(Briefing slides are available)
Vice President Gore: Good morning, ladies and gentlemen. It's an honor for me to be here with Secretary Cohen and with the Chairman of the Joint Chiefs of Staff, General Henry Shelton; with the Deputy Secretary of Defense, John Hamre; with the Vice Chairman of the Joint Staff, Joe Ralston; and the Director of the Joint Staff, Dennis Blair; and the entire Defense Reform Task Force. I'm especially pleased to see Doc Cook here this morning. Doc has been one of my most important and dependable allies in the effort to reinvent government over the past four and a half years, and I know he's just as important to the defense reforms that you're going to hear about today.
Let me also say a word of personal thanks to John Hamre and all of those who on short notice rearranged the timing and format of this event so that I could participate in praising the work of Secretary Cohen and his team, because I think it's just an extraordinary work product, and I asked for the opportunity to lend my words of praise because I have seen how difficult it is to reinvent government, and this is an extraordinarily well put together plan, and I just wanted to come over here and say that.
I also want to tell you that because the President's asked me to be back at the White House for an announcement at 11:00, I will have to depart just after Secretary Cohen's comments, so I will miss the details. But I've seen them all, and you're in store for a good presentation here.
There is an old barracks saying that if you complain too much about the eggs at breakfast, they're liable to make you the cook. Well for decades as a congressman and senator, Bill Cohen complained -- quite loudly at times -- that the Defense Department needed to get leaner and more competitive and more efficient in its business practices. So today Mess Sergeant Cohen will give us a taste of his recipe for a more businesslike Defense Department.
This has been a long time in the making. Just a few days after Bill Cohen was confirmed as Secretary of Defense, he and I got together to talk about reinventing the Defense Department. We agreed on the problem. The nation needs to spend tens of billions of dollars to replace aging military equipment. This is an urgent requirement. That money has to come from somewhere other than borrowing for bigger budget deficits.
What really excited me was that Secretary Cohen shared my own bone-deep conviction about the solution to this problem. That we have the money we need to keep America's military forces fully modern and fully capable -- the strongest in the world by far, but that we are spending too much of our defense money on the wrong stuff. On paperwork, for example, and on industrial-age bureaucracy that is too expensive and too slow to keep pace in the world today.
We all know that no business could survive like that, and the Secretary and I agreed that national defense cannot either.
We agreed that government should emulate the best in business -- to learn from them and to adopt their best business practices. We agreed that big, all powerful, all knowing corporate headquarters operations were a thing of the past. That today's world needs fast moving, fast thinking, fully empowered front line workers and front line fighters. We agreed that information technology is changing everything -- from the way we buy supplies and equipment to the way we fight; and that information technology is the key to America's future strength as a defense leader just as it is the key to America's future as a business leader.
In short, Secretary Cohen and I agreed that what we need is businesslike government and that is, coincidentally, our theme in this year's reinventing government operation. This is the latest progress report on reinventing government, and it is all about what we have been learning from America's best companies. It's full of stories about private companies teaching government agencies how to work better and cost less, and lots of the stories in the book are about defense. For example, about General Provratski who learned inventory management from IBM, from Eddie Bauer and from Spiegel, and whose goal now is to beat Walmart; or stories about Colonel Al Arnold who is reinventing the DoD travel system with help from AT&T, American Express, and IBM, who says he wants to "ride industry's bow wave, not steer the ship."
All the stories are about capitalizing on America's strong free market economy -- about creating businesslike government.
I believe that the reforms that Secretary Cohen and Deputy Secretary Hamre and General Shelton and the entire team here have prepared will build on the stories in this book in a way that really does reinvent the entire Defense Department.
So today, Defense Secretary Cohen will unveil his plans for businesslike defense management -- management that is not only up to date, but management that will bring America's defense into the next century -- efficient, effective, the strongest in the world by far.
I'm pleased to note that not only does the Secretary have a plan, he has the man to carry out the plan -- the same person who was primarily responsible for working with the Secretary in putting it together, my friend John Hamre. And I want to particularly compliment John on the dedication and gusto he has brought to this task. Secretary Cohen said it has to be done, here are the broad outlines, and John has added an incredible amount of ingenuity and drive to really get this done. And with the help of this task force that came up with the specific ideas and the front line workers in the Department of Defense who supplied them with the recommendations that they sifted through and used to come up with this plan, this is really an extraordinarily good document. And make no mistake about it, behind the scenes and between the lines you will see tremendous courage on the part of this leadership team here in doing things that people for years said were unthinkable and impossible. They've provided the leadership and the ideas to do it right.
