Deputy Secretary of Defense Dr. Kathleen Hicks Remarks in a Fireside Chat at the AFCEA/Int – Department of Defense

MARIA DEMAREE: Good afternoon. It’s my privilege today to be able to introduce two powerhouse speakers to you. They are trailblazers, they are thought leaders, and they are change agents, and I know we’re going to get a lot out of this fireside chat format today.

The first is the honorable Kathleen Hicks, who currently serves as the Deputy Secretary of Defense. Dr. Hicks earned her PhD in Political Science from MIT in 2010, after publishing her dissertation which was entitled “Change Agents: Who Leads and Why in the Execution of U.S. National Security and Policy.”

Fast forward to the present day and Dr. Hicks is the highest serving woman in the DOD and is herself a change agent, making those very decisions which ultimately impact our overall National Defense Strategy. On her Twitter earlier this week, she emphasized “the National Defense Strategy is very clear. Our priority is making sure we can deter and defend against and win, if necessary, a conflict with China as the pacing challenge, today and in the future.”

Facilitating the fireside chat today is Tish Long, the current Chair of the INSA Board of Directors, and she previously served as the Director of the National Geospatial-Intelligence Agency, or NGA, becoming the first woman to lead a major U.S. intelligence agency. She was an influential thought leader in the intelligence arena and she might be a Virginia Tech Hokie.

(APPLAUSE)

So please join me in a warm welcome for the honorable Kathleen Hicks and Tish Long.

(APPLAUSE)

LETITIA LONG: Well, I guess I have to start with Go Hokies.

(LAUGHTER)

Maria, thank you for that, from one Hokie to another. So I have to tell you, we had a great kickoff this morning with the honorable Christy Abizaid and then we’ve just done a couple of breakout sessions, and so I think the audience is warmed up.

So Deputy Secretary Hicks, I have to say, it’s wonderful to see you, and it’s really an honor to share the stage with you. I think the last time I saw you, we were sharing a stage at CSIS. So that’s actually been a little while, yeah. So I haven’t seen you in person, so person-to-person congratulations on your position.

And, you know, as Deputy Secretary of Defense, you are responsible for a very wide range of issues — I mean, gosh, technology, acquisitions, supply chain, security, workforce, we just heard about the Defense Strategy. And, you know, all of those are really of interest to the audience here. 

And of course, our audience is the defense industry, as well as academia, and I’d say there’s probably a good portion of your workforce here as well, both military and civilian. So … 

DEPUTY SECRETARY OF DEFENSE KATHLEEN HICKS: Even the DOD workforce gets to eat, so.

MS. LONG: Yes, indeed, and gets to come listen to the Deputy. So before we get to some of those functional issues, though, I’d like to ask a few questions from a national security perspective, kind of set the stage, you know, for the later questions. 
So — and no surprise, let’s start with the Russia-Ukraine conflict. So Ukraine’s actually made some pretty good advances in the last couple of days. And, you know, I’d like to hear from you, from your perspective, your assessment of the impact of the conflict on global security and maybe how does that translate to security challenges for, you know, this audience, security challenges and opportunities for both the defense and broader national intelligence communities?

DR. HICKS: Sure. Well, first, Tish, it’s so nice to be on the stage with you and to see you again and see you doing so well. We’ve spent parts of our career together over the years — we won’t say how many — but it’s really wonderful to share the stage with you.

So on Ukraine, I think, starting with what did the Russian invasion of Ukraine mean back in 2014 and then its more recent push further in at — post the annexation of Crimea into Ukraine just this past February — and what it tells us is that there are countries who will continue to challenge the international system, who will not respect sovereignty and a rules-based order, and for countries, democracies, like the United States and other nations like us, we need to take notice of that and not take for granted what we want to achieve for our citizens, that it will be uncontested.

And Ukrainians are standing up to that threat, obviously most directly putting their lives on the line, to make clear that they want to protect their country, and the United States and a broad coalition, including NATO but beyond NATO, countries — partner countries with us are here to show that we will not stand for that and that we will help countries that want to stand up for themselves.

So that’s the first thing I think is a big takeaway, which is we need to be attentive to that. Security will require some investment from us, it will require us to enforce rules that we believe in if we’re going to protect our citizens.

