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Presenter: Adm. David Jeremiah, U.S. Navy (Retired)
Wednesday, June 13, 2001 - 1:30 p.m. EDT

Special DoD News Briefing on Morale and Quality of Life

(Special Defense Department briefing on morale and quality of life in the military. Also participating was Victoria Clarke, assistant secretary of defense for public affairs.)

Clarke: Ladies and gentlemen, we're going to get going here. Thanks for being with us.

Admiral David Jeremiah, U.S. Navy (Retired), is here today to talk about the defense morale and quality of life study prepared by the RAND Corporation for Secretary Rumsfeld. Many of you in this room know him, Admiral Jeremiah's service in the early '90s, vice chairman of the Joint Chiefs of Staff. Now he is president of the Technology Strategies and Alliance Corporation, a strategic advisory and investment banking firm engaged primarily in aerospace, defense, telecommunications, and electronics industries. Did we miss anything there?

Jeremiah: (Off mike.)

Clarke: Got it.

He has also worked on the Defense Policy Board, a National Reconnaissance Office advisory panel, the Space Commission, the National Defense Panel, and a human resources task force for the Defense Science Board.

As you know, the study he's going to brief today is one of a number of studies the secretary has commissioned to stimulate his thinking on the issues before the Department of Defense now and in the future. As such, this and other studies that we have represent inputs to the secretary, not decisions.

With that, Admiral Jeremiah.

Jeremiah: Stimulating the secretary of Defense's thinking is not hard; I'll have to tell you that right now. He goes very hard, very deep, very fast, and he's very good at it.

This briefing is -- was brought about to do the things that Victoria suggested, but also it has direction from the secretary -- from the president of the United States, under National Security Presidential Directive 2, that says -- that asks the secretary of Defense to conduct a study of quality of life and provide recommendations in whatever fashion he deems appropriate.

When we looked at that charter, we thought that the words "quality of life" tend to have a certain set of subsets and did not reach out far enough across the board to the things that really do affect what goes on in the military today. And so the secretary asked that we expand the study charter to include a broader issue of morale, and we'll talk to that as we go through the remarks.

You don't have it on the -- in your program, but I wanted to just tell you a little bit about who the study group were. The people that were involved came from each of the services, including the Coast Guard and including Reserve officers. We had a representative from the HR world in industry, a $7 billion company, vice president of human relations; people from academia; and the former president of the National Military Family Association.

We also employed the services of some outside consultants who are also engaged in the Quadrennial Review of Military Compensation so that our recommendations will be in sync with the findings that they will come to produce. And we drew our -- relied heavily upon Admiral Tracey and her staff to give us some of the information material that we needed to substantiate some of our recommendations. Dr. Paul Mayberry is here, and he was the study director. He came from service in the Personnel and Readiness portion of the department.

[ Slides used in this briefing are available as a single .pdf file or as individual .jpg files ]

I'd like to go to the next chart and give you our view of the problem statement, and I'm going to tell you that there is a break in that chart. If you look at the -- where it says "Too much dated infrastructure," there's a break between the things above and below it. So this bill goes into four quadrants, and that's the way I think it shows in the charts that you have in your handout.

We wanted to -- I want to talk to you about what we thought we saw. What we think we saw was a department which is highly esteemed by the people and the nation; they have great regard for the military. The percentages of people who support the military is very, very high. But among the population that we're interested in in terms of bringing in recruits, the propensity to serve is very low, on the order of 5 percent. So you have to really -- you have in the recruiting area a significant problem trying to bring -- reach the target populations and get the right kinds of people in.

We also had -- we have fewer people outside the military who act as what I'll call influencers -- retired, veterans, people with prior military service -- either on the Hill or in the population at large. And so the experience that the youngsters have with people who have been in the military or associated with it is pretty small. This is a problem that we have to deal with, and we pretty much look at it as a leadership problem. It is a leadership problem in the sense that everybody from the president on down has responsibilities to the people who serve. And one of the things that is necessary is to ensure that they understand that the work they do is noble work. And we'll talk a little bit about that later.

On the right-hand side is an area that we generally categorized as management. It goes down to the section that begins with "changing demographics." And what we're talking about in management is the following: there's no real structure, no strategy that deals with the human resources in the department across the board, not just military but civilian and contractors as well.

We have a much richer blend of people now -- military, active military, reserve, civilian, civil service, civilian contractor, civilian out-sources -- and those people tend to go to war, or what we are now doing today in Kosovo and Bosnia and places like that, much more often, and they are integrated into the force that we're dealing with. So we have to look at how do we handle that? Are there things that they need to have that we haven't provided for them? And we looked at that as well.

We have a military institution that was put together 50 years ago, as far as our compensation and personnel structure was concerned, and it tends to be somewhat inflexible in the sense that one size fits all. We have people marching through the pay grades and then out the top; it's an up or out sort of a system. That works okay, and has worked for decades okay. It's been band-aided a lot by the Congress and by the executive branch in order to make it do the things that we need to do at certain times. But it also doesn't necessarily recognize the individual needs of the services. For instance, the Army and the Marine Corps have a much stronger predilection for larger numbers of junior personnel; the Navy and the Air Force have a disposition towards the technical skills and ratings and, therefore, a somewhat more senior service.

