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It is an absolute delight to be here, to see a vibrant collection of distinguished people filling a room who care so much about a topic that matters in such a critical way. I must say it is a special delight for me to see Frank Kelso here. Frank, as Chief of Naval Operations, had as one of his collateral duties, breaking in a new Secretary and Undersecretary. He had some experience in that role, but I can tell you he performed it absolutely superbly. I think I can say that every one of my vices has been mitigated by being around Frank and every one of the Secretary’s virtues has been enhanced. (You see in my description here something of a division of labor between a Secretary and an Undersecretary.) I really am grateful, Frank, for everything you did for us and so many people in this room are grateful to you for so many things related to the submarine world and the Navy generally.

I note many others figures within the community here … Admiral Long, and too many people to mention and recognize. Admiral Trost-it’s a great pleasure to be here and to have this opportunity.

When I last had occasion to speak separately with this community, it was some nine months ago at the National Security Industry Association Symposium in Groton. At that point, I sounded a theme that was for me fundamental and continues to be fundamental for the time ahead. That theme is that it is critical for us to stop and take a longer-term perspective about what is really important. My basic proposition then was that we could get at that theme by asking ourselves what it was that our predecessors had done that we thought was important, and how we measured and assessed them. My suggestion was that there were messages and morals in that for the rest of us about how we would be judged by our successors and what we really ought to care about.

My central observation in this regard is that our predecessors have bestowed upon us a great and truly exceptional gift. The gift is that, at the moment, for all of our troubles, travails, and controversies amongst ourselves, we have received from our predecessors a world in which the national security of the United States in the most basic sense is not at the moment threatened.
There is no enemy out there that is now preparing to attack us. There is no country out there that threatens to dominate us on the international scene. In that sense we stand in a fundamental way at peace; and that is a gift which was of the people who came before us enjoyed in the whole half century, indeed in some measure in the whole century, preceding us.

It seems to me the most fundamental question for us is how we continue that. How we sustain that over the time ahead. It seems to me there are a number of risks. But I want today to simply focus on one and continue the line of thought that I began with some of you in Groton nine months ago. My suggestion and deep belief is that we start at square one with the proposition that whoever has declared achievement of peace in our time comes to regret it. Particularly if they believe that peace is some kind of enduring condition that continues of its own momentum. The 20th century has been the bloodiest in the history of mankind. Why would we really expect the next century would be different? Certainly we can’t rely on the hope that it will. Things change, circumstances evolve.

Immediately relevant to the concerns of this audience and very high on the congressional agenda today is the question of the role of submarines in this respect. My observation is that we are largely free of national security threat because there is no power out there that could be described as a major competitor of ours. No nation can challenge us in ways that might lead us to believe that it could achieve a measure of military dominance or intimidation.

The question for us is bow we diminish the likelihood of the evolution of such a competitor. How we retard the tendency, inevitable in my opinion, of other countries in other times and other circumstances, to think that they can threaten us or endanger us or compete with us. To my mind a strong submarine community is fundamental in that regard. It is fundamental for an exceedingly simple reason, which is that subsurface warfare is a major domain in which nations compete and in which nations exercise military leverage on one another. It is also fundamental, increasingly in the time ahead, because it is the domain in which we and other nations have determined that we are going to put our main strategic resources, our strategic strike capability, and the ability to protect that depends in substantial measure on submarine warfare.

It is fundamental again because in a technologically sophisticated world, stealth and the reduction of casualties are major areas of critical investment. The submarine continues to represent the stealthiest, the most potent capacity in which men wage war. This is therefore. in my view, an area in which we ought to invest.

I’m not saying anything new to this audience, indeed there is extraordinary irony-and no one knows it better than this group-that I offer you a civilian. For me to layout these particulars to you would be as if I were to appear in front of the National Symphony Orchestra and propose to play a harmonica solo. You all know it better than I do. I’ve learned it from many of you.

I think, though, that there is a debate that matters going on in this country in which all of you need to participate, and in which we the civilian leadership must be counted. That is the debate about the magnitude and the character of the investment in this arena. How it is made and to what extent we invest during times that have the benefit of the great gift of peace and in which there is a Jot of pressure for budget reduction.

