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Pentagon Briefing; Bush Visits NSA to Make Case for Wiretapping; Senate Hearing Examines Ethics Reform; Reports Say Military Overextended

Aired January 25, 2006 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


KYRA PHILLIPS, HOST: You're watching LIVE FROM. I'm Kyra Phillips.
Don't call it domestic around President Bush. And he prefers surveillance to spying. But he's fiercely defending the concept of warrantless wiretapping. Some call it data mining. At the very epicenter of the controversy today, the National Security Agency.

CNN's national security correspondent David Ensor joining us now from Fort Meade, Maryland. The president going to the NSA, doing a lot of convincing today

DAVID ENSOR, CNN CORRESPONDENT: Well, that's right, Kyra. President Bush needs to make a virtue out of necessity today. He needs to answer critics who charge that his authorization of surveillance of Americans by the National Security Agency is illegal.

And today's visit is designed to highlight the administration's argument that the NSA surveillance is only of communications where one side is outside the United States and where one side is suspected of al Qaeda ties. And this is all part of a campaign this week that started with a rare public appearance by the nation's No. 2 intelligence officer, who himself is a former head of the NSA.

(BEGIN VIDEO CLIP)

GEN. MICHAEL HAYDEN, DIRECTOR, NSA: This isn't a drift net out there where we're soaking up everyone's communications. We are going after very specific communications that our professional judgment tells us, we have reason to believe, are those associated with people who want to kill Americans. That's what we're doing.

(END VIDEO CLIP)

ENSOR: And you may hear that theme echoed again today by President Bush out at the NSA, Kyra.

PHILLIPS: Coming forward and talking about the various laws, saying the president's breaking the law, naming numerous laws, going all the way back to 1947. In addition, still wanting to make the point that, why doesn't he go through FISA, why doesn't he do this by the book?

ENSOR: That is what the critics are asking. The NSA is, after all, the nation's largest intelligence agency, vast power to eavesdrop. And as you say the critics are charging the president by authorizing some surveillance of Americans without a warrant from a special court set up back in 1978 for this purpose. Well, in their view, he's quite simply broken the law.

PHILLIPS: David Ensor, staying on top of the president' speech. We'll follow it throughout the day. Thank you so much.

And cleaning up the cloak rooms and hallways and offices and cocktail parties all over Washington. These days, lawmakers are falling all over themselves promoting their plans for reforming the age-old practice of lobbying. All because of the scandal involving the poster boy for crooked influence peddling, Jack Abramoff.

Today it's the topic of yet another hearing. CNN's Andrea Koppel joins me with more on that -- Andrea.

ANDREA KOPPEL, CNN CORRESPONDENT: Hi, Kyra.

Well, today's hearing is probably going to be the first of many hearings that we're going to be seeing here on the Hill in the weeks and days ahead and months ahead, looking at all kinds of things.

The senators on the panel today were talking about what we've been talking about, and that is the travel ban, whether or not senators and congressmen should be able to accept trips from lobbyists to go to places like Scotland.

They were also talking about the -- the existing gift rule ban, and that means that if you're going to go out to lunch, dinner, drinks with a lobbyist, you -- they can't spend more than $50 on you. That's at one go. More than $100 in a year. We know that lots of people have been violating that. And what they're saying today is they need to enforce that existing rule.

But they were also talking about some of the things that we haven't been talking about that much. And that has to do with how money is raised. And, in fact, Dick Durbin, Democrat of Illinois, was trying to explain. Look, he said, "Why do we need -- why do we hang out with lobbyists?" He said, "It isn't for the free lunch. It's because, in order to run an effective political campaign, you need money. And where do you get the money? It's from the lobbyists."

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), ILLINOIS: Why is it that we warm up to all these lobbyists? It isn't for a meal at night. Heck, at night, I want to sit down, put my feet up and watch TV. I don't want to go out to some restaurant. Most of us are pretty tired at the end of the day. But we know when it comes time to finance our campaigns, we're going to be knocking on those same doors.

(END VIDEO CLIP)

KOPPEL: Now, another issue that is on the table right now in terms of lobbying reform has to do with earmarks, pork barrel politics, something that has been a pet project and something that John McCain has been trying to push for some time. It was a sentiment shared by other senators testifying today.

(BEGIN VIDEO CLIP)

SEN. TOM COBURN (R), OKLAHOMA: Until we eliminate earmarking, the process of putting the well-heeled above those that aren't able to be in that position, until we change the motivation that the next election's more important than the next generation, we won't solve problems. The problem is us.

(END VIDEO CLIP)

KOPPEL: Now, something else that's on the table and that senators are talking about, in particular, Norm Coleman, who's a Republican from Minnesota and Senator Ben Nelson, who's a Democrat from Nevada, they're saying, Kyra, that maybe they need to set up something like a 9/11 Commission for lobbying reform, to get folks from the outside, former senators, congressman, former lobbyists, to take a look at this with supposedly an objective view, Kyra.

PHILLIPS: Andrea Koppel, thank you so much.

Well, the debate, predictable. The outcome, barring any bombshells, a foregone conclusion. Nevertheless, Supreme Court nominee Samuel Alito is make the rounds on Capitol Hill one last time, meeting with Senate leaders and fence-sitters as floor debate begins on the fitness for the job.

Republicans insist Alito is exceptionally qualified. The Democrats say he's outside the mainstream. A day after the Senate Judiciary Committee approved the nomination on a 10-8 party-line vote, we know 52 senators overall, that's 51 Republicans and one Democrat, plan to vote yes. Twenty Democrats say they'll vote no. The rest haven't said or haven't made up their minds.

