• Fourth, to protect U.S. information networks from attack;

Fifth, to use information technology to link up different kinds of U.S. forces so they can fight jointly; and

• Sixth, to maintain unhindered access to space-and protect U.S. space capabilities from enemy attack.

We reached these conclusions well before the September 11 attacks on Washington and New York. Our experiences that day, and in the course of the Afghan campaign, have served to validate those conclusions, and to reinforce the importance of moving the U.S. defense posture in these new directions.

In the 21st century, new adversaries may not to be discouraged from attacking us by the traditional means of deterrence that kept the peace during the Cold War-namely, the threat of nuclear retaliation. The terrorists who struck us on September 11 certainly were not deterred.

This is why the President concluded that stability and security in the new century require a new approach to strategic deterrence that enhances our Nation's security while reducing our dependence on nuclear weapons. With the Nuclear Posture Review, we have proposed deep cuts in offensive nuclear forces, combined with strengthened conventional capabilities and a range of new active and passive defenses against weapons of mass destruction (WMD) and all forms of delivery-to be supported by a revitalized defense infrastructure and improved intelligence. This new triad of nuclear, conventional, and defensive capabilities will help deter and defend against the wider range of threats we will face in the decades ahead.

The 2003 budget request is designed to advance each of the six transformational goals. It does so by accelerating funding both for the development of transformational programs-programs that give us entirely new capabilities-as well as by funding modernization programs that support the transformation goals.

The budget requests $53.9 billion for research, development, test, and evaluation (RDT&E) a $5.5 billion increase over fiscal year 2002. It requests $68.7 billion for procurement-a $7.6 billion increase. It funds 13 new transformational programs, and accelerates funding for 22 more existing programs.

We have established a new Office of Force Transformation to help drive the transformation process, and have tasked each of the services to develop Service Transformation Roadmaps by the summer of 2002.

All together, transformation programs account for roughly 17 percent of investment funding (RDT&E and procurement) in the President's 2003 budget requestand will rise to 22 percent over the 5 year FYDP.

This is a significant investment in the future. However, the investment in transformation cannot be measured in numbers alone. Transformation is not just about new weapons-it is about new ways of thinking and new ways of fighting. In some cases, it does not involve new capabilities at all.

In Afghanistan, U.S. Special Forces are using a mix of capabilities in ways that had never been tried before, coordinating air strikes with the most advanced precision guided weapons, with cavalry charges by hundreds of Afghan fighters on horseback. The effect has been devastating—and transformational.

The goal is not to transform the entire military in 1 year, or even in one decade. That would be both unnecessary and unwise. Transformation is a process, and, because the world is not static, it is a process that must continue. In short, there will be no point where our forces will have been "transformed." Rather, we aim to transform between 5-10 percent of the force, turning it into the leading edge of change that will, over time, continue to lead the rest of the force into the 21st century.

We cannot know today precisely where transformation will take us. It is a process that will unfold over time. But we believe we know the directions we want to take the force. Our goal is to move our military from service-centric forces armed with unguided munitions and combat formations that are large and easily observable, manpower intensive, earth-bound capabilities, and transform a growing portion into rapidly-deployable joint-forces made up of less manpower intensive combat formations armed with unmanned, stealthy, precision-guided capabilities, and unmatched space capabilities.

1. Protecting Bases of Operation/Homeland Defense

Even before September 11, the senior civilian and military leaders of the Department had concluded that defending the U.S. homeland from attack, and protecting U.S. forward bases, should be our top priority. For most of our history, thanks to favorable geography and friendly neighbors, U.S. territory was left largely unscathed by foreign aggressors. As we painfully learned on September 11, this will not be the case in the 21st century.

Future adversaries are at this moment developing a range of new capabilities with which to threaten the U.S.: new forms of terrorism, cyber attacks, ballistic missiles, cruise missiles, nuclear, chemical and biological weapons of mass destruction. To meet our objective of making homeland defense the Department's top priority, the President's 2003 budget funds a number of programs. These include:

• $300 million to create a Biological Defense Homeland Security Support Program to improve U.S. capabilities to detect and respond to biological attack against the American people and our deployed forces.

