilometers is the legal maximum so this ship was in direct violation of u.n. resolution and with that chinese ship rudder onboard, we approached the vessel. we engaged the vessel and it turned out it appeared to be a chinese vessel. we worked through the people's republic of china. we boarded that vessel and we interdicted that vessel and turned it over to the chinese government for prosecution and there is collaboration and cooperation on that level and in the north pacific coast guard forum and those are some of the forums we alluded to and we do enjoy a collaborative cooperation to some degree, but

i think as we look at the role that the chinese coast guard is paying, you mentioned an aggressive enforcement arm of the pla, we have to consider that carefully. we're about open sea lines of communication a world order that has maritime trade. we're watching those carefully. >> good morning, admiral. a question on what you do in central america and they are thousands of miles out and there is concern of providing aid and interdikt drugs that would curtail your mission or your ability to successfully do what you do down there if aid to those countries from the u.s. is going to be cut. so i would say on what we do, you know, the push part pushing

the borders 1500 miles out and i think that worked significant and i think the work translates to stemming some of the instability that hits the central american corridor, but if you look at regional stability and getting out there, there's a whole of government solution that is required there. aid is a part of that. i'm not going to comment. there are many discussions about the space and there was a central american prosperity and security conference in the nation and i think all of those conversations across the security and the prosperity thing are under way. there are recent changes, and there will be a new president here in mexico and i see it in the early part of december and there is a new president and a lot of the coca that tends into cocoa -- cocaine, rather, that's the drugs that we spend a lot of our energy there, the president is doubling down. he's commitment to a 50% reduction in eradication of the

coca leaf here in the next five years. that's tough talk and we're encouraged by that. so i think it's an important time to look at the whole of government effort and getting after that problem that really unfolds in the central american corridor there from the north coast to the indian-producing regions of north america, through the south american corridor that manifests itself with the violence on the streets and you heard the numbers. more than 70,000 deaths last year, exceeding automobile accidents. that's a big number. we don't stop and think about that, but that's a significant threat to our nation. two quick questions and one is for the centcom region. can you give us the status of the arabian gulf now. we know there was the big iranian planned exercise back in august and it's been relatively

quiet reporting wise, and i would like to get your status update on the security situation there. second question. we were told by the cno earlier this year that russian submarines were prouing and they'd not been seen since the cold war and i wonder if they've made it to the coast guard terrain or what we've seen of russian activity. >> i would tell you the arabian gulf remains very dynamic and you heard the numbers. i think we had 700 and something boardings here and that was a dynamic area, and the iranian presence, i will say persistently aggressive behavior as we escort army, the u.s. army vessels and the navy vessels in the region. the threat remains high and i'm not going to speak on behalf of the centcom commander or the ucom commander in those parts of

the world. we are supporting there. we bring the maritime law enforcement expertise, the broad authorities and we compliment the navy fleet of vessels and work under their authority and i think those are questions best answered by my geographic and supportive commanders here where the coast guard provides that capability. >> and then in russia? >> in russia, undoubtedly, we see russia meddling in a lot of different places and more aggressive than in recent years. within my department, the department of homeland security we have a midterm election coming up here and we have coast guard cyber professionals working with the department of homeland security's hunt and incident response teams and working with our dod colleagues under u.s. cyber com to make sure that we have secure elections. i'm not going to touch the russian sub. that's not in my lane and that's not something they think i'm the

appropriate person to speak to, and i think we see different behaviors out of russia and we continue to support the department where appropriate. >> i'm lou martinez from abc, sir. good to see you again. >> hi. >> during your remarks you made a pitch for additional funding. what ideally would you like to see? would you describe your force right now as strained under the current budget packages that you have? what more can or would you like to see, i guess, resource wise coming into the organization? >> what i think would be if i win without the sound bite would be stable, predictable funding on the capital front, and it was pc and i with the nomenclature and that's about a $2 billion trajectory going forward and that would allow us to reclaim