The White House wants Alito in his new job before the president's State of the Union address next Tuesday.

Is the U.S. Army overdeployed, under recruited, stretched to the breaking point? Well, a study commissioned by the Pentagon indicates it is. The report finds the pace of the Army's missions abroad, the demands of war and shrinking recruit numbers all add up to a race against time that the military and the nation can't afford to lose.

We're expecting to hear from top Pentagon officials this hour. We'll get their response to that report. Jamie McIntyre joins us now from the Pentagon with a preview.

Jamie, what do we know?

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Kyra, this is one of two reports out today that's moving military readiness to the forefront. This report, which was commissioned by the Pentagon, took a look at basically what was going on for the past year or so in Iraq.

And among its conclusions is that the U.S. military and the Army in particular is looking at likely problems in sustaining the kind of troop rotations that they're having to do in order to keep the troops in Iraq.

It's the -- it was also -- the sentiment also echoed today by a separate report released by Democrats on Capitol Hill. That called on the expertise of former defense secretary, William Perry, in putting that together. It also sounds an alarm, not so much about how the U.S. military's performing today, but whether the pace of operations can be sustained with the size of the force that the U.S. has and the amount of money that's being spent.

And that first report, commissioned by the Pentagon, concludes that that's not the case, that the military needs to be larger, in order to fulfill missions like Iraq.

But the Pentagon insists that it's going to be drawing down troops in Iraq and that it would be a waste of money to build a larger Army now because by the time they got it trained it wouldn't be needed. And they're insisting that they're managing the problem through incentives for additional recruiting and also by training Iraqi forces to step up in Iraq. And they say that's really the ultimate answer to relieving the stress on the U.S. Army -- Kyra.

PHILLIPS: All right, Jamie. We'll take that live Pentagon briefing once it happens, when Defense Secretary Donald Rumsfeld and Joints Chiefs Chairman Peter Pace, expected to address the media possibly in about 20 minutes. We'll take that live.

What did White House staffers know about Hurricane Katrina's potential for damage and when did they know it? That's what top members of a Senate committee want to know. But knowing and talking are two different things.

We recently found out federal officials tried to warn the White House about the damage Katrina could do the day before the storm hit. Now senators are accusing the White House of stone-walling their probe.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: We've asked to talk to some of the key decision makers at the White House. They won't let us do that. And most irritatingly, a number of witnesses from other federal agencies who we've asked questions about conversations they had with the White House and the critical days leading up to Hurricane Katrina and afterward, tell us they've been told by the White House not to answer. I don't get it.

(END VIDEO CLIP)

PHILLIPS: The White House says it's cooperating but that it also has to protect the confidentiality of staffers.

The report, sent to the White House on the eve of Katrina, may not have been read by everybody. So we decided to take a look back to see whether administration officials acknowledged the last-minute warnings.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: The report from the Department of Homeland Security was released the night before Katrina made landfall. It warns, "Any storm rated Category 4 or greater on the saffir-simpson scale will likely lead to severe flooding and/or levee breaching, leaving the New Orleans metro area submerged for weeks or months."

Three days later, the president made a comment that would suggest he wasn't aware of the report. On ABC's "Good Morning America," he said, "I don't think anybody anticipated the breach of the levees. They did anticipate a serious storm."

That same week, homeland security director Michael Chertoff, himself, said, "The break in the levees was not foreseen."

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: The collapse of a significant portion of the levee leading to the very fast flooding of the city was not envisioned.

UNIDENTIFIED FEMALE: We've now learned just 48 hours before the storm FEMA released its own report. It compared Katrina's possible impact to an exercise simulation using a fictional storm named Hurricane Pam.

The possible impact from Hurricane Pam detailed in the report included 50,000 potential deaths, one million people displaced, and at least 60 days to drain New Orleans. On September 1, FEMA director Michael Brown had this to say about what had been foreseen.

MICHAEL BROWN, FORMER FEMA DIRECTOR: I think what we did not anticipate was that there would be quite the numbers that we do -- that we are dealing with and that we would have the logistical problems that we're having getting those people evacuated. In addition to the levee breaks, the levee breaks had been much more widespread than we anticipated.

UNIDENTIFIED FEMALE: Brown stepped down from his post less than two weeks later. It took more than a month to drain New Orleans, and more than 3,000 people remain missing.

(END VIDEOTAPE)

PHILLIPS: The polls have closed and the counting is on. Security was beyond tight as hundreds of thousands of Palestinians turned out in the West Bank and Gaza to choose a new parliament, their first new parliament in a decade.

All eyes now are on a group that's not only not been a part of the peace process, it's openly called for Israel's destruction. CNN's Guy Raz is at election headquarters in Ramallah.

And Guy, of course, we're talking about Hamas, an organization that Israel and the United States refers to as a terrorist organization.

GUY RAZ, CNN CORRESPONDENT: That's right, and it could pose an enormous problem for the next Palestinian government, essentially, the cabinet. Because if Hamas fares well in these elections, Hamas will have a strong presence in the next Palestinian government. You may have Hamas ministers serving in the next Palestinian Authority cabinet.

And essentially, Hamas still formally committed to Israel's destruction. It doesn't recognize the state of Israel. And neither Israel, nor Hamas are particularly interested in negotiating with the other.

So the big question is, if Hamas is a major factor in the next Palestinian government, is how it will affect future negotiations between Israel and the Palestinian Authority -- Kyra.

PHILLIPS: Well, Guy, how is it looking when you look at Hamas, Fatah, other contenders here? Does Hamas really have a true chance at victory, and if it does claim victory, what does that say about Palestinian supporting terrorism?

