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U.S. Lagging Behind in College Graduation Rate; House Members Return to D.C.; Definition of Homeless Changes; Medical Mysteries of Mummies; U.S. Joint Forces Command Ending
Aired August 09, 2010 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CNN ANCHOR: Okay, this is exciting: Starting this Thursday, I'll have a new segment on the show called "Q&A." Q stands for Quest, A stands for Ali. Or maybe the Q stands for question, and maybe the A stands for answer.
Each week, Richard Quest and I will be coming to you, simulcast around the world, about business travel, innovation, whatever you want. But what is unique is that, you will decide the topic. You will send us questions. That's the "Q." We have the answers. That's the "A." Nothing is off limits.
Just go to our blog and CNN.com/Ali and tell us each week what you want to talk about, a question you want answers. We'll both go at it. It all gets started this Thursday at 2:00 p.m. You'll want to stay tuned to us for that.
OK. Brand new hour, brand new "Rundown."
It doesn't happen often. Congress has been recalled from recess. It happened in the wake of Hurricane Katrina. It happened as the auto industry was sinking. Now it's happened for the Federal Medical Assistance Percentage Bill.
What's that? I'll tell you about it in a minute.
Plus, the face of homelessness in America. It doesn't always mean jobless in America. It also doesn't always mean life on the streets.
And a force of nature up close and personal, complete with some colorful commentary. We've got a "Sound Effect" for you you're going to want to hear.
Let me first tell you about a story that we've been concentrating on today because we care so much about education on this show -- college education, high school education. America used to lead the world in college graduation rates, but not anymore.
The U.S. has fallen from first place to 12th place among developed nations in the percentage of young adults with college degrees. That's an important way to measure it.
I want to show that to you on the screen. The way we're looking at this is the percentage of adults age 25 to 34 with post-secondary education, according to the College Board. Now here's a look at where the U.S. stands.
As of 2007, just 40 percent of U.S. adults age 25 to 34 held a college degree. Canada, by the way, leads the developed nations in the world. They have -- about 56 percent of young adults hold degrees. After that, it's Korea, the Russian Federation, Japan and New Zealand in the top five.
Now, the Obama administration wants the U.S. to be back in the top spot by the year 2020. The goal is to have 60 percent of young adults graduating from post-secondary education. That would mean adding about 10 million grads over the course of the next 10 years.
Ed Henry with the president in Texas as he prepares to make this announcement at 3:00 Eastern, one hour from now.
And I guess the question for guys like you, Ed, traveling with the president, is that you can't have any disagreement about that goal. You can't say that's not fantastic. Find me one American who thinks that's a bad plan, to have 60 percent or more of that age group having a post-secondary degree.
What's the president going to do about it?
ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: You're right. Well, that's going to be the key, is the follow-up.
The president has already given a lot of speeches on education. He's followed through on some pieces of this agenda. He's going to try to push Congress some more, but as you noted, Congress being pulled back into town for a rare session. There's not been a lot of agreement on Capitol Hill lately on much of the president's agenda, so it's going to be an uphill battle on some of these things, even though the goal may be universally accepted.
I think the key to look at is if you go back to last year, early in the president's first year in office, he gave a major speech at Georgetown University on the economy and how to rebuild it. And he laid out four pillars.
One was health care reform. One was Wall Street reform. Those two have been done.
A third pillar was energy reform. He's still struggling in Congress to move forward on that. And the fourth was education.
So, he really wants to frame this today, here at the University of Texas, as not just an education issue, but as an economic issue, and that one of the reasons why the U.S. is having difficulty competing, especially on college graduation levels, is education, figuring out how to deal with this and having a strong workforce moving forward as you try to rebuild the economy. How is he going to do it? What's that follow-through going to be like?
He's going to be talking about how to make college more affordable, challenging university presidents around the country to cut costs as much as possible so more people can go to college. He's going to talk about how he's cut out the middleman and cut out some billions of dollars in tax money that was going to big banks in student lending, trying to cut student lending costs.
He's also going to be talking about the use of community colleges and making sure they're part of the equation, because one of the real challenges here when you look at the problem in terms of the falling college graduation rates in the U.S. is the fact that some people are starting college and just not finishing. Maybe they can go to a community college to finish, go at night, et cetera. He's really going to push hard there.
VELSHI: All right, Ed. I don't know what we did to deserve this. This isn't our "Stakeout" either. So I'm going to see you a third time in this show.
HENRY: This is pretty cool. This is cool for me as well -- Ali.
VELSHI: It is good. All right.
We'll see Ed in a little while.
And by the way, at 3:00 Eastern, the president expected to speak in Texas. "RICK'S LIST" will carry that live for you.
All right. A terrifying moment in western Minnesota over the weekend as a storm chaser, someone who's experienced at this, watches a tornado splinter a farmhouse in Wilkin County.