You may know that the traditional procedure might have been for the Secretary of Defense to introduce me. We turned that on its head purposely today, because that smacks of the old fashioned ideas about hierarchy. We're focusing on people on the front lines doing the work, and then turning the organization charts upside down. That's the way businesslike management works. So it is my honor, ladies and gentlemen, to present to you your Secretary of Defense, William Cohen. Congratulations on...
Secretary Cohen: Thank you very much, Mr. Vice President. I hope you aren't setting a dangerous precedent by introducing me in this fashion.
In order to keep the dignity that we are so accustomed to in the Pentagon press room, we decided to eliminate the laser lights and no disco music this morning. (Laughter)
Mr. Vice President, let me indicate to all who are here, that we had the occasion to work together very closely when we both served in the United States Senate, and I must say that it was a pleasure then to work with you in developing items in legislation such as competition in contracting, but dedicating ourselves to making government work better, more efficiently, and to be a better performer for the American taxpayer. You were a leader when you were on the Hill, you've been a leader as Vice President. And indeed, the first visit I paid was to meet with the Vice President to talk about how we bring the leadership that he's been exhibiting in terms of reengineering government to the Defense Department. So it really is a pleasure for me to welcome you here today, this morning.
We began with the Defense Reform Initiatives that started initially with our defense strategy. Most of you who are here this morning are familiar with what the Quadrennial Defense Review sought to do, and that was to establish a strategy which included the three components of shape, respond and prepare.
We are continuing to shape the environment in ways which will reduce the possibility or even probability of conflict in the future. NATO enlargement is part of that. The enhanced PFP, Partnership for Peace program, is a part of it. The NATO/Russia Charter, the NATO/Ukraine Charter, the U.S./Japan Guidelines for Defense Cooperation -- that also is a key part of our shaping the environment as well as being forward deployed.
On the respond aspect, we are capable of responding to the full spectrum of threats and really challenges from humanitarian operations to the firefighting that's being carried out in Indonesia to evacuation operations in West Africa and also Albania. But even more importantly as we talk about today's issues, containing Iraq by way of example.
We are now faced with the issue of preparing for the future, and as the Vice President just indicated, that is one of the biggest challenges we face -- how do we streamline and reform and reengineer ourselves in order to provide the necessary dollars which will keep us on the very front end of technology and to allow our troops to remain the superior force they are today.
Each of the services have their own programs -- the Army, Force 21; the Navy, Fleet Battle Experiments; the Marine Corps' Advanced Warfighting Experiments; and of course the Air Force Global Engagement. That is all part of preparing for the future. What we need to do, of course, is to make sure that we have the resources necessary to allow us to prepare for the future.
We have a task force which is to my right, which has been responsible for really developing these broad principles -- lessons learned from business. This task force consists of Mike Bayer, David Chu, Rhet Dawson, Jim Locker, Arnold Penaro, Kim Wincup, and Doug Zackheim. I want to thank you all personally for the work and the tremendous effort that you put into this project. They have worked literally for months around the clock, meeting with top corporate officials all across the country, trying to find out how business has been able to reengineer their practices to put them to the very top of the performance across the globe today. So these are some of the lessons that were learned from business, and these are the items which we focus upon in our Defense Reform Initiative.
Dr. Hamre and I applied all of these principles in devising this Deform/Reform Initiative which would have four pillars.
The four pillars basically: reengineering, consolidating, competing, and eliminating. These are the four key pillars of this entire Reform Initiative.
We are going to reengineer. We are going to, for example, do away with some of the things that have dominated business as usual here in the Pentagon. By way of example, this here [slide] is simply a compilation of the defense financial management regulations. This is what currently, or has in the past at least, been the practice of business here at the Pentagon. All of this information is now contained on this one CD ROM. In the future we will see to it that all of these regulations are not only reduced to the CD ROM, they will in fact be reduced to the Internet itself. So by next July we will have all of these regulations on either CD ROM or the Internet. You no longer will have documentation such as this.
