It's great to be here. Thanks. And to my college classmate, Bill Stewart, who put the collar on me to come out and talk to you all. Thanks very much for this opportunity. It's kind of a tragedy about Bill. He doesn't remember much from college, so anything that he told you about me is absolutely untrue. [Laughter].

What I'd like to talk to you about today is just a little bit about two questions that I get most when I'm out and about-that's, "How's the Army doing'" and "Where's the Army going'" ...And, when I talk about how the Army's doing, I want to let you know what we have done because one of my jobs as the Chief of Staff of the Army is to ensure that not only do we provide forces for today's operations, but we have to ensure that we deliver the capabilities that we think the country will need in the future. That's a big part of my job. I know you all are very much interested in that.

Let me just start with how we're doing. I'm wrestling hard with finding the right words to describe the condition of the Army. It was almost three years ago when I got here. Folks were saying the Army's broken. The Army's hollow. The Army's not ready. As I traveled around the world visiting Soldiers and Families and talking to them, it was clear to me that this was a hugely professional, combat-seasoned force. But, there was no question that we were stretched...that we were deploying at unsustainable rates. ...We have been sending Soldiers to combat for years and bringing them home for only one year before we send them back. If you'd asked me five years ago if we could continue to do that, I'd have said, "No way." It's remarkable.

So while we are stretched, it's a hugely professional force. So, I came up with the term that the Army's "Out of Balance." ...We're so weighed down by our current demands that we can't do the things that we know we need to do to prepare, give the country the strategic flexibility it needs, and sustain the All-Volunteer Force. And it's striking-I read something in the paper the other day that said sometime in the next week or two, this conflict will surpass the combined durations of World War I, World War II, and Korea. That's a lot of strain on the force.

So, three years ago we put ourselves on a plan to get back in balance, and we set that plan on four imperatives.

We said we had to sustain our Soldiers and Families. Our men and women are the heart and soul of this force. They're what make it the best Army in the world.

Second, we said we had to continue to prepare our Soldiers for success in the current conflicts. We couldn't flinch on making sure that they had the training and equipment they need to get the job done. I'll tell you, we're much better at that now. When I go around and talk to Soldiers in Iraq and Afghanistan, I always ask them what they need and how they're doing. Occasionally, I run into a guy who wants another gun, but beyond that, they're fairly satisfied with the equipment that they're getting, and we're getting it to them a lot faster. When you think about it, it took almost three years to get up-armored vehicles into Iraq; it took about 18 months to get the next generation in; about a year to get the most up-to-date version in. So we are making progress on that.

The third one is reset. Reset means taking Soldiers and equipment as they come out of a conflict and preparing them to go back in again. To a lot of folks, this is about equipment. But, it's also very much about the people.

Lastly, we said we had to transform. I will tell you that since the early 1990's, the Army has been transforming. But, I believe we were dragging our feet, frankly, until September 11th [2001]. After that, there was a recognition that the types of operations that we would be conducting would be far different from the operations that I grew up preparing to do-large tank battles on the plains of Europe or in the deserts of Saudi Arabia.

So, we set out in 2004-in earnest-to move away from this Cold War Army to an Army more relevant in the 21st Century. I will tell you we've made great progress. In 2004, we set out to transform all 300+ of our brigades in the Army to modular organizations-organizations that could be mixed and matched and put together to match a situation on the ground where -- in the past -- we would just have to send something that was designed to do something else and tell them to figure it out when it got there.

The other thing we've done is transform about 160,000 spaces from skills necessary in the Cold War to skills relevant to today. What am I talking about'

For example, we stood down about 200 tank companies, artillery batteries, and air defense batteries, and we've stood up a corresponding number of civil affairs, psychological operations, military police, and engineer units. Taken together, they represent the modular conversion of brigades and rebalancing. That's the largest organizational transformation of the Army since World War II, and we've done it while sending 150,000 Soldiers over and back to the combat zone. There are a lot of moving parts there, let me tell you.

If that didn't make it interesting enough, some of you have heard the term BRAC. [Laughter]. It almost sounds like AFLAC a little bit, doesn't it' [Laughter]. The Base Realignment and Closure...combined with the growth of the Army, is going to cause us to move about 380,000 Soldiers, Civilians and Families around the Army. We started that a couple of years ago. We'll be done by 2011. So, it already is a fundamentally different Army, but by the end of FY11 it will be a transformed force that much more relevant to the challenges of the 21st Century.

So, how are we doing' We have made a lot of progress. And we're much better postured today-than we were three years ago-to deal with the challenges of the future.

But that said, we are still suffering from the cumulative effects of eight and a half years of war. Those effects are going to be with us a while, and it's going take us a while to continue to work our way through them. But again, we've made progress. We're not out of the woods yet.

With the drawdown in Iraq, I project that we will get most of the Army two years at home [between deployments] by the end of FY11. That's huge. That's good stuff.

Again, the bottom line is: we are doing okay, but we're not out of the woods yet.

Now, I'd like to talk about the future. I say this, subscribing to what Yogi Berra says about the future: "Predictions are hard, especially when you're talking about the future." [Laughter].

