Washington, D.C. ­– U.S. Senator John McCain (R-AZ), Chairman of the Senate Armed Services Committee, delivered the following remarks today on the National Defense Authorization Act for Fiscal Year 2017 at the Brookings Institution:

“Thank you, Martin Indyk, for that kind introduction. It is good to be back at Brookings among so many old friends—and enemies. I appreciate all of you taking time out of your busy schedules to be here this evening.

“Last week, the Senate Armed Services Committee approved the National Defense Authorization Act for Fiscal Year 2017 with a strong bipartisan vote of 23-3. I am tremendously proud of this legislation, which includes major reforms that I want to discuss with you today. However, I must begin with one challenge that the committee could not address in the NDAA: the dangerous mismatch between growing worldwide threats and arbitrary limits on defense spending in current law.

“Too often, we lose sight of the fact that the debates we have here in Washington have very real consequences for the thousands of Americans who are serving in uniform and sacrificing on our behalf all around the nation and the world. From Afghanistan to Iraq and Syria, from the heart of Europe to the seas of Asia, our troops are doing everything we ask of them, and we must ask ourselves: Are we doing everything we can for them? The answer, I say with profound sadness, is: We are not. We are not.

“For the past five years, the Budget Control Act has imposed arbitrary caps on defense spending. This year’s defense budget is more than $150 billion less than fiscal year 2011. And the world has only grown more complex and dangerous over the past five years, not less so. Despite periodic relief from these budget caps, including the Bipartisan Budget Act of last year, each of our military services remains underfunded, undersized, and unready to meet current and future threats.

“Two recent television reports portrayed the horrible consequences of this folly.

“The first story detailed the crisis in Marine Corps aviation. Years of budget cuts have left us with a Marine Corps that is too small and has too few aircraft. The aircraft it does have are too old and can barely fly, and only by cannibalizing parts from other aircraft. Pilots cannot train and receive fewer flight hours a month than their Chinese and Russian counterparts. Young marines are working around the clock to keep planes in the air with shrinking resources knowing that if they fail, their comrades flying and riding in those aircraft could pay a fatal price.

“A similar story showed what it really means to have the oldest, smallest, and least ready Air Force in history, as our nation now does. The service is short 700 pilots and 4,000 maintainers for its fleet, which is smaller than its mission requirement and lacks the spare parts it needs to keep flying. It is so bad that airmen are stealing parts from retired aircraft in ‘The Boneyard’ in my home state of Arizona, and even museum pieces, just to get their planes back into combat. Our aircraft are aging, but even worse, our airmen are left, quote, ‘burnt out’ and ‘exhausted.’

“The story is similar in the Army, where only two out of 60 brigade combat teams are the highest level of readiness, which led the Army’s Chief of Staff to testify last month that the force is at, quote, ‘high military risk.’

“The story is also similar in the Navy, which can no longer provide constant carrier presence in the Middle East or the Western Pacific. The Navy is 36 ships below its requirement of a 308-ship fleet, a requirement that many think is years out of date.

“In short, as threats grow, and the operational demands on our military increase, defense spending in constant dollars is decreasing. How does this make any sense?

“The President’s defense budget request follows the Bipartisan Budget Agreement, which is $17 billion less than what the Department of Defense planned for last year. My friends in the House and I share the same goal of restoring these arbitrary cuts to military capability and capacity. The House has adopted one approach. The Senate has adopted a different path to reach the same objective.

“The Senate NDAA, at present, conforms to last year’s budget agreement. But when the legislation comes to the floor next week, I will offer an amendment to increase defense spending above the current spending caps, reverse short-sighted cuts to modernization, restore military readiness, and give our servicemembers the support they need and deserve. I do not know whether or not this amendment will succeed. But the Senate must have this debate. And senators must choose a side.  

“At the same time, as I have long believed, providing for the common defense is not just about a bigger defense budget—as necessary as that is. We must also reform our nation’s defense enterprise to meet new threats, both today and tomorrow, and to give Americans greater confidence that the Department of Defense is spending their tax dollars efficiently and effectively. That is exactly what the NDAA does.

