>> oh. oh, my. well, i think i may have helped a little, maybe. >> a little? > i hope so. >> we'll have more on nancy reagan and other prominent figures tonight. that's at 8:00 eastern here on c-span. at c-span.org and on the c-span radio app. >> c-span's "washington journal" live every day with news and policy issues that impact you. coming up this morning, jessica vaughn from the center for immigration studies and tom jaufance on the study for american progress on how the trump administration and congress will approach immigration. then on how current and future immigration policy affects border states like texas. be sure to watch c-span's "washington journal" beginning live at 7:00 a.m. this morning. join the discussion.

>> this is just over an hour. >> it is who will win the army-navy game next week. nation i think the nation

ill win. it is a really amazing privilege to be here. i think the reagan national defense form for the invitation. we have extremely important questions to address today, and to get to the first, which i will limit to admiral harris and general millie, it is who will win the army navy game next week? >> i think the navy will win. >> this is my 15th time on a panel -- actually the 15th army navy game that we have won -- >> >> i tried to be diplomatic. navy did not cover ourselves in glory today against toledo. if you have any toledo fans, good on you. temple. temple fans. >> we are playing the first annual army navy hockey game as the same week as the hockey game -- football game following the caps off previous week. i will be coaching the army team. we ill see you prevent is in that will see you prevent is in that game as a prelude. fighting will be authorized. >> admiral harter's callsign as an aviator is slap shot. >> yes it is. we will see. >> now that we have otten these major affairs of

state taking care of, it is a privilege to be here at the forum and with an amazingly distinguished panel. the personalities here are well known, but to start briefly, from my right, bob work, the deputy secretary of defense, after a long career in the u.s. marine corps, and a leading thinker, of course, on the future of competition, the third offset. admiral harris is future of competition, the third offset. admiral harris is the commander of u.s. forces in the pacific. general mark milley is the chief of staff of the u.s. army. mark chinese, ceo of l3 communications. joey tomorrow, ceo of the i.d. ystems -- bae systems. we have

systems -- bae systems. we have been asked to speak about the current challenges facing the u.s. in a way, it echoes the third offset. i suggest we are now in a third modern era of deterrence. if we say the first was the 1930's, which did not go well at all in determining aggressive, dangerous adventure -- behavior by nationstates. the second would have been the cold war, which is generally seen as a success of nuclear deterrence, although there were some exceptions around the korean war, and the like. then we had the post 9/11 moment where it was question whether classical principles of deterrence even applied dealing with non-nation state actors, suicide terrorism. that brings us to today where it seems we have returned to a third error of classical deterrence considerations, of course,

of classical deterrence considerations, of course, defenses in the environment and abilities that distinguish our error from the past, whether the nuclear around, ciber, a and otherwise, but it is helpful -- i find it helpful to look at the historical context and to see the ways in which there are key differences. the key difference with the cold war, where that was a deterrence environment that looked overwhelmingly at one adversary in the soviet union, today, the united states looks at a diversity of deterrence challenges. we are speaking today chiefly about china and russia but there is also a rand, north korea -- -iran, north korea. it seems that diversity requires also a diversity of the turns approaches. one deterrence approach is unlikely to fit all. one way i look forward to discussing together in which

the current environment is especially challenging, it seems , is that china and russia are, of course, different countries with different governments, different institutions, different histories, different things that motivate them, different vulnerabilities. it would seem that requires the united states to tailor its eterrence approaches, and with deterrence approaches, and with a particular focus on the different individuals who lead these systems, the split systems. to speak about capabilities alone talking about determinants would run the risk of missing the personal and psychological aspects are just as different individuals are motivated differently in affairs of the heart, or art, they are also motivated differently in

perceptions of risk, national interest. it seems with kim jong un, shooting pain, vladimir putin, in the case of china and russia -- xi jinping, vladimir putin, in the case of china and russia, it's important to take individual ersonalities into account. it's not just business, it's personal. i'm looking forward to speaking with all of us about the capabilities of the terrence and the personal ones, the industrial ones, and thers. we have an absolutely first-rate panel. it really is a privilege. so i will open it up to all of us with the basic question of what is most important to understand, and not to misunderstand, about getting deterrence right, given these rising powers in russia and china in particular? >> first of all, you heard a chairman say, you heard

secretary carter say, essentially we have to address before you are state powers -- four state powers and one nonstate problem. four state powers, china and russia are rising importance of the department of defense, focusing its attention on. john defines a great power, a large state that could take on the dominant state in the world, the united states, conventionally, and have a survivable new year deterrence. a very simple definition for a great power from the department of defense's perspective, because it focuses on capabilities. whether or not you agree that china or russia is a great power, by any definition, they are really going to cause the united states to expend a lot more strategic capital than it has the last 25 years. both are