Two good acts by the Congress of the United States, the Defense Officers Personnel Management Act, and the Goldwater-Nichols, have worked in a way that has put some stress on the personnel system. DOPMA, the Defense Officer Personnel Management Act, was intended to get rid of a little hump that we had in the force structure and normalize that, and it also wanted to compress the force structure so that we had younger senior officers; people weren't staying on for a long and extended period of time. So in that compression, we then injected Goldwater-Nichols, which requires you to go to a joint war college, and requires at least one, probably two joint tours in the space of your career. This inside that compression that was generated by DOPMA has created a problem in terms of how we handle our force structure, and we need some more flexibility from what we saw in dealing with that. And there is, of course, an ever-changing requirement for specific kinds of skills that are also very competitively desired by industry.

If you go to the lower left, to the part that says "too much dated infrastructure," we're talking about the ability to provide in the bases we have the best kind of facilities that we can get.

That isn't the case. We have too many bases, and those bases have too many old structures on them. And the impression you get when you look at as an individual in the military is that this is an organization that's not working very hard to give us the kinds of things we need to do our job and do our work. And I recognize that there are some places around this town in particular that are several hundred years old and still very functional, but that's a whole different thing than getting a functional hangar in an air station and things of that nature.

We don't have as many job enablers as we might -- would like to have from the -- as compared to civilian practice. And we have some business practices that when you look at it from the vantage point of a 19- or 20-year-old who's had a little experience in what he's accustomed to, those business practices don't seem as sensible to him as they might be.

In the fourth category, then, is personnel and family support, and it begins on the chart with the bullet labeled "Changing Demographics." What's out there now is a world in which we have more married, we have changing ethnic compositions of the force, we have an aging civilian force -- and I'll show you some charts on that as we go through -- and in the personnel area, we have substandard and, in some cases, limited housing available to support our force structure.

We've got -- the housing has been on the QOL list for -- since the beginning of the term, I think. It does not seem that we are going fast enough to alleviate that problem.

So what you have is a system that is basically 50 years old and has been band-aided over the years to accommodate different stresses and strains on it. It needs to be looked at in a totality, restructured, and new proposals brought forward to change the way we do business, so that we reflect the fact that we no longer have a draft where we -- the cost of human capital was very low, where we have individuals with much higher expectations for their future than they did in the past, and where we have the housing kinds -- and we have medical problems that are -- a much larger population of veterans and others who depend upon our medical facilities. We have a retirement system that was wonderful 50 years ago, but -- and was very competitive compared to the civilian sector, but is no longer and has different kinds of expectations. So what we have is a 50-year-old system that we're trying to use in the 21st century, and that needs to change.

(To staff.) Next chart.

I think you can see in the chart up there -- what you see is a continuing pattern of high operating tempo. You see the numbers down there below for the services, the changes in their requirements. This is a world in which we are not at war and we're not at peace.

The peace that we're in is the absence of major war, but it isn't peace as we know it, and it demands an enormous amount of activity on the part of the military members in the force.

A particular group that have contributed -- next slide, please -- is the Reserve. If you look at that chart, on the lower left-hand side you'll see that before Desert Storm, the Reserve force structure was providing about a million duty days a year. Then, of course, it peaked, as you see in the red line during Desert Storm, and following that, we've averaged about 12.1 million duty days a year out of the Reserve -- a twelve-fold increase. That creates a whole different structure in ways you think about the Reserves when they deploy more often, and it puts stress on the family, it puts stress on their employability in the civilian sector, in their regular job, and it puts stress on their finances because in many cases they get no compensation -- their compensation is not equivalent to that which they earned in the civilian world. So this is a problem that we've had to deal with.

I talked earlier about the costs of acquiring personnel. And here you see a chart; the red line reflects the numbers of high- quality recruits, which are defined as high school diploma graduates, and the mental categories 1 through 3-A, who satisfy both of those criteria. And that number we try to keep around 65 percent [correction: 50 percent]. You can see that we have a declining number approaching 55 percent at the end of 2000. And the cost to acquire the individuals has gone up from an average of about $6,000 to about $10,000 a year. So more money going into recruiting, and still a hard job to capture them.

Well, what's going on in the enlisted force? What's going on is that we have a force that has changed over time from what you see in the category listed as 1985 to what's going on in 1999. In 1999, the enlisted force -- 55 percent of the enlisted force who had four years or less of service had some college education.

By the time you get up to the 5-10 years of service, nearly 80 percent of the force has some college education. Some of that is college equivalencies for the trades and the skills that they've acquired in service; some of it is the opportunity they've taken to get additional education benefits while they're on active duty. And we find now many enlisted people with in some cases more than one bachelor's degree and master's degrees, or more than one master's degree. So it's a very different force than that high school diploma graduate if we were lucky and ahead of the sheriff 50 years ago. (Light laughter.)

This is a force, if I may have the next slide, please. Oops. Maybe, maybe not. (Pause.)

Okay. Pressing on. This is a chart that is important. And so if you can discern it in the handout, and please try and pay attention. In your handout --

(Off mike remark.)