We are going to continue to apply these lessons of reengineering, successful private enterprise activities by moving to a paperless society by the year 2001. We intend to have all of our acquisition programs, weapons acquisition programs, again, reduced to either the CD ROM or directly to the Internet.
We're going to consolidate our organizations. This obviously is something of great concern to a number of people, but we are going to, in fact, reduce the Office of Secretary of Defense, OSD, by 33 percent; we'll reduce defense agencies by 21 percent; and we will reduce field and related activities by 36 percent.
We are going to compete with commercial activities. If you look at this chart you can see by way of the OMB A76 Circular, so-called, that we should be competing many of the functions currently being carried out by government, we should be competing those for the private sector. If you look at the years in the past right up until 1996, you can see we haven't done a very good job of putting out these functions for competition in the private sector. Starting this year you will note a dramatic increase in the competitions that are now taking place. We have had a tenfold increase in competition which has, in fact, benefitted the American taxpayer. As a result of these competitions which the private sector and the public sector tend to split almost evenly so that the public sector can demonstrate it can compete with private sector organizations as well, 50 percent of the time, but ultimately, we still benefit in the long run because the taxpayer is benefitted.
We are going to eliminate excess infrastructure. You've heard me talk about this before. We need to have at least two more BRAC rounds. In our Defense Reform Initiative, we're calling for additional rounds in the years 2001 and 2005.
We need to point to the success stories in order to get congressional support for this. We can't have BRAC proceedings without Congress' support, obviously, but we need to point out how successful the BRAC proceedings have been. Pease Air Force Base, by way of example, for every civilian job lost, three new ones have been created. The Sacramento Army Depot -- when closed in 1994, it lost 3,000 federal jobs. Today Packard Bell employs more than 4,000 individuals and expects to grow this work force to 10,000 in three years. Chanute Air Force Base -- 1,000 jobs were lost, more than 2,200 have been created. So we have really been in a position to show, and we will be in a position to show that there is success at the end of this process -- that with the help of government, that we can turn what appears to be certainly a disaster for the local community into a real opportunity where real growth is generated and long term jobs are created. So that is an effort that we certainly intend to undertake with as much support as we can possibly gather from Capitol Hill.
We're also going to be privatizing all of utilities by January of 2000 with some limited exceptions.
In order to assure everyone that this is not simply a statement of the day, we are creating a Defense Management Council to ensure that the 26 major decisions in this Defense Reform Initiative are faithfully implemented. So the Council is being set up and it is not simply being set up, it is ready to move.
It will meet for its first meeting next week. I am tasking the Council with the responsibility of pressing ahead with additional reforms based on the principles found in this particular Defense Reform Initiative.
For example, it's going to be reviewing the three military departments in order to apply the same type of reforms that we're making in OSD and the defense agencies to the three military departments. That Council is going to be chaired by Dr. John Hamre.
So to sum up, what we are doing is providing a corporate vision for the Department of Defense. The QDR developed a defense strategy to protect and to promote American interests well into the 21st Century, and we want to ensure that we continue to lead a world of accelerating change.
We are going to be transforming our military. To execute this strategy we need to have superior forces in the future. The QDR provides a path to maintain a large enough force to meet today's requirements while transforming that force through a revolution in military affairs. General Shelton is going to address you in a few moments about the component of the revolution in military affairs.
And we need this revolution in business affairs in order to achieve the goals that we have set for ourselves and for the future. We need to have this revolution in business affairs if we're going to cut the fat out and really apply resources to building more and more muscle.
So the message is quite simple today. Our strategy requires a revolution in military affairs. We're going to develop that force here in the Pentagon. It requires the corporate and support elements of DoD to embrace this revolution in business affairs. And the decisions that we are announcing today are going to require that difficult effort. But quite simply, there isn't any alternative. These are not simply recommendations; these are decisions which have been made and now will be carried out.
Before going any further, I would like to take this opportunity, not only to thank the Vice President once again, but to thank John Hamre for the outstanding work he has done, and also the task force which really has labored in obscurity, but certainly has devoted its extraordinary efforts to produce some of these recommendations that have now evolved into decisions.
I also want to thank General Hugh Shelton, who in a very short time as Chairman of the Joint Chiefs has really not only taken the helm -- and I won't compare him to Ahab at all -- but I can say as a result of these decisions that we have made today, that Ahab is not lashed to the rail any longer, but he's riding it in full control.