ery large nuclear powers. both very large nuclear powers. both are starting to really challenge us conventionally, as the chairman said, today, our competitive advantage is intact, but the trend lines are not all that encouraging. we want to take care of that. both, to a greater and lesser egree, disagree with a liberal degree, disagree with a liberal order that united states has been working with since world war ii. the russians believe they have been humiliated since the end of the cold war, and china still smart from the century of human lesion that drives so much of their thinking. both of their un security council members, even without taking us on militarily, and both are especially prickly there and broad. militarily, and

bothwhen i think about competition -- deterrence, i think of it in terms of, look, the west for some reason think the term competition is an inherently negative term, which would lead inevitably to conflict. the russians and chinese believe competition is just a natural state of affairs. so within that competition, three things we have to have. we have to have strategic deterrence. we have o make sure we have that right to make sure we have that right against both of those two large nuclear powers. conventional deterrence. we have to make sure we have a competitive advantage on the content as conventional side so that the likelihood of a conventional ttack or conventional war with these two powers would be minimized. then a third thing is we have to minimize the strategic competition on a day-to-day basis. i would argue, if you think about strategic deterrence at the top, confessional the terrance in the middle, managing strategic competition at the bottom, the link between the two is crisis management and between the top two, escalation control. third offset, not a unified field very. it only focuses on

conventional deterrence within this framework of comprehensive strategic stability. i look forward to the questions on that but we have to get all three of these things right, managing the strategic competition, conventional eterrence, and strategic deterrence. >> here we are in the reagan library, and president reagan said one time that we cannot be innocents abroad, because there is no innocents abroad, or something like that. that kind of lends itself to how i look at deterrence. i read all the deterrence theories, thomas schilling, all of these guys, it is pretty complicated stuff, more complicated than obvious to articulating, because i'm from the south, if you cannot tell already. i kind of boiling down to my own idea of deterrence. to me, deterrence is an equation, capability times resolve times signaling.

that becomes deterrence. if any of those things on the right-hand side, capability, resolve, or signaling, r zero, then you have no deterrent. you could have the greatest ilitary in the world, which we military in the world, which we do. you could have the greatest resolve to use that if threatened, which we do. but if you don't have the signaling, or if you signal incorrectly, then you have no deterrence. that is my sort of idea of deterrence. deterrence is in the eye of the beholder. deterrence is about the person you are trying to deter, and how that person or country or entity views your capability, resolve, and signaling. the terrance is in the eyes of the beholder. the last thing i will say about the terrance from my erspective is that the

military, the capability part of that equation, the military is only a part of the equation. the terrance is a whole government thing. and that is kind of where i fallout on deterrence. as the secretary said, we are talking about hina, russia, great powers and how we work inside the international system with them. i look at all of that carefully, from my vantage point in the pacific, through a dark lens. everything we do is aimed at giving the national command uthority the ability to manage authority the ability to manage that in a complex way. >> general millie. >> to echo what harry is saying, we are here in

the regular library, and i would requote his peace through strength. if you want to deter opponents, you have to first have the capability, that first party did equation harry is talking about. you need the capacity and the size and also the skills and the readiness, and you need the right type of capabilities. then you have to demonstrate that will. the adversary has to know that you adversary has to know that you have the will to use it. but the baseline of the whole thing is you have to be strong to begin with. i think, frankly, our capabilities, u.s. military capabilities, are exceptionally strong, but they have atrophied over the last 15 years when it comes to the two adversaries that secretary work was talking about, russia and china. significant state powers. that

significant state powers. that is true in the army, air force as well. i will not speak for the navy except to say that it is true for the navy and marine corps, too. we have been focused on a single typology of war. counterinsurgency and counterterrorism. we have optimizes our forces to do that. we have sub optimized other parts of our core structure. those capability gaps that have emerged, we still have a competitive advantage in the aggregate, but there are cap that are clear and dangerous, and they are closing fast. and there is also proximity issues. with the case of russia, they have the ability to operate faster with interior lines. china is a different situation as well. the bottom line is, while it is true the united states military is strong and is very good, very capable, you will not hear anything different from me, let's be careful about beating our chest on that stuff. the world is a very serious place.