Jeremiah: Okay. If you look at the blue line, that line represents the regular military compensation that we pay to our personnel. And the line that is the -- just above it generally with the diamonds -- in our graph it shows up there, is a line that represents the average compensation for some college students, or for civilians with some college. What that chart tells you is that we have from about six years of service until 25 years of service a mid-grade pay -- and this is true also for the officer corps and the junior elements -- gap between what is being offered in the civilian economy and what is being offered in the military. That gap is because we are -- have been paying on the assumption that we're talking about high school diploma graduates and not some college graduates. And the civilian headhunters look at that gap and say to themselves, "Here's a ripe opportunity to recruit out of the military and into the civilian world." And, of course, that appeal rings very well with our youngsters who are looking at making decisions about whether to stay or go.

So this is a problem.

It's why we recommended to the secretary that the pay raise, the billion dollars that President Bush provided in -- I think it was his speech at Fort Stewart -- that that be targeted because if it was flat, it would -- if it was a straight percentage across the board, it would tend to pay more to the lower enlisted and to the higher enlisted, and accentuate the gap in the middle. And that we're trying to redress. And the Quadrennial Review of Military Compensation is also trying to work on that.

One last comment on it. When our pay systems -- scales went into effect, the thought was -- as we became an all-volunteer force, the thought was that we would move to that top line, the 70th percentile, as the objective for our compensation for enlisted personnel. We have not done that, and as you see, we're at the blue line.

Now, the problem in the civilian workforce is similar but also different. They are also competitively challenged for civil service. We did a drawdown after Desert Storm and as part of the end of the Cold War, and did that very nicely. But the effect of that drawdown is that the civil service has aged so that now half of the force is eligible for retirement in the next five years. And, of course, during the drawdown we did not hire, or not substantially, so there's no young end of this coming up to fill that gap. That will take some extraordinary measures in order to get things sorted out, and we believe -- and you'll hear this in the recommendations, so I'll just let that one go for the moment. But there was also very little attention to the development of the leadership in civil service and the tremendous need for individuals with technical skills who could handle the acquisitions and the activities we've had over the years.

Let me go to the next area. Better housing sooner. We have a very difficult time, apparently, and certainly in keeping up with the demands on the housing because we got in such bad shape across our whole facility structure. What you see on this chart is a before and after, the "before" on your right-hand side, and the "after" on the lower left, and that is privatized housing. That's not to say that there's a distinction between what we build in the public sector and what we build in the private sector, but the public sector -- the private sector finances that construction.

And the ability to move more rapidly towards a modern housing facility is enhanced by that flexibility. The Congress of the United States has given us the authority to do this, to go into more privatized housing. When we looked at it, we felt that the department had to move faster, and it had to provide better and faster in terms of dealing with the housing (inaudible).

The next one shows you the impact on, as far as I'm concerned, on morale of workplace conditions that, on the right-hand side you see a sewer cover in an aircraft handling area. The aircraft, an F-15, hit the sewer cover, broke through it because it was poorly maintained. We replaced the sewer grate for 500 bucks; it cost $185,000 to fix the airplane for the landing gear damage that was done, damage that was preventable with adequate resources for the physical plant. That's an example, it's a good example, and it shot through all of the things that we see in our facilities. And what it says to an individual is, "You don't care" -- well, you guys are all familiar with that. You live in the Pentagon press corps area (laughter) -- "You don't care enough about us to really provide for us the kind of facilities that we need to do our jobs right."

So what do we recommend? Let me start with leadership.

It is important for the youngsters who serve in the military, officer and enlisted, to understand that what they are doing is noble work. It is compensation that you don't get by more pay; it is compensation that leads people to choose that profession because they believe in patriotism, they believe in their country, they believe in discipline, they believe in the things that the military represents. They've come from a civilian background, they want to do that sort of thing. We have to be careful when we talk to the troops that we don't confuse them by telling them that since they've only -- they've been in Bosnia for six months they're not ready to do their job when they come back and we're going to have to put you back into the training command in order to get you out of C4. Well, what is our job today? That is the job in Bosnia, Kosovo and other places, and that's what we need to say, "You did very well, that was the work you did. You performed well. Good on you: on to the next task."

We have to give them training that says, "We're going to make you competent to do the work that you want to do." And you've got to recognize -- I'm talking inside the lifelines now -- that value with your troops, and communicate it to them all the time so that they know that you value them, and that starts with the president of the United States and goes down to the junior petty officer or sergeant with his troops.

The American public needs to understand -- and you are the vehicle that can do it -- what goes on in the military, and that this is a noble profession to which you should be proud to commit your sons and daughters because there are careful stewards who will train them and lead them and protect them and will never, ever, ever waste them inappropriately.

We have to make realistic commitments to our troops. We have to be consistent in what say and do what we say.