RAZ: Well, the latest polls suggest that Fatah, the mainstream and dominant Palestinian political movement, will win this election and that Fatah will be a minority coalition partner in the next government.

What it essentially says about Palestinians has very little to do with what we by and large know about Hamas, which of course is a group many associate with suicide bombings. All polls show the overwhelming majority of Palestinians today more than ever are very much opposed to attacks against Israel.

But really, this is a protest vote against Fatah, the movement founded by Yasser Arafat, a movement many Palestinians regard as ineffective, a movement that they believe has failed in government and has essentially become a corrupt movement over the last few years. And most Palestinians see Hamas as an organization free of corruption, a clean and honest political movement, Kyra.

PHILLIPS: Well, has Hamas moderated its position during election time? And if it has, can it be trusted?

RAZ: Well, yes and no. I mean, there are some Hamas candidates who have shown an open mind who say they are prepared to negotiate with Israel. But there are others, very hard-line members of Hamas, who say essentially they are not prepared to recognize or to negotiate with Israel, particularly Hamas' leadership based outside, in Damascus, Syria.

But interestingly enough, Hamas has left out its commitment to destroy Israel, it's left that out of its election manifesto. And many observers believe it's a sign that the group is really trying to become a political organization. It doesn't want to be seen as a terrorist group by the United States or by Europe. It wants to be seen as a political player. And many people believe that Hamas is well on its way toward becoming that, in fact, Kyra.

PHILLIPS: Guy Raz on the Palestinian elections. Thank you so much, Guy.

We're talking veterans affairs today, the same day the Pentagon is addressing its very real concerns over troop strength. Still to come a live interview with the secretary of veterans affairs, Jim Nicholson.

The news keeps coming. We'll keep bringing it to you. More LIVE FROM next.

ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: A very divisive and hotly debated issue now: the government's support of America's warriors after their service is complete. Depending on who you talk to, the state of veterans affairs in this country is either an insult to those who serve, or it's a model of efficient health care.

Nobody debates the importance of veterans health care, though. Abraham Lincoln knew it 140 years ago. He underscored in his second inaugural address, "To care for him who shall have borne the battle and for his widow and his orphan." Those words are etched on the facade of the V.A. headquarters in Washington.

But the department is troubled. Budget cuts, closing hospitals, public criticism, most of it harsh, some of it justified. Jim Nicholson has led the Veterans Affairs Department for the past year. He joins me now live from Washington.

Mr. Secretary, nice to have you with us.

JIM NICHOLSON, VETERANS AFFAIRS SECRETARY: Good to be with you.

PHILLIPS: Well, overall, how are you feeling about the care that your hospitals give right now?

NICHOLSON: I'm feeling great. The V.A. health care system is the largest integrated health care system in the world. And just last week, we got the results of an independent survey. It's done every year, the Consumer Index Survey, and it said that the V.A. and the people, the customers who are our patients, our veterans -- and we served 55 million patient visits last year -- had a higher satisfaction by 10 percentage points than the counterparts in the civilian hospital system of America.

So, you know, the proof of the pudding is in the taste. And the people that we're serving are saying to us, "You are doing a great job."

Now, the other thing that is happening. You mentioned hospitals closing. Right now, there are no hospitals scheduled for closing. But there are some hospitals in some areas where we've had big demographic shifts that we are looking at, to either possibly close or to downsize or to adjust the services that they're doing. We have 154 of these major medical centers. And we have 867 clinics throughout the United States. So we're trying to be just as accessible and convenient to our patients, to our veteran, as we are competent and compassionate.

PHILLIPS: And I want to talk about the care. But you mentioned the hospitals. And from the reports that I've been reading, 18 hospitals, it's been recommended, to either have those closed down or downsized. Are you concerned about vets of lower income that desperately need a hospital that is close to them?

You'll know Hillary Clinton, of course, debated this issue, hospitals in her area, and that vets were having to travel to very far places in order to get care. So are you saying that those 18 hospitals will not make a big difference?

NICHOLSON: Well, I'm not saying that any hospitals are at this time going to be closed. We're looking at it, because the Congress said to us, the V.A., "Look at this because you've had hospitals that were built right after World War II for 2,000 inpatients and some of those hospitals have 100 patient populations per day." Some of them have fewer than that.

And that's because in those areas, the number of veterans has declined. They've moved. They've moved west and they've moved south. And we have cities like Las Vegas and Orlando, Florida, where we have no hospitals. So there we're going to be building new hospitals. We're going to build a new hospital in Denver, Colorado, where there's been considerable growth.

So, you know, veterans are like the rest of our population. They move and they shift. And we want to be there, where they are.

PHILLIPS: Well, let's talk about being able to afford that and the mandatory funding and the budget. Do you feel you have enough money to serve returning vets, all the returning vets, at this time?

NICHOLSON: Well, we're treating a lot of veterans. There are 25 million veterans in America. We have 7.5 million enrolled. And as I said, last year, we had millions of patient visits. So that's a lot of demand on our system. Our good work is being rewarded by more and more demand.

So resources are always going -- in this environment, will be a challenge. But the Congress and the president have been very generous to us. We've had a 57 percent increase in our funding since President Bush came into office. We're going to start dealing with the fiscal '07 budget here in a couple weeks, and I think you'll see that they're continuing to be generous in our funding.

So you know, our budget right now is $70 billion, which is -- it's bigger than the budgets of 24 states combined. So the American people are spending generously on our veterans, as they should, because they appreciate, just as you said, about President Lincoln. These are the people that raised their hand and went wherever we asked then, to do whatever we asked them. They're doing it today, in the combat zones...

