Thank you ... Thank you Sully.

Thank you everyone, and Sully thanks for all you and AUSA have done for this great Army here over the last 60 years. How about a big hand for AUSA on their 60th anniversary' (Applause)

The head table has already been introduced, so I am not going to recognize them again individually, but this is the leadership of your Army that has led us and carried us through a very difficult time. They're not much to look at but they are very, very capable and competent. How about a big hand for them' (Applause).

There are a couple of former Chiefs here in addition to Sully: Carl Vuono and Denny Reimer-great to see you here. And a couple of former Sergeants Major of the Army are here - Sergeants Major Connolly, Hall, and Jack Tilley. It's great to have you here with us. (Applause)

In addition to this being the 60th anniversary of AUSA, it's also the 60th anniversary of the Korean War. And I'd ask all of our Korean Veterans led by Medal of Honor Recipient Ron Rosser to please stand and be recognized for your service. (Applause).

In this great 235 year old institution, we all stand on the shoulders of those who have gone before us. So thank you, and you won't be forgotten.

So, it's that time of year. I get to take a few minutes and tell you how I see the state of the Army and talk a bit about how we see the future. No surprise, I will stick with what I have done for the last three years. And I think it's important because we are just coming out of a fairly significant and stressful period, and we're beginning to move in a much better direction for this Army.

If you think about it, it's been over nine years since we've been attacked. And even now we still remain a nation at war -- because we're engaged in a long term, ideological struggle with a global extremist network that attacked us on our soil. And your Army has been a leader in this war, and we share in its challenges and its successes. Think about what we've done.

We've liberated more than 50 million people from tyranny. We've helped establish representative governments in Iraq and Afghanistan, and governments that are actually based on Constitutions, based on free and fair elections, and based on respects for the rights and dignities of their populations. We've built two armies. We've built two police forces. We've built the infrastructure of two internal secured ministries. It's an amazing accomplishment. And while we've been doing all that we've been transforming while we've been fighting this war. We've adopted a new doctrine. We've built tailorable modular organizations across the Army. We've rebalanced skills, from Cold War skills to skills more relevant to today. And we've put the entire Army on an integrated, (integrated, meaning Active, Guard, Reserve) an integrated rotational model that has fundamentally changed the way that we've built readiness across the Army. So what you've done over the last 9 years has been absolutely phenomenal and nothing short of incredible. So give yourselves a big hand. (Applause)

But as each of us in this room knows, this success and these successes have come at a cost. We've been stretched and stressed as we've led the nation in what's been the longest war we've ever fought with an all-volunteer force. Over a million Soldiers have deployed to Iraq and Afghanistan. More than 4,000 of them have given their lives, leaving over 20,000 surviving family members. Another 28,000 Soldiers have been wounded, 7,500 of them seriously enough to require long-term care. Almost 100,000 Soldiers have been diagnosed with Traumatic Brain Injury. Another 50,000 have been diagnosed with Post Traumatic Stress. We cannot and will not forget any of these fallen comrades. They and their families must know that their sacrifices are both recognized and appreciated and will not ever be forgotten. (Applause).

Yet, as resilient as we've been in meeting the challenges of this war, we must also begin to prepare for challenges of the second decade of this century and of this war, because this war is along term ideological struggle against violent extremism, and our job is not done yet. This war is a long way from over.

Now, most of you will recall that in 2007, I told Congress, I told this forum, and I told the American people that our Army was out of balance; that we were so weighed down by the current demands that we couldn't do the things that we knew we needed to do to sustain this volunteer force; and to prepare ourselves to do other things. Over the last several years, we've made great progress toward restoring balance. And I can tell you that after a few tough years, I am actually beginning to feel like we can start to breathe again. In fact by the end of next year, I anticipate that we will be able to put the Army on a sustainable deployment tempo - where we will have about as many units trained and ready to deploy as we will have going to Iraq and Afghanistan. And that's great progress, and it's going to make a big difference for our force. (Applause).

Three years ago, the plan we instituted to put ourselves back in balance was and remains based on four imperatives: Sustain our Soldiers and families; continue to prepare our Soldiers for success in the current conflict; reset them effectively when they return; and then continue to transform for uncertain future. We are in the final year of the plan. And with the FY 11 budget that is on the Hill now, we have the resources to largely accomplish the objectives we set out for ourselves in 2007. Let me just cover a few of those for you.