Listen to his emotional commentary on our "Sound Effect."
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Oh, it hit that -- oh no! Oh, no, no, no, no, no. Oh, no. Oh, no, ,no, no, no.
(END VIDEO CLIP)
VELSHI: Well, thankfully, the house was empty when the twister tore it apart. There were no injuries reported from this particular storm. The National Weather Service says as many as seven tornadoes may have touched down in the southeast North Dakota and western Minnesota area.
All right. Don't you hate it when you leave for vacation and your boss calls you back in to work? Well, that's the case on Capitol Hill this week. But don't feel too bad. The work is pretty light and the payoffs for the states are pretty big.
I'll show you what your representatives are up to after this break.
(COMMERCIAL BREAK)
VELSHI: All right. You're going to see that special on Hurricane Katrina. That was actually one of those events I want to tell you about. I want to give you a picture of three watershed moments in recent American history: Hurricane Katrina, the devastation in New Orleans and in that area, a major city all but destroyed by natural disaster.
Then I want to give you another watershed moment: the fate of a woman, Terri Schiavo. Remember that? The fate of a woman who was in that persistent vegetative state and whether she could be allowed to die or not.
And the third thing I want to show you is the bankruptcy of General Motors, the difficulty in which the U.S. auto industry was in when we thought it was on the brink of collapse.
What do these three watershed moments in American history have in common? Well, what they have in common is that during all three of those things, Congress was called back from a recess in order to pass legislation that would try and deal with those issues.
Well, it is happening again. In fact, it has happened again.
The issue now, not so momentous, but it is important, a $26 billion bill to help recession-ravaged states pay teachers' salaries and Medicaid expenses.
I want to find out what this is about, why this event qualifies along with those other watershed events, getting Congress to come back on its summer vacation.
Let's go to Gloria Borger. She's in Washington right now. She's our senior political analyst.
Gloria, let's just tell our viewers what this is. This is $26 billion, $10 billion for teachers' salaries, $16 billion for Medicaid.
Obviously, the recession may have passed us by, but there are lots of people unemployed, lots of homes not occupied, lots of businesses not paying taxes. So the states in some cases are hit harder today than they were a year ago. And this is a move to try and get some of that money back.
GLORIA BORGER, CNN SR. POLITICAL ANALYST: Yes. This is a move to help the states pay their Medicaid to people who need it, and also to make sure that kids, when they go back to school, have teachers. And you don't want to have an election in November when teachers are out of work in September, and that's -- $10 billion of it is for teachers.
You know, the Democrats say this is necessary spending. They say it's going to be offset in part by raising taxes on multinational corporations. And Republicans say, are you kidding me? This is just so you can kowtow to the teachers unions.
VELSHI: Well, this is interesting. I mean, this is an interesting one.
BORGER: Yes.
VELSHI: In fact, John Boehner -- an aide to John Boehner actually called it -- what did he say? He said it's special interest bailouts. I wouldn't think that we could disagree about teachers and Medicaid, but apparently, as you pointed out many times on this show, in Washington we can disagree about everything.
BORGER: Yes, they can. And don't forget, you know, the Senate -- this doesn't endear the Senate to House members, I might add.
The Senate passed this measure, then left town. And so the Democrats had a decision to make -- Nancy Pelosi. Do you not pass the measure, or do you make the best of a bad situation, call your House Democrats back, call the Congress back, and try again to set up what they're trying to do in the midterm elections, which is make this a choice election?
OK. We Democrats want to pay for the teachers, we're going to pay for the first responders, we're going to make sure the states don't go broke, versus Republicans, who are saying, you know what? This is just more stimulus that we really don't need, and more special interest stimulus about the folks who are going to come out and vote for you this fall, i.e. the teachers unions.
VELSHI: All right. And this is all under the backdrop of the discussion that's been going on about whether or not to let those Bush-era tax cuts expire.
BORGER: Oh, yes.
VELSHI: Something that the Republicans are hoping doesn't happen, and something that this administration says is likely to happen in some form or other.
BORGER: You know, it was interesting. I had breakfast today with a very senior House Democrat who said that sort of at the decision process, Ali, of whether they're going to try and make this tax cut issue the big issue in the fall election starting in September, because as you know, these Bush tax cuts expire January 1. Congress has to do something about it.
And they say that, look, if they want to tie Republicans to George W. Bush -- because it works for them -- this is a replay of Bush economics. They're going to say, OK, Republicans, you want to continue this? Don't you care about the deficit? It's going to cost $2 trillion to $3 trillion. And they believe that will play for them.
Do you want to extend these tax cuts for the wealthy? They're going to say, the Democrats, we want to extend them for the middle class, but we don't want to extend them for the top three percent of American wage earners.