PHILLIPS: And -- absolutely and they continue to do it and come home with great needs, specifically from the veteran affairs. And you talk about the increase in the budget. But at the same time, your budget fell short, I've been reading, anywhere between $1 billion to $2 billion. Why isn't the V.A. budget automatically increased to keep pace with the inflation and the surge in returning vets?

NICHOLSON: Well, you're talking about this question, I think, versus -- mandatory versus discretionary budgets. And having a discretionary medical budget for the V.A. gives us great flexibility, because there is an ebb and flow of this demand.

Right now, we're at war. And every person who comes back from the combat zone, whether they're reserve, National Guard or regular, are eligible for V.A. care for a window of two years. Well, we need to quickly be able to ramp up for that, that demand, that surge in our -- for our services, which is what happened to us half the year. This year, we're anticipating that.

And I'm sure that, you know, we will be well prepared, as we are now. And that's a very high priority for us, those young folks that are coming back from the combat zone, particularly those that have been injured.

PHILLIPS: Well, let's talk -- and I do want to talk about the injured. But I want to start with mental health. The Army surgeon general estimates 30 percent of returned Iraq veterans are showing signs of some sort of mental stress. 2004 Army Mental Health Advisory Team survey showing improved unit morale in Iraq over the previous year, but it also showed that nearly one in five U.S. combat soldiers had acute post-traumatic stress syndrome.

What are you doing to deal with this? And do you feel you have enough doctors to deal with this and keep track of these veterans?

NICHOLSON: We do have enough and we're keeping very close track of them. We've got over $100 million increase in last year's budget, just for the mental health part of our returning combatants from the theater.

We keep very close tabs. This is a very high priority, because what we're trying to do is identify these people who are having these -- what are really common experiences to an uncommon experience. That is combat, war, to a civilized society is an uncommon experience.

And so when people are restless and they have fitful nights and dreams and so forth, these are common experiences. And we're trying to identify that, have no stigma attached to that, and try to get them to come in to see us. Because there are the opportunities for great recovery.

Most people from World War II and Korea and so forth that have been treated, you know, have led normal lives. And so we're trying to get them to come in to see us. And so we're seeing -- of all those that have come back, we've seen about 13 percent so far, and about a third of those have had some post-traumatic stress disorder issues. And we want anyone who's feeling that to know there should be no stigma attached. It doesn't mean that -- for a minute that they're losing their mind. It's a common reaction to an uncommon experience. and we want them to come and see us.

PHILLIPS: Let's talk about amputees. Walter Reed, there's various numbers, but we can say has at least he helped more than 300 amputees from OIF, Operation Iraqi Freedom and Operation Enduring Freedom. Yet, I've talked to several soldiers, amputees that say it's taken six to eight months to get their prosthetics. Why is it taking so long for these men and women to get what they need, just to be mobile?

NICHOLSON: I think that would be pretty rare. I'm not familiar with one of those cases.

I was actually at Walter Reed yesterday with the attorney general and the secretary of HUD and the secretary for education, visiting some of our young wounded warriors in the clinics. We watched them taking physical therapy and talked to several of them. Their morale was terrific. We have great new technology. We have these sea legs for above these above the knee amputations, which have micro processors that can almost, you know, think like one's brain and know how to take a step or to arrest a step.

I think that the moral among our amputees is very high, and I think they're very appreciative. Because, frankly, I think the Army is doing a fantastic job at Walter Reed.

PHILLIPS: Jim Nicholson, secretary of veteran affairs, thanks for your time today, sir.

NICHOLSON: Thank you.

PHILLIPS: Let's get straight to Fredricka Whitfield, working a story for us in the newsroom. Fred, what do you have?

FREDRICKA WHITFIELD, ANCHOR: Well, a verdict is in, in the case of a jailhouse killing involving the defrocked Catholic priest, John Geoghan. Dan Lothian is following the story from Boston -- Dan.

DAN LOTHIAN, CNN CORRESPONDENT: Well, Fredricka, the verdict did come in. Joseph Druce, who had already been spending time in prison, in fact a life sentence for killing another man, was just convicted of first degree murder in the killing of John Geoghan.

As you mentioned, he is the convicted pedophile, former priest, who was really sort of the central figure in the -- in the clergy sex abuse scandal in Massachusetts.

This was a case where he didn't deny that he actually committed the crime. He felt like, in words, he had to stop the priest because he was bragging about what he had done in prison. He really didn't -- was arrogant and seemed unrepentant.

And so in testimony on the stand, he would talk about how he felt compelled to kill the priest in order to stop him or send a message to other pedophiles around the world, that what they were doing was wrong.

So, again, a first degree guilty verdict in the case of Druce, who was convicted of killing the former priest.

WHITFIELD: And at the same time, Dan, Joseph Druce had claimed he was severely mentally ill, trying to plead that he was insane. But he was under the delusion that God had chosen him to kill Geoghan. Do you understand or have you learn of the circumstances why the jury said, "We're not buying that"?

LOTHIAN: We've not had a chance yet to hear from the jury. As I mentioned, it just came in that the -- the guilty verdict just came in. So we haven't had a chance to get all the details as to what the jury was thinking.

But certainly, as you mention, he did during the trial talk about how he was abused as a child, at a school that he was attending, by father. He said he was abused repeatedly.

And so when he heard Geoghan, according to him, describing how he had abused other young boys, how he sort of laughed at what he had done, he said it kind of pushed him over the edge. And his attorney did mention that he was carrying out, in his word, God's will, to send a clear message to other pedophiles. So he was acting in this sort of delusion that he was -- had been instructed by God to carry this act out.

WHITFIELD: All right. Dan Lothian out of Boston, thank you so much.