We think that you have to change the command climate somewhat. Most of the services now ask the 0-5s, the commanders and lieutenant colonels who run the battalions and ships and squadrons, their tours are generally 24 months, and that's generally about right, but it ought to be a minimum tour and not, in our view, an average. Too many people go through that command tour, particularly beyond that at the 0-6 level and sometimes senior to that, for a very brief period of time, and it's almost a button push -- something you have to check off on the "do list", and that's not right. Command is a very tremendous responsibility and it is a great joy, and our youngsters need to understand that, and it takes the leader who is in that job who believes it and exemplifies it in his daily conduct, and he can't do that if he's still learning the job or if he's just got it sorted out. He needs time to become a solid mentor for his people so that they look to him for guidance -- or her -- and that they move forward in their career with an aspiration to be the commanding officer and do the same or better job.

I told you that the system -- let's go to the next one -- the system was a little bandaged and a little old, it doesn't quite fit. So how do we fix that? To my knowledge, the department has never had a human resource strategy, even independent of an overall military strategy, just what do we do with -- what's the plan?

How do we plan to move our people through the forces? How do we plan to acquire them? How do we plan to retire them? How are we going to do it with this total force that involves contractors and civilians as well as -- and civil service as well as military personnel? How are we going to -- you know, are they covered by the Geneva Convention and other kinds of requirements when they're in combat zones? What's the deal? What is required there? Are we treating them the way we should? Do we have defined roles for our active and reserve military? Then that plan needs to be (inaudible) up with the things that Jim McCarthy talked to you about yesterday [ transcript ] and the things that others will talk about in terms of general purpose programs and what we're doing with the total force so that we are providing the right kind of manpower into the system to do what needs to be done, and that we are thinking far enough ahead to see issues and problems.

For instance, we know that if you look at today's demographics in the United States, a much larger proportion of the population will be Hispanic in 20 years or so. If that's the case, then the military has to prepare -- and this is an example. There are other things, obviously, that are equally applicable. If that's so, then we need to start putting into the system young Hispanics who can mature and be the sergeants and the colonels and the flag officers who can lead that force when the majority of the force may very well be Hispanic in at least minorities and not the typical Caucasian leadership that we have seen over the years. We have to plan ahead to do that or it won't happen. You have to build those kinds of leaders.

We need to know what kind of skills and experiences we're going to need for our transformed force. We need to know that we probably may not want a 60-year-old infantryman. I've seen plenty of 40-year-olds that'll drive the 20-year-olds into the ground. But 60 might be pushing the issue a little bit. But I'd be happy to have a 60-year-old information warrior he or she has probably got 15 or 20 years of experience in the business, knows how to do it, knows all the tricks of the trade, at least the youngsters that are coming up now as they would mature. So there are different needs out there, and it doesn't -- the one-size-fits-all doesn't work any more. We need to think about how to deal with these different requirements.

We need to provide for a flexible career management system. And this is, I think, the most fundamental of the recommendations that is included under this force management. We need to understand how to recruit and retain and retire the force structure so that it fits the needs of the individuals and it fits the needs of the services.

The typical and classic example is a pilot. Generally speaking, after 14 or 15 years of service, you begin -- the total force needs relatively fewer pilots, and there are appealing occupations in the civil sector, but that individual will hang on, perhaps doing something he'd rather not do, in order to get to the 20-year retirement point. Why do that? Why don't we have a flexible retirement system so that the individuals both have portability to take their retirement with them when they go, and it vests early as it does in the civilian sector so that we're competitive with the civilian sector. Those kinds of changes need to be looked at, and we need to look at how we recruit and access people.

I told you early that there were only 5 percent of the population we're interested in that were inclined to serve. But that population, at least the ones where we go to recruit, does not include -- generally does not include junior colleges and colleges. And yet there are plenty of kids out there who are willing to drop a year -- take a year or two off to get their head straight, to travel, to do something so that they have a better -- to get some more cash that they can put against their education -- a host of reasons why a junior college or college student may want to interrupt their education, go to the military, come back with additional education benefits, or stay and continue to get those benefits and continue a different career.

We think that in at least one instance, we need to think about how to partner with industry. As an example, the pilots, the air traffic controllers, and most of the mechanics who work in the aircraft industry are provided out of the DoD pipeline. Yet with a smaller force structure, we're not pumping out large numbers of pilots as we did before. The number of pilots that we need determines the pilot training rate. So if we program for the force structure we have, and 10 years out the civilian aviation industry now suddenly needs a bunch of pilots to replace those who are retiring, where are they going to get them? In the military. So ditto with the air traffic controllers who will come to their three-year peg point and will be retirement eligible three years from now, and those air traffic controllers that were hired during the Reagan administration are going to go out the door, and most of the air traffic controllers are in the military today who would replace them. So ought we not to think about a different way of handling that pipeline by looking not only at the military requirement, but also at the civil requirement and treating that as a national asset and a national requirement and get some public/private cooperation in doing that sort of thing?

Finally, we think that in the force management recommendations we need to compensate the work force properly and accurately.

We need to bring that level up to reflect the fact that these are college -- people with some college, and that's what we have to do to be competitive. And we have to pay people for performance, for what they're doing, and not just because they're present. Some people will get paid more because they have special skills, and that's the way the world is.