I think the next thing Ukraine shows is really the power of that community. And intelligence — just to cut straight to this community, intelligence is a place where you’ve seen that very much come to the forefront. President Biden was the primary early advocate for sharing and declassifying, downgrading, information to share with other countries, to include the Ukrainians, with our NATO Allies. We worked — tried to work in advance to talk to the Russians and say we see what you’re doing, you know, these are challenges. 

And all of that effort, I think, has made substantial gains, in terms of building trust with other countries, in terms of making sure we had better indications and warning and had some preparations, saved some lives, quite frankly.

And the continuation of that effort and the sharing of intelligence really demonstrates itself as a way to build on the community of interests and grow it, both for operational and tactical purposes, but really for strategic purposes.

And it demonstrates that the realm of information warfare is a substantial domain of international engagement and certainly of conflict, and we need to make sure we can outpace challengers like Russia, China, obviously, Iran, and others who are in this space with truth and with a broad community of interests.

MS. LONG: Well, I have to say, sitting on the outside now and seeing that happen — you know at first, and I think I can say for many in the audience there was a bit of surprise at how much was shared, how much was actually put out there. And then also the realization that it’s a new world and that that’s exactly what needed to occur. And so I think that’s probably a new tool in the toolbox that quite frankly, I hope we continue to use. 

DR. HICKS: Yes, I completely agree. And if you’re going to switch to the Indo-Pacific, as I suspect you are, there’s a lot of lessons there. 

MS. LONG: Well, indeed a lot of lessons there, and that is a good segue. Because I actually was going to ask about what does it mean for Europe and the Transatlantic Alliance, but you really touched on that already. So let’s do, let’s do swap — or switch to China and perhaps lessons learned. 

You have actually said China is our pacing challenge, so as you — you know, talk about lessons learned, how do you see this impacting or where do you see the U.S.-China relationship going? 

DR. HICKS: Yes, so in the lens of Ukraine — there are many aspects, of course, to the U.S. approach to the Indo-Pacific, but just sticking with the lens of Ukraine — think we are all still learning lessons, certainly the Chinese are, the Taiwanese are, the Russians, the U.S., NATO, et cetera. So, no conclusion to that storyline. 

But what I think all parties could agree they should be learning is, as I said before, that there is — when there is a committed community of interest that is freedom-seeking and looks to protect the rules-based international order, that’s a real challenge to autocrats and they need to contend with that. 

And there are battlefield elements of that, obviously we at the Department of Defense are very focused on how to ensure that we have the capabilities both of course to deter conflict, we don’t seek conflict, we deter it, ensure stability. But part of deterring successfully is having the war-winning combat-credible capability to fight and win. 

So that’s what we do, primarily at DOD, but we also contribute across a broader range of deterrence toolsets and we at DOD talk about this as integrated deterrence. So we’re working across multiple domains of warfare — air, land, sea, space, cyber. 

We are thinking dimensionally in terms of pre-conflict through conflict which is a very fluid — we used to think of this in a very time-phased way. We understand it, of course, to be much more dynamic than that today. 

And then at the interagency / international level we think about how all the tool kits come together, and this again is where information warfare, intelligence sharing as a way to develop strategic operational and tactical advantage, comes very much into play. And then of course, economic tools also are very important. 

The last thing I think I’ll say through the lens of Ukraine for any potential challenges that the United States may face with China, is again, the indications and warning – and this is where the intelligence community, including the DOD elements of the intelligence community because our partnership, of course, is an institutional one we have the four DOD intelligence agencies. 

And it’s also a very personal one, we work very closely across DOD in the IC in a day-to-day way, certainly at the senior leadership level, but then all the way through. But that connectivity to create strong indications and warning, that really helps pull back from conflict wherever possible – de-escalate conflict where we believe that appropriate — and of course be prepared to succeed in conflict if we need to. 

MS. LONG: So taking a step beyond the indications and warning, and just the threat in general, how is the intelligence community doing in helping us to stay ahead of the threat? And is it in such a way that we really do have as you just referred to it, that integrated deterrence? 

DR. HICKS: I think we have a very strong collective understanding of the key elements. Again, China is a pacing challenge for decades to come. We expect, you know, without being predictive about where any country, including the United States or China might be further down the road, they have the comprehensive – they’ve demonstrated that they’re building and have in many cases the comprehensive power to try to challenge us in ways that affect our interests. 