• $7.8 billion for a refocused and revitalized missile defense research and testing program that will explore a wide range of potential technologies that will be unconstrained by the ABM Treaty after June 2002, including:

• $623 million for the Patriot PAC III to protect our ground forces from cruise missile and tactical ballistic missile attack;

• $3.5 million for the Mobile Tactical High-Energy Laser that can be used by U.S. ground forces to destroy enemy rockets, cruise missiles, artillery and mortar munitions;

• $598 million for the Airborne Laser (ABL), a speed of light "directed energy" weapon to attack enemy ballistic missiles in the boost-phase of flight-deterring an adversary's use of WMD since debris would likely land on their own territory;

• $534 million for an expanded test-bed for testing missile intercepts; and • $797 million for sea, air, and space-based systems to defeat missiles during their boost phase.

The 2003 budget requests roughly $8 billion for programs to support defense of the U.S. homeland, and $45.8 billion over the 5 year FYDP (2003-7)—an increase of 47 percent since 2000.

2. Denying Enemies Sanctuary

Another objective of transformation is to deny sanctuary to enemies-to make certain they understand that if they attack the United States, there is no corner of the world remote enough, no mountain high enough, no cave deep enough, no bunker hardened enough, no SUV fast enough for them to escape the reach of the U.S. Armed Forces.

To achieve that objective, we must have the capability to locate, track, and attack-both mobile and fixed targets-any where, any time, at all ranges, and under all weather conditions, 24 hours a day, 7 days a week, 365 days a year. This will require changes in our intelligence collection, analysis, production, and distribution. It also requires development of new capabilities for long-range precision strike-including unmanned capabilities-as well as the ability to insert Special Operations Forces into denied areas and allow them to network with our long-range precisionstrike assets.

To achieve this, we must develop new data links for connecting ground forces with air support; new long-range precision strike capabilities; new, long-range, deep penetrating weapons that can reach our adversaries in the caves and hardened bunkers where they hide; and special munitions for underground attack.

The President's 2003 budget funds a number of programs designed to help us meet our objective of denying sanctuary to enemies. They include:

• $141 million to accelerate development of UAVs with new combat capabilities;

• $629 million for Global Hawk, a high-altitude unmanned vehicle that provides reconnaissance, surveillance and targeting information. We will procure three Air Force Global Hawks in 2003, and accelerate improvements such as electronics upgrades and improved sensors, and begin development of a maritime version;

$91 million for the Space-Based Radar, which will take a range of reconnaissance and targeting missions now performed by aircraft and move them to space, removing the risk to lives and the need for over-flight clearance; • $54 million for development of a small diameter bomb, a much smaller, lighter weapon that will allow fighters and bombers to carry more ordnance and thus provide more kills per sortie;

• $1 billion for conversion of four Trident nuclear submarines into stealthy, high endurance SSGN Strike Submarines that can each carry over 150 Tomahawk cruise missiles and up to 66 Special Operations Forces into denied areas;

• $30 million for advanced energetic materials and new earth penetrator weapons to attack hardened and deeply buried targets; and

• $961 million for the DD(X), which replaces the cancelled DD-21 destroyer program and could become the basis of a family of 21st century surface combat ships built around revolutionary stealth, propulsion, and manning technologies. Initial construction of the first DD(X) ship is expected in fiscal year 2005.

The 2003 budget requests $3.2 billion for programs to support our objective of denying sanctuary to America's adversaries, and $16.9 billion over the 5 year FYDP (2003-7)—an increase of 157 percent.

3. Projecting Power in Denied Areas

In the 21st century, we will be increasingly called upon to project power across long distances. Today, however, to operate in distant theaters, our forces in many cases depend on vulnerable foreign bases.

Potential adversaries see this-and they will seek to develop new weapons and ways of fighting to keep U.S. forces out of their neighborhoods-so-called "access denial" capabilities. These capabilities could include: saturation attacks with ballistic and cruise missiles to deny U.S. access to overseas bases, airfields and ports; advanced air defense systems to deny U.S. access to hostile airspace; anti-ship cruise missiles, advanced diesel powered subs, sophisticated sea mines to threaten U.S. ability to project Naval and amphibious forces; as well as the use of chemical and biological agents against deployed U.S. forces.