Let me go on to the workplace recommendations. Those are pretty obvious to you, but we wanted to include them because where you work and the environment in which you work has a lot to do with why you want to continue in that environment. If you're working in a place where the infrastructure, as I said earlier, is too big, well, and our facilities are decaying, we need to do something about it. Well, whether or not you get BRAC'd, you have a pretty good idea of what you want to keep and what you probably aren't going to keep. But the key thing is, focus on what you want to keep.

I would say, from a Navy perspective, that you probably will not leave Norfolk or Pearl Harbor -- those are both pretty critical places -- and so when you modernize and replace, perhaps you ought to focus on those areas where the bulk of the population is and get the best value back. So you don't build a new barracks or build a new commissary or build something else and then move out of the base a year later.

Personnel and family support recommendations: use the housing authorization, move faster, understand how to deal with the investment strategies so we are intelligent enough to do the right numbers when we're making private/public decisions, to provide both better housing and also to provide better facilities for our people.

We have Tricare that needs to be fully funded. It has been underfunded for a long period of time. Every year we have to go in for a supplemental. Part of that is because of the demand, but part of it is because I think that there is a deficiency in the way we recognize the escalating costs of health care, as opposed to the overall cost of living. We need to do that and look with a little more precision at it and get cooperation between OMB and the Department of Defense in terms of the resources that are allocated for that purpose.

There was, about the time we were working, an accident in a C-130, and four members of the crew died in the cockpit. They were Reservists. Those four individuals were treated differently with respect to their death benefits, ranging from nothing to full compensation, depending upon the status under which they were flying -- weekend warrior or temporary additional duty. [Clarification: This is an illustrative example of what could happen, rather than an actual accident.]

Something wrong with that. It's an inequity. We need to fix that, and particularly in view of the fact that our Reserves are providing so much of the force structure today, we have to modernize the way we think about their service and how they're compensated for their service.

We want to provide more employment opportunities for spouses, particularly overseas. Many of them are willing to work, want to work, but can't find occupations. A simple way to do that, we found, is that when we looked at our child-care centers, again overseas, we found that they were being paid at minimum wage or less, and keeping people there was very difficult because they'd always go to another job. How about cranking up the compensation, providing more job opportunities for them and more stability for the child-care centers? You get a double out of that one.

And we need to look at how we relocate people, if we can minimize it -- it's easier done in the enlisted force than it is in the officer corps. But also, we need to put criteria out there, performance metrics for the movers. Most of our people moving have damage on every move. That's not right. We need to do a better job of qualifying the movers so that we get quality people. And, of course, we have a different scenario because most of our people are relatively junior who move around, as opposed to industry where most of the people who move around are relatively senior. And so there's a little better ability to cope with the problem when that happens in the civilian side.

And finally, we want to be sure that the department has done everything that it can and should do to ensure that the military member and spouse and dependents have the opportunity to vote when it's time to vote.

Where are we so far on these recommendations? Well, the one that's obvious is the president's initiative at Fort Stewart, in which he said that he wanted to increase pay and allowances by a billion dollars in base pay and $400 million in adjustment to compensate for a shortfall in the prior -- in the original budget. And we would target that pay raise, for the reasons I talked about in the chart that I showed you just after that little break we had that showed the gap between where we want to be and where the competition is and where we are. We want to fill that up, and that says you're going to have a targeted pay raise rather than a straight across the board.

We want to accelerate our housing privatization through the public/private ventures and get more funding into the existing stock to maintain it better, and eliminate a lot of the out-of-pocket costs associated with at least permanent change of station moves.

And that -- $400 million will go to that. And there's a $3.9 billion price tag on the pharmacy benefit for over-65 retirees and for Tricare and Medicare claims, and that will be compensated for, and the president will go forward with that, as we understand it.

Those are the end of my remarks, and I apologize for being long.

Yes, sir.

Q: Admiral, I might ask you, possibly the most scintillating recommendation of all the subjects you touched on here was the flexible retirement system. Are you all concretely recommending that the military perhaps go -- get away from having to serve for 20 years, or that officers don't have to be promoted or get out? Are you recommending that --

Jeremiah: Yes.

Q: -- or are you suggesting that be -- you are recommending that.

Jeremiah: We have recommended that.

Q: That you could serve less than 20 years and --

Jeremiah: You can serve less than 20 years and retirement is vested just as it would be in private life, and we will not require you to leave at 20 years if you're performing the way we need you to perform in physical condition to planned performance at that point in time.

Q: But you don't -- so you wouldn't have to be promoted or get out in that --

Jeremiah: Well, that's what we need to look at. And we would say that's probably right, we get -- but this -- the difficulty with this human resources business is when you have a lot of recommendations, and these translate into about 64 different recommendations, when you have a lot of recommendations and you poke the Pillsbury dough boy here, you've got to be sure you understand what's going to come out of his arm over there. (Laughter.) And so it really -- I mean, because we could have some very serious unintended consequences out of this. So you don't want to go into it lightly. But that is the intent, is to get that kind of flexibility into the system, and it'll depend upon the services how they want to use it within their speed and altitude envelope that the department gives them.

Q: And how about cost? Have you any idea what this would cost?