So, again, they're going to try and use it to draw a distinction between the Democrats and the Republicans being for the wealthy. However, as you know better than I do, there's a downside to this, because every time Democrats talk taxes, and they raise taxes on someone, the public says, ah-ha, Democrats raised taxes and we don't like it. VELSHI: It's not the conversation they would choose to be in. When Democrats get -- because what you're describing is a nuanced conversation. But when it comes to campaign signs and rallies, the nuance is lost.
BORGER: Right. But they think rich versus middle class is not so new. And what they're saying is, if we do this, Mr. President, you need to be out there leading the charge on this for us, because you're the best spokesman still that the Democrats have.
VELSHI: It will be interesting to see how these messages coalesce. We've started to see it, but over the next month or so, how they decide what they're actually going to go out on -- because these multiple directions, that's going to be hard to get people's attention, particularly in a midterm, when everybody doesn't come out and vote.
BORGER: So here's the question, Ali: Are the Democrats better off talking about this tax cut issue, "We're on your side," the middle class, or jobs?
VELSHI: That's a good question. I think it's the same problem. When you talk about jobs, you have to have that ability to say here's what we've done. And it's a tough conversation to have with 9.7 percent unemployment.
BORGER: Right. So maybe it's in their political interest to shift the conversation, ironically, to this tax issue and try and tie Democrats (sic) to George W. Bush, because their internal polling shows -- I mean, try and tie Republicans to George W. Bush, because their internal polling shows every time you tie Republicans to Bush, the numbers go down.
VELSHI: They get hurt, yes. Very interesting. And yet, jobs still remain the biggest problem.
BORGER: That's right.
VELSHI: Gloria, we'll have many opportunities to talk about this.
BORGER: Sure.
VELSHI: Gloria Borger is our senior political analyst in Washington.
All right. Homeless, but not on the streets. Employed, but not employed enough.
After a break, a working mother of four in search of a break.
(COMMERCIAL BREAK)
VELSHI: OK. When you say "homeless" here in America, it actually doesn't always mean jobless, believe it or not. It doesn't always mean a life on the streets. It's a nuanced term.
Poppy Harlow from CNNMoney.com joins me again with a snapshot about this that you need to see.
Boy, you're covering a lot of topics today, Poppy.
POPPY HARLOW, CNNMONEY.COM: Right.
VELSHI: We went from the definition of rich, where some people said they don't feel rich if they don't have a billion dollars, to a very -- this has always puzzled me, this issue of homelessness. We have an identification with homelessness, people who sleep on the street, who don't have work and don't have an income.
But in the last few years, this has changed in America.
HARLOW: In a big way. It is one of the horrible side-effects of the deep recession in this country.
When you look at homeless shelters, what we know, Ali, is that the number of families in this country, in homeless shelters now, is 30 percent higher than it was just three years ago, in 2007. And the way that you picture a homeless person, you won't think about it the same way after you meet Damita.
She's the woman right here. We're going to tell you her story.
She lives in Connecticut in a women's shelter with her four children, and she has a job. She has a car. She's going to nursing school, but she doesn't have anywhere to live.
Here's her story.
(BEGIN VIDEOTAPE)
DAMITA, CAREWAYS SHELTER OCCUPANT: I'm juggling school, work, the kids, 14, 5, 3 and 11 months. Most of the time they're in Ms. Kleel's (ph) little classroom.
UNIDENTIFIED FEMALE: Sometimes the kids come in here with their moms and they play.
UNIDENTIFIED FEMALE: This is (INAUDIBLE), yes.
DAMITA: I'm trying to find housing and hopefully a full-time job. I had to dip into the savings just to get the laptop so that I don't have to flunk class.
Most of the time I'm in here making dinner or breakfast for the kids.
KELLYANN DAY, NEW HAVEN HOME RECOVERY: We track the number of people who have been turned away, so to speak, from our shelter because of lack of space. And that's gone up 105 percent just since January.
DAMITA: You don't have to have that image of looking disgusting, smelling. You can actually look good, have a job. It's just that your job is just not enough.
I'll see you later. Oh, it's going to rain. Off to work. It's not easy, but if it's what I have to do for my kids so they can see me not being depressed or whatever, that's what I have to -- keep my smile on.
(END VIDEOTAPE)
HARLOW: You know, it's interesting, Ali. That is not at all what you picture when you think of someone that's homeless.
VELSHI: No.
HARLOW: Damita is going to nursing school. So she hopes to have her nursing degree in two to three years, eventually be able to buy a house. And she said the real big dream here, Ali, is to be able to take her four kids on vacation.
But you have to commend her on, you know, going to school, having a part-time job, raising four kids, and giving up a lot for herself. Keeping them in a shelter, that's her only choice right now -- Ali.
VELSHI: Yes. But it is interesting for us all to see.