First of all: growth. To date, we've increased the Army by almost 95,000 Soldiers since 2007, when President Bush instructed us to increase the size of the Army. Some of that is temporary growth, and we're going to continue to grow until we hit a total of 22,000 Soldiers. It's been hugely important for us. That growth, plus the draw down in Iraq, is what's allowing us to continuously improve the time our Soldiers spend at home to improve our dwell.

And as I've been here, its become clearer and clearer to me that the most important thing we can do to restore balance to the Army is to increase our dwell - to increase the time that our Soldiers spend at home. Its not just so they can spend more time with their family - that' s important. But it's so they can recover themselves. And so they can begin to prepare to do other things. For about five years there, we were deploying at about one year out, one year back. It was absolutely unsustainable. Last year, we completed a study that told us what we intuitively knew: that it takes 24-36 months to recover from a one- year combat deployment. It just does. And when you turn faster than that, the cumulative effects build up faster.

In addition to improving the dwell and the growth, we're also completing the largest re-stationing of the Army probably since World War II. You know about the Base Realignment and Closure Act. Some of you on your installations see cranes every place you go. You know how it goes: They pass the law; they give you the money; you do the design, you build the building; and then everybody moves in the last 18 months. Guess what' We're in the last 18 months. We have the whole Army on cell phones, and we'll publish the wiring diagram when we're done, at the end of next September. The upside of this: significant, a quantum improvement in the quality facilities on our installations [that] will benefit us for years to come.

The other key elements of getting back in balance are modularity and rebalancing. We have completed the modular conversions of 290 of the 300 plus Brigades in the Army. It's a huge accomplishment. We've also finished rebalancing about 124 - 125,000 of 160,000 spaces away from Cold War skills to skills more relevant and necessary to today. Taken together, this is the largest organizational transformation of the Army since World War II. And again, we've done it while we're sending 150,000 Soldiers over and back to Iraq and Afghanistan every [year].

The last thing that we're working hard on now is building and restoring strategic flexibility. One of the challenges that we've had is that everybody has been either in Iraq and Afghanistan or preparing to go. While, as we get additional time at home, we will be able to train and equip units that will not be in the available pool, but will be ready enough to be called forward in an unexpected contingency. And I think it will probably be another two years or so before we're able to give the country that capability that it has needed so desperately here in the past couple of years.

So... great progress. Little bit more to do. But as I said, I am really feeling that we can start to breathe again, and we can also begin to shift our focus now to what I call the second decade -- the second decade of the century and the second decade of this war.

I'd like to take just a couple of minutes here to talk about the future, to talk about how I see that second decade, and I do that with great temerity. You know the old Yogi Berra adage' "Predictions are hard, especially when you're talking about the future." That's where I'm headed.

One of the things we do know about the future is that no matter how smart you think you are, you never get it quite right. And we've spent a lot of time thinking about this, and we do it with our eyes wide open. The best we're going to get is about 85% solution. If we get that close, we're in the ballpark. But as I think about it, I spent the first 30 years of a 40 year career training to fight a war I never fought, and [in] the last ten, I learned to fight a new and different kind of war while I was fighting it. And that's been the nature of the beast for Soldiers.

After a decade of war, we're still facing a future with the global trends that we see will continue to shape our emerging security environments and exacerbate the ideological struggle that we're engaged in. You've heard me talk about these trends for the last three years or so: globalization, technology, demographic and climate change, and the two that worry me the most-weapons of mass destruction in the hands of terrorist organizations and safe havens - countries or parts of countries where the local governments can't or won't deny their countries to terrorists.

It seems to us that all of these are very likely to combine to make it more rather than less likely that we will be engaged in an era of persistent conflict for some time to come. What that means, that in that era, we expect that these conflicts will arrive unpredictably. They will vary in intensity and scope. They will be less susceptible to traditional means of conflict resolution. As a result, even with the draw down in Iraq, and eventually in Afghanistan, our operating environment in the next decade is going to remain uncertain and complex, and our commitments are likely to be frequent and continuous. So that's the environment that we're preparing ourselves for.