My own judgement in this regard is that we see a strong measure of the significance of this investment in what other countries are doing. We see it in the continuance of the Russian submarine program; its investment in improved Akulas and its plans to build another generation beyond that. We see it in the Chinese building and in purchases in the submarine area. We see it in Iranian purchases of Kilos from the Russians. We see it, in fact, in the ships that other countries are making with the scaresest of their resources.

Against this backdrop, I am delighted to report that we see emerging a broad consensus within the United States Congress and within the Defense establishment that we need to invest in submarines. Whatever the degree of contention that exists at any particular moment we have to step back and recollect that some two or three years ago, before the Bottom-Up Review, during the time of change-over of Administrations, a lot of these issues were up for grabs. I think there is now clearly a basic consensus that we ought to move ahead in this area and make substantial investments.
There is also, I am pleased to report, a large preponderance of support for the notion that we ought to sustain two nuclear-capable shipbuilding enterprises. That in fact the national security is best served by investments in two yards. Our calculus within the Navy suggests, indeed I think reasonably demonstrates, that the premium that’s paid in that regard is at approximately the three percent level in our submarine building costs in the period between now and the year 2012. In my view it is a very well warranted expenditure to buy the capacity and the safety that comes from having two yards. A capacity that’s useful should we want to expand the submarine building program, a capacity that generates a hedge against all kinds of risks, natural and otherwise, and further, a capacity that generates price restraints by all participants because of the potential for competition continued across the scene.

This is the common understanding that underlies the issues of the moment. The contentious issues of the moment-real and important issues-are about how to get there. We have agreed I think amongst all of us that the new attack submarine is the rational place we want to be. The how to get there is the issue of the moment, as you all well know. My view is that this is not a terribly complicated issue, though as with any issue, it has literally hundreds of secondary considerations that can be placed into play.
My sense in this regard is that one plays the ball where it lies. Where it lies is that we have $900M invested in a third Seawolf. For an additional expenditure of $1.SB we can achieve that third submarine. And I view that expenditure as eminently sensible. It’s sensible for three very basic reasons.

One, this is the world’s best submarine. It is extremely useful to have the world’s best submarine in these kinds of circumstances where we know that in some circumstances that matter, Russian submarines lack capacities that the Seawolf would not.

Two, at the moment, it is the least expensive submarine that we can buy. It represents in its incremental cost to us an acquisition that has a remarkably high value in performance as against its cost. Particularly when we take account of the fact that very substantial costs, in ranges approaching $1B, are inflicted upon us if we don’t follow through.

And three, the Seawolf represents to us a sensible way of sustaining our submarine building capacity at the same time as we are evolving towards the new attack submarine. It sustains for us the two yards and it sustains for us submarine crafts and production abilities which once stopped are extremely difficult to restart. Now it is the natural experience in all leaders in the defense community, undersecretaries as well as everyone else, that one encounters increasing disagreement as you move from general propositions to particular ones and more particular ones. Men and women of good views and good sense on the Hill and elsewhere are naturally disputing some of these kinds of these propositions. I know this is of great concern to everybody in this room. My own view is that in fact the logic of the situation and is exceedingly strong, will prevail in the discussions that are likely to occur in the course of the rest of the Congressional debates. This is a debate which is continuing and in which the Navy is persevering. I want to emphasize the magnitude of that perseverance to you and I want to urge all of you to contribute to that. You represent an extraordinary wealth of experience, an exceptional pool of good sense, and a great reservoir of credibility and intimacy of knowledge. You have a contribution to make in that regard that we very much need in the time ahead. I want to urge participation from all of you, not just in the context in which today and yesterday we talked to one another, but in the context in which tomorrow you have opportunities to talk with the appropriately ultimate decision makers-the members of Congress.

To return to my original theme; we have been given a gift by our predecessors and it is a great and extraordinary gift. It is the gift of an exceptional degree of national security. It is the gift of being at peace. We have an obligation and a challenge to sustain that gift. I take it terribly seriously. The Secretary of the Navy takes it terribly seriously. The Chief of Naval Operations and the Commandant of the Marine Corps, I know, live by it everyday. On this issue we need to sustain that effort and, we need your help. I’ll be very grateful as we receive it in the time ahead.
Having said that, I thank you very much

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