Jeremiah: The way we handled cost was -- you know how you go to a restaurant and it's a one-, two- or three-whisk restaurant? Well, we did it that way with respect to the dollars associated with the -- either you had no dollars, or a one-whisk, two-whisk, three-whisk dollar sign. And that's not -- part of that is because of this interaction. To price any one of those doesn't reflect the interaction of all of these things. So we did not price explicitly, but we gave the secretary an idea of what the magnitude of the pricing might be.

Q: Can you give us the idea of what -- the twixt and between, what the high and low figures might be?

Jeremiah: I don't -- I can't remember it right now. (Laughs.) But much of this is policy; much of it has no price attached to that.

Yes, sir.

Q: Admiral, the pay raise that -- the billion dollars the president wants to spend, well, even if you target it, the overall average is like 2 percent or something like that.

So that's the one year. You might take a -- but this gap that you talked about, because they're not high school graduates anymore, they're something more than that, would require additional pay.

Jeremiah: Yeah.

Q: What are you recommending for future years as far as pay raises above --

Jeremiah: We deferred that to the Quadrennial Review of Military Compensation, because they're working on the same track, but with more precision than we have.

Q: And no recommendations --

Jeremiah: But -- they're following the same thing, but they're not in yet.

Yes, ma'am?

Q: You've said a little bit -- on the part about training pilots and air traffic controllers and --

Jeremiah: Yes --

Q: -- are you saying that DoD should train more pilots, for instance, than they actually will need? And what would they -- if you're training more pilots than you need, what would they be doing?

Jeremiah: Some might go directly into the Reserve. I think that's probably unlikely, but given the op tempo that the Reserve has, it's likely that there will be some. There will be some who would prefer to get -- we may have some earlier outs. And if it's a big, big number, that's a problem, but if we start early enough and work the problem, it shouldn't be a huge number that we have to deal with.

Q: All right. So is this something that industry has asked for, and how much would this cost?

Jeremiah: Well, they have not. I've talked to a few people in the industry at the right levels, and there's some interest in it, but not immediately, because they don't have a problem for 10 years, or something like that.

Q: (Off mike) --

Jeremiah: But we would have a problem in 10 years, when that draw comes down, if we haven't prepared for it in advance.

Q: Because there are not enough pilots now, in 10 years --

Jeremiah: In the pipeline.

Q: Okay.

Jeremiah: All right.

Yes, ma'am --

Q: Admiral, the problem with that is -- the problem right now, of course, is the -- is your leadership; you don't have people staying around to become majors and lieutenant colonels, you know, commanders; you know, you don't have your section flight leaders and squadron leaders. How do you keep those people around? If you're basically doing a training mill for the airlines, how do you keep your people around to come --

Jeremiah: That's in part because their commitments are pretty close to 12 years, I think, 13 years now, when they sign on, to get through the training and then their obligated service afterwards. And so that'll deal with part of it. And the other part of it is, you have people who prefer to do what they're doing, flying and being involved, who are essentially naval officers who fly, if you will, or -- and the Air Force officers who fly and do other kinds of things. And that gets you a population that will continue on to fill those -- the slots that are usually commander, lieutenant colonel, colonel, and up.

Q: Admiral?

Jeremiah: Yes? We're here. Okay.

Q: Oh. Oh, thank you. I'm interested in your comments about morale and the readiness issue. Secretary Rumsfeld has talked about the same thing, about troops coming back in from Bosnia and being told that they're not ready. This was actually a big issue during the campaign. You'll remember Norm Schwarzkopf standing on the deck of the Jersey, talking about, you know, the -- on readiness of the force.

And even President Bush and Vice President Cheney made a big deal of that when they went to military audiences, with "Help is on the way." What is your assessment, or your panel's assessment, on the impact that the election cycle has on military morale? Do you see it being used as a football?

Jeremiah: No, I think those were honestly held views on both sides and, in some cases, correctly held views, because they tended to talk past each other in terms of what they were discussing. So I don't see that that's a political issue.

Yes, sir.

Q: Admiral, you talked here about the high op tempo. This is something many people have mentioned in the past several years, and certainly it was mentioned during the campaign. And the secretary, of course, talked about the military mission being over in Bosnia and cutting back there, then he seemed to backpedal and said, well, we'll stay there. Then there was talk about taking the troops out of the Sinai, and that seems to have gone away as well. What would you do in this situation, and what should be done? Is it time, outside of the high-profile deployments, is it time to tell some of these countries -- let's look at the map here -- in South America and Africa that we just can't show up anymore? How would you deal with it?

Jeremiah: First, let me say that this is a quality-of-life problem that has no quality-of-life solution, all right? The solution rests in the transformation and general purpose force questions, because fundamentally -- and strategy -- because it's fundamentally a question of the force structure you have and the missions you believe you have to undertake, and if you believe you have to undertake the number of missions we have there, then we have to change the force structure. That means more dollars.

So we start going through that drill, and there's got to be some balancing amongst the three of those. And I, personally, would probably buy more ships, but -- (laughter). But for that reason. There aren't enough to cover all the bases that everybody has told us we have to cover, for as long as I was a Naval officer.

Let me get to this side over here.