there are some dangerous actors out there. those actors need to be deterred . there are urrently, in my view, in the currently, in my view, in the long scheme of things, there are significant threats to the international order that has been getting enforcing the bretton woods. we as a nation needs to come to grips do that, and we need to continue that international border or not, because it is under challenge by those in russia, china, north korea, iran, and terrorists. we will have to come to grips with that. that means maintaining capabilities in order to ensure our allies and to deter our adversaries. it is not, in my mind, a difficult science project. it is done through strength, which is a combination of size and capability. we have some work to do on that. the current leadership of the department of defense has acknowledged that. i think the future leadership

will do the same. >> i think part of that story is , in restoring the conventional deterrence, restoring the technological capability that seems to have eroded or atrophied over the last decade or so. that is industry job and partnership with our customers. in our system, nothing is made in the pentagon. it comes from private industry. yet, our adversaries are generally running state owned companies, where there is a lot more speed and capability -- bucks ability doing what they need to do. we, on the other hand, are dealing with takeholders, whether it is shareholders, a host of others, in a highly regulated environment. it is just how we work. part of restorative technology is going to involve the will to adequately fund the budgets. we have gone through a terrible situation known as

sequestration over the past 7, 8 years, that has done a lot of damage not only to the industry we operate, but also to the perception of the u.s. willingness, seriousness about willingness, seriousness about maintaining its technological advantage. it was always the objective to own the night. now we seem to be sharing the night because others have caught up with us. we need to get all of those advantages back. we in industry are very committed to industry are very committed to that. just how bad were the last seven or eight years? as an industry, we probably lost one point 7 million employees just because of all of the downsizing. not only do we need to attract that workforce back, so we are able to surge, if we needed to again, but we need to get young people attracted into the s.t.e. m. program so we can get

the best and brightest into these industries. one of the way we have been dealing with it is partnering with some smart companies here on the west coast, bringing some of those commercial practices into the aerospace and defense industry, to help us get innovation and technology inserted into our products faster to help close this cap. that is part of how we are looking at the problem. >> extending on what mike said, industry's role is really to beat arsenal for the military, beat arsenal for the military, whatever that vision is in the national security strategy, whatever the military needs, essentially, relies on a free market that we have in the united states on the aerospace andfor this industry to be healthy, our customer needs to be healthy and mike talked about the certainty of budget and that

has been problematic. i think we have heard that throughout this session and all of us spend some time on the hill see some bipartisan recognition that at a minimum, there needs to be greater stability, if not ncreases in the budget so we increases in the budget so we can get at these readiness issues and the mid-and long-term equalizing of the threat where perhaps we have lost some ground. first and foremost, i would say for industry to be able to help our customer and help the mission f deterrence, it needs to be of deterrence, it needs to be robust. get rid of the caps so priorities can be established. then establish the kind of initiatives mike has talked about where we have streamlined. statistics show he top five or six aerospace and defense contractors since 2008 have reduced 15% of the

workforce. if you carry that through the second and third tier, you get to mike's umbers. we send a man to the numbers. we send a man to the moon and have the most advanced weapons in the world. i'm confidence our customer can get stability and robust funding, they can set priorities that collectively in a partnership, collectively in a partnership, we can achieve what they want to do. this morning, we heard from several panels about reform or rebuild. it is both. congress was discussed by two embers this morning. it also members this morning. it also has to recognize that we have to focus on dod and we have to streamline and get rid of these egulations or reduce people.

we all here how many signatures it takes to get through a j rock process. whether it is to two or 28, with the quality of that decision be any better if it had 52 incidents 26? i don't have the answer, but that regulatory regime affects quality of decisions and we have got very transactional in our business looking contract by contract, regulation by regulation. the most recent rule without understanding the implications of that for industry which operates in competitive capital markets as

mike alluded to. sometimes, we see actions that have the reverse effect. incidents supporting the innovation for the third offset and providing the capital to do that, we need to carefully consider that cosystem. i think we will have resources and we have demonstrated the agility as a team to work on these difficult problems. lastly, i think it would behoove all of us and assist industry in helping the department meet its goals if we could look at the export regime or the export regulation regime. it is obvious, the nteroperability gains in the solidification that comes in

our alliance when we share the equipment and it strengthens the coalition, which we can bring those economies of scale back and assist in the investment of new technologies, price reductions, more effectively supporting our customer. >> admiral harris, i would like to circle back on the definition of deterrence that you offered. you put it forward as capabilities times intent times signaling. i have heard others put it similarly, but with the distinction capability times intent of times belief. it's the belief of the other guy and our willingness to act. that gets to the point that you made about the terms of being in the eye of the boulder. i wonder if you can contact -- can talk about whether that's an important decision about the way the united states act and ow the adversary and potential adversary calculates risk?

