INTERVIEWER: So our first question would be, what is the mandate of the National Defense Panel, and why do you feel it's necessary to create a panel outside the Pentagon to conduct this type of review?

SEN. LIEBERMAN:Okay. In answering that question, let me go back to describe the origins of both the Quadrennial Defense Review, hereinafter referred to as the QDR, and the National Defense Panel, which is known as the NDP.

In fact, there was, a few years ago, a commission created within the Pentagon called the Commission on Roles and Missions. And one of the recommendations that that commission made is that every four years, at the beginning of a presidential term, there ought to be, within the Pentagon, a review done of where we are in our national security and what we should do to protect our national security in the future.

There were some of us on the Senate Armed Services Committee, particularly Senator Dan Coates of Indiana, Republican of Indiana, and I, who had been sharing our own feeling that in the way the process works, too often we're going from either crisis to crisis, or day to day in the budget and authorization process here in Congress without looking out over the horizon and deciding what we should be doing today to be prepared to defend America's security --

[General conversation]

SEN. LIEBERMAN:Okay. Let me see if I can do it quickly.

In answering your question, let me give you some background on where the Quadrennial Defense Review -- the QDR -- and the National Defense Panel -- NDP -- came from. This grew out of a feeling of some of us on the Armed Services Committee that we were not really looking out over the horizon, that we too much focused on the day to day, and secondly, that some major changes had occurred which were already beginning to affect the way we defend ourselves as a country, and would have even more effect in the future, and there were two.

The first is that the whole world political situation has changed. The Cold War is over, and we now have a very different situation. Great powers, minor powers, and some small powers that are rogue nations, or even not nations, like terrorist groups, that can nonetheless affect our security very drastically.

Second, big change is the impact of the transition from an industrial age to an information age on our military, and the fact that that is now creating a so-called revolution in military affairs. History tells us that many of the big changes that have occurred in society -- the advent of the train, or the telegraph, or, of course, gunpowder -- have also had, inevitably, an effect on the way wars were fought. And we can already see that happening in the impact of the information age on warfare, the ability that commanders are given by surveillance satellites -- telecommunications revolution. By laptops being used on the battlefield.

So our feeling was that this is all changing, and we've got to figure out now where to invest our money so that we're -- where to invest our money wisely so that we're well-defended, not just next year, but ten, fifteen, twenty-five, thirty-five years from now.

And that's what the QDR is supposed to do. It's within the Pentagon. It's in house. But then, because we understand that the Pentagon can be a political place in the same way that any organization can be political, that it may not be able to present the boldest recommendations for change -- and frankly, the Congress. We, ourselves, are political. We may be focused on protecting our own constituencies, or groups within the military that we're loyal to, that we ought to have an outside group.

And that's why we created the National Defense Panel -- you can call it a Team B, or outside the box experts -- to come back and critique the QDR, the Quadrennial Defense Review, but also do its own review, in which we tell it, "Don't start by being constraints by dollars. We want this report to be strategically driven. We want it to be drive by your totally independent and fresh-minded view of what it will mean ten, fifteen years from now to be prepared to protect America's security."

And that's where these two both came from, and why they're so critically important to us at this point in our nation's history, when we are strong. But if we want to remain strong, just like a successful company that wants to remain successful. You can't keep doing what you're doing today, let alone ten or twenty years ago. You've got to change to keep up with change, and that's what these two reports are all about.

INTERVIEWER: You mentioned conducting the study outside the context of the fiscal constraint, and basing it on our strategic needs, yet Secretary Cohen has repeatedly stated that the QDR, while it will be strategy-driven, has to be conducted with the understanding that the Pentagon budget will most likely remain at current levels, adjusted for inflation. To what extent do you feel that this predetermines the outcome of the QDR, and how will the NDP address this issue?

SEN. LIEBERMAN:Well, I'm frankly concerned that exactly the factors that you described will predetermine the QDR, and that it will turn it into a choice within the fiscal box of modernization, procurement of new weapons systems, or personnel, for instance, on one hand. I understand why the inside-the-house Pentagon review would have to deal within the probabilities of how much money is available, but that's exactly what we don't want the National Defense Panel to do.