So we have to worry about this today in the midterm and in the long-term. And so, I think we have a generally good understanding — the intel community’s done a good job laying out the dimensions of that — that multidimensional challenge. 

Again, in the economic sphere, the military sphere, technology, intelligence itself, and other areas. I think the challenge we collectively face as we do in every era is prioritization — how do we make sure we are correct in our assessments of how to prioritize, how do we then move all the assets that we have against those priorities, and then how do we hedge our bets in terms of managing across the portfolio? 

I think what we have at our advantage, again, is the quality of the analysts that we have which is at the core of the United States’ intelligence community advantages. And then I think where we can probably make even greater gains than we have to date is leveraging technology to enable those analysts and other intel professionals. 

MS. LONG: And other — yes. And we talked a bit about that with Director Abizaid this morning, as you can imagine. Let’s talk about a particular technology…

DR. HICKS: Sure. 

MS. LONG: …hypersonics. Some would say we are already behind China when it comes to fielding hypersonic capabilities. So — and let me just kind of weave in there, you said priorities, I’ll say budget. Will the current budget enable the U.S. to outpace the Chinese militarily, and from a technology perspective? 

DR. HICKS: Hypersonics. 

MS. LONG: Hypersonics. 

DR. HICKS: The Russians, I’m sure folks know, have used — already used –some hypersonic weapons in the Ukraine war, to almost no effect. I start there, because I think we have a tendency to go to an arms race mentality. We see the use of something like hypersonics and we think if they’ve got five hypersonics — units of hypersonic, whatever you want to think of it as, we must have six. That is not how we look at this challenge set. 

What I will say to you is that we do have a strong understanding of how the United States believes it should employ hypersonics within a broader portfolio of capabilities and we are going after that. I am impressed with the progress we have made in the last few years. 

There is no question that the United States made, I think a largely conscious choice to — right or wrong — to invest in other areas than hypersonics in the decade prior. So that’s just a different portfolio mix. We have areas we did invest in that are asymmetries for us that the Russians and the Chinese have to worry about. So, that’s how I would think about hypersonics dollars.

We have increased in the ’23 Defense — President’s Defense Budget that we are seeking on the Hill — substantially over the ’22. We obviously have, on Capitol Hill right now, they’re debating out what that topline would be. It’s looking like it is likely going to be even higher than what we have requested. So we are — for those of us who lived through sequestration, we are in the unusual place of being in an uptick era in defense spending.

The — what that — that does not remove pressure, that creates a different kind of pressure, which is to make sure we are investing in the right areas and prioritizing effectively, and that is where having strong strategy, having strong fiscal discipline, being good at communicating strategy and being able to explain, for example, on Capitol Hill, why we have made the investment decisions we have makes such a difference.

And that’s the campaign, if you will, since we’ve released the budget, that we’ve been on, trying to explain — at a classified level, for example, where needed — why we’ve made the choices we’ve made and understanding that, in some areas, we want to increase the buying power to go after — where there are buying power challenges — to go after the same program that we’re interested in.

But I am confident that we are investing in the right areas and we are looking at the right areas to buy down risk, both in the ’23 budget and then as we are now preparing for the ’24 budget.

MS. LONG: So it — so can you say a little bit more about, you know, what I’ve always viewed as the classic tension, and that’s readiness, you know, versus … 

DR. HICKS: Sure.

MS. LONG: … versus acquisition platforms — you know, manpower, you know, versus — how are you thinking about that, balancing those two? You know, when you talk about priorities, you know, it’s often within those two stovepipes and you really have to balance the two of those.

DR. HICKS: Yeah, and I — strong force planning makes a big difference here, having a good sense of force design, say, 20, 30 years out, and then how you bridge the gap from the force you have today to that force of the future and doing it in a way that tries to manage risk across timeframes. 

That’s what’s really, I think, unique about the strategy that we have in the National Defense Strategy now. We don’t, as many strategies of the past have done, say, take risks today in order to invest in the future or take risks in the future to invest in today.