I had a conversation with an 11-year-old girl the other day who had grown this big cabbage and taken it to a food shelter, and the first time she had been there. And she was surprised. She didn't know that that's what people at the food shelter would look like. She said, "They seem like me."
HARLOW: Yes, right. Normal people.
VELSHI: Right. And I think this is part of the issue with homelessness, too. We don't know that these are people who are working and they just can't afford to live where they're living.
That, of course, doesn't negate the old homelessness problem we have, which is what you traditionally identify, people living in the streets without a job. And that's not getting any better either.
So thanks for staying on top of that for us, Poppy.
Poppy Harlow, CNNMoney.com. You can see all of her work there and you can check into that story that she was just telling us about.
All right. Let's look at some of the top stories that we're following here at CNN.
(NEWSBREAK)
(COMMERCIAL BREAK)
VELSHI: All right.
Chad, good to see you, my friend.
CHAD MYERS, CNN METEOROLOGIST: Good to see you.
VELSHI: What's happening?
MYERS: Happy Monday.
VELSHI: We're going "Off the Radar." This is one of those very unusual -- this is very off the radar. We're talking about mummies.
MYERS: Yes. But you know what? I think people will enjoy it.
VELSHI: All right.
MYERS: I think we have a lot to learn about people that have been dead a long time.
VELSHI: All right.
MYERS: How about that?
Now, when mummies were first found, they thought, let's x-ray them, let's not unwrap them. Let's x-ray them so you can tell the age, we can tell the sex, we can tell how they died, their broken bones. Then we would CAT scan them or MRI them, run them through there, and then we could slice them up in little bits.
Now you DNA them. And there is still possible and potential DNA in these cells that are in -- and you can take one of these little endoscopes and you can get into the places that you want, get only the one or two or five cells that you want, take them out.
And what are we finding? What do you think we're finding?
VELSHI: Well, I mean, I think the big mystery I'd have is most people in these eras died much younger than we generally die.
MYERS: Absolutely. Yes.
VELSHI: So what did they die of?
MYERS: Well, they didn't get eaten by dinosaurs.
VELSHI: Yes.
(LAUGHTER)
MYERS: I mean, right?
So, did you know that women 3,000 years ago had probably just as big of a problem with breast cancer and we're having right now?
VELSHI: I wouldn't have known that.
MYERS: No, you wouldn't have because we think about all the environmental things and all the other things. They are finding that women died of breast cancer just as commonly as they're dying now.
There was Hepatitis, Hepatis B. Five hundred years ago, people were dying from that. And we haven't fixed this yet. How have we not fixed some of these things yet? Well, what they're doing now, they're going into families of mummies.
VELSHI: All right.
MYERS: OK, the women died of this, but the men didn't die of this. Why didn't they? They were living in the same house.
VELSHI: Right. Did they have some immunity? Was there something different about them?
MYERS: Yes. They're finding out that the Spanish flu and epidemic back in the early 1900s wasn't even Spanish flu. It didn't even happen.
VELSHI: Interesting.
MYERS: It was something completely -- it was a total easy strain of flu, but because the bodies tried so hard to fight it off, the lungs filled up and they died of basically not being able to breathe. So, all of these things that we thought we knew about medicine are all changing because of mummies.
VELSHI: All right. I like it. Maybe we'll devise -- that is interesting, to find out what they -- because that was the one characteristic, these earlier generations and centuries just didn't live as long.
(CROSSTALK)
MYERS: Thirty years, 40 years was a good life.
VELSHI: Yes. Yes. Always fascinated by that.
All right. That is --
MYERS: You and I are done, sir.
VELSHI: That is official. Yes, we're two lives, officially "Off the Radar."
All right, Chad. Thanks so much.
MYERS: Sure.
VELSHI: Listen, massive mudslides have really been wreaking havoc in China. Pakistan facing its worst floods in 80 years.
We're going "Globe Trekking" to tell you about it when we come back.
(COMMERCIAL BREAK)
VELSHI: All right. We're going "Globe Trekking," as we do every day. I don't have a whole lot of great news to bring you.
Earlier, we told you about that smog in Russia because of those fires. Now I've got to take you to China and tell you about ongoing massive mudslides in the northwest part of China. They've killed more than 330 people, so much, but more than 1,100 people are actually missing right now.
They were triggered yesterday by torrential rains. And the mud is so thick, that they haven't been able to get those excavators in.
Forty-five thousand people have been forced to leave their homes. The mudslides have actually clogged a major river, and so the water raging into that river has overflown its banks. The Chinese military now using explosives to try and blast through the blockage. It's such thick mud, rescue crews are ferrying tents, food and water to the affected areas.
Let's go to Pakistan now. We were telling you about the flooding there, remarkable flooding there.