So General Shelton, please come to the podium and discuss some of the revolution in military affairs.
General Shelton: Vice President Gore, Secretary Cohen, ladies and gentlemen.
Joint Vision 2010 has served as the centerpiece that guided our Quadrennial Defense Review, and also the Defense Realignment and Reduction Initiative. Pursuit of this vision for our armed forces depends on our ability to be able to balance our tooth-to-tail ratio, since our forces in the future will be smaller. We need to rebalance to ensure that we have the funds available for modernization, as well as to ensure that we can fund joint operations.
I think all of us would agree that we need to have agile organizations, organizations that have been trimmed in size, organizations that can move quickly, that have the best information technology available to them, so that we can direct and support our armed forces and our joint operations in the best possible manner.
Our Joint Staff has worked very closely with our unified commanders to apply these principles, and we have worked and developed a plan to match our functions with OSD, to reduce the size of our headquarters and also to move functions and organizations down in the chain of command.
Our guiding principles for this endeavor have been quite simple. Basically, there are two. The first is that headquarters should concentrate on core functions. Those in our case are for providing and planning for the unified and efficient direction of our armed forces.
Secondly, to ensure that tactical staff actions, delivery of services, and management of programs is left to subordinate staffs and organizations.
In a few moments Admiral Denny Blair, the Director of the Joint Staff, is going to provide you with the details of that plan. But first of all, I want to assure you and underscore that this has been a collaborative process -- one carried out by both the civilian and uniformed leadership of the military. And secondly, we all felt it was important that the Joint Staff and DoD set the example in this endeavor by making these reductions in a significant and intelligent manner.
Thank you, Mr. Secretary.
Secretary Cohen: Mr. Vice President, if you would care to come up and make any concluding statement -- he does have to depart momentarily. Then we will deal with some of the other issues and I will respond to some questions before introducing Dr. Hamre who will lay out in fairly finite detail some of the changes that we're recommending.
But I just want to thank you, again, for coming here. I know it's been a busy time at the White House on a variety of issues, and for you to take the time to come over has meant a great deal to us here.
Vice President Gore: I want to congratulate you again, Mr. Secretary. It's a great job. Your whole team has done a wonderful job.
Before I depart, if you have any brief questions, I'm going to have to race over to the White House, but...
Q: Mr. Vice President, I wonder if you might very briefly, before you go, on Iraq... We understand that a U-2, a U.S. U-2 made a safe flight over central Iraq this morning. There were no incidents. But Iraq is now saying that it will no longer recognize U.S. U-2s as a part of the UN operation, and are demanding that the U.S. at least cut its presence on the inspection teams. How would you both respond to this?
A: (Vice President Gore): Well, it is not for Iraq to decide the composition of the UN inspection teams, nor is it for Iraq to decide whether it recognizes what forces make up the inspection effort.
As was stated previously by the President, we're going to insist, as part of the world community, that Iraq observe the United Nations resolutions in every particular. We will continue the inspection activities, and a part of that includes the U-2 flights.
Q: Are we moving closer in any way... The United States has refused to rule any action in or out, in the words of the President. Is this moving closer to military confrontation with Iraq?
A: (Vice President Gore): One way or another he will have to comply with the UN resolutions. Of course we continue to hope that the discussions that are underway will result in Saddam Hussein deciding that he has to change his behavior. We hold out some hope that that will be the result.
Q: Just to turn that question around, the peaceful overflight of the U-2, or the uneventful overflight of the U-2 today, what do you read into that? Does that mean that military action or confrontation is less likely at least in the short term? Do you see that as a hopeful sign?
A: (Vice President Gore): I think we need to know more before we can really answer that question. It has proven over the last several years to be very difficult to read Saddam Hussein's mind. I'm not going to engage in that exercise.
I'm going to turn it over to the Secretary now, and...
Q: One more. Does the Clinton Administration believe that Iraq is already in material breach of the UN resolution? Is it asking the Security Council to find Iraq in material breach? And what signal should that send to Baghdad?
A: (Vice President Gore): Obviously Saddam has taken steps that interfere with the ability of the inspection team to carry out its mission. The procedure chosen to deal with the situation is to engage him in discussions in which he can be made aware that this is not a smart thing for him to do and he ought to change his mind. In the mean time, we're going to continue activities such as the U-2 flights, and we'll await the results of these discussions and take further steps only after full consultation.