What we really have stressed is focus on China throughout that timeframe. And as I said before, there’s a China challenge that’s today, in 2027, there’s a China challenge in the mid-term and potentially one in the long term. There are different requirements there. There are also different possibilities there for the U.S. It’s not all about being reactive, it’s about taking advantage of our asymmetries, and there are a lot that we bring.

And so we prioritize that, and that means we are trading off, for example, manpower and modernization in some areas that are not keyed to that pacing challenge. We, of course, don’t look exclusively at China. That’s not what I’m saying. We look at, for example, Russia, we look at counter-terrorism, counter-violent extremists, other types of challenges that come forward, but we really have prioritized that China challenge set and taken some risks in both the personnel and strength force structure and modernization priorities that are for a less-concerning competitor.

MS. LONG: … yeah. So I guess that gets to prevail in one, deter in a second … 

DR. HICKS: Correct.

MS. LONG: … to that. So you addressed this a little bit, but I want to ask you about this specifically, and that is inflation. So NDIA just released a paper entitled “How Inflation Hurts America’s National Defense.” And I think you’ve been on record before saying that the current budget under consideration included, I think, a 2.2 percent rate of inflation. It’s clearly much higher.

DR. HICKS: Yeah.

MS. LONG: August inflation reports were not what everyone was either hoping for, or anticipating. So how are you thinking about that, you know, right now, today?

DR. HICKS: Sure, absolutely. As we have said since we’ve put the budget out, we want to make sure we’re working with Congress, that we have a good sense of where we anticipate inflation going, cause remember, we’re talking about a budget that would begin October 1 and would continue — so we — we’re trying to project ahead a full year, and inflation … 

MS. LONG: And if — and if you can do that … 

(CROSSTALK)

DR. HICKS: … which is true every year, it’s just we’re in a particularly volatile year. But we definitely want to work with Congress to make sure that we’re taking account of — that’s why I used the term “buying power” — yes, it’s inflation, it’s not to dodge that it’s inflation, but it’s about how do we get that combat-credible force that we believe we need to meet the strategy and what does it take to get there? 

And inflation affects different parts of the budget differently. So in some areas – fuel — it’s very reactive to that — food stuffs, you could imagine, other sorts of supply issues. In some other areas, we haven’t seen as much movement, but we might, and we want to be prepared for that. 

So that means both working with Congress now in the development of that ’23 budget they’re going to pass. As we look ahead to ’24, we’re going to have the same issue that we do every year, which is we’re going to have to find a number to pick that we think we can project ahead to what that ’24 will be — what ’24 inflation will be, and we will have to tell Congress, as I have indicated to them repeatedly, if we think we need more, we may come back to you on reprogramming.

Last thing I would say — the biggest inflation buster that we have is on-time appropriations. The ’23 budget, if it were passed on October 1, would deliver substantially more money than the ’22 budget that they did not pass until March. If we could get that ’23 budget, that would be the first best step, on time that is, to beating inflation. And again, we could work with Congress from there on additions beyond that.

So I will be optimistic here and say I look forward to working with Congress, as I know the Secretary does and the administration does, to get that on-time appropriation before the end of the month.

MS. LONG: Well, unfortunately, I don’t think that’s going to happen.

(LAUGHTER)

I can say that, since I’m no longer in the Executive Branch, so. 

DR. HICKS: Yeah.

MS. LONG: I wish you … 

DR. HICKS: (Inaudible) 13 years.

MS. LONG: Yeah, I know. So, not so much inflation but something that certainly impacts is supply chain … 

DR. HICKS: Yeah.

MS. LONG: … and just the availability of things. But of course, the department has to think about supply chain in multiple dimensions, and one, of course, is supply chain security. So, you know, no surprise that I’m going to ask you this — we’ve recently learned that the F-35 had a potential supply chain issue. So a couple of folks were talking — we just — one of the sessions right before this dealt with China. And a couple of us were talking afterwards, just posing a theoretical — you know, we talk about cyber from a zero-trust perspective, zero-trust framework. Should we be thinking about the supply chain like that?

DR. HICKS: In general, the answer is yes. There are – what constitutes the supply chain for the Department of Defense can mean many things. It can mean toilet paper to water bottles to an F-35. So in general, the answer is we should be thinking that way, we should assume that there are going to be challenges to our supply chain. 