then, if we could speak about how that belief part of the equation looks in china and ussia today and how the belief russia today and how the belief of china, russia and the u.s. deterrence compares today to a few years passed. >> i think we are talking about the same hing in the sense that the belief of the deterred is affected by the signaling of the deterring power and the resolve and capability. the eterred power, if you will, is deterred power, if you will, is going to look at all of that. he deterred power's belief determines whether you determine the deterred power's actions in the spectrum of conflict. i think we have been successful as a nation in determining great powers

using the secretary's definition of a great power in terms of russia's actions on the global stage and china's actions on the global stage. i would say we have to keep at it and continue signaling part of that in order to affect their belief and continue to deter them in the great spaces, if you will. >> just consider this for a minute. we are on the 75th anniversary year of the japanese attack of pearl harbor. before the japanese launched that attack, they knew the capability of the united states and they knew they would lose a war. they knew that. they consciously made a strategic decision to attack when they knew they would lose

a war. they knew we would fight back and a new our will was there, but they believed it. history has several cases where countries understood the opponents capability, understood the guy had the will, and they believe it and they still attacked. there are some other things to consider, like myths of short course, the japanese thought they would knock our fleet out and the war would be over and we would negotiate a peace. they thought it would be over in six weeks. we are also subject to that and thought things would be pretty sure in iraq and so on and so forth. it is not an exact science, the whole idea of deterrence. it's a matter of judgment and it is something

that is different in every single case. there is no uniform, cookie-cutter stuff. the one thing to deter is to maintain very strong and capable military forces. until such time as a universal government, maybe someday 200 or 300 years from now, the world by definition is in arctic because there's no over no -- no overarching force that an overrun the rules. you have can overrun the rules. you have to maintain strong, large, capable forces to terror. >> you used the word intent and harry used the word resolve. it's the capabilities you bring to the table plus the signaling of hat you can and cannot tolerate and the resolve you

show. what is different in our strategic competition with china and russia is our national strategy values allies. allies. what the president has said, every president since world war ii, article five commitments are ironclad. there may be other areas where we may decide what we do, but in terms of article five commitments, i don't inc. anyone in russia or china doubts our resolve to nato and our allies in the western pacific and i think that's a very big help or deterrence against these great powers. >> thank you for the correction on resolve and intent. i did not mean to put words into the admirals equation. if i could ask more n how china and russia looks at the u.s. in a deterrence ballasts -- deterrence balance and a capability resolve, how

do you assess their views on our standing compared to years past. we had the crimea pisode, ukraine generally is not risk to the baltic's -- we have seen some moves and a presence that is growing and growing. how do you understand the chinese and russian view compared to let's say 10 years ago? >> i know for certain that the chinese conception of turns on demonstrated capabilities and the chinese and russians are trying to complicate -- trying to copy and duplicate our version of deterrence. i'm

onfident both russia and china believe the united states, as the chairman has stated has a competitive advantage today. they may be looking at the trendlines and we are looking at the trendlines and we are trying to make judgments on how to ensure american overmatch emains, but today, i believe they do believe in our resolve for article five and commitments to our allies and i believe they believe we have an advantage. the irony is that's forcing them to put a lot of money into capabilities, so the trendlines are what concern the department of defense. how do e keep track and make sure the we keep track and make sure the trendlines still have us thinking we had a competitive advantage? >> if we could step back and look in a strategic sense about china and russia,

hat would we say their goals re? i think you mentioned this are? i think you mentioned this in your opening remarks -- two what extent are they impatient powers or patient powers? how do their economic and political circumstances shape their trategic thinking? what should strategic thinking? what should that mean for u.s. deterrence strategy? >> i would defer to arry. he's been thinking about this for a long time in the china strategic initiative started in 2008, we are really trying to understand them. although the chief worries about providing forces in the pacific and europe, he has been thinking a lot about the

european problem. i would ask them first to see them from a military perspective and ask what their judgment is. >> i have spoken about china and we typically attribute patients to china but i have spoken about ow china has become a nation in a hurry and how the president has become a man in a urry where they try to ramp up hurry where they try to ramp up their military development and all of that. there island reclamation, there aggressive actions and assertive actions in east asia in a hurry, i have testified before congress that i believe china seeks hegemony in east asia and their view is to push the united states out. that's where those military capabilities that we have come into play and where the

government view on deterrence omes into play. >> i think the united states enjoy certain asymmetric advantages over every country on earth that would challenge us. and as asymmetric advantages include anti-submarine warfare, jet propulsion, our culture of innovation and our ideals. but those hardware aspects of those asymmetric advantages are at risk if we don't continue to invest in them and resource them. china is trying to overcome that asymmetric advantage cap we enjoy quickly and they do that through cyber theft and everything else because they are not constrained by law, regulation and policy as we rightfully are. we have to be sensitive and be aware of the threat that