And, as we're entering that future, we're entering with the resilient, but tired force that has performed and transformed magnificently at war for almost a decade. And we remain faced with an era of persistent conflict and a persistent and ruthless foe that continues to try to attack us on our soil. As I said, this war is not over; we just won't all be going at the same time. And we'll have more time at home that we'll have to learn to use more judiciously. It strikes me then that our challenge in the second decade of the century is that we have to maintain our combat edge while we simultaneously work to reconstitute this force and work to build resilience for the long haul.

Let me just talk a few minutes about each of those: maintaining our combat edge. As I said earlier, beginning in 2012 we will have about as many Brigades available but not earmarked for Iraq or Afghanistan as we will have deploying. And I'd make two points with you on this: Those that are not deploying for 12 months won't be sitting on their duffel bags in the barracks. Those not going will be given a training focus for a Combatant Commander and be available to them for engagement and for exercises. Or they will be part of the global response force, or the CBRNE Consequence Management Response Force or supporting other ongoing missions. I can tell you the Combatant Commanders outside of CENTCOM have been waiting for you, and you'll be received with open arms and used.

The second thing I'd tell you is don't get disappointed if you don't go in 12, because you will probably go in 13 or probably 14, because we going to be at this for a while. I think it will be imperative that we remain focused on tough demanding training at home stations and our combat training stations. And to do this, we will need to revitalize our home station and leader development programs because we have to continue to challenge this great generation of young combat seasoned leaders who will lead this Army into the second decade.

Now, we have already begun to adapt our CTC's for full spectrum operations against hybrid threats. And I visited the 3rd Brigade 82nd Airborne Division at JRTC last weekend. They are conducting the first full spectrum rotation in quiet a while, and I had the opportunity to sit in the grass and listen to a company level AAR and sit in the van and listen to Battalion AAR. And as I did that, I was struck by a number of things. First of all, I was struck by the fact that there was clearly a lot of learning going on. We hadn't done this in a while. And it was clear -- this was a defense - and it was clear we need to rebuild our appreciation for the ground ... a lot of learning going on.

The second thing that struck me is that we are very, very lethal at the company and platoon level. When these guys closed at the enemy level, they were dominant.

The third thing that struck me as I sat there with these leaders that had been up 36 hours preparing for a defense-- some of the lieutenants you could tell they had dug their own foxhole and they are sitting there discussing among themselves how they can get better at doing what they are doing. And I said to myself, my, what a great Army we have. (Applause)

I will tell you one other thing that everybody told me at that airborne assault into JRTC -- we got a little spoiled, I think, by all the fiber optics we have in Iraq and Afghanistan that bring all that great data into us. They say you don't jump fiber optics. So they ran analog for quite a while. It was a real eye opener for them.

The second thing I want to talk about is reconstituting the force. We have to reconstitute this force not only to back to where were, but we have to reconstitute it for the future. And this is going to require continuous reset for the returning units, but also require continuous adaptation because I believe we are in a period of fundamental and continuous change, and that's just the way it is. I mentioned that we are almost complete with our transformation to modular formations and rebalancing, but even as we are completing these actions, we've begun a review to take into account the lessons from the last 9 years at war. TRADOC has undertaken an intense study of our force mix and our force design, and we are looking at every war fighting function. We have got to ensure that we have the right capabilities and the right numbers and the right organizations. And our organizational transformation is going to have to be continuous if we are going to retain versatility we need for this uncertain future environment.

Another area that will require some adaption is our active component and reserve component mix. I can tell you that we have been relying heavily on our reserve component in the past decade, and they know it far more than I do. The two things I can tell you [one] is our Guard and Reserve have absolutely performed magnificently. Without you, we could not have accomplished what we have accomplished as an Army or as a country in the last nine years. (Applause). The second thing I will tell you is that from my perspective the relationship between components is better than I have ever seen it. We have fought together, we have bled together, and more than ever, we really are one Army. And I really look forward to taking that to another level.

As we look to the future, we are actively studying what should the role of our Reserve Components be in an era of persistent conflict when continued deployment is the norm. And one my predecessors, Denny Reimer, has led a study team that has actively looked hard at that and will be briefing the Secretary and I next week. It is designed to help us lead this discussion, because the Reserve Component is so critical to long term health of this, we want to lead it and we want to get it right. One thing we know, across every echelon of this Army, we do not want to take the Guard and Reserve back to a strategic Reserve (Applause).