By the way, those could be, of course, nation state or actor-based. They could also be a fragility, a lack of suppliers in key areas, an inability to illuminate that and see it in time to fix it. So there is kind of an all-hazards, if you will, approach to how we should think about the security and resiliency of our supply chain.

But – but it is time for not just the U.S. government but for our primes and, you know, second tier, et cetera, to have a really strong understanding of what is in that supply chain, how it is touched, how resilient it is, and that is a focus area that we have.

I think collectively as a country, you know, people have recognized through COVID the challenges to the supply chain and that fragility. If you layer onto it for the Defense Department and other key sectors, the idea that you’ll have countries like China who might seek to exploit that supply chain, that’s a big problem.

I’ll just add that the CHIPS Act, this was a big piece – CHIPS and Science Act, this is a big piece of why the Department of Defense was so vocal in trying to make sure that we have an onshore lab-to-fab approach on microprocessing.

It is for this reason we need to be able to secure our microelectronics, in order to put forward the kind of high quality advanced military that we expect in the future, we will now have. We’re in a much better position now with the passage of CHIPS + Science to get us there.

MS. LONG: Did you have my questions?

DR. HICKS: I did not have your questions, I promise.

(LAUGHTER)

MS. LONG: OK, that one’s done.

(LAUGHTER)

I guess it’s pretty easy to know what I was going to ask you about. Let’s turn to space.

DR. HICKS: Sure.

MS. LONG: So the Vice President just announced the U.S. moratorium on kinetic energy ASAT, anti-satellite, testing, and she argued as activity in space grows, the U.S. must establish international rules and norms, with the U.S. serving as a global role model for the safe use of space. Hard to argue with.

OK, not everyone is going to follow that, and certainly that’s something that we have war-gamed, we have thought about, you know, when it comes to any type of future conflict. I mean, space is so very important and intrinsic to the way the department fights.

So how are you thinking about protecting our space advantage, and should that protection be extended to commercial satellite providers? I just got back from the worldwide space satellite conference and it’s a – you know, it’s a big topic of discussion, particularly as commercial space capabilities are really integrated into what the department and the intelligence community depends on.

DR. HICKS: Sure. So there’s a lot in that question. Let me just try to make sure I hit the major pieces of it. The first is that the Vice President had – she has announced before and has just restated recently this norm, that the United States – we believe we are able to produce the capabilities we need and to affirm a test ban, you know, on the direct ascent ASAT.

So as we do in many areas of whatever you want to call it – warfare, international interaction – we believe a norms-based approach is appropriate. We, the United States, believe we have the advantages that allow us to continue to, you know, assure ourselves of our military capability and to demonstrate the rules of the road.

We also don’t, you know, as the Russians have just done, bomb people’s apartment buildings. You know, you can pick many other examples. You know, we, generally speaking, of course, don’t use cluster munitions. There are other approaches you can think of. It is not saying that we give over an ability for the United States to defend itself, and that is certainly not the intent of the Vice President’s statement either. 

As to those capabilities, we believe very much in the need for space resiliency. We put substantial dollars — the largest space budget ever — with most of that going into a big space resiliency add in the ’23 budget request. We will continue to build on that.

We look closely, of course, with the IC at the capabilities of the Russians, Chinese, as they are developing in space. We are very aware of how space is developing, and again, we’re focused on the kinds of capabilities that we can bring to bear.

I think I answered all of your questions in – oh, commercial.

MS. LONG: Commercial.

DR. HICKS: On the commercial side, the answer is space, as in many other areas, is a place where we are doing, of course, so much more with the commercial sector and we’re seeing real opportunity there. And as we look at, both from the Defense Department and, dare I say, from the IC – the portions of the IC that are inside DOD, we certainly see a lot of opportunities to work together.

It does require us to think about how we can contract effectively, to include issues like indemnification or just how we think through the process of making sure we’re enticing – it’s an enticing offer to bring commercial space capabilities to bear. So that is absolutely on the table.

MS. LONG: I’m sure you just made a lot of people in this room happy. You know, we’re not going to get to half the questions that I put together but it is time for the last question … 

DR. HICKS: OK.

MS. LONG: … and it is certainly in the category of last but not least — because I want to talk to you about the workforce, because we can’t do – we can’t achieve any of this without a world-class workforce, and you have often talked about that. You’ve talked about the need for the department to attract top talent, particularly in STEM fields, as well as the need to further diversify. How’s it going?