The President's 2003 budget includes increased funds for a number of programs designed to help us project power in "denied" areas. These include:

• $630 million for an expanded, upgraded military GPS that can help U.S. forces pinpoint their position—and the location of their targets—with unprecedented accuracy;

• $5 million for research in support of the Future Maritime Preposition Force of new, innovative ships that can receive flown-in personnel and offload equipment at sea, and support rapid reinforcement of conventional combat operations. Construction of the first ship is planned for fiscal year 2007;

• $83 million for the development of Unmanned Underwater Vehicles that can clear sea mines and operate without detection in denied areas;

• About $500 million for the Short Takeoff/Vertical Landing (STOVL) Joint Strike Fighter that does not require large-deck aircraft carriers or fulllength runways to takeoff and land;

⚫ $812 million for 332 Interim Armored Vehicles-protected, highly mobile, and lethal transport for light infantry-enough for one of the Army's transformational Interim Brigade Combat Teams (IBCT). The fiscal year 20032007 Future Years Defense Program (FYDP) funds six IBCTs at about $1.5 billion each;

• $707 million for the Army's Future Combat System-a family of advanced-technology fighting vehicles that will give future ground forces unmatched battlefield awareness and lethality; and

• $88 million for new Hypervelocity Missiles that are lighter and smaller (4 ft. long and less than 50 lbs.) and will give lightly armored forces the lethality that only heavy armored forces have today.

The 2003 budget requests $7.4 billion for programs to support our goal of projecting power over vast distances, and $53 billion over the 5 year FYDP (2003-7)—an increase of 21 percent.

4. Leveraging Information Technology

Another transformation goal is to leverage rapid advances in information technology to improve the connectivity and joint war fighting capabilities of different types of U.S. forces. The goal is to find new ways to seamlessly connect U.S. forcesin the air, at sea, and on the ground-so they can communicate with each other, instantaneously share information about their location (and the location of the enemy), and all see the same, precise, real-time picture of the battlefield.

The opportunities here to give U.S. forces unparalleled battlefield awareness are impressive-if they can "see" the entire battlefield and the enemy cannot, their ability to win wars grows exponentially. But as our dependence on information networks increases, it creates new vulnerabilities, as adversaries develop new ways of attacking and disrupting U.S. forces-through directed energy weapons and new methods of cyber attack.

The President's 2003 budget funds a number of programs designed to leverage information technology. These include:

• $172 million to continue development of the Joint Tactical Radio System, a program to give our services a common multi-purpose radio system so they can communicate with each other by voice and with data;

• $150 million for the "Link-16" Tactical Data Link, a jam-resistant, highcapacity, secure digital communications system that will link tactical commanders to shooters in the air, on the ground, and at sea-providing near real-time data;

• $29 million for Horizontal Battlefield Digitization that will help give our forces a common operational picture of the battlefield;

$61 million for the Warfighter Information Network (WIN-T), the radioelectronic equivalent of the world wide web to provide secure networking capabilities to connect everyone from the boots on the ground to the commanders;

• $77 million for the "Land Warrior" and soldier modernization program to integrate the small arms carried by our soldiers with high-tech communications, sensors and other equipment to give new lethality to the forces on the ground; and

• $40 million for Deployable Joint Command and Control-a program for new land- and sea-based joint command and control centers that can be easily relocated as tactical situations require.

The 2003 budget requests $2.5 billion for programs to support this objective of leveraging information technology, and $18.6 billion over the 5 year FYDP (2003– 7)—an increase of 125 percent.

5. Conducting Effective Information Operations

As information warfare takes an increasingly central role in modern war, our ability to protect our information networks-and to attack and cripple those of adversaries will be critical to America's success in combat.

To do so, we must find new ways to more fully integrate information operations with traditional military operations, while developing new computer network defenses, electronic warfare capabilities, and the ability to influence an adversary's perceptions of the battlefield.

Many of the programs supporting this objective are, for obvious reasons, classified. But the President's 2003 budget funds a number of programs designed to provide unparalleled advantages in information warfare, such as $136.5 million for the Automated Intelligence, Surveillance, and Reconnaissance System, a joint ground system that provides next-generation intelligence tasking, processing, exploitation, and reporting capabilities. The 2003 budget requests $174 million for programs to support this objective-$773 million over the 5 year FYDP (2003–7)—an increase of 28 percent.

8. Enhancing Space Operations

From the dawn of time, a key to victory on the battlefield has been to control the high ground. Space is the ultimate "high ground."

One of our top transformational goals, therefore, is to harness the United States' advantages in space. Space can provide an ability to see what enemies are doing, anywhere in the world "24-7-365”—and to ensure global secure communications for U.S. forces.

This will require moving operations to space, improving the survivability of U.S. space systems, and developing a space infrastructure that assures persistent surveillance and access.