Now I'm going to depart and turn it over to the Secretary.
Q: Could we ask you about base closures politically? How are you...
A: (Secretary Cohen): There's no problem there. (Laughter)
Q: For you, perhaps? (Laughter)
A: (Vice President Gore): I made some reference earlier to the courage of this team and taking the steps that it has. I don't know in the final analysis whether it's more difficult to close more bases or cut the OSD staff by 33 percent. They're all difficult decisions, but they're all necessary to accomplish the missions that General Shelton has talked about. In order to maintain U.S. leadership in the world into the next century, we have to make changes. That means modernizing our forces and taking other steps that require the elimination of waste and expenditures that do not go directly to performing the mission.
So another two rounds of base closures as recommended by the Secretary and his team I believe will be in the national interest.
Q: Sir, how is this different from the Bottom-Up Review?
A: (Vice President Gore): The QDR? This is an iteration of one of the facets of the QDR. When that came out, the Secretary said this is going to require some reinvention. We had extensive discussions about the kinds of things that ought to be included in that. And as I said before, and this is going to be my last comment, I really do need to leave, this is an extremely impressive implementation of that part of the QDR. This is really... This took guts, it took imagination, it took a lot of real hard work, and this team led by the Secretary and the Deputy Secretary have really done a superior job on this.
Thank you very much.
Q: Secretary Cohen, was that U.S. U-2 pilot who flew the plane over Baghdad today, was he ever in any danger?
A: (Secretary Cohen): I think all of our men and women who are stationed around the globe, be they in South Korea, be they in the Gulf region, be they in any part of the world where there is a potential for harm, are in danger. Certainly the pilots who fly over the no-fly zones are in danger, and the U-2 pilot who would fly, did fly last night, was in some danger, but we assumed that that danger was a risk that was a low risk to him. And we sent a message, a very clear, unequivocal message, to Saddam Hussein, through a variety of channels that were any harm to come to that pilot, any attack to be made upon that aircraft, that it would result in some fairly significant consequences. It would be a big mistake for Saddam to have attacked that aircraft, and, fortunately, no such attack came about.
Q: You were unable to completely neutralize the threat from Saddam's missiles?
A: (Secretary Cohen): No one can completely neutralize any threat. I think that we were very clear in analyzing the situation. We felt that the risk to the aircraft was low. It's not impossible for Saddam Hussein to have successfully attacked it, but we measured that risk and we came to the conclusion that it was a reasonable one for him, the aircraft, and the mission had to go forward. It did, and it was successfully completed.
Q: Did you see anything on the ground that indicated that he was attempting in any way, shape, or form to threaten this aircraft? Was there lock-on? Were his missile batteries active? Were any aircraft in the non-no-fly zone up?
A: (Secretary Cohen): There was no such activity that would have posed such a threat to the U-2 that you've just described. There was no indication that there was an active attempt to, in any way, threaten the aircraft last evening.
There was some movement of assets on the part of Saddam Hussein, but none that would have appeared to pose a threat to the aircraft.
Q: Mr. Secretary, has analysis shown, or can you say at this point what the motive of Saddam's government is? Is this to divide the allies with the UN through one of its blustery moves? Or is this an upgrade of his mass destruction capabilities?
A: (Secretary Cohen): What lurks in the mind of Saddam Hussein, only the Shadow knows. (Laughter) Beyond that I don't think we can speculate in terms of what his motivations would be.
Obviously the UNSCOM, the UN inspectors who are on the ground, have a very important mission to carry out. We can see a lot of things from the air, we can see a lot of things by satellite, and we certainly can observe important actions and activities by the U-2 flight. What they cannot do is see inside buildings, and that is precisely the reason why we have the teams on the ground, to examine, investigate activities that we suspect to be in violation of the sanctions regime.
As I've indicated before, it is the equivalent of an individual who is presented with a search warrant saying that you can come into my living room or my dining room, but you can't come into the basement or the attic, and you can't bring Uncle Sam. You might have Uncle Vinny, but not Uncle Sam. So he has imposed restrictions which are completely in violation of the United Nations. That cannot be allowed to stand.