Fourteen million people have been affected by monsoon-triggered flooding. More than 1,200 have been confirmed dead there. Two hundred and eighty-eight thousand homes have been destroyed or damaged.
A lot of people are complaining about the government's slow response to this, including the fact that the president has been out of the country. It first started in the northwest, and now it's moved as far south as Karachi.
And let's go to Cuba now for the last stop on our "Globe Trek."
The youngest detainee at Guantanamo Bay, which, as you know, is on the southeast end of Cuba, is about to go on trial. Omar Khadr is -- he was 15 years old when he was captured in Afghanistan in 2002. He's accused of killing a U.S. medic and of being trained by al Qaeda. He's 22 years old now.
Khadr's trial by a U.S. military commission is going to start tomorrow. His father says he's been threatened with rape and death after his capture, and his statements, as a result, are not reliable. Khadr is a Canadian citizen. He's the only westerner who is still being held at Guantanamo Bay.
All right. Talk about a man with a mission. A British explorer becomes the first person to walk the length of the Amazon River. Why he did it and, better yet, how long it took him, when we come back.
(COMMERCIAL BREAK)
VELSHI: I want to take you right in for some breaking news, to Defense Secretary Robert Gates announcing dismantling of the Joint Forces Command, a potential dismantling of the Joint Forces Command.
Let's listen in to what he's saying.
(JOINED IN PROGRESS)
ROBERT GATES, DEFENSE SECRETARY: -- other major powers investing heavily in their military.
It is important that we not repeat the mistakes of the past where tough economic times or the winding down of the military campaign leads to steep and unwise reductions of defense. The current and planned defense budgets which project modest but steady growth represent the minimum level of spending necessary to sustain a military at war and to protect our interests and future capabilities in a dangerous and unstable world.
Having said that, we must be mindful of the difficult economic and fiscal situation facing our nation. As a matter of principle and political reality, the Department of Defense cannot expect America's elected representatives to approve budget increases each year unless we are doing a good job. Indeed, everything possible to make every dollar count.
As a first step, last year we began reforming the department's approach to military acquisition, curtailing or canceling about 20 troubled or excess programs, programs that, if pursued to completion, would have cost more than $300 billion. Additional program savings have been recommended in the budget we submitted this year.
However, it is clear to me that additional major changes are needed consistent with the reform agenda laid out by the president. I believe that sustaining the current force structure and making needed investments in modernization will require annual real growth of two percent to three percent, which is one percent to two percent above current top-line budget projections. Therefore, in order to preclude reductions and military capabilities that American needs today, and those required for the future, that spending difference will need to be made up elsewhere in the department.
As a result, in May I called on the Pentagon to take a hard and unsparing look at how the department is staffed, organized and operated. I concluded that our headquarters and support bureaucracies, military and civilian alike, have swelled to cumbersome and top-heavy proportions, grown over-reliant on contractors, and grown accustomed to operating with little consideration to cost.
This manifested itself over the past decade in vast increases in spending and staff by nearly 1,000 employees in the case of the Office of Secretary of Defense alone, and in the proliferation of new organizations and senior executives to lead them. This expansion and its associated habits and attitudes was abetted by a near doubling of the defense-based budget since 2001, and further enabled by a steady diet of supplemental war appropriations. Both factors that will soon end.
Let me be clear, the task before us is not to reduce the department's top-line budget. Rather, it is significantly to reduce its excess overhead costs and apply the savings to force structure and modernization. Toward this end, starting in June, we embark on a four-track approach to move America's defense institutions toward a more efficient, effective and cost-conscious way of doing business.
First and most significantly, earlier this year the military services were assigned the task of finding more than $100 billion in overhead savings over the next five years. Unlike budget-cutting efforts of the past, the services will be able to keep the savings they generate, to reinvest in higher priority war-fighting needs and modernization programs.
This exercise is well under way as the services are evaluating their programs and activities to identify what remains a critical priority and what is no longer affordable. They are all planning to eliminate headquarters that are no longer needed and reduce the size of the staffs they retain.
I've also authorized each of the military departments to consider consolidation or closure of excess bases and other facilities where appropriate. This is obviously a politically-fraught topic.
Currently, Congress has placed legal constraints on DOD's ability to close installations. But hard is not impossible. And I hope Congress will work with us to reduce unnecessary costs in this part of the defense enterprise.
Second, we are seeking ideas, suggestions and proposals from outside normal official channels. This includes soliciting input from experts such as think tanks, industry, and the department's external boards.
Within the department, we're launching an online contest for the purpose of soliciting and rewarding creative ideas to save money and use resources more effectively. And I would encourage all DOD employees to visit defense.gov on the Web to learn more.
