It is great to be here. If I had a breakfast at 7:30 in the morning in Washington, I would be standing by myself. (Laughter) I am very impressed with everybody getting out here very early. I know a lot of people drove a long way. So thank you so much for being here. I know you got up early to get here. It means a lot to us that you took the time to be here. Thank you so much for being here. Claudia Wigglesworth, Mayor of Dalesville, thank you so much for hosting this. Thank you for your service. It is great to see somebody with previous service here taking leadership in the community. Thank you for what you do. Mayor Blackwell, thank you so much. I also want to thank Matt Doug, the CASA. Thank you for what you do to help us out. And Phillip Tidwell, thank you. We really appreciate everything you do to support the Army. I want to thank MG Kevin Mangum and his wife Angela. Thank you for being such great hosts. This is one of the most important jobs we have in our Army, and we select very carefully whom we place here. Kevin has come down here and done a great job keeping Aviation heading in the right direction. I have had the opportunity to talk to the last couple of Commanders. Jim Barton sees me quite regularly, probably more regularly than he would like. He told me to make sure I pass along all his best to everybody down here. He asked me why it took me 18 months to get to the center of the universe in Dothan, Alabama. So it is great to be here. I want to let you know that many people are thinking about you in Washington D.C.

I want to thank Sergeant Major of the Army Chandler for being here and coming down with me. We usually travel separately from each other because it enables us to cover more ground and see more people. But we decided that it might be important to come together to a few key places. That is why we wanted to come down here today together and have an opportunity to talk to all of you. We had a great day yesterday talking to people. We are very, very pleased to be here.

Let me start by saying these are challenging times. I do not have to say that, but it is important that we go through times like this. It is important that we get this right. That is what I am focused on. That is what the Secretary of the Army is focused on. That is what the Sergeant Major of the Army is focused on. We must get this right as we move through these times of great challenges to our country. We all know the environment. In all the studying I have done throughout the years, and the lessons I have learned, the one thing that is always apparent, is that the most important thing you need to be a strong country is a strong economy. It is important that we have that. That is the underpinning of all our political process. It is the underpinning of being able to provide a strong sense of security to our own country. You have to have that strong economic base to do that. That is what we are working towards right now. We are going to work together to make sure that we do this right.

These are challenging times, and there are three things we are trying to do at one time. So as I stand here today, I would like to remind everyone that right now we have 80,000 American Soldiers deployed. Sometimes I think we forget about that. We have had so much discussion about sequestration and budgets and everything else, we forget that as we stand here today there are 80,000 Soldiers deployed. There are about 60,000 in Afghanistan and another 15-18,000 in other places in the Middle East, some I cannot talk about. There are another couple of thousand in places like Kosovo and the Horn of Africa. We also have another 90,000 Soldiers in over 150 countries around the world everyday wearing the uniform of the United States representing our government, representing our people to many of these countries. They are the one visible sign of U.S. presence around the world. So it is important that we never forget the sacrifices they are making; that we never forget that we must make sure they have everything they need to accomplish the job that we have asked them to do. That will always be my number one priority -- that those forward deployed and those getting ready to deploy will have what is necessary to ensure that they will be able to do their jobs. They will have the right training. They will have the best equipment. They will have the best leaders that will allow them to move forward and accomplish the very complex and difficult tasks that we often ask them to do.

The second thing is yes, right now we have some budget problems that we have to work through. For the Army in FY13, we have had a lot of events occur that has caused us to have some really significant issues with our budget this year. First, on March 1st, the President signed into law sequestration, which is an automatic $500 billion dollar additional reduction on top of the already $490 billion reduction in the Department of Defense. So we have to execute that in the last six months of the year. That is about $12 billion dollars to the Army; $6 billion in procurement and $6 billion in operations and maintenance funds. Additionally, we have a problem because the operations in Afghanistan have been underfunded for this year by about $9 billion dollars. That is because costs have risen. That is because we did not get the amount of money that we needed. So the Army is responsible for funding that effort. We are making sure that they have the first priority. When they passed Resolution 933 a few weeks ago that relieved about one third of our problem. That was helpful for us, but it did not relieve the whole problem.

So as I stand here today, we have somewhere between a $10-12 billion dollar shortfall for the rest of this year in our operations and maintenance accounts. We are in the process right now of prioritizing what we need to do in order to fix that problem. I have several meetings every week. On Saturday, I will have a meeting that goes through and gives me final prioritization. Secretary McHugh and I will get together and we will make some decisions on how we will prioritize funding these shortfalls as we work out the rest of the year.

This will require several things. You have heard about a furlough of civilian employees. That is not something we want to do. However, we are limited because we have to take everything out of our operations and maintenance accounts. Because of the bill, we are reducing some of our initial estimates of 21 days of furlough down to 14 days of furlough. That is still 14 days that our dedicated civilians will not be paid. We are concerned about that. In order to make sure that the units deploying to Afghanistan, to the Sinai, to the Horn of Africa, and our Forces are ready in Korea, we will have to limit training for the rest of the Forces in the United States. In fact, one thing is we could have to cut some of the flying hours here in Fort Rucker here for the rest of the year. What does that mean? That means it will put us behind. That means it will delay us getting our newly trained pilots out to our units next year. So we are worried about that. It looks like we will have to cancel five National Training Center rotations for our Brigade Combat Teams, which will impact our readiness for next year.

There is no easy decision. We will have to reduce some of our depot maintenance. I am going to Anniston today to talk about that. We will have to reduce some of our work in depots this year, which again will affect our equipment readiness into the future. So we have to work through these problems. Then when we start 2014, we have to make sure that we begin to rebuild our readiness and rebuild what we need in order to meet the challenges of the future. What is concerning is as you look out and read the newspapers every day, you realize that right now, we are not in a time of complete stability around the world. There are lots of issues going on. So it is important that we have to sustain a level of readiness in case we are needed for unknown contingencies.