So what we would expect the United Nations to support a continuation, and insist upon a continuation of those inspections. There has been some evidence that he has moved a number of items and facilities around in order to avoid these inspectors. He has barred them on occasion when they had reason to believe there might be either biological activities taking place, chemical weapons development taking place in certain facilities, and he has been playing a hide and seek game for some time now. Hiding and forcing us to try and seek. When we get too close, there seem to be barriers that are constantly erected.
So one can only speculate about his motivation, but what remains is that as a result of his activities prior to the Persian Gulf war and following that, we know that he has continued to try to develop chemical and biological weapons, and possibly even acquire nuclear materials.
The UNSCOM investigators have been very successful in destroying a good part of his chemical and biological weapons and cutting up SCUD missiles, but they have not been completely satisfied or successful, and that is why we are where we are today.
Q: Over the weekend Senate Majority Leader Lott criticized the Administration for, in the past when there was a military action it was basically pin pricks and a slap on the wrist. If there were military action this time, for instance if there were an attack on a U-2, could Saddam Hussein be warned that it's going to be a much stronger military attack? And should the U.S. recoil at the thought of taking a head shot at Saddam?
A: (Secretary Cohen): I'm not sure what you mean about a head shot at Saddam, but let me say that I believe sufficient warning has been given to Saddam Hussein, that he should not seek in any way to attack or harm UN inspectors, including U.S. members who are part of that team, nor should he take any hostile action against the U-2 flights. Any such action would result in, I think, some consequences which he is fully aware of. We have indicated it would be a big mistake for him to do this. I think that's sufficient warning that he understands the consequences will not be insignificant.
Q: Could you explain to us the significance of dispatching General Zinni of Central Command to the Gulf region?
A: (Secretary Cohen): By way of, perhaps, an irony involved, he was scheduled to make that visit during this time, but it turned out that it was an important visit for him to make. He is touring the Gulf states as we speak, and also visiting with the troops and satisfying himself that we have the capability to make sure that our forces are not only adequately protected, but adequate to carry out any missions they might be assigned. So it happened to be a coincidence, but a happy one.
Q: How long can this go on, that those teams on the ground, the eyeball-to-eyeball searches, are not taking place? And why is it that there seems to be a sense that some people in the Arab world think it's time the United States gives Saddam a break here?
A: (Secretary Cohen): I think it's time for Saddam Hussein to simply abide by the rules that he has been asked to abide by. He can relieve his country of considerable pain by simply complying with the inspections regime, so he has it within his power tomorrow to say, what are you looking for? Here, I'm opening up everything that you need to look at. I am doing my level best to comply with the requirements set forth by the United Nations. So Saddam Hussein has no one to blame but himself. He can correct the problems that he currently has encountered and continues to encounter, simply by compliance. So it's really up to him, and we would hope that he would take some measure of compassion for his own people by abiding by the rules that have been established in view of his conduct in the past.
So it remains up to Saddam Hussein in terms of complying with them. As I've indicated before, if he has nothing to hide, he has nothing to fear. Simply open up the doors, let us look at the facilities, let the UN do its job, and then there is every hope that the sanctions in the future would not have to be applied.
Q: How crucial has this week of no-inspections been? Do you think he's really gotten away with a lot?
A: (Secretary Cohen): I think any time there is delay that it gives him an opportunity to move certain activities, assets, facilities, to different parts of his country. But ultimately we'd have to go back to the beginning, and the UN inspectors would have to start over again, so we'll simply have to redraw the baselines, where they left off. So he doesn't do anything but extend the time during which he's going to have to comply. It's going to be an indefinite extension each time he delays the full implementation of the sanctions of the inspection regime.
So really, the game that he might have is temporary in nature, so it will come back to...
Q: However this comes out, should Saddam be punished? Either with new economic sanctions or military action?
A: (Secretary Cohen): This is something that the United Nations obviously has to decide. This is not Saddam against the United States, it's Saddam against the United Nations. I believe that the United Nations should speak very candidly and without compromise here, that he must comply. There are no exceptions, no negotiations -- he must comply with the rules.
They may find that more restrictions are necessary to force him to engage and indulge in behavior modification. There may be other measures that can be taken, but I think it's not helpful to speculate at this point what they might be.