“The last major reorganization of the Department of Defense was the Goldwater-Nichols Act, which marks its thirtieth anniversary this year. Last fall, the Senate Armed Services Committee held a series of 13 hearings on defense reform. We heard from 52 of our nation’s foremost defense experts and leaders. We lowered these standards only once so Mike O’Hanlon could testify.

“Goldwater-Nichols responded to the challenges of its time. Our goal was to determine what changes need to be made to prepare the Department of Defense to meet a new set of strategic challenges. As Jim Locher, the lead staffer on Goldwater-Nichols, testified last year: ‘No organizational blueprint lasts forever…. [T]he world in which DOD must operate has changed dramatically over the last thirty years.’

“Instead of one great power rival, the United States now faces a series of trans-regional, cross-functional, multi-domain, and long-term strategic competitions that pose a significant challenge to the organization of the Pentagon and the military, which is often rigidly aligned around functional issues and regional geography.

“Put simply, Goldwater-Nichols was about operational effectiveness—improving the ability of the military services to plan and operate together as one joint force. The problem today is strategic integration—how the Department of Defense integrates its activities and resources across different regions, functions, and domains, while balancing and sustaining those efforts over time.

“The legislation would require the next Secretary of Defense to create a series of ‘cross-functional mission teams’ to better integrate the Department’s efforts and achieve discrete objectives. For example, you could imagine a Russia mission team with representatives from policy, intelligence, acquisition, budget, the services, and more. There is no mechanism to perform this kind of integration at present. The Secretary and the Deputy have to do it ad hoc, which is an unrealistic burden. The idea of cross-functional teams has been shown to be tremendously effective in the private sector and by innovative military leaders such as General Stan McChrystal. If applied effectively in the Office of the Secretary of Defense, I believe this concept could be every bit as impactful as the Goldwater-Nichols reforms.

“The legislation would also require the next Secretary to reorganize one combatant command around joint task forces focused on discrete operational missions, rather than military services. Here, too, the goal is to improve integration across different military functions, and do so with far fewer staff than these commands now have. Similarly, the NDAA seeks to clarify the role of the Chairman of the Joint Chiefs, focusing this leader on more strategic issues while providing the Chairman greater authority to assist the Secretary with the global integration of military operations.

“The NDAA also seeks to curb the growth in civilian staff and military officers that has occurred in recent years. Over the past 30 years, the end-strength of the joint force has decreased 38 percent, but the ratio of four-star officers to the overall force has increased by 65 percent. We have seen similar increases among civilians at the senior executive service level. The NDAA therefore requires a carefully-tailored 25 percent reduction in the number of general and flag officers, a corresponding 25 percent decrease to the ranks of senior civilians, and a 25 percent cut to the amount of money that can be spent on contractors doing staff work.

“And, in what I expect to be a contentious provision with the White House, the NDAA caps the size of the National Security Council policy staff at 150. The NSC staff has steadily grown over administrations of both parties in recent decades. It has gotten so bad that all three leaders who served as Secretary of Defense under the current administration recently blasted the NSC’s micromanagement of operational issues during their tenures. The NDAA seeks to begin reversing this trend and return the NSC to its original strategic mission.

“Integration, as I have said, is a major theme in the NDAA. Another is innovation.

“For years after the Cold War, the United States enjoyed a near monopoly on advanced military technologies. That is changing rapidly. From China and Russia, to Iran and North Korea, we see militaries that are developing, fielding, and employing long-range precision guided weapons, advanced fighter aircraft, anti-access and area-denial systems, growing space and cyber capabilities, and other advanced weapons. The result is that we are at real and increasing risk of losing the military technological dominance that we have taken for granted for thirty years.

“At the same time, our leaders are struggling to innovate against an acquisition system that too often impedes their efforts. We recently had a hearing on the F-35. This aircraft has been in development for 15 years. I get a new smart phone every 18 months. We should be able to upgrade our weapons on a similarly rapid turn.

“I applaud Secretary Carter’s attempts to innovate and reach out to non-traditional high-tech firms. But it is telling that this has required the Secretary’s personal intervention to create new offices, organizations, outposts, and initiatives—all geared on moving faster and getting around the current acquisition system.