As we become increasingly dependent on space for communications, situational awareness, positioning, navigation, and timing, space will necessarily become an area we have to defend. Adversaries are likely to develop ground-based lasers, space jamming, and "killer" micro-satellites to attack U.S. space assets.

They will do so whether or not we improve U.S. space capabilities-because the U.S. economy and our way of life are growing increasingly dependent on spacemaking U.S. space assets inviting targets for asymmetric attack. Consider for a moment the chaos that would ensue if an aggressor succeeded in striking our satellite networks: cell phones would go dead; ATM cards would stop functioning; electronic commerce would sputter to a halt; air traffic control systems would go offline, grounding planes and blinding those in the air; and U.S. troops in the field would see their communications jammed and their precision strike weapons would stop working.

Today, in so far as we know, no nation has the capability to wreak such havoc. We must make sure no one can. Our goal is not to bring war into space, but rather to defend against those who would. Protecting U.S. military and commercial assets in space from attack by foreign aggressors must be a priority in the 21st century.

The President's 2003 budget includes funds for a number of programs designed to provide unmatched space capabilities and defenses. These include:

• $88 million for Space Control Systems that enhance U.S. ground based surveillance radar capabilities and, over time, move those surveillance capabilities into space;

• $103.1 million for Directed Energy Technology to deny use of enemy electronic equipment with no collateral damage, to provide space control, and to pinpoint battlefield targets for destruction.

The 2003 budget requests about $200 million to strengthen space capabilities$1.5 billion over the 5 year FYDP (2003–7)—an increase of 145 percent.

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Of course, many of the programs I have described support several transformation goals. For example, the Trident-SSGN conversion will help support our goals of operating in access denial environments and denying enemy sanctuary. Together, they represent an emerging portfolio of transformational capabilities that should enable us to defend freedom in the dangerous century ahead.

Again, it is important to emphasize that transformation is not an event-it is an ongoing process, a journey that begins with a transformed "leading edge" force, which, in turn, leads the U.S. Armed Forces into the future.

Moreover, it is not only about changing the capabilities at our disposal, but changing how we think about war. Imagine for a moment that you could go back in time and give a knight in King Arthur's court an M-16. If he takes that weapon, gets back on his horse, and uses the stock to knock his opponent's head, it's not transformational. Transformation occurs when he gets behind a tree and starts shooting. All the high-tech weapons in the world won't transform the U.S. Armed Forces, unless we also transform the way we train, exercise, think, and fight.

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As we transform for the wars of 2010 and beyond, we must also prepare the forces for wars they may have to fight later in this decade, by improving readiness, increasing procurement and selective modernization.

To advance transformation and deal with the backlog that resulted from the "procurement holiday" of the last decade, we have requested $68.7 billion for procurement in the 2003 budget request-an increase of 10.6 percent over fiscal year 2002. Procurement is projected to grow steadily over the 5 year FYDP to $98 billion in fiscal year 2007, and will increasingly fund transformation programs over time.

We have requested $140 billion for operation and maintenance (O&M) accounts in 2003. This includes substantial funding for the so-called "readiness accounts"tank miles, steaming days, and flying hours for the Army, Navy, and Air Forcewith only minor shortfalls. Funding includes:

• Aircraft operations/flying hours: $11.8 billion, up from $11.3 billion in fiscal year 2002;

• Army OPTEMPO: $3.7 billion, up from $3.3 billion in fiscal year 2002;

• Ship operations: $2.4 billion, up from $2.3 billion in fiscal year 2002;

• Depot maintenance: $4.8 billion, up from $4.5 billion in fiscal year 2002; and

• Training: $10.0 billion, up from $9.4 billion in fiscal year 2002.

PEOPLE/MILITARY PERSONNEL

If we are to win the war on terror, and prepare for the wars of tomorrow-in this decade and beyond-we must take care of the Department's greatest asset: the men and women in uniform. They are doing us proud in Afghanistan and around the world-and today, thanks to their accomplishments in the war on terrorism, morale is high.

But if we want to attract and retain the necessary force over the long haul, we need to know we are looking for talent in an open market place, competing with the private sector for the best young people our Nation has to offer. If we are to attract them to military service, we need to count on their patriotism and willingness to sacrifice to be sure, but we must also provide the proper incentives. They love their country, but they also love their families-and many have children to support, raise, and educate. We ask the men and women in uniform to voluntarily risk their lives to defend us; we should not ask them to forgo adequate pay and subject their families to sub-standard housing as well.