Full transcript of the second panel discussion at the 2011 Atlantic Council Missile Defense Conference.

Annual Conference on Trans-Atlantic Missile Defense Phase II and the Lead-Up to the NATO Chicago Summit

Trans-Atlantic Missile Defense: Assessing Progress to Date and the Future

Moderator:
Barry Pavel,
Director, International Security Program,
The Atlantic Council

Speakers:
John Plumb,
Principal Director, Nuclear and Missile Defense Policy,
U.S. Department of Defense

Dov Zakheim,
Senior Fellow,
CNA Corporation

David Mosher,
Assistant Director for National Security,
Congressional Budget Office

James Appathurai,
Deputy Assistant Secretary General for Political Affairs,
NATO Headquarters

Date: Wednesday, October 18, 2011
Location: Atlantic Council, Washington, D.C.

Transcript by
Federal News Service
Washington, D.C. 

BARRY PAVEL: Welcome, everybody, back from your break. I want to introduce my esteemed panel, but I will minimize their biographies; they’re generally well-known. And we have such a great group here that I want to maximize your chance to have a discussion with them. This panel will focus on sort of the progress to date of the EPAA, where we’re going with NATO, what’s the budgetary context and where we might look for some areas to improve the general path. I’ll introduce each of the panelists briefly, and then I’ll turn to the first panelist.

On my right is Dr. John Plumb. He is the principal director for nuclear missile defense policy in the U.S. Department of Defense. He has served in this position since the beginning of the administration. Prior to this he was in the office of the – of Senator Ken Salazar, first a science and technology fellow – so we can also ask him about physics questions as we did O’Reilly – and also subsequently as the senator’s personal staff.

On my further right we have the Honorable Dov Zakheim, who served as the Defense Department comptroller in 2001 to 2004, a position he no doubt wishes he had today. (Laughter.) Dov is a –

MR. : Have another cup of coffee. (Laughter.)

MR. PAVEL: Dov is a senior fellow at the Center for Naval Analyses and also a member of the board of directors of the Atlantic Council here.

On my far left is Dave Mosher – a long-time colleague of mine – and is now assistant director for national security at the Congressional Budget Office. He returned to DBO in June, 2010. He’d started his career there, he went to the RAND Corporation for five years, and now is running the national security division at CBO at a time when we really need strong budget analyses of our national security issues.

And on my immediate left we’re very glad to have James Appathurai, deputy assistant secretary general for political affairs at NATO. James was appointed to this position in December of 2010 – so not quite yet a year. We’d love your thoughts on how it’s going. (Laughter.) And in this capacity he’s responsible for NATO’s political relations with countries around the world, for international organizations, for enlargement and arms control as well as defense and economics – quite a broad portfolio. And he’s also Secretary General Rasmussen’s special representative for the Caucasus and Central Asia.

I think the way I’d like to do this is have each of the panelists speak for five or 10 minutes. I think we’ll go through all and then we’ll open it up to questions. I might have a few myself. I’d like to start with James to sort of complete the perspective that you gained this morning from the U.S. point of view. We’ll hear from James about where things are going in the NATO context. And I think from Dave Mosher on the budgetary environment, which is very important. I think then for – to hear from Dov and then Dr. John Plumb.

So, James, would you like to open our remarks?

JAMES APPATHURAI: Thank you. Thank you, first of all, for those kind words. If you want to know how it’s going, I was NATO spokesman for six years, so it’s pretty relaxing, I must say, compared to that. But let me thank also the Atlantic Council for hosting us and all of you for having me and my colleague Lawrence (ph) here.

I don’t want to talk too long because I think the most interesting part is the – is the discussion, but let me give just a little overview of where we are when it comes to missile defense with regard to NATO. And of course there are two tracks. There is the NATO track and there’s the track we hope to develop, which is the NATO-Russia track. And I’ll discuss both of them.

Obviously, the discussion on missile defense within NATO has changed fundamentally from what it was not many years ago – where it was quite a toxic subject, it had implications of Star Wars – and I don’t mean George Lucas Star Wars – weaponization of space, et cetera. And it was really not something that could be, I think, seriously brought on the NATO agenda.

But in the past few years the allies have agreed in essence on three things. One is that there is a threat. And there are over 30 countries developing or possessing ballistic missiles. And that is an agreed NATO assessment. And so they feel the need to develop a system that could defend against it. Second – that the technology works. That is a shared view within the alliance, that this can be done; and third, that it’s affordable.

And it’s affordable for two reasons. One: because NATO has been investing for quite some time in a system that would connect our missile defense systems for deployed troops. And by taking it to the next level, we can connect the bits of the EPAA and what other allies have in a very similar way – just on a higher scale. So the incremental cost was very manageable.

The second reason why it was affordable, because as – of course, the United States has paid for such a huge portion of it and made it available for defense of Europe. So that is based on the enormous generosity of the United States, but other allies want to pull their weight and pay their part as well. So that was sort of the foundation for the decision to go forward. And I think there are experts here on the money issue who can – who can comment.

Where are we now? Bottom line, by the Chicago summit in May, we should have an initial operating capability for the NATO missile defense system. What does that mean? It means that NATO will have the ability to provide command and control, integrate the bits of the system in a way that the alliance can oversee.