is post by a closing of the gap. the chairman talked about we don't want to go into a fair fight with our enemies or dversaries. i have said before adversaries. i have said before i want to go to a knife fight with a knife -- a knife fight with a gun and a gunfight with a piece of artillery. >> why is china in a hurry? >> asked china why they are a nation in a hurry. hey seem to have put aside any hey seem to have put aside any cause of fear, honor and interest. there are other

interests, but those get to the heart of the matter. in both china and russia's case, i think fear plays a big part. in russia's case, they have in living memory -- are people who surround dinner tables or the leaders of the sons and daughters that have living memory of a nazi invasion and that was brutal. both of my parents fought in world war ii. my dad hit the beach at iwo jima. at the united states has not suffered anything like eastern europe and russia did. that is living memory. putin is the son of survivors of leningrad. just a butte -- brutal 900 plus day siege. people need to remember that, that what russia went through. that's the first time in terms of big invasions. you have the mongols who occupied for three centuries doing everything you see isis doing today. fear of

xternal invasion is a palpable narrative in russian internal politics. it is not fake. they view nato, rightly or wrongly. hey think nato is an existential threat. fear is driving some of their behavior and their political leadership believes it themselves and exploits that for political gain. they want to defend the russian people. they want to defend mother russia. ukraine is part and parcel. the idea of efending against an external fear is very real in their mind. there is also pride.

russia was a great power starting with peter the great all the way up until the fall of the romanov dynasty and the russian revolution. it was a great power and a great empire and you have the russian revolution and then it becomes a power in its own right eye making the greatest contribution to defeating not the journey and then -- nazi germany and becomes a superpower drink cold war. all that came shattering down between 89 and 90. putin himself called at the greatest catastrophe of the last century. it was something that ripped apart at the self-esteem nd pride of a country that was and pride of a country that was fed propaganda about how big and tall they were. they want to regain russian nationalist pride in themselves and there's lot of interest involved, not

a lot of interest involved, not the least amount of money and so forth. those three factors are significant to the russians and that is translated into behavior. along comes a guy who gets in a horse, takes his shirt off, says i will lead you to restore your pride and efend you. i will take care of defend you. i will take care of your fear. trust me and i will be the strongman. it has been done thousands of times in history and it is entirely believable. so, they rally around the flag and modernize, reform and rebuild their military while we are involved in a campaign in iraq and afghanistan. then, their behavior follow suit with attacks on georgia, crimea, threatening and intimidating against the baltic states. you see what they have done in syria. they want to be on the same laying field. if we want to deter that kind of further behavior, further aggression,

hat will require significant strength. china is slightly different but essentially the same in my mind. they published it, by the way. there's no great super secret. they called it the china dream. by 2049, they want the united states out of east asia and want to be the regional hegemon. they would prefer to do it peacefully. they want the united states to peacefully retrench and ithdraw and let the chinese be withdraw and let the chinese be the dominant power in asia as they have been for five millennia. between the opie moors of any 1840's and the chinese communist revolution, they want to restore what they think is their rightful place in the world. they are on a roll since 1979 in their economy following economic shifts in power like that. the modernization of the chinese

military is incredible and incredibly fast. they want to do it peacefully, but they are preparing to do it violently if they need to. if you want to deter, there's a lot of diplomatic action but the baseline of deterrence is a strong, capable military, peace hrough strength. >> the only thing i would like o add is what the chairman said at lunch, i hope they understand what he is saying. i hope they have deterred russia and china conventionally. you called it competition below the action and russians are expert at this. both the russians and chinese are investing a lot of effort trying to break our alliances

because both in europe and in asia. this adversarial competition below the threshold of action goes back to what harry was saying. to really have a strong strategy on how o approach and deter both of these powers. >> i would be interested to have you expand on your remarks about the ifferences or similarities between the american defense industry and its relationship to innovation and government and the russian and chinese cases. how do they compare and how are they organized in how they look to create capable platforms? >> i think our advantage is the great people we have that work within our industry in terms of their

technical capability. there is a lot less of an impediment to achieve -- to achieve the bjective if it is state run. we need to create a gps divide environment and we wanted in six months and you will do everything you need to do to ake it happen. if we have to get to companies are five companies working on it, that's hat they are able to do some a what they are able to do some a control the ways and means and production to achieve their objectives. whereas in our systems, many of them are ublicly owned companies and we publicly owned companies and we have shareholders to answer to.