We go into this [thinking about the future] with our eyes wide open. We understand how hard it is. So we have to think about it and continue to refine our views. What I'm saying to you here is I'm going to talk about the future and how we see it and how we think about it...

Where do we begin' First of all, it seems clear to me that we are in a period of fundamental and continuous change. Change is the constant. And this isn't just in the Army. You all probably experience this more than anybody else. In a bureaucracy the size of the Army, we're not very agile. Right now, technology is moving faster than our procurement processes. We have to fix that. We have to do better. But we're in a period of fundamental and continuous change.

Secondly, we're at war. We've been at war for eight and a half years. We're at war against a global extremist terrorist network that attacked us on our soil. They're not going to stop. They're not going to give up. And, they're not going to go away.

I believe this is a long-term ideological struggle. I think about this war in terms of the Cold War length of time. This is a long-term proposition. What happened at Christmas time [2009] with that [failed airline] bomber is an indicator that they're still out there and they're going to continue to try to come after us.

The second thing we look at after the fact that we're at war is the trends in the global environment. The trends I look at seem to me to be more likely to exacerbate the conflict than to alleviate it. What am I talking about'

Globalization: Up until about 18 months ago, globalization was having a positive impact on a good part of the world. But it was also missing in probably even a larger part of the world. So we were building "have" and "have not" societies. The people in those "have not" societies are much more susceptible to recruiting by the terrorist organizations.

Technology: This is another double-edged sword. The same technology that's enabling innovation and bringing knowledge to anyone with a computer is being used by terrorists to export terror around the world. And, there are people who are self-radicalizing just by getting on jihadist web sites. It's happening today in the United States.

Demographics: a third trend that is also going in the wrong direction. We have seen studies that say that the population in some of these developing countries is expected to double in the next decade. Can you imagine the population of Pakistan doubling in a decade and the attendant problems that will give an already strapped government'

The population of the world is increasingly moving into cities. I've seen studies that say by 2030, 60 percent of the population of the world is going to live in cities. Some of you have seen pictures of the sprawling slums in Sadr City, in Baghdad-about a 3x5 kilometer area with two million people living there. That's a tough place to operate.

The other thing about demographics is that it puts more demand on resources. The middle classes in both China and India are already larger than the population of the United States. That's a lot of two car families, and that's a lot of demand on resources.

There are two trends that worry me most, though: weapons of mass destruction in the hands of terrorists and safe havens-countries or parts of countries where the local government can't or won't deny their countries a safe haven for terror.

We know that there are terrorists out there, roughly 1300 or so known terrorist organizations. The bulk of them are seeking weapons of mass destruction. When they get one, I have no doubt they will attempt to use it against a developed country.

So you wrap all those together with the fact that you're already involved in a long term ideological struggle, and it seems to us that we're in a decade-long or so of persistent conflict-a period of protracted confrontation among state, non-state and individual actors who are increasingly going to use violence to accomplish their political and ideological objectives. We're in this for awhile, and we can't wish it away. That's the first point.

The second thing I have to do as the Chief of Staff of the Army is to look at what war is going to look like in the future. Clearly, Iraq and Afghanistan are giving us harbingers of what kinds of things to expect.

But, I also prefer to look at what happened in Lebanon in the summer of 2006 where you had a terrorist organization - Hezbollah -- operating inside a country - Lebanon -- supported by two other countries -- Syria and Iran -- and fighting in another country -- Israel. And this non-state actor, this terrorist organization, has the instruments of state power. They started the war with over 13,000 rockets and missiles-and not just the small rockets that they shoot at our bases in Iraq and Afghanistan, but the large missiles that they fire at Israeli cities. They had unmanned aerial vehicles to observe the Israeli forces. They combined that with the use of improvised explosive devices that channeled the attacking Israeli armored forces into areas where they fired at them with state of the art anti-tank guided missiles that they got from Iran. They shot down an Israeli helicopter with a state of the art surface-to-air missile. They hit an Israeli ship in the Mediterranean Sea with a cruise missile. They used secure telephones to communicate. And they got the message out on local television.

Now that's a much different operation-about 3,000 Hezbollah operatives basically brought a well-equipped, well-trained Israeli force of about 30,000 to its knees. That's a different ball game.

So we're looking more broadly than just Iraq and Afghanistan. You've heard the old adage, "Don't prepare to fight the last war, that's history." Everybody claims we do that. We're a little more sophisticated than that, not much, but we're a little more sophisticated. So we're looking at it more broadly.

But what that says to us is the complexity of conflict is only increasing. And I can remember when I thought planning to fight that battle in the Fulda Gap was really complicated. Then I went into Bosnia and I said, "Holy mackerel. That was easy compared to this." Then I went into Kosovo and I said, "Boy, this is even harder than Bosnia." Then I went into Iraq, and said, "This is eight times harder than Kosovo." So it's only going to increase in its complexity and that places great demands on leaders.

So we're going to be at this for a while. The character of conflict is evolving. What then should you expect of the land forces in the country' I would say a couple of things.