So a guilty verdict for Joseph Druce, who is convicted of killing John Geoghan in jail -- Kyra.

PHILLIPS: Fred, thanks so much.

A live look now at the Pentagon briefing room. Defense Secretary Donald Rumsfeld is getting ready to brief reporters. As soon as he steps up to the mic we will -- we'll go ahead and stay with it.

A couple of things that we are hoping that he will address and that is mainly a report that was released about the U.S. Army being overdeployed and being stretched to the breaking point. We're going to listen in and see if he talks about this study commissioned by the Pentagon.

DONALD RUMSFELD, DEFENSE SECRETARY: Why am I here alone?

UNIDENTIFIED MALE: (UNINTELLIGIBLE)

RUMSFELD: Apparently, and the vice and several others.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) civilians are capable of running the Pentagon.

RUMSFELD: Never run smoother.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) but not flu shots.

RUMSFELD: I guess, yes. It's a shame. They both are down with some kind of a bug.

Before President Bush took office, he expressed his determination to see the United States military well-prepared for the challenges of the 21st century.

Noting that the outcome of great battles are often determined by decisions made decades before -- which, of course, we all know is true from history -- he said that, as president, he would recommend that the Department of Defense challenge the status quo and envision a new architecture of American defense for decades to come.

Since 2001, the Department of Defense has been doing exactly that: questioning old assumptions, reorganizing, with the goal of providing military commanders with greater flexibility.

Consider, for example, one of the many changes within the United States Navy.

When I came to the department in 2001, Vern Clark, the chief of naval operations, showed me their current Navy deployment map. It indicated that three out of every four U.S. naval ships were not deployable at any given moment, because of the long repair and maintenance cycles and the peacetime culture.

The map -- we call it the hockey puck map -- it had globs of hockey pucks located in maintenance yards and, as I say, very few ships deployed.

Then some of the best naval strategists went to work and developed creative ways to make considerably more efficient use of the United States Navy's fleet.

These included swapping crews by flying them out to ships rather than bringing the ships all the way back home and then all the way back out to the AOR, investing in more spare parts to significantly reduce maintenance down time, keeping manning at high readiness levels throughout the fleet at all times.

Because of those innovations, and others of a kind, and, importantly, because of a change in culture, the number of a ship's deployable days has nearly doubled.

We hear a lot of talk about how many ships are there in the Navy. What people should talk about is not how many ships, but how many ships are deployed, how many ships actually are giving you capability out there.

And the percentage of the fleet routinely at sea has increased by more than 50 percent. And the number of deployable days has nearly doubled. And an additional third of the fleet is ready to surge as required.

In short, the United States Navy is vastly more capable, more lethal and more agile today.

Consider the Army, as well.

For decades, the Army was organized in large divisions of roughly 15,000 soldiers. If commanders wanted to send a smaller number of troops somewhere, it required an enormous effort because the logistics needed to support the troops were arranged at the division level, in division-size support capabilities.

With the Cold War long over and the likelihood of a large conventional battle reduced, the Army asked: Is there any reason to still organize that way, other than the fact that that's the way they've always done it?

The answer, of course, was no. So the Army decided to reorganize into brigade combat teams consisting of about 4,000 soldiers, and it divided up the large division-size support systems to give each brigade enough of its own firepower, logistics and administrative capacity to deploy on its own.

This innovation has given commanders considerably greater flexibility. Because of the reforms now under way, some 75 percent of the Army's brigade structure should always be ready in the event of a crisis; and more capacity in modules that are more flexible and more applicable to the new century.

Each of the services have made changes in equipment and practices to be sure, but also changes in attitudes and culture. Necessity is, indeed, the mother of invention.

There's a clear awareness that our military must be ready for unforeseen eventualities, while incorporating lessons learned from previous and current conflicts.

In Iraq, lessons learned studies began, as many of you know, the very first days of the war. The team of Central Command, along with strategists in Washington, have since analyzed both the successes and setbacks from that conflict, with an eye toward improving the way we train our troops, equip them and fight.

To name just a few of the recent changes: the department has increased funding for intelligence, put an emphasis on training troops in foreign languages, significantly expanded the role of special operations forces and emphasized curriculums that teach nontraditional, irregular or asymmetric warfare at military training schools.

In the coming weeks, the department, as you know, is going to submit to Congress several documents. One is the quadrennial defense review, another is the national military strategy risk assessment, and a third is the president's 2007 budget request and the forward year defense plan. Each is part of a larger strategy designed to focus on how to fight future wars and how to maintain the momentum behind the last several years' continuum of change.

The quadrennial defense review in particular should be seen as the next step in a long line of significant changes, many of which have been accomplished in the last five years, others of which are in process. It should not be seen as some sort of new menu for program adjustments.

The overriding goal is to keep our country safe and to support the missions of the dedicated men and women in uniform.

I would be happy to respond to questions.

QUESTION: Mr. Secretary, you and General Pace and other leaders from the Pentagon have said in the past that the Army is not only not broken, but not even close to being broken.

And yet former-Defense Secretary Perry issued a report today on the Hill which says -- as other reports on the outside -- that the U.S. military ground forces have been placed under enormous strain by the wars on Iraq and Afghanistan; so much so that potential adversaries could be tempted to challenge the United States.

He said at a press conference that if the strain is not relieved, it will have highly corrosive and long-term effects on the military. And this report warned of looming crises in recruiting new troops and retaining current ones that threaten the viability of the all- volunteer military and cites critical equipment shortfalls in the Army and National Guard.

How do you respond?

RUMSFELD: Well, I haven't read the report. But from what you've said, it's clear that those comments do not reflect the current situation. They are either out of date or just misdirected.