Third, I directed a series of assessments of how this department is organized and operated to inform the FY 2012 budget request. As part of that process, Under Secretary of Defense Ashton Carter has launched an initiative to improve the efficiency and reduce costs in the contracting arena. The goal being to get better buying power for the taxpayer and war fighter in defense goods and services. We plan on providing more detail on this effort in early September, and our intent is for this initiative to begin affecting ongoing programs immediately.
Fourth, even with these DOD wide efforts under way, I have concluded there are a number of areas where we can take action starting now and not wait for the normal budgeting and program process. Therefore, today I am announcing an initial set of decisions designed to reduce duplication, overhead and excess in the defense enterprise, and over time instill a culture of savings and restraint in this department.
These initiatives vary in size and levels of savings achieved, ranging from personnel and paperwork, to organizational structures and business practices. They represent an initial step of a comprehensive department-wide efficiency and savings campaign that will be incorporated more fully into the FY '12 budget request.
I'll summarize them briefly and take some of your questions.
Copies of this -- so you all don't get writer's cramp, copies of this statement will be available at the end of this session, and general Cartwright, Christine Fox and Bob Hale will brief in more detail and answer further questions.
So, to the initiatives,
First, over the last decade, this department has seen a dramatic increase in the use of service support and advisory contractors of all kinds, from 26 percent of the total DOD workforce costs in 2000, to 39 percent a year ago, not counting contractors supporting the war effort in Iraq and Afghanistan. In some cases, contractors may be performing functions that should be done by full-time government employee, including managing other contractors. Last year, the department announced a plan to reduce the number of service support contractors by about 33,000 by 2015, and where necessary, to insource those positions with full-time government employees.
Based on the data available after one year, I'm not satisfied with the progress made to reduce our over-reliance on contractors. Accordingly, to accelerate this process and achieve additional savings, I have directed that we reduce funding for service support contractors by 10 percent a year for each of the next three years. Furthermore, as I'll explain in a moment, we will no longer automatically replace departing contractors with full-time personnel.
Second, and directly related to contractors, is the issue of dramatic growth in size and expense in the Office of the Secretary of Defense, the defense agencies, and the Combatant Command staffs. Much of this growth came from new missions that emerged since September 11th. However, there was no commensurate decrease for activities that had become less relevant and urgent. With additional funds made available, there was not much incentive to do so.
As I've said before, the department must start setting priorities, making real tradeoffs, and separating appetites from real requirements. Constraining the personnel available is one way to force this painful but necessary process to take place. Therefore, I'm directing a freeze on the number of OSD, Defense Agency and Combatant Command positions at the FY '10 levels for the next three years. With regard to insourcing, other than changes planned for FY '10, no more full-time positions in these organizations will be created after this fiscal year to replace contractors. Some exceptions can be made for critical areas such as the acquisition workforce.
These measures are just the first step of a comprehensive re- baselining of OSD, Defense Agency and Combatant Command staffing and organizations. We will conduct a clean-sheet review to determine what our people should be doing, where and at what level of rank in keeping with the department's most critical priorities. I expect the results of this effort by November 15th of this year.
Third, the proliferation of new staff and more layers of bureaucracy is a natural consequence of the substantial increase in the most senior leadership, general and flag officers, career senior executives and political appointees requiring Senate confirmation. Over the past decade, the department has added what was already a high historical baseline for senior personnel. For example, since September, 2001, the number of general and flag officers has grown by more than 100, including now 40 four-star positions, and the number of senior civilian executive positions has increased by more than 300.
As a result of the wars, this department has taken on new missions and responsibilities that have required some of these new senior military and civilian (INAUDIBLE). But apart from meeting these genuine war- related needs, we have also seen an acceleration of what Senator John Glenn more than 20 years ago called brass creep, a situation where personnel of higher and higher rank are assigned to do things that could reasonably be handled by personnel of lower rank.
In some cases, this creep is fueled by the desire to increase bureaucratic clout or prestige of a particular service, function or region, rather than reflecting the scope and duties of the job itself. And in a post-9/11 era, when more and more responsibility, including decisions with strategic consequences, is being exercised by more junior officers in theater, the Defense Department continues to maintain a top-heavy hierarchy that more reflects 20th century protocols than 21st century realities.
For example, unlike most other commands, four-star service component headquarters remain in Europe, long after the end of the Cold War, and long after the vast majority of their fighting forces have departed. We need to create a system of fewer, flatter and more agile and responsive structures where reductions in rank at the top create a virtuous cascading downward and outward. In addition to the number of senior positions, there is also the question of their allocation and whether our distribution of rank by geography or function reflects the missions and realities our military faces today.
Therefore, I am directing a freeze at FY '10 levels on the number of civilian senior executive, general and flag officer, and PAS positions. Furthermore, a senior task force will assess the number and location of senior positions, be they old or new vintage, as well as the overhead and accoutrements that go with them. I expect the results of this effort by November 1st.