Because ultimately, if we're going to defend our national security, the first questions we should be asking is, what are the threats we're going to face in the future, and then what do we need to protect ourselves against those threats? Then we can come back and say, "Well, now here's the amount of money we're probably going to have. How are we going to spend it?"

Or we may decide, if the NDP comes back and says, "You need more than the amount of money you think you're going to have," that we want to carry the fight to our colleagues here in Congress, and to the public. And say, "Look. We're not talking about something casual. This is the security of our country, of our children. Let's make a fight for a little bit more money."

So I'm really counting on the NDP. And Senator Coates and I have said this directly to the chair of the NDP, Phil O'Dean: Don't do this within the fiscal box. Make no assumptions about how much money you'll have. Just tell us what we need to protect our national security.

Maybe it will be less than the amount of money that we think we'll have, because the NDP should be nonpolitical. It may not feel it has to take care of every existing constituency.

INTERVIEWER: Do you want to [inaudible]?

SEN. LIEBERMAN:I can go probably about -- what's it, at 9:00? I can probably go about five more minutes.

INTERVIEWER: Okay. As you mentioned, in part, QDR appears to have become a debate over force structure versus modernization --

SEN. LIEBERMAN:Right.

INTERVIEWER: -- versus end strength. Is that your perception? And do you feel that the NDP, operating within its mandate, is going to be able to address this problem, and not fall into the same trap that the QDR --

SEN. LIEBERMAN:Yeah.

INTERVIEWER: -- appears to be headed?

SEN. LIEBERMAN:Yeah. Look. Even though I'm concerned that the QDR is being budget limited, and it's not strategy or threat driven, the truth is that the process, nonetheless, can be very constructive. It certainly seems to have forced folks within the Pentagon to face some issues that they haven't been forced to face before. And that -- forced them to make some decisions that ought to be made.

I mean, for instance, mot of the people in the Pentagon will tell us, if we ask them, that there's too much infrastructure, that, in fact, as painful as it may be politically here on the Hill, we need another base closure round. We've reduced personnel much more than we've reduced infrastructure.

Now, it may be that the QDR will push them to make that kind of recommendation to us, but I'm counting on the NDP to come back and really do the flying free, over the horizon view, of what we need to protect our national security. So I think this is going to build in stages. And, frankly, if the Armed Services Committee of the Senate doesn't feel that we've gotten all the answers that we want, we'll ask other people after the QDR and the NDP.

I think the important thing is that we're asking the tough, demanding questions. The world situation has changed. Major change in information systems, telecommunications systems, all of them feeding their way into warfare. Maybe we're investing now, in some systems that are multibillion dollar systems that really don't make sense in the battlefield of the future. Those are the kinds of questions we expect the NDP to ask.

Maybe the Pentagon, as I suspect, as much as it's modernized, is still too divided into the stovepipes of the services: army, navy, air force, marines. Maybe there's not enough jointness in the way that the Goldwater-Nichols legislation called for. Maybe we've got to do some other things to force the services to come together, both in terms of saving us money so we eliminate redundancy, but also being more effective in war fighting.

I mean, our folks don't train together, really, and yet they fight together, whatever the service is, and so we've got to begin to ask those tough questions that I'm really counting on the NDP to ask.

INTERVIEWER: So you're really viewing this as an evolutionary process that won't end in December, or in 1997 and '98? You're looking at this being a review over time?

SEN. LIEBERMAN:Yeah. I make an analogy, which is inexact, but I think it's helpful, which is that in the private sector, in all the great companies, they're continually asking themselves, "What do we need to do to change to be successful next year?"

And while ago, General Electric, which is headquartered in my state, reported enormous unprecedented profits. And yet, what was the story in one of the newspapers? The chairman, Jack Welsh, who's a very strong, innovative chief executive, pushing the company for new efficiencies, for new ideas, for new ways to produce the products that General Electric wants the rest of us to buy. And that's the way the Pentagon, and all of us who are its trustees here in Washington, are going to have to be.

But, even though I say that it's a continual process, the fact is that the two steps we're going to take this year, the QDR and the NDP, are critical steps, and if they're done right, they can save us a lot of money and give us a lot more protection in the future. If they're done wrong, it's going to be a real lost opportunity.

INTERVIEWER: I think that pretty much does it.

SEN. LIEBERMAN:Fantastic.

[End of interview with Senator Lieberman.]