There's no question but that if the country is in a conflict -- and we are, in the global war on terror -- that it requires our forces to do something other than what they do in peacetime. And so if one thinks that a wartime force is the same as a peacetime force, they obviously are wrong.

The issue of recruiting and retention, retention is up and recruiting, against higher goals than previously -- because we're increasing the size of the ground forces -- the recruiting against them have met their goals, these higher goals, I believe, every one of the last seven months.

The force is not broken. The implication in what you said is also, I think, almost backward in this sense.

The world saw the United States military go halfway around the world in a matter of weeks, throw the al Qaeda and Taliban out of Afghanistan, in a landlocked country thousands and thousands of miles away. They saw what the United States military did in Iraq.

And the message from that is not that this armed force is broken, but that this armed force is enormously capable.

Second, I would say that it is not only capable of functioning in a very effective way and, therefore, ought to increase the deterrent rather than weaken it; in addition, it's battle-hardened and is not a peacetime force that has been in barracks or garrisons.

It is a force that has been deployed, functioned effectively and, as I say, battle-hardened.

So while I haven't read it, I think that it's a misunderstanding of the situation.

QUESTION: Mr. Secretary, do you think others might be tempted by the fact that the ground force is stretched, notwithstanding enormous air and naval power that this country has?

RUMSFELD: I think quite the contrary.

I think anyone in the world who has watched what the men and women in uniform of this country are capable of doing and seen the investment we've made -- an increase of I don't know what it is, 47 percent or something -- and the equipment that's been acquired would -- anyone with an ounce of sense would see it exactly opposite.

QUESTION: Mr. Secretary, may I continue on along much the same line?

There's another report on the table, one ostensibly ordered by the Defense Department and prepared by a retired military officer, which refers to a "thin green line" and says the Army is stretched so thin it's close to breaking.

But the bottom line of this report, as I read it, is that the OPTEMPO is so severe and so demanding, particularly the Army now in Iraq and Afghanistan, that if we continue with this current OPTEMPO, we cannot outlast the insurgents.

Can I get your specific reaction to that please?

RUMSFELD: Well, it's just not consistent with the facts.

I just came from the White House, where the president was meeting with eight or 10, 15 senators, and Pete Schoomaker was with me and someone asked that question.

And Pete Schoomaker's answer was that it's just not correct; that he's seen a broken army, he knows what a broken army looks like in the post-Vietnam period.

There's no question but that during the period of the '90s, a number of aspects of the U.S. armed forces were underfunded and there were hollow pieces to it. Today, that's just simply not the case. Close to breaking is -- only someone -- I just can't imagine someone looking at the United States armed forces today and suggesting that they're close to breaking. That's just not the case.

QUESTION: (INAUDIBLE)

RUMSFELD: Just a minute. I'm going to finish my responses.

We have over 1.4 million active, over 2 million total, counting the Guard and Reserve. And we've got 138,000 people in Iraq.

Now, does the force still need more rebalancing? You bet. Do we have the wrong skill sets within the Guard and Reserve as between the active and reserve components? You bet.

Do we have too big an institutional Army as opposed to a war- fighting Army? You bet. And is that what we have been doing for five years, fixing that? You bet.

And Schoomaker and Harvey are making solid progress. The changes that are taking place in the Army are revolutionary. They are going to -- I mean, you just don't go from 33 combat brigades to 42 -- or whatever the number is we're heading toward -- and not increase your war-fighting capability.

The Guard and Reserve, for a great many years, didn't have the kind of equipment that they needed. And those changes -- the funding's taking place up on the Hill and the supplementals and equipment's being purchased. And you are going to see a more capable Guard and Reserve than in a very long period.

So I think those kinds of things misunderstand what's taking place. Which is not surprising. You know, an awful lot of things are happening and there are a lot of moving parts.

And some people have said, "My goodness, you can't transform the Army in the middle of a war." The fact of the matter is that the sense of urgency and the impetus from the war to transform is actually accelerating transformation rather than retarding it.

QUESTION: But the Army is reducing its combat brigades from 77 to 70.

RUMSFELD: That's just factually wrong.

QUESTION: Last year, they told the Hill they were going to...

RUMSFELD: It's just factually wrong. You're talking about Washington reductions.

If you have a plan that says, in the case of active duty brigades, that you have 33 and you're going to go to 43 -- and that was the announcement last year -- and this year -- and you're going to 43. You're en route.

That's an increase from 33 to 43, what you've announced. And this year you announce that you've changed your mind and you're going to go from 33 to 42. That is not a reduction. That is an increase from 33 to 42.

QUESTION: But the Army officials told the Hill last year they needed 77, and this year they're saying 70. What has changed in the last year that would lead them to believe we need 70?

RUMSFELD: The Army will be up presenting their budget and testifying to it. They have made adjustments within their desires and interests and needs as between the present and the future, as between the active and the Guard and Reserve.

And they are all going to be increased. The war-fighting Army will be higher, not lower.

Calling it a cut is a Washington, inside-the-Beltway misunderstanding and characterization.

QUESTION: What has changed in the threat environment in the last year...

RUMSFELD: Just a minute, just a minute.

QUESTION: ... that would lead you to believe you need seven less combat brigades?

RUMSFELD: We're increasing from 33 to 42 combat brigades.

(CROSSTALK)

Well, wait a second. Are you going to let me finish or not? Are you going to let anyone else ask a question or not?

QUESTION: I will.

(CROSSTALK)

RUMSFELD: That'd be a whale of an idea.

Why don't we go over here?

QUESTION: Mr. Secretary, I want to ask you about this report that the Pentagon paid good money for, from Andrew Krepinevich, and two things...