At a minimum, I expect this effort to recommend cutting at least 50 general and flag officer positions and 150 senior civilian executive positions over the next two years. These reductions would represent 50 percent of the total growth in senior military and civilian positions since 2000. That's the minimum.
Fourth, there are great benefits to be gained in cost and efficiency from taking advantage of economies of scale. The problem is that too many parts of the department, especially in the information technology arena, claimed a separate infrastructure and processes. All of our bases, operational headquarters and defense agencies have their own IT infrastructures, processes and application ware. This decentralization approach results in large cumulative costs and a patchwork of capabilities that create cyber vulnerabilities and limit our ability to capitalize on the promise of information technology.
Therefore, I'm directing an effort to consolidate these assets to take advantage of the department's significant economies of scale, thereby creating savings in acquisition, sustainment, and manpower costs. This action will allow the increased use by the department of common functions and improve our ability to defend defense networks against growing cyber threats.
Fifth, this department is awash in taskings for reports and studies. In 1970, the Pentagon produced a total of 37 reports for the Congress, a number that topped off at more than 700 reports in last year's cycle. Consider that as of 2009, the department had nearly 1,000 contractors working in some capacity producing reports for the Congress of which more than 200 were working full time. Reports directed by the Congress are effectively beyond our control, but a good number of these reports are also internally generated, including by my own office.
At this time, nobody knows what they cost, and thus there is little basis to determine whether the value gained is worth the considerable time and resources expended. Therefore, I have directed that starting now, we'll freeze the overall number of DOD-required oversight reports, we'll immediately cut the dollars allocated to advisory studies by 25 percent, and henceforth we will publish the actual cost of the preparation of each report and study prepared by the DOD in the front of each document.
By October 1st, we will conduct a comprehensive review of all oversight reports and use the results to reduce the volume generated internally. In addition, we will engage the Congress on ways to meet their needs while working together to reduce the number of reports.
Sixth, the department have set up numerous outside boards and commissions, 65 in the case of OSD alone, to oversee our activities and provide independent advice. Some of these entities provide real value, others less so. Even if their members are unpaid, these bodies still require substantial support, $75 million for OSD alone, in the form of staff and indirect costs. Therefore, I'm ordering a review of all outside boards and commissions for the purpose of eliminating those that are no longer needed, focusing the efforts of those that continue to be relevant, and cutting the overall funding available for studies tasked by the remaining boards and commissions by 75 percent in FY '11.
Seventh, it's no great secret that since September 11th, the U.S. government has seen a proliferation in new intelligence organizations and operations. This is partly due to the war on terrorism and partly due to massive intelligence requirements associated with fighting two wars.
Even so, in the defense arena, large and well-staffed intelligence structures now exist in the services, the defense agencies, the combatant commands and in the war theaters. To some extent, we're still struggling to find the right balance between the value of centralizing intelligence functions versus distributing or embedding them closer to the front.
Nonetheless, we should not flinch from eliminating unnecessary redundancy and directing more resources to places where they are needed such as certain specialties in short supply in theater. I'm thus directing an immediate 10 percent reduction in funding for intelligence advisory and assistance contracts and freezing the number of senior executive positions in defense intelligence organizations. We must also take further steps to end needless duplication within the department's intelligence community.
Accordingly, I've directed a zero-based review of the department's intelligence missions, organizations, relationships and contracts to be completed by November 1st. While these steps will only apply to the Department of Defense intelligence organizations, the new director of National Intelligence, Jim Clapper, has indicated to me an interest in pursuing a parallel and coordinated effort using the same business rules for the National Intelligence organizations.
VELSHI: All right. We're going to continue to monitor this announcement by Defense Secretary Robert Gates. But to get you some sense of what this means, I'm joined on the phone right now by retired general Russel Honore from New Orleans.
General, are you with me?
GEN. RUSSEL HONORE, (RET.), CNN CONTRIBUTOR: Yes, I am, Ali.
VELSHI: All right. Very interesting, broad-ranging, what seems like a consolidation of the Defense Department and a consolidation of some of some of the non-military parts of the Defense Department.
What do you make of the announcement that they're cutting back on the Joint Forces Command, they're cutting back on the use of contractors, they're cutting back on reports that can be commissioned by the Department of Defense?
What's your initial reaction to what Secretary Gates is saying?
HONORE: I served in the Pentagon and I've served on Joint Forces Command. I served on the joint staff. And I'm here to tell you that most of those reports, as the secretary said, were generated by requirements from Congress or from his own staff at DOD.
You've got the joint staff, then you have the DOD staff that replicates the joint staff. So I think the secretary is moving this in the right direction.
We have Joint Forces Command today because it was mandated by the Congress that we form the joint command. And I think the secretary needs to relook at that and right-sizing these headquarters. But I hope he would choose the word "right-sizing" the headquarters based on the missions we've got, as opposed to saving money, because that scares the troops down range that they'll get a lesser-quality product when we get into saving money.