when things don't go well, you ave shareholders and activists dicey environment. we are all very aware of our environment and it's not the end of the world, but i think they can get things done a little quicker hen they need to. our job is things done a little quicker when they need to. our job is going to be how do we develop technologies, weapon systems and the like that can operate the gps divide environment. great u.s. force projection was the carrier group and the chinese have developed missiles now that negate the carrier groups. they can keep them so off sure that the effectiveness has been somewhat impacted. >> i would challenge that. >> i'm just repeating what i read in defense news. in any event, the point is there have been challenges made over the last eight years to places where the u.s. has perceived a technological advantage, whether it is going after her stealth and better developed radars, longer-range missiles and the like. we need to respond in kind and work with our customers to develop

systems that will offset those capabilities being developed. we had a panel earlier today on cyber. it has become a terrible problem. it keeps happening over and over again and seems there is no solution at hand right now but it is something that will have to be dealt with and we as an ndustry industry cannot drop everything and everybody focus on one problem because we have multiple customers and other obligations to deal with. the model does ot necessarily work as fast as theirs does at times. >> i would offer to expand on mike's point, we are looking at eight, 9, 10 year time frame where we have had to adversaries who have been very focused on what they are trying to address -- what the threat is, what they ant to accomplish technically,

want to accomplish technically, tc.. as secretary, the admiral want to accomplish technically, etc.. as secretary, the admiral in general have said we have been immersed in other activities, not the least of in general have said we have been immersed in other activities, not the least of which is a huge downturn in the economy that has caused other restraints on the system and i have every confidence that as has happened before in our industry, most of the great discoveries are here and the fundamental reason is the free-market enterprise system that we have drives innovation and incentives. we need to focus on those things that will allow us to establish priorities and a reasonable planning horizon to stay with

them and the regulatory regime that facilitates rather than restrict that innovation and, just as we do in the pharmaceutical industry through financial instruments that are created to a credit default swaps and those sorts of things, that kind of free-market approach, when you provide the right environment and reinforcement is tremendously powerful and will be again. let's institutionalize in the budget and in the process so we can drive to whatever priorities come out of a long-term budget, whatever those critical things are, we put a man on the moon, there are many things that could be unleashed. we need to set the fundamentals in place and let this model work. >> before we open up to questions, i would like all of us to weigh in on the aspects of predictability and unpredictability in deterrence. when we look at the asia-pacific and in europe, we see article five covers the nato countries, covers japan and the secaucus as president obama clarified. it has not

clarified the philippine holdings in the south china eas are necessarily covered by seas are necessarily covered by that. there is no treaty, of ourse. is well-known that mulled over nd other countries are outside f any article five. how do these issues affect the deterrence calculus and what is he role of verdict ability and the role of verdict ability and unpredictability for good or for ill in establishing deterrence against powers? you can leave aside surprise phone calls to taiwan if you like,

which was an unpredictable move. >> i will leave behind the call. i really like harry's three words. it really has to do with signaling and resolved n a way russia and china believe in our resolve and ambiguity is very helpful in some places, not helpful in others. it goes to managing strategic competition, knowing the competitor you are trying to deter and understand the ignals and how you demonstrate signals and how you demonstrate resolve. within the context of the third offset, we will reveal apabilities for deterrence. we want chinese military planning

-- planner's wondering what ind of military keep abilities kind of military keep abilities the u.s. could bring to bear if, god for bid, we got into a military confrontation. ambiguity is useful in some cases but it is not universal. sometimes clarity is very, very needed, but it is certainly something e want in our arsenal of deterrence. >> a related eterrence question about the differences between deterrence and provocation. if you want to touch on freedom of navigation controls in the south china sea. >> sure. on the issue of particular the and npredictability, there are dvantages to being predictable

advantages to being predictable in certain circumstances and unpredictable in others. the united states only has five bilateral defense treaties and hey are all in the sia-pacific region. the others asia-pacific region. the others are nato and real pack. they should not worry about america's commitment under those treaties and those are treaties with japan, korea and the philippines. they should not be concerned about our resolve in meeting our treaty obligations. i think the president clearly signaled for example where we stand as a nation with regard to our treaty with japan over the issue of secaucus and the fact that they fall under the

provision of the treaty with japan. that was clear signaling to china. with regard to freedom of navigation perations and the like and the operations and the like and the issue of deterrence and provocation, freedom of navigation operations are not designed to deter anybody from doing anything. freedom of navigation operations are designed to do just that -- hey are designed to exercise a they are designed to exercise a nation's freedom of navigation in international water or over it. and so if you don't exercise the freedom of navigation, then, under international law, you might lose that freedom of navigation over whatever issue it is. the secretary of defense has been very clear that the