RUMSFELD: I haven't read it.

QUESTION: ... two things that he said that I'd just be curious about what you think.

First of all, all these reports make a distinction between how the U.S. Army is performing now and what the risk is in the future. And one of the central premises of this report is that recruiting and retention problems are going to get worse and that's why there's a danger of breaking the Army in the future. RUMSFELD: Oh, so they don't say it's broken, as was characterized?

QUESTION: Not what I've read.

RUMSFELD: OK.

QUESTION: The other thing that he suggests is that the drawdown of U.S. troops in Iraq is not entirely based on the ability of the Iraqi forces to take over, but partly driven by the need to relieve the strain on the U.S. Army.

RUMSFELD: That's just false.

QUESTION: Could you comment on either of those matters?

RUMSFELD: Unless people are telling me something other than the facts, that's just false.

Because I know I spent another hour on the secure video with General Casey this morning. I then spent another hour on it with the president briefing a group of senators. And the recommendations he has made, the recommendations he told me he will make over the coming year, are based on conditions in Iraq.

And they do not have to do -- the problem here of how we deploy or redeploy and manage that is a Washington problem, not a Casey problem. And he is not making his recommendations paced on that. And anyone who says he is, I think you would find if you ask Casey, he'd tell you that's just not true.

QUESTION: And are you managing problems in the Army in terms of recruiting and retention in a way that provides a short-term fix but is going to come back to provide bigger problems down the road? Because that's what these reports seem to be suggesting.

RUMSFELD: That I don't know. I've never heard that argument.

I know that when -- I'm trying to think when it was. Gosh, it was almost two years ago, when the Army said, "My goodness, we better increase our efforts to attract and retain," so they increased various incentives, they beefed up the number of recruiters, they announced all of this to you folks, and went about their business.

And they've had good effect. They've been able -- the retention, as I say, is up. It's particularly high for people who've served in Iraq and Afghanistan.

QUESTION: How long is that going to be the case? If the troops continue to be sent back to a war zone, how long before they...

RUMSFELD: I don't know. Time will tell. We'll see. But my...

QUESTION: (OFF-MIKE)

RUMSFELD: I don't know the answer to the question. I suspect the people writing these things don't know either. Because I suspect that they don't have any more insight than the other people around here do.

And it seems to me that we have started to reduce our force levels as conditions have permitted. We are now, I don't know, at 227,000 Iraqi security forces. We're transferring bases. We're transferring real estate. We're transferring responsibilities. We're training people to handle the combat support and the combat service support. Expected to be, I think 300,000 by the end of the year and more in 2007.

Certainly, it's their country. They're going to have to take hold and take responsibility for it.

What we've seen in the Guard and Reserve, for example, is that the percentage of the force deployed in Iraq has gone, I think, from 40 percent down to 25 percent or 26 percent or 27 percent of the force from the Guard and Reserve. Rather than going up, it's going down.

And there isn't any reason in the world why we shouldn't be able to maintain, with an active and reserve total force concept of over 2 million people, why we shouldn't be able to maintain 138,000. Even though I don't expect we will maintain 138,000 in Iraq, there isn't reason you shouldn't be able to do that is you balance your forces right and arrange them, and get the right skills sets on the active side, and if you move some military people out of civilian slots as the Army's been doing.

I think there are so many things happening in this department and have been for five years and on an accelerating basis that people haven't taken the time to think about or look at or watch the effects of.

I mean, if you think of the water barrel with the spigot, the spigot was at the top. You were only able to drain the top 10 percent of this institution, and it's been moved down, and it's still moving down. And we're able to access, which takes the ability to use a larger portion of your total force.

I think there's just -- people just don't fully understand.

QUESTION: Mr. Secretary, could I take you back to what you said at the outset about the Navy and the reforms that Admiral Clark put in place to get more use out of a smaller fleet?

RUMSFELD: Yes.

QUESTION: Admiral Mullen is understood now to be proposing a rebuilding of the Navy, adding more than 30 ships to get back up over 300.

Are you suggesting that perhaps that's not necessary?

RUMSFELD: No, I agree with Admiral Mullen. He's doing a good job, and he was a very intimate part of Vern Clark's team, along with Gordon England. They've done an excellent job in the Navy. And, you know, what I'm trying to point out is that if one focuses only on 20th century metrics like, "How many ships; is it 500, 600, 400, 300, 200?," you missed the point.

The point is: How many days do you have ships capable of being deployed to do what it is that naval vessels are there to do for the United States of America, to create presence and to be able to provide military power in various parts of the world?

And a naval ship today, in terms of lethality -- first of all, the deployable days are not any different today, with a Navy of just under 300 ships than they were when the Navy was 400 or 500, because we've increased their deployable days. And the lethality of those ships has gone up many-fold.

We used to talk about a number of aircraft -- number of sorties per target. Today, we're talking about number of targets per sortie. And the precision weapons make an enormous difference.

So what the Navy's done is important, and it's important for people to begin to start thinking about it in the 21st century, looking at the right metrics, rather than the last century's metrics.

QUESTION: Along those lines, the QDR recommends that the Navy...

RUMSFELD: How do you know? It's not been released.

QUESTION: The draft's been out there, sir.

RUMSFELD: But the draft's a draft.

QUESTION: The packet's on your desk...

RUMSFELD: Think of all the fine tuning it's getting.

(LAUGHTER)

QUESTION: But the broad point is this: According to the latest draft, the...

RUMSFELD: Do you believe every draft you see?

(LAUGHTER)

QUESTION: The later ones, I do, especially if they come off your desk.

RUMSFELD: Come on.