VELSHI: Well, tell me -- you're a straight-talker. Tell me, for those of us who are not intimately connected to the military, what is elimination of Joint Forces Command, if that's what ends up happening, what does that mean? Is that like a level of management that disappears? Does that mean that work that they do gets transferred somewhere else?
What's the impact of that?
HONORE: Well, the Congress is very proud of that because that pulled together what was called the Goldwater-Nichols Act that required the services to be joint. But you know, Ali, over the last 10 years, we've been at contentious combat almost. And we've asked services to continue to step up to the plate and create positions in the field as (INAUDIBLE) general officers.
We didn't build the Army to do nation-building. And we've been doing nation-building in Iraq. All those required general officers to go in and manage big programs, everything from turning power on, to putting sewer lines in, to cleaning up the streets and training the Iraqi forces.
That is what the growth of those general officer positions are evolved from. So, it's time to relook that as we come now out of Iraq. But at the end of the day, there's (INAUDIBLE) troops and call it a service (ph). If this becomes budget-driven, then that could affect the troops on the ground who are fighting the war.
VELSHI: But it does sound like it's budget-driven, right? It does sound like he's talking about, while the rest of the world is outsourcing, he's talking about insourcing, getting rid of contractors, trying to do it possibly for less money inside the military. But the bottom line is this does sound like a review of waste.
The other thing he said, General, is he talked about brass creep. You were just alluding to that, more and more senior officers doing work that can be done by more junior people, or people who are not general officers.
HONORE: Well, you're right. But if you look at the requirements down range and the requirements for oversight and budget authority inside the beltway, it just got out of hand. And I think the secretary got a hand on that.
But when we look at down range at the fighting force, we were sending division headquarters in. Division headquarters, at the beginning of the Iraq War, were about 500 people. It's close to 1,000 people now because all of the things we were asking those troops to do, that was not in the original mission, such as nation-building. So, hopefully that does not translate into the troops on the ground who are fighting in Afghanistan and those who remain in Iraq.
VELSHI: And I'll tell you, General, he's just said now -- because our producers are listening in to this -- he has just said that he's recommending the elimination of the Joint Forces Command.
Where will he get resistance to that move from?
HONORE: I think it will be in the Congress. There's a couple of congressmen and senators there that (INAUDIBLE), thought it was key to bringing the military to a joint perspective.
And I think his fight will be over there with members of the Congress and the Senate who have seen over time the goodness of what Joint Forces Command did to create joint tasks (ph), joint equipment, fielding, and joint experimentation. And that's what that command was doing.
(INAUDIBLE) absorbed into the Pentagon, but the Pentagon wasn't designed to be an operational headquarters. So who's going to do that in the future? I don't know, because that's what Joint Forces Command was doing for the services.
VELSHI: We have two big issues that we're facing right now if you are in the military. One is that we've got budget cuts and budget challenges because of this recession. And everybody's trying to find a place to cut. And the other one is that we're involved in two wars at the moment.
Is rationalizing the military on any level a good idea, in your view, at this point?
HONORE: I think there are some adjustments that could be made, Ali, particularly all those reports the secretary is talking about. But you've got to remember, I was in the Pentagon in 2000. We took a 10 percent cut.
We cut the military positions, and the next thing, we hired them as contractors. So we've been around this before. Right-sizing the Pentagon is a tough job. And he's going to have a tough job with the Congress on those reports, as well as those mandated things like the Joint Forces Command to get that fight through, but it needs to happen. He needs to talk about right-sizing the force and the management of it without affecting the troops in the field.
VELSHI: All right.
A thumbs up, generally, from retired General Russel Honore, a good friend of ours joining us from New Orleans.
We of course will continue our coverage of this on CNN, the announcement by Defense Secretary Robert Gates of some rationalizing, some downsizing in the administration of the military.
We're going to take a break.
I've got a special message for you, the viewer. My "XYZ" up next.
(COMMERCIAL BREAK)
VELSHI: Time now for the "XYZ."
You know how much I enjoy our time together and your e-mails and your tweets and your Facebook posts. This week, I'm taking our interaction a step further.
One of the things I like doing is explaining things, breaking them down in ways that are easy to comprehend. Now, I do this as much for myself as I do it for you, because going through the exercise of explaining something on TV makes me understand it better.
Now, sometimes my explanations work, sometimes they don't, and sometimes your comments make my explanations better the second time around. But what makes explanations and answers really good is when you have competing explanations.
And starting this week, Richard Quest and I are going to start a segment -- we'll start it on Thursday -- where we are going to take your questions and we're going to give you our answers. I'll have more on this tomorrow.
That's it for my "XYZ."
Time now for "RICK'S LIST."