The other bit of adaptation here is that we have to continue to give our Soldiers a decisive advantage in every fight, and to do that we need to adapt our modernization strategy. Our goal is to develop and field a versitile mix of tailorable and networked organizations that are operating on a rotational cycle. So we can routinely provide trained and ready forces to our Combatant Commanders to operate across the spectrum of conflict. This involves developing and fielding new capabilities, modernizing and recapitalizing old capabilities. The primary focus of our modernization strategy will be on developing and fielding the network and fielding the new ground combat vehicle in 7 years.

Institutionally, we also need to refine our doctrine and war fighting concepts. Our operational concept is full spectrum operations, and while our understanding of full spectrum operations has matured, we still need a little better clarity on what we mean and how we conduct full spectrum operations across the spectrum of conflict. Now that units will have more time at home, we will train against the broader range of threats, and we will train in a broader range of environments, and we will use these experiences to help us drive the continued adaption of the Army.

The third element is building resilience. I can tell you it is clear that in the last 9 years they have taken a physical, mental, emotional toll on our force. I spoke about the human cost earlier, and while these chests are broad, there are no "S's" underneath; there is flesh and blood. And none of us is immune to the impacts of war. Combine that with the fact that we are in a protracted struggle, and it becomes imperative that we take advantage of our time at home to make ourselves stronger for the challenges ahead, even as we continue to deal with the continuing impacts of war. Last year we began two great programs designed to strengthen our Soldiers families and civilians for the challenges ahead. Comprehensive Soldier Fitness and the Army Program for Health Promotion and Risk Reduction and Suicide Prevention. I solicit your strong support in helping us institutionalize both these programs over the next year.

Finally, I believe its time to exam the impact of 9 years at war on our profession -- the profession of arms. The impacts of war have changed us as individuals, as professionals, and as a profession in ways that we don't yet fully appreciate. For us to succeed as an Army in the second decade, it is imperative that we gain a better understanding of how a decade at war has affected us personally and professionally. As a profession, the Army is a vocation composed of experts in the ethical application of land combat power, serving under civil authority entrusted to defend the Constitution, and the rights and interest of the American people. Our country places special trust and confidence in Soldiers as individuals and in the Army as an institution. They expect us to perform our duties with character and competence in the complex cauldron of war. No other occupation or profession manifests that level of responsibility to the nation. And we can never afford to let our actions, or the perceptions of our actions, be the cause of loosing that trust.

As such I believe it is time and it is essential to take a hard look at ourselves to examine what we been through to examine how we have changed for better for worse and how we must adapt ourselves to succeed. To this end, I have asked General Marty Dempsey and TRADOC to conduct a comprehensive review over the next year to examine the state of our profession after a decade of war to make recommendations to the Secretary and me for changes to Army policies and programs that will strengthen us as an institution.

In closing, I want to thank each of you, our Soldiers, our families, and our civilians for your service to this country at a very tough time. It's because of your efforts that we are winning Iraq and that we will prevail in Afghanistan and it is because of your effort this country has not been attacked in 9 years. (Applause)

Last year, as we celebrated the year of our Non-Commission Officer and our great Non-Commissioned Officer Corp, we honored the first Army Medal of Honor recipient from the war in Afghanistan. President Obama has just awarded our second, to Staff Sergeant Rob Miller, and I would like to close today with a tribute to Rob, whose service and sacrifice which exemplify the highest ideals of the American Soldier, who in the face of overwhelming odds, will stand in and fight for their comrades in arms and values and ideals that make this country great.

At the Medal of Honor Ceremony, here in Washington a few weeks ago, the President talked about the bonds between Soldiers that has bound us together as an Army for generations. It is a bond of trust exemplified in our ethos.

I will always place the mission first,
I will never accept defeat,
I will never quit,
I will never leave a fallen comrade.

Please watch the video here with me.


Ladies and Gentlemen, can I introduce Maureen Miller, Staff Sergeant Miller's mom. (Applause)

Thank you all, God Bless you, God Bless America.