QUESTION: The latest draft has the Navy positioning six of its 12 aircraft carrier groups in the Pacific and 60 percent of its submarines in the Pacific for engagement, deterrence and presence factors.

The question is this: How much is that being driven by the threat of an emerging China or the perceived threat of an emerging China? And is this one of those issues where you're showing a long- term trend, repositioning of U.S. forces, to accommodate that kind of potential?

RUMSFELD: I think we'll wait for the QDR to be released and leave it to that. This is the president's budget that's going to be announced next month. It's the quadrennial defense review, which we give to the Congress and the president.

And rather than speculating on whether what the draft you saw was a late one or an early one.

QUESTION: (OFF-MIKE) I mean, is that a factual...

RUMSFELD: We'll wait and see when it comes out. Why don't you just report the news instead of what might be the news.

QUESTION: Sir, in the report that was released on the Hill today, Secretary Perry's take on what's going on, there's an interesting and important data point. When you talk about retention, the forces are being retained at historically high rates, but specifically the lower level soldiers, the soldiers with one four-year term under their belts are not staying.

RUMSFELD: In which service?

QUESTION: In the Army.

RUMSFELD: In the Army?

QUESTION: They said that they're 18,000 soldiers short. So you're making up for it right now with older career soldiers. But two or three years down the line, four or five years down the line, there's going to be a problem with not having enough young soldiers to fill the ranks of the NCO corps.

Have you all tackled that question?

RUMSFELD: It's a question that people think about who are in charge of these things. They worry about the mix within the various services. It's interesting -- I haven't read the report; I'll have to do that -- I mean, these are the people basically, who did that report, who were here in the '90s. And what we're doing is trying to adjust what was left us to fit the 21st century.

QUESTION: Clean up their mess? Is that what you're saying?

RUMSFELD: I didn't say that.

QUESTION: Did you think it?

(LAUGHTER)

QUESTION: I want to follow up on that report. One of the recommendations...

RUMSFELD: Which report? QUESTION: ... from Secretary Perry today was that the size of the Army should be increased by 30,000 on a permanent basis, not on the current temporary boost. Why are you opposed to that?

RUMSFELD: Oh, my, goodness, gracious, that kind of argument -- you know, we're increasing it by about 30,000 using the emergency authority. It costs money. It costs a lot of money to have a larger Army, to have larger numbers of people because of the costs involved.

We've said that we're perfectly capable of doing whatever is needed to do in the current time frame because of the emergency authorities.

The Army, people who happen to know something about this, General Schoomaker and Fran Harvey, are telling us they do not know how successful they'll be in switching skill sets, in moving things from military positions to civilian positions, in reducing the size of the tail, the institutional Army, as opposed to the teeth, the war- fighting Army.

And they think that they'll have to get through this process of increasingly the number of combat brigades, modularized brigades from 33 to 42 or 43 -- they'll have to get through that to see what the savings are. And then, they'll know what level they will need above the current level.

And they just don't know at the present time. So it's magic that somebody outside knows all of that because you can't know it. It's not knowable. So when you read it...

QUESTION: (inaudible) that 30,000 could be permanent?

RUMSFELD: The Army tells me they think it will not be.

But why do we have to guess? Why don't we go through this transformation that's taking place in the Army? Many things they are doing are less manpower-intensive. They're doing many more things that involve reachbacks, so you don't need combat support; you don't need combat service support; you don't need force protection for people who are back in the United States. And they're doing much more reachback.

There was peanuts for reachback in the '90s. People do not understand all of the changes that are taking place.

So I'd read very carefully what these reports are saying and ask yourself the questions: Do the authors of them really have a clear understanding of what's gone on in this department in the last five years?

QUESTION: Sir, is there going to be a change in the strategy of the American Army?

RUMSFELD: I mean, you've been looking for bin Laden for the first four years and Zarqawi and his people for the past three years and you haven't been able to find them. So are you going to shift to accommodate the Army strategy to guerrilla warfare instead of traditional warfare?

Well, clearly, there's an emphasis on recognizing that the things that we face today are not conventional threats with large armies, navies and air forces, but more asymmetric or irregular threats. And we've been making those adjustments over the past four and a half years.

QUESTION: Mr. Secretary, you said that the people outside the building don't really have the insight of all the moving pieces. And you said that perhaps you should read into these reports.

RUMSFELD: You've always been a steward of the taxpayer dollars. Why does the Pentagon pay these people like Krepinevich to give you a report if you're standing up there saying they don't have the insight of all the things going on inside the Pentagon?

Well, because the way you get the best knowledge and the best perspective is to listen to people with different views, let people think about things, walk at them from different perspectives and see if they come up with insights that are helpful.

And that's the reason we do our lessons learned is after the fact, is to say, "Gee, what actually happened? We know what we thought. What actually happened?"

And I think it's a useful thing to invite people to make comments and critiques and to opine on this and to opine on that. And then people who are really in the gearbox, making this thing work, have to take all of that and make judgments about it.

And that's what we do, and it seems to work pretty well.

Thank you, folks.

PHILLIPS: Secretary of Defense Donald Rumsfeld, getting a lot of pointed questions from reporters there. We thought he would just be talking about one study and that was the Army study called the "thin green line." And this was a Pentagon-commissioned study on Army troop deployment and it concluded that the Army needs more troops to fight in Iraq and Afghanistan.

But there's also another study that is out. He was kind of going back and forth between the two, and that was the military readiness study that Democrats released a report on, blaming the Bush administration for the strain on the nation's armed forces.

So we'll continue to talk about both of these studies, how the secretary of defense responded, after we take a quick break. More on LIVE FROM.

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