I know you have all been reading about North Korea and the saber rattling that has been going on by the leader of North Korea. We have to ensure that we are ready. There is a large annual exercise that is going on today. We are watching very carefully what is going on in Syria. There are some concerns that there could be use of biological and chemical weapons and what that means. There is continued concern over Iran's nuclear program. There are concerns in the Asia Pacific region to make sure that everyone has access to the global commons and the economic growth that is necessary out in the Asia Pacific region. There are still issues with Afghanistan that we have to deal with. There is a lot is instability around the world. We have to be prepared to respond. So is it my job, the Secretary's job, and all of our jobs to ensure that we are ready to meet these.

Our first priority is making sure the people we send over are ready. Our second priority is to make sure we do the things that continue to give us asymmetric advantages around the world. We must continue to develop the best leaders in the world. As I go around to many different countries to talk, the one thing they always ask is how we train our Non-Commissioned Officers. They want to know why we have such a strong Non-Commissioned Officer Corps. How do we train our Officers to be adaptable and agile? What do they need to do? They want to come to our school systems. They want to understand how we train our leaders. It is important that we continue to invest strongly in all of our leaders. The ability of our leaders to show initiative, to be adaptive, agile and flexible, to operate in a variety of environments gives us an advantage like no other in the world. We have to sustain that.

Our ability to command, control, communicate and deliver intelligence down to the lowest level is unmatched around the world. We have to continue to make sure we maintain that advantage. Our ability to deploy, our mobility, our strategic, operational and tactical mobility that we have is key, as well as being able to move quickly anywhere in the world and when we get there, be mobile by ground and air. That is something that no other country can do in the world. We have to sustain that advantage. Our ability to sustain ourselves with logistics from a strategic operational and tactical perspective is something that no one else in the world can do, especially for long periods of time. So we have to build on these. We have to continue to build and gain new advantages: whether it be new techniques or combined arms maneuver, whether it be manned or unmanned teaming in aviation, or whether it be improvements in our ability to conduct cyber and protect ourselves with cyber. We have to continue to grow in these areas of advantage.

So as I look to the Army of the future, it is important that we focus on our asymmetric advantages. What we want the Army of the future to do is be an Army that is regionally engaged and globally responsive. We want to be regionally engaged with each one of our Combatant Commanders. Whether it is in the Pacific, whether it is in the Middle East, whether it is in Latin America and Central America, whether it is in Africa, or whether it is continuing to build our partnerships with our NATO allies in Europe, it is critical that we stay engaged and realign our Forces to them. So we continue to build relationships to gain access to prevent conflict, to shape the areas of operation so we don't have to fight wars. But we will be ready if necessary to protect our country and protect our security interests. That is the Army that we need in the future.

That will be underpinned by our ever-developing leader development programs. It will be underpinned by the importance of the profession of arms. The importance that we put into being somebody who is technically competent in what they do, who is tactically competent, who has high character, and brings forward the moral and ethical values that this country represents: that is what we want our Soldiers to be as we go forward. We are given a huge responsibility as Soldiers. We are given the responsibility to save lives, and in some cases we are given the responsibility to take lives. That is a heavy burden. We must be prepared to do that.

Being professional is important. When I think about leaders and professionals, I think about somebody who is competent, who has high character, and who is committed to himself, his team, his unit, his Army, his Nation. We have people who are competent, have high character and are committed, and are able to accomplish everything they are asked to do. That is where we are headed.

There are some other things that we are working on. We just announced the Ready and Resilient Campaign, which is going to be a long-term campaign in order to improve individual physical readiness, mental readiness, and emotional readiness. This will build confidence in our Soldiers and our families. It will allow them to face the difficult tasks that we ask them to do together. This will be a long-term campaign to improve every individual that comes into the Army. We are also starting a campaign called Soldier for Life. From the time you come into the Army to the time you leave the Army, and once you leave the Army, we want you to feel that the Army is there for you. We are in the process now of revamping how we assist our Soldiers leaving the Army to prepare them for their next jobs and next careers. We owe that to them for their service. We want them to be proud of their service in the Army. We want them to carry that on as they go on to their next life, whatever that might be. That is important to us. This is a profession that lots of people should want to do. It is a special profession. It is important that we sustain that in ourselves as we look to the future.

Let me close by saying that the one thing I will guarantee all of you is that as we stand here today, we are the best Army in the world. As we go through figuring out the budget in the future the one thing I guarantee you is that two years from now, three years from now, five years from now, or ten years from now, we will still have the best Army in the world. That is because of you. It is because of the great support of our communities and those who continue to support our Soldiers in uniform, and it is because of the Soldiers that we have. They are willing to raise their right hand. They are willing to dedicate themselves to the Constitution of the United States. What I want you all to do here is let me worry about the budget problems. Let us make sure that I get you the resources necessary to do your job. What I need you to do down here at Fort Rucker is train hard, sustain your equipment, count for your equipment, and develop all those young leaders underneath you if you are a leader. I also need you to be good stewards of every dollar that you are given. Get the most out of every dollar. If you do that, then we will be in great shape.

It is an honor to be here today. It is an honor to come down here and spend some time at Fort Rucker. It is incredible to watch the organization and the training necessary for us to sustain one of our great advantages, which is having by far the best rotary wing capability of any nation in the world. That is because of what goes on here at Fort Rucker. So thank you all for your great support. I would be happy to take any questions that you might have.