One, we have to prevail in the conflicts in Iraq and Afghanistan. We're succeeding in both those places. You may not get that out of the news media, but we're succeeding in both places. But, they are long term propositions. And, they're not going to get done as quickly as we would like to see them get done. But, we have to prevail. It's what Secretary Gates calls, "win the war you're in."

Secondly, we have to build our capability to engage to help others build the capacity to deny their countries to terrorists. We can't keep doing this ourselves. As we drawdown in Iraq, what we'll see is more forces available to go out and help build capacity in other places.

Third, your land forces have to be able to support civil authorities both at home within the United States-usually in response to natural disasters and attacks-and then also abroad. And we're doing this today in Iraq and Afghanistan. This is nothing against any of the other agencies of government, but we are the only ones in the government who plan, organize and integrate to a scale that's necessary in these types of operations. And what I've been suggesting is that it's going to take awhile for the other agencies of government to build expeditionary capacities to help in the interim. We can help them bridge that gap by letting them rely on our skills.

Lastly, we need to be able to deter and defeat hybrid threats and hostile state actors. We cannot walk away from the need to prosecute state-on-state conflict. There are still states out there that are going to do us harm.

I was in China last August for my first visit. I visited a Chinese regiment on the North Korea border. Not surprisingly, what kind of tanks do you think were their targets' They were U.S. tanks. So, there are folks out there that can still doing us harm.

So those are the four things we're organizing our Army to do.

With those things in mind we said, "Okay, what's the 21st Century Army going to look like'" It's a versatile mix of tailorable and networked organizations that's operating on a rotational cycle. Therefore, we have to do three important things. First of all, we have to continue our ability to sustain the current forces deployed. That means we're going to be sending between 100,000 and 150,000 Soldiers to war every year for another decade or so. We have to guarantee our ability to continue to do that.

Secondly, we have to build the capability to hedge against the "unexpected." Right now, we do not have the flexibility we need. If something happened in Korea, for example, we'd have to say, "All you folks in Iraq and Afghanistan, hold what you've got. You guys complete your mission." Back home, we tell those forces, "Start training for something else." And when they were ready, we'd send them. That's not a good position to be in.

The third thing is we have to do both of these things at a tempo that's sustainable and predictable with an All-Volunteer Force. This is the longest war we've prosecuted with the All-Volunteer Force. We're in a bit of uncharted territory, so we're working hard to build that type of force.

It seems to us, though, that as we look to the future, versatility has got to be the centerpiece of our efforts because the environment I described is both complex and unpredictable.

For 60 years, the central organizing principle of the Department of Defense and Department of the Army has been conventional war. And we are very good about cranking systems out for conventional war. What Secretary Gates has been saying is, "Hey, wait a minute. That's not what we're going to be doing, and we need to adapt and we need to change."

So I believe that versatility needs to replace conventional war as the central organizing principle. And as we build systems, organizations, and leader development programs, it's got to help engender versatility in the force.

So that's the type of Army we're building. I will just say more about one word; you heard the word "network" in there. I think that might be important to some people in this group. But as we look at versatility, we look at our need to operate across the spectrum of conflict-from peacetime engagement all the way up to the full-scale conventional war and everything in between. In all those instances, the Soldier needs to know where he or she is. They need to know where their buddy is. They need to know where the enemy is. And when they shoot at them they need to hit them with precision. All of that is enabled by the network, and it's a huge piece of our ability to operate across the spectrum of conflict. It's a huge piece of our versatility.

Now let me close here [with a tribute to the men and women in our Army.]. A couple of Memorial Days ago, I participated in a wreath-laying ceremony at the Tomb of the Unknown Soldier. And, then I spoke at the Vietnam Memorial. Afterward, my wife and I walked the Mall. We walked over to the Korean Memorial and then to the World War II Memorial. I was struck by two things.

I was struck, first, by the scope of the loss-150,000 men and women who have given their lives to this country.

Secondly, I was struck by how lucky we are as a country to have generation-after-generation of men and women who believe so strongly in the values and ideals this country stands for that they're willing to die for it. That's something that we should not take for granted. Those men and women are in your armed forces today.

One of them is Sergeant First Class Jared Monti. He was awarded the Congressional Medal of Honor by President Obama last September for action that took place in Afghanistan in 2006. He was leading a 16-man patrol in the province of Nuristan by the Pakistani border. They were ambushed by a force about three times their size. He immediately organized a defensive position, called in artillery fire, quickly enlarged their position, and organized its defense. While he was doing that, he saw a flanking attack and took some hand grenades and his own rifle and went and headed off the attack. He came back to his position and saw that one of his Soldiers was down-wounded-between the enemy and the position. He called for covering fire, started crawling out to recover the Soldier and was driven back by extremely high volumes of fire. He organized himself again, called for more covering fire, and tried a second time to go. Again, he was beaten back by the fire. A third time he went out, and this time he was mortally wounded.

Jared Monti was living and exercising part of our Warrior Ethos: "Never to leave a fallen comrade." That's the type of men and women you have in your armed forces today. You can be very, very proud of what it is that they do.

Thank you very much for your attention...