the capitalization rate on ships and other systems and the real area that's of most concern to me and i mentioned my number one priority is readiness of the coast guard and readiness of the people about a 5% steady growth rate there. i mentioned post pca, and the 10% purchasing power and on the operating side. we need to get a steady trajectory, 4% to 6%. that would allow the service chief to ensure i'm delivering a ready coast guard to the secretary of homeland security to the combat and commanders to support their needs for coast guard capability and that's where i am with steady, consistent growth. >> on the operating budget we're about a $7.3 billion coast guard and it's about an increment

portion of our budget. >> and that's less about hardware. that's less about equipment. this is really more about personnel cost? >> on the harbor side, as i mentioned, we have a high watermark with 2.69 bullion and that put the tenth and 11th cutter and there are moneys to start in the eopc. so we've been doing well there, and i mentioned earlier, that is attribute believe to other political interests and where you build and things like that, but it's that operating piece that i remain most concerned about because it's harder to go to the hill and articulate that doesn't come to the operating account, what can't you do with that? we'll deliver a ready coast guard. it's choices. at the end of the day you talked about personnel growth. you need a bigger coast guard. i could make a really strong case for a bigger coast guard. i will run the coast guard i

have. some of the new platforms if we make the predictable funding do bring associated growth there, but some of the realities and maybe it's a myth, we're replacing 50-year-old two endurance cutters and almost 40-year-old cutters that will be 50 and 60-year-old ships by the time we replace them and the new ships are tremendously capable and the national security cutter with 128 sailors that replaced the 1960s and 378-foot high-endurance cutter and those new ships are technologically sophisticated and a lot more of that maintenance is done with contract support. it cost me almost 200% to sustain a national security cutter than to have the ship it replaced just because they're bigger and more capable. it's the ship we need, but the new assets have a tail that

operate a support tail that go with them, too. just getting the procurement funds without the operating funds kind of drives you to a challenging space with regard to service readiness. john grady. a new question on flow. your predecessor said that he was intercepting approximately 20% of what the coast guard was able to identify coming in. what is the percentage now and then a follow-up question. are you seeing a drop in precursors of opioids coming from china? >> so on the first question i would say we provide the endgame

capability and the joint interagency task force style with admonoishing. that falls under the command. it has situational awareness on probably 80-plus percent of the maritime drug activity in the eastern pacific and maybe a slightly degree and on the drug flow on the oceans is in the eastern pacific right now. you know, we are able to action about plus or minus 20%. in the cases where we have the ability to action that, that intelligence, we're successful, you know, 85%, 90% of the time and there is a capacity conversation there. with more capacity you can remove more drugs. that's a set of choices there. in terms of the precursors from

china, that's not -- the focus on that is a little more in the wheel house of the drug enforcement agency and the joint interagency task force west and i don't have the precursor here and i think china clearly, you can tie china to the precursor chemical conversation, absolutely. you can tie china to the opioid conversation. i don't have those numbers with me here today, sir. >> i was just wondering, what's the future of your aviation fleet look like? do you need more aircraft? what's the future look like there? within our aviation fleet, we fly rotary and fixed-wings. today in our fixed-wing we're a mix of c-130h models and c-130j models and we are marching

through 130 js. we got funding in the '18 budget of what we think needs to be a fleet of c-130js and we're optimistic that there might be a 16th and a 19th budget. we have the 235 and it's a medium-range patrol aircraft and we're on a trajectory and it was 36 of those at one point and we had an arrangement or deal that didn't fall out and it's come to fruition with the united states, and we picked up a fleet of it looks like a small c-130 and the twin engine aircraft and we're working and there's a bit of a worldwide park shortage on that and we're fielding the c-27s and we got the first couple out of the air station in sacramento and we got money in the '18 budget for a simulator that we'll put down in mobile with the building and we're stepping

out on fielding those c-27s. i think at the end of the day our fixed-wing will be an amalgamation of the c-130js and they're missionized in the not too distant future. on the rotary side we're watching the department of defense with a future vertical lift. we fly a fleet of 60 and it's 98 helicopters and that is 65s and no more of those being made and that fleet of 98 is what we will have there and we're probably looking to fly those more than 30,000 hours. so we're into the mh-65 echo upgrade and that's the next generation, but we have to keep those things in there for a while yet. probably into 2030. and the larger rotary wing and the mh-60s and similar to the seahawks and the army version of the black hawks.