Q: You talked about sending mixed messages to the peacekeeping troops coming back from places like Bosnia. Is one of your recommendations that we change the readiness reporting rules so that folks like that aren't judged C-3 or C-4?

Jeremiah: Not the rules, but the standards. Not the rules, but the missions, probably, that you're evaluating, because a lot of those troops that are ready to go into the Fulda Gap might be not quite ready to do the kind of problems they had to do in Bosnia. So I think the whole thing needs to be looked at and rethought in the context of the strategy as it comes out as a military strategy, and we have to look at our metrics and decide how to measure them.

Yes, sir.

Q: At two points in the brief you ran up against the changing patterns of education in young people. More of your enlistees have some college. You've got to recruit from junior colleges. I'm almost sure that it was before Rudy De Leon became under secretary for personnel that he was targeting this. Now, that's six or seven years ago; eight years ago, perhaps. This isn't some FFRDC [federally funded research and development center] report squirreled away in a vault. This was a fairly senior civilian leader in the department highlighting this problem with specificity and data. And here we are seven years downstream and David Jeremiah, under the high-powered -- (inaudible) -- discovered this. Why has it taken so long?

Jeremiah: We didn't discover a lot of this, it was all there. People have said it many times, and somebody has to listen. That's what we're doing, we're trying to find people who will listen.

Q: I wasn't clear on what your recommendation was for technical speciality fields and compensation for them, like particularly the IT fields and hard-to-recruit fields like that. Were you recommending that we perhaps pay those people more in the hard-to-recruit specialties?

Jeremiah: I think we will move more towards pay for performance.

Q: Sir, along those lines, is that including enlisted?

Jeremiah: Oh, yes, absolutely enlisted.

Q: So aside from -- now pilots are compensated a little bit more, a $25,000 bonus per year type thing, but there's nothing that mirrors that in the enlisted --

Jeremiah: Oh, sure, there are some bonuses. And I think you've got to get that restructured a little bit. It's a lot of patchwork to do different things at different times. Some of it's carried over, some of it's not.

Yes, ma'am?

Q: Admiral, in your recommendations to the secretary, did you put priorities on these things; these need to be done now, the fastest? And if so, could you tell us what's at the top of your list?

Jeremiah: I can't tell you precisely which ones came first, but we did say these things are important, they need to be done now; they're policy things with low-hanging fruit, you can do it; these things will take more study. And you probably -- and the great bulk of these fundamentally will probably show up in the guidance for the QDR [quadrennial defense review] and the guidance for the Defense Planning Guidance. Perhaps some of it will turn out to be language, but not much, I don't think, and that will go into the -- I would say the '03.

Q: Well what is at the top of your list, two or three things?

Jeremiah: I think we have -- from my perspective, you've got to get the pay tables properly aligned. We need to get the private and public -- the quality of housing and the quality of workplace sorted out. And I think those are pretty high on my list of things that need to be done. But that's not necessarily where -- when you get done with this and look at all of the pieces, the priorities may be different.

Q: Sir, there was, you know, substantial pay increases just enacted a couple of years ago, and money put into housing as well. There's the promise of a further pay increase, as you've noted, from this administration. It seems important to understand, if you're trying to get people to listen, how far those investments get you towards the goal you're proposing. I mean, I'm asking you to talk about money at least in terms of orders of magnitude and whether the money that's been invested the last couple of years and that is on the table now gets you a third of the way there, half the way there, 80 percent of the way there? Can you give us some sense of how much money you're talking about?

Jeremiah: I don't think money in and of itself is the metric. I mean, you clearly need to deal with the compensation schedules. But if the environment in which the individual works, if the leadership is clicking the way it's supposed to, if they feel like they are an appreciated force, there is some -- what do you call it? -- subliminal compensation that's associated with that that's pretty darned important. And that's why I went with some of the facilities -- where you work and where you live -- as kind of up-front things that needed to be dealt with.

Q: Well, sir, if the intangibles should be provided for by the services, what are you asking the American public to do in terms of a financial investment here?

Jeremiah: I think in the main, comparability with civilian pay for the same purposes.

Q: Well, you must have some sense of what that adds up to.

Jeremiah: As a matter of fact, I don't. (Laughs.)

Q: Well, the 70th percentile line for some college, for example, I mean is that --

Jeremiah: No, I think we probably -- certainly the first place we want to go is not the 70th percentile but that lower line that talked about it.

Q: It's still going to take billions more dollars, correct?

Jeremiah: Over what period of time?

Q: You tell me.

Jeremiah: Okay. It probably -- there are billions of dollars associated with this.

Q: Admiral, just to clarify that, the chart you showed us with the gap in pay, does the military side of that gap include benefits like the housing allowances, like the free medical care, that aren't normally available to civilians?

Jeremiah: We got that on the Hill, and the answer was not so fast.

Staff: It does include the housing benefit, the tax advantage, but it does not include the medical side of that equation or the retirement.

Q: So if you include those things, the real gap is somewhat smaller. Can you say how much?

Staff: Well, you would have to, of course, add those into both sides of that line, whereas the private sector those lines were comparable in terms of comparison.

Jeremiah: It was an apples-to-apples comparison, as I understand it.

Yes, ma'am?