“Innovation cannot be an auxiliary office at the Department of Defense. It must be the central mission of its acquisition system. Unfortunately, that is not the case with the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, or AT&L. It has grown too big, tries to do too much, and is too focused on compliance at the expense of innovation. That is why the NDAA seeks to divide AT&L’s duties between two offices: a new Under Secretary of Defense for Research and Engineering and an empowered and renamed Under Secretary of Management and Support, which was congressionally mandated two years ago.

“This reform builds on our previous efforts. Whereas last year’s NDAA sought to rebalance authority for acquisition from OSD toward the services, this year’s NDAA seeks to rebalance the acquisition mission within OSD toward innovation.

“The job of Research and Engineering would be developing defense technologies that can ensure a new era of U.S. qualitative military dominance. This office would set defense-wide acquisition and industrial base policy. It would pull together the centers of innovation in the defense acquisition system. And it would oversee the development and manufacturing of weapons by the services. Secretary Carter was unfortunately misinformed this week when he suggested otherwise. In short, Research and Engineering would be a staff job focused on innovation, policy, and oversight of the military services and certain defense agencies, such as DARPA.

“By contrast, Management and Support would be a line management position. It would manage the multi-billion dollar businesses, such as the Defense Logistics Agency and the Defense Commissary Agency, that buy goods and services for the Department of Defense. It would also manage other defense agencies that perform other critical business functions for the Department, such as performing audits, paying our troops, and managing contracts. This would not only enable Research and Engineering to focus on technology development; it would also provide for a better management of billions of dollars of spending on mission support activities.

“These organizational changes complement the additional acquisition reforms in the NDAA that build on our efforts last year. This legislation creates new pathways for the Department of Defense to do business with non-traditional defense firms. It streamlines regulations to procure commercial goods and services. It provides new authorities for the rapid prototyping, acquisition, and fielding of new capabilities. And it imposes new limits on the use of so-called ‘cost-type’ contracts. The overuse of these kinds of contracts, and the complicated and expensive government bureaucracy that goes with them, serves as a barrier to entry for commercial, non-traditional, and small businesses that are driving the innovation our military needs.

“The final major reform in this year’s NDAA is the most sweeping overhaul of the military health system in a generation. This bipartisan effort is the result of years of careful study. We have incorporated the best practices and recent innovations of high-performing private sector healthcare providers. Taken together, these reforms can improve access to, and quality of, care for service members, retirees, and their families; improve the military and combat medical readiness of our force; and reduce rising health care costs for the Department of Defense. 

“This entails some difficult decisions. We make significant changes to the services’ medical command structures. We seek to right-size the costly military health infrastructure. And yes, we will ask some beneficiaries to pay more. But what we can promise in return is that our service members, their families, and retirees will all receive greater value—better access, better care, and better health outcomes. 

“These are major reforms. And when taken together with other equally significant reforms in this NDAA—including a modernization of the military justice system and the most significant reform of defense security cooperation in two decades—this is a truly historic piece of legislation. But I need to make two points in closing.

“First, no one should think that the work of defense reform is finished. Far from it. This will continue for years to come—as it must. Like Goldwater-Nichols and other previous reforms, the changes we are making will require dedicated follow-through by the Department of Defense and vigilant oversight by the Congress. Reform is not a singular event. It is a long, winding, and challenging process.

“Second, reform is not a substitute for sufficient resources. As Secretary Gates has said, ‘the proverbial “low-hanging fruit” … have not only been plucked; they have been stomped on and crushed. What remains are much-needed capabilities.’ Former Chairman of the Joint Chiefs General Martin Dempsey described last year’s defense budget as ‘the lower ragged edge of manageable risk.’ And yet, here we are, one year later, with defense spending arbitrarily capped at $17 billion below what our military needed and planned for last year.

“I do not know what lies beneath ‘the lower ragged edge of manageable risk,’ but this is what I fear it means—that our military is becoming less and less able to deter conflict, and that if, God forbid, deterrence does fail somewhere and we end up in conflict, our nation will deploy young Americans into battle without sufficient training or equipment to fight a war that will take longer, be larger, cost more, and ultimately claim more American lives than it otherwise would have. If this does not compel us to change course, I shudder to think what will.”