DR. HICKS: We are in a very tough labor market, the whole U.S. economy is having a tough labor market – I think everybody here is probably very well aware of that – and that affects us at DOD. My view of our challenge is that it’s not for the defense sector, is it’s not just a DOD challenge. We are so reliant, for our advantages in the United States military, on the partnership – effective partnership – with allies and others in the international sphere and of course on the commercial sector, on the university sector and non-profits.

So what we really want is sort of lifting all boats on the STEM talent workforce that want to work in this norms-based, Western version of how to advance security, and we see a lot of patriotism and opportunity — folks wanting to work with us. 

And I really have to applaud industry but also the research community and others who are coming forward – I was at – before you mentioned hypersonics, I was Purdue last month…

MS. LONG: I saw. 

DR. HICKS: …and they’re doing phenomenal things. Young researchers from all over the country coming forward to work on some of our hardest problems. That’s the ecosystem that we really want to engender. Inside the federal workforce it is going to be tough, and we really have to focus on that, we have to have a flexible workplace because that’s becoming the norm to be expected coming out of COVID for the IC and other parts of — some parts of DOD that will be especially challenging, so thinking through what the business proposition is for folks, I think will be very important. 

We have to have a good wage, the federal workforce, civilian and military are looking forward, I think, if the president’s budget gets passed, to the largest pay raise in 20 years, 4.6 percent, we’d probably need even more than that as we look ahead to where the pay needs to be, so we need to keep making sure we bring competitive pay. 

The end of the day what brings people into the federal government and certain into national security’s mission, we continue to deliver an incredible mission. But we have to make that come through, folks have to be used well, we have to excite them to the mission, we have to show them how it can contribute to a full work life whether they stay in the federal sector or they move in and out of it, we need to create those opportunities for people to move in and out more easily. We need to shrink the length of the timeline for their clearance processes, and just for processing their applications. So a lot of work to do is my answer. 

MS. LONG: Indeed. You touched on military, and you know, the Army in particular, but I think all services are having a challenge recruiting right now. Can you say a few words about Gen Z, you know, bringing them in? And in fact, you know, some of the skills challenges as well when it comes to the military? I mean, in some areas they may not even be qualified. 

DR. HICKS: So we — I will say we are not having a universal challenge across all of the department, and I’ll point to the Space Force as an area where they’re actually doing very, very well in their recruiting. But absolutely a very tough recruiting environment. 

You have what I just talked about overall — reflection of the overall work sector for the U.S. and that is traditionally how you should think about recruiting for the military, which is when it’s a hot job market, it’s kind of tough. That’s still true. 

If you layer onto that the fact that schools were closed, and recruiters could not get into schools during COVID, that makes it hard too, in particular, because appropriately, if you will, the U.S. military as a percent of the overall demographic of the country has shrunk because it’s down to kind of the size of the military we need and away from a nation at war. 

And that means that there are many young people who do not have a connection to the military, those recruiters are the connection. We know that they’re incredibly valuable in terms of demonstrating why there’s a mission, why there’s a place for folks to go. 

So we think getting recruiters back up and running, being able to look at the economics, so you look at things like retention bonuses, et cetera — those will help increase propensity to serve. 

But I’m just going to go also with some of the other challenges we have which are harm and self-harm challenges, and we do see that we have data challenges in the defense department, but one area we have excellent data is on recruiting. 

And we know that there’s a lot of concern about psychological harm, sexual assault, sexual harassment, suicide — and those are all areas we want to get after. We just put forward the largest prevention workforce for harm and self-harm issues, really galvanized after Fort Hood on the sexual assault / sexual harassment issue set, but that will really help across a lot of these areas. 

We will be able to demonstrate that we mean it when we say we want to bring you to a safe workplace, a workplace where you can contribute and where readiness of the core unit is number one. We’re not looking to drive wedges between people, that’s not how militaries win wars, we bring people together. If we can do that, I think we’ve got a really strong message, because Gen Z — they want mission, and boy, do we have it. 

MS. LONG: Indeed. Well, Secretary Hicks, thank you so much. Thank you for your service, and just what a terrific conversation. 

(APPLAUSE)

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