It is my expectation and hope -- more of an expectation than a hope, that the United Nations will be very clear -- we're not negotiating. We'll listen to what Mr. Tariq Aziz has to say, but that will not alter what you are obliged to do.
Q: There have been numerous studies and attempts to reform the Pentagon. The Bottom-Up Review was one of them. How does this differ from those previous attempts? Or are we in four year's time going to see another defense reform management...
A: (Secretary Cohen): Tell me, Father, why is this day different from all other days? Why is the OSD... This study... Why is the QDR different from the Bottom-Up Review? I could take the next half hour to talk at length about the QDR, but what I... (Laughter) ...But I do want to leave a little bit of opportunity for John Hamre to talk about some of the details.
But you will recall when we first talked about the QDR that I was not satisfied that we had done enough to really change the way in which OSD functions. I've thought about this in the past, that you can try to simply speed things up in this building. It would be the equivalent of taking a Model T and putting a turbo-charger on it to accelerate its speed. Well, of course, you'd get a temporary burst of speed, but the wheels would fall off. So you've got to actually change the structure.
Why is this different? I think you will find as Dr. Hamre goes through some of the details, this is a very dramatic reduction in the size of operations here in OSD. It's a change in philosophy, that we are getting out of the management business. We are going to really focus upon our core competencies and our core responsibilities and that is policy decisions, policy recommendations. So we are going to slim down in size. We are going to become as lean and as agile and as fast responding as we expect our military to be in the future. This is quite different than what the Bottom-Up Review entailed, and frankly, it is part of the QDR process which is not a static document.
As I mentioned to all of you before, the QDR is simply a beginning -- it's not the end. It will continue to evolve. There will be changes that will be made as we proceed each and every year. But the core elements of it, of the strategy itself -- shaping, responding, preparing -- those will not change. How we achieve those will change and evolve as technology comes forward faster, as we're able to implement these things faster. As John Hamre will talk to you about, the paper chase that we've been on in terms of the travel regulations, how we have a 30 percent overhead as far as travel regulations in the Department of Defense. Best business practice is around eight percent, some are down to five percent. But we will save something like $300 million just by doing business differently in terms of travel.
He will tell you some horror stories about one of the ads that you see on television about the man who's experiencing a divorce. He says, "You want half? I'll give you half." He takes the chain saw out an starts cutting everything in half. Dr. Hamre will tell you experience we've had with moving furniture on the part of our military personnel, where we have, some companies have taken saws and cut the furniture in half to fit it into their vans.
These are things that are going to change. So it's a difference of philosophy, it's a difference of focus, it's a difference in size. But the ultimate direction that we're heading is we're going to be leaner. The old philosophy was the bigger eat the smaller; now it is the faster eat the slower. We're going to be fast. We're going to be slim. We're going to be very competitive. We're going to eliminate redundancies. We're going to consolidate agencies. We are going to bring this Department into the 21st Century and going from this type of philosophy to this type of capability.
Money saved, I think John Hamre will talk about that very clearly. Base closures is part of it, and you will see that by the year 2001. For example, we will save on an annual basis roughly $5.6 billion per year. With each round of BRAC we will save roughly $1.4 billion a year. So there are substantial savings in that. There will be substantial savings in doing away with all the paper, not to mention saving the main forests by all the trees that we have to cut in order to produce this paper. We will, by reengineering our travel practices, again, save $300 million just there. So we will save substantial amounts of money but the purpose, we have to remember, is this. It's not only to save money, it's also to serve our role better. To the extent that we can redefine what the philosophy of this Department should be and to shed the excess weight that we're carrying with too much bureaucracy, too much redundancy, too much delay, that we will have a new management style, philosophy, that will serve this Department well into the future and for future Secretaries of Defense.
Q: Mr. Secretary, that $5.6 billion would not include the $1.4 billion? That's...
A: (Secretary Cohen): No, from the previous four BRAC rounds we've had we will, as of 2001, begin to save $5.6 billion on an annual basis...
Q: The $5.6...
A: (Secretary Cohen): The $5.6 now included in the four rounds we've had previously, as of 2001 we will save on an annual basis $5.6. With every new round that we finally complete after we pay the initial cost, you will have an annual savings of $1.4 billion.
Q: The other initiatives, how much are they going to save you?
A: (Secretary Cohen): Dr. Hamre is here to spend the next hour and a half filling you in with details.