united states will fly, sale and operate wherever international law allows and that means we must exercise that and it is the purpose of freedom of navigation. it is simply to exercise our right to operate wherever. >> i agree. sometimes ambiguity is good. sometimes being clear is good, but at the strategic level, i think clarity is more helpful than lack of clarity. i think the question that needs to be sked and answered right now is sked and answered right now is

asked and answered right now is hat is america possible role in the world. general dunford was asked at lunch if you had a magic wand, what would you ask for? he said i would like consensus as to our role in the world. why is that so important? because the answer to that question derives all kinds of things like the sizes of your forces and capabilities and so on. it is a critical question and has been answered for seven decades. it was answered in a hotel in new hampshire in bretton woods when we just suffered 100 million dead between 1914 and 1945 in the first and second world wars. the united states said that is not happening again. we gathered all the diplomats at that new hampshire hotel and everyone hung out for a couple of weeks and they all wrote paragraphs and chapters to essentially the rules of the world. how is post world war ii going to be run? we just did it twice. america wrote those rules. all the other diplomats signed up to them, but america wrote them. those were the

rules of the western world of until 1989 and then they expanded to the rest of the world. some people don't like those rules were that international order and they want to revise it. they are out there right now today. so the question we have to ask as it relates to deterrence is do we like those rules? are we comfortable with them and do we want to keep them? if the answer is yes, that is an expensive proposition and we have to have the capabilities and forces to enforce those rules and you have to have the will, posture, the presence, the capacity, all of it if you like those rules. if you don't like those rules and you are ok

with someone else writing the ules, that is ok. it not asked rules, that is ok. it not asked and answered by the military. it is asked and answered by presidents, congress and the people of america. it needs to be asked and answered because from that commie figure out what you are willing to fight for and we have made this mistake before. the end of world war i, britain was the enforcer of the rules. you got what you got in the 20's and 30's and ended up in world war ii and then we got it again post world war ii when dean acheson comes out and says south korea is not important. then grandfather calls up talin and said green light, go stalin and said green light, go and you got the korean war and truman jumps in. it started again when saddam was told to wait is not important. so signaling and being consistent at the strategic level matters and knowing what you are able to fight for, knowing what you stand for what your role in the world is is fundamental to deterrence and

to our military. i personally hink we need to ask and answer think we need to ask and answer it and clarify it. normally, that happens every four years in american politics. we've een answering it one way for everal decades that i think it several decades that i think it will be answered and we will be in good shape once it is answered. >> what opera pretty debility and unpredictability in procurement, budget and r&d? what about the surprises we have seen with difficulties with major platforms coming online? how does that affect deterrence? >> the predictability of pledges is essential to execute what we need to do in an effective and efficient manner. it allows us to hire and retain the people we need and it will show future workforces that is stable industries come to work, it's not one that will experience layoffs every few years because of contracting budgets depending on who is in office at the time. i think that in and of itself, the will to fund

it is a deterrent. it makes it more predictable and efficient and in terms of the system's proprietary data, companies have addressed that risk in many different ways, but it did reside in a safe somewhere and for now, that's what it will have to be. the crown jewels will not be exposed on a vulnerable network as far as i can see. i think that's how most companies are dealing with right now. >> clearly, as we talked about predictability through the budget provides stability in the industrial base. if you don't have it, it undermines the industrial base and

undermines the will to invest. there are four things we can do with earnings -- we can invest in capital,, we can give dividends or buy back stock. i would argue it's the lack of stability that is a function of that. it's not the determining factor. we in industry have come to appreciate our obligation in the cyber building. we talk about space and we are part of that battle and part of the defense infrastructure and we are working hard and clever tivoli with intelligence agencies and the defense infrastructure to do everything possible to protect those assets. >> let's open it up. we have microphones.

we have one here and if the questioner can identify themselves and make sure their comments have a question at the end. >> how concerned are you about china's self manufactured naval base in the spratly islands? what, if anything, can we do about it and have a effectively deterred the west through their strong resolve and signaling? >> thanks for the question. i will answer it quickly to give the opportunities for other questions. i think a lot about the islands. i think they held seven new bases. i don't think of them as islands. i think of them as bases. three of them have runways of about 10,000 feet in length. i have two as a military commander think about those bases. i do not think hey have deterred us at all. i

they have deterred us at all. i think they have given us seven additional targets, if you know what i mean. but as i have said n opportunities in the past, a in opportunities in the past, a continuing buildout of chinese capabilities in the south china sea will give them the ability to control the south china sea and $5 trillion worth of trade that travels through the south china sea and it will give them the means of controlling the south china sea against any scenario short of war against the united states, which no one wants, including us. we have to continue to work with china on that and our friends, allies and partners to assure them and we continue to build critical combat power and build a