>> and again, we're going to be doing a bridge and strategy and probably 30,000 hours. we have a program called the sun downer program and we have the 60 seahawks and sometimes they are put out to pasture and we have the aviation logistics center in north carolina. it's almost like watching that show overhauling on velocity channel where they take a car down and take it down to the carcass and rebuild it. we brought in a handful of hauls under the program and the supplemental funding for the hurricanes and put money in there for 360 and i think our fleet of 60 is 46 air frames and i would like to grow the 60 fleet and because there are no more 65, we need to press in on the gap here, the early 2030 timeframe and things will happen and we'll have some type of incident where an aircraft will suffer some type of mechanical problem and the 60 is the

long-term solution and we'll be bridging the next decade and a half with those dolphins and the seahawks and the jay hawks and what you see in the rotary wing is what you will see for a while and we're doing the upgrade on them. okay. [ inaudible question ] >> we dodged that bullet on the house. >> i'm sorry? >> the community resolution. setting aside how much money you get, and depending on whether you get it is another question and your capital programs and b, your operations programs where you said you were more concerned. >> you continue our resolution, and probably not a good reflection of things and you're operating on continued resolution so much in the last couple of decades that it's almost a normal order. it's far advantageous for a

service to start your year with your appropriated budget on the first of the fiscal year. on 1 october, we have that not being reality, and that process is that process having worked for the coast guard there are things in terms of major acquisitions that you can't start under the cr here and to get the opc offshore patrol cutter here within the last fiscal year and we awarded that on september 28th. we are where we are on that, and i think when you start to take crs and that fast forwards the conversation about government shutdowns and the civilian employees that don't come to work and live in there, they're a more capable ready response and it gets rid of some of that uncertainty. >> in the back. >> lucas robinson.

a year ago "the new york times" had a story about detainees on coast guard ships and they were on the ship for weeks and months at a time and a year later they were picked up in drug operations and a year later the detainees were transferred for law enforcement and does the problem still persist? thank you. >> sure. first and foremost, i would say, whether there was a problem or not and there were some detainees that had been in ships for a few weeks and those were exceptions and not the norms and we try to bring folks that are violating the laws to justice as swiftly as possible when you're operating in places in far reaches of the, and there is a time space distance components and we treat them who are violating international law. we try to bring them in in a

reasonable amount of time and one thing that has benefited us here in the last year through cooperation with the department of justice is we had a change that allowed us in the past and we would have to present detainees wherever they were presented in the united states and the attorney, the u.s. attorney's region and that's where they were prosecuted and if we bring folks in to miami they could be moved to san diego if there was a case that was worked out of the u.s. attorney's office. that has been helpful. in the past, trying to triage those offloads and get to the right attorneys offices to complicate the space. i would assure you that we treat those detainees humanitary and that was a politicized story to start with. >> all right. >> thank you very much. thank you, sir.

>> thank you very much. >> before i let you go, i want to give you a memento of your appearance. your choice of the mre mug, souvenir, worth a lot of money to stay or to go? >> i think i'll take it to go. it keeps it off my uniform. >> a round of applause for the admiral. thank you. [ applause ] >> so we're going to break for lunch now and general dunn ford should be here and start around 1:00.

president trump is in buenos aires, argentina, for the g20 summit holding one-on-one meetings with several world leaders including japanese prime minister shinzo abe and german chancellor angela merkel. he on sunday he has dinner with xi jinping. we'll continue to update you on

the trip as news becomes available. join american history tv this weekend for live all-day coverage of the international conference on world war ii from the national world war ii museum in new orleans starting saturday at 9:00 a.m. eastern with authors and historians discussing d-day june 6, 1944. the world with japan, world war ii's greatest unheralded commanders and lessons learned from the war. watch the international conference on world war ii live saturday starting at 9:00 amp m. eastern on american history tv on c-span3. >> now remarks from undersecretary of state for political affairs, david heal. he spoke recently at a policy conference at the middle east institute in washington and he outlined the policy toward iran and the u.s.-saudi arabia