Q: You talked about changing the retirement structure so that maybe somebody could get out as a major instead of having to wait till 20 years. What about the upper end of it, what about a three-star that hasn't made their fourth star and is forced out at 35 years; is that something that you looked at?

Jeremiah: The chief of the service has a consultation with them and they decide collectively what his career options are -- (laughter) -- he's not forced out!

Yes, that's the part that Secretary Rumsfeld, I think -- that's one of the parts that he's been most reacting to. Here's a perfectly solid, well-serving officer who, because he's hit an age wicket, we've sent him -- we say goodbye. He says why are we doing that? Most of the people we send out of the military, in a corporation are just at the point where they're really producing and doing good things for the corporation.

Why do we send them out to go do that for the corporation? It doesn't make any sense.

Yes, sir.

Q: Is that because he's 68 years old? (Laughter.)

Jeremiah: (Laughs.)

Q: No, the question I had in mind that I thought was intriguing was do you foresee a Hispanic minority force anytime soon? What do you view as trends in that direction?

Jeremiah: I think that what the demographics show, if it follows the nation's demographics, is that you will have a largely Hispanic and African American force. The majority will be Hispanic and African American.

Q: When?

Jeremiah: I can't remember the when. I think it's about 20 years out, isn't it, Paul? Yeah.

Q: Did you -- you said you looked at ethnic demographic change. Did you look at the decreasing number of women and what that means?

Jeremiah: Not specifically. We thought that that was an issue that had been pretty well wrestled with, and our issues were to get an 85 percent solution; we didn't work that one.

Yes, sir.

Q: Admiral, playing devil's advocate here, the Hispanic situation that you talked about, what's wrong with just allowing -- as they grow in the population you take more Hispanics in the door, they progress up through the ranks, in 20 years they're the majority of the leaders of the force and so forth, versus going to some equal opportunity effort now to promote people who are more Hispanic in higher percentages. Is that what you're --

Jeremiah: No. What I'm saying is we'd -- I would prefer what you gave as the first option. Generally speaking, that doesn't happen unless you force it.

Q: How do you do that, though? I mean, you have --

Jeremiah: You have to go look for them and say, "We want to get this -- we want more Hispanics." No quotas or anything like that. But we --

Q: But what I'm saying, there wouldn't be any kind of an effort to quickly get them into leadership positions faster --

Jeremiah: No, I think you go by the quality and the talent and what they provide and deliver. But the point is that you want to have senior leaders who understand what the juniors are -- how they think and what they're worrying about. And you won't get that necessarily --

Q: It doesn't happen naturally as the percentage of the population --

Jeremiah: It has not happened naturally, I think, in the past, no.

Q: So you're talking about, what, recruiting, and then once they're in, basically fostering their careers to help advancement as well. Is that --

Jeremiah: No.

Q: You're just talking about improvement?

Jeremiah: No, I'm talking about assessing a large enough body so that in the future there is a body remaining at senior positions. And they will perform or not.

Yes, sir?

Q: Admiral, these aren't recommendations, but you've obviously bounced these off Secretary Rumsfeld and his staff. What's your feedback? I mean, is this something that we're likely to see?

Jeremiah: I told the secretary that if he incorporated all of these changes that we suggested, that they'd certainly name buildings after him. He might even get a ship named after him. (Laughter.)

Q: Did that influence him? (Laughter.)

Jeremiah: He listens, as he does in all things. I served on the Space Commission with him, as you know, and he was very attentive to everything we had to say, shared some of his own experiences, was sympathetic with what we were trying to accomplish, I think substantially, and he has, I think -- has said publicly that dealing with this aspect of his job is one of the more -- most important tasks that he has.

Q: Just to follow that, was there anything where he listened to your recommendation and challenged you in serious way and said he thought you were fundamentally mistaken?

Jeremiah: Who do you think we're talking about? (Laughter.)

(Laughs.) Of course he did! (Laughs.)

(Laughter.) Yes, sir?

Q: Sir, I just wanted to ask you -- I understand we're spending about 2.9 percent of our gross domestic product on defense, at about or perhaps less than what was spent at Pearl Harbor. Do you get the feeling that not only has defense but quality of life been underfunded, and it's still underfunded?

Jeremiah: Oh, yeah.

Q: Do you have a time line on any of these kinds of things, any idea when any of them would be or could be implemented, the soonest date possible?

Jeremiah: I don't want to second-guess the secretary, because he's going to make his own decisions, obviously, but I would guess that the great majority of these will be incorporated either in the -- either in legislation, if that's required, or budget proposals for the other three budgets.

Yes, ma'am.

Q: Thank you, sir.

Q: Did you specifically recommend base closures or infrastructure -- (inaudible word)?

Jeremiah: Did we?

Q: Yes. Was it a specific recommendation?

Jeremiah: Oh, absolutely. Yeah. As a generic thing.

Q: Not one, two, BRAC -- I mean, did you go into the detail about what --

Jeremiah: No. No.

Q: Thank you, sir.

Jeremiah: Thank you.

Q: Admiral, where is the report? (Off mike.)

Jeremiah: The report is in the hands of the secretary.