network of like-minded friends, allies and partners to ensure that we can operate internationally. >> let's keep the questions brief. >> i thought i would ask about the ilitary officials on the panel. have you seen any tangible benefits from this initiative? to the members of industry, how do you view this? o you see them having an unfair advantage with this fast-track acquisition tool? >> i was out there a few weeks ago to check on exactly what you asked. frankly, it is a bit early in terms of tangible benefits. this is not the kind of stuff these wrinkle magic dust on and get magic solutions. i think it's a very good idea. i think there are some tweaks

o it. i think it's a very good dea and should be sustained in idea and should be sustained in this initiative because we need to accentuate and accelerate products for the military. but let's give the da a little space, give them some running room before we start parading them out. >> anything that sparks innovation and brings news thought to the problems that we are trying to solve we would welcome. the aerospace and defense industry does not reate a lot of the technology. create a lot of the technology. it integrates and applies that technology, whether it is integration or whatever it is. i think it is early days but stimulating more people to come into the industry can't be

anything but good. >> both of the four stars might have a hought on this. you have put a thought on this. you have put a lot of energy into this offset strategy and i remember you telling me about a year ago that your hope was to set up options for the next administration to choose from. at this stage, how comfortable are you that there has been time to set up good options and hands them over to the next administration across what is going to be probably a more turbulent transition and most? >> we need to run a two minute drill here. if we can get the ther questions, we will answer other questions, we will answer them as quickly as we can. >> my question is primarily for admiral harris. how realistic

o you deem an asian equivalent do you deem an asian equivalent of nato? could the united states reassert itself to everage the regional politics? i'm here with the alexander hamilton society. there seems to be a growing concern and skepticism on an activist foreign policy and looking at that resistance, especially russia and to an extent, iran seems to be exploiting that. would you say this is a fair assessment and how should it be resolved? >> the third offset, this is all

about trying to maintain our conventional advantage and whatever you call it, that is what it is all about. what we have right now as many, many demonstrations laid into the budget. we are talking about a $3 trillion program. it is a $3 trillion program and we have about $20 trillion late in right now for a lot of different menstruation see incoming administration can elect to either pursue were not. it goes back to what the general said -- there are an awful lot of things going on right now and we are seating a lot of innovative approaches. i will skip over the ttp and sian equivalent in nato, but i don't inc. the data shows the

american people are resistant to an activist policy. i think we have to have the debate of merican roles in the world and american roles in the world and the american people will take part in that debate and tell us. but i think that is mixed on whether there is any indication. who do we want to deter, how do we want to deter them, who do we want as allies and who will we protect? all of those questions will be answered. i know we are running over time, but let me say as far as deterrence goes, this is what the russian and chinese military planners worry about most -- the american soldier, ailor come and men, marine and coast guard. there is no other military, not in the history of our planet that is as

nnovative as these people. if i was a chinese or russian ilitary planner and started to military planner and started to crack my deterministic model and say it's time to take on americans, sooner or later, the model is going to freeze up go some young american is going to ay why don't we do it this way say why don't we do it this way and they will whisper something into the generals here and say yes, let's do that. it will ruin their day. i have to tell you, be rest assured. >> i want to talk about nato and asia. the other thing i believe scares our potential adversaries is the fact we are having this kind of forum because we are a society and questioning nation. i cannot imagine this kind of

venue where you have military, civilian and industry leaders together answering whatever questions come up in the ways we are trying to do for all of you. i do not believe we are ever going to see a nato in asia. nato was formed when there is a single focus threat and is countries that were aligned with the soviet union nd lined up against those that and lined up against those that were not and we formed up with nato for all the right reasons. in asia, there's not a compelling, single focused entity. china is part and parcel of asia and part of our economic life. we are not going to see a nato in asia. we will ee a multilateral framework, i call it partnerships with a

purpose. that is a natural, trilateral linkage between korea and the united states. there are countering extremists in southeast asia and natural grouping would be the u.s., malaysia, indonesia, maybe bangladesh and certainly the philippines. we should be going after these kinds of naturally forming multilateral organizations to get those advantages. then we have elsey on that exist not as a defense pact -- the of the regional orm, ars, and those things that are useful to go after, piracy, kidnapping for ransom and all of the issues we see. hat is how i view multilateral

that is how i view multilateral defense instructors in asia. >> thank you, john, thank you to the reagan foundation, and hanks to all of you. [applause]

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