And it’s progressing very well. As you may have heard already this morning, though I wasn’t part of the discussion, a number of allies have already made it clear that they will host elements of the NATO system – radars or interceptors. Other allies will upgrade equipment that they have to be able to plug in effectively to the system or host Aegis-class cruisers.

So by the time of the May – the May summit, we’ll be in a good position with a solid foundation in policy terms, in financial terms and in equipment terms. We aim, by 2020, to have the system fully up and running. So I must say, from a NATO – from purely a NATO point of view, things are progressing very well.

And there are two, I think, really important aspects to that. One is, of course, the practical aspect. And that is, we’ll have a defense against a capability that is growing and spreading in the world. And it’s our job as defense people and NATO people to defend our populations. And so we’ll be able to do that.

But secondly, it has a very political benefit. And it is glue between the allies. In a time of financial austerity, where countries are very focused on their national defense budgets and doing the most that they can with limited funds, it’s very important that we do not walk back to renationalization of defense, renationalization of procurement – that we do things together.

And missile defense is sort of the ultimate smart-defense project where we get a lot more defense by doing things together with relatively modest incremental investments than we could if we did it separately. So it’s a real flagship project for smart defense, for collaborative multinational projects, and it’s about defending ourselves together. And so for political reasons we’re very pleased that it’s going forward in this very positive way.

The second track is the NATO-Russia track. I can’t be quite as positive on the NATO-Russia track as I could be on the NATO track. From a political point of view and from a practical point of view there is strong desire within NATO to cooperate with Russia – to connect, in essence, a Russian system to a NATO system – for two reasons.

One is because the two systems would be more effective if they cooperated – you get a wider view of what’s going on in the skies and better coordination of response; but secondly for political reasons, which are very obvious: If we were to get to a stage where NATO nations and Russia were defending European territory together, that would be a fundamental change in the way in which we look at each other and the way that we cooperate together – to everybody’s benefit.

That’s the reason why the allies reached out their hand to Russia. We are in extensive discussions, I – believe me when I say they are very deep and detailed in NATO headquarters – on the political reassurances that could be provided, on the practical cooperation and how it would work – in particular, how we would create the capability to have joint intelligence sharing, joint early warning and coordination of response. That’s sort of the elements where a linkage between these two systems would seem to make the most sense.

You’ve all seen the public statements by Russian officials, particularly in recent weeks, which have been, let’s say, less than positive at times. But we are determined to keep looking for opportunities to cooperate, to link these two systems up, because we think the benefits would be substantial for Russia, for NATO nations and for European security more broadly. I think I’ll stop there and be happy to take any questions later.

MR. PAVEL: Thanks, James.

MR. APPATHURAI: Thank you.

MR. PAVEL: David, I think you were going to give us a more granular sense of the budget context.

DAVID MOSHER: That sounds good. I – being a budget person, I have to come with a few slides. I’ll make them quick and hopefully pain – less painful than you fear. I know that the focus here is on missile defense in Europe and the United States together, but I don’t think we can really have this conversation without some sort of context in which – in which to discuss it.

So – let me see if I can get this – they never told me how to drive this exactly. Oops, there we go. All right. So what I want to do is, I want to talk about two things. The first is the plan that – DOD’s plans, which are laid out in the 2012 budget and all the accompanying documents.

And we’ve done an analysis of that that looks at what the internal pressures are within DOD’s budget and the difficulty that DOD would have – even if you sort of took the budget today and drew a straight line – the difficulty that they would have in keeping that much program because of some of the internal pressures that are continuing to eat away at the money that would be available for things like procurement, whether it’s for missile defense or something else.

And then I want to talk about this Budget Control Act, which is the act that Congress passed this summer that mandates certain cuts. And I want to talk about what those might be for defense, just to give you overall – a context. The bottom line is that missile defense is going to have to – whether the Budget Control Act ends up doing what people hope or what it’s intended to do or not, there’s likely to be downward pressure on budgets.

And the – and that – there are internal pressures within the budget itself that are going to drive – to squeeze procurement more and more. Missile defense has to share whatever of that part is. So it may or may not be affected. There’s a lot of uncertainty about this. But I just wanted to share that.

So we did an analysis here – and the important thing is to look at the top line there. That big dark bump is the costs of the overseas operations. The rest of it is what we call the base budget. So it’s what DOD spends not supporting the wars. And what you can see is that there’s some little dotted lines there, kind of about two way – two-thirds of the way through; I don’t have a pointer. But – and that’s the plan. That’s from 2012 to 2016 and then we’ve projected the money beyond that.

But what you can see is that just using DOD’s plans and – two ways. That top line basically says: Using prices that are consistent with our experience that budgets are going to be going up. It’s going to cost more and more each year to do the plan that the administration has in mind. This is no – this is an unconstrained picture.

The other thing I want to share with you in this is that if you look at the top – light-colored blue wedge, it keeps getting bigger and bigger. And in fact, the top two wedges keep getting bigger and bigger. They now account for – those are what we call ONS, that’s the paying for military and also paying for all the operations. They account for about 63 percent of the budget today and we project that by 2030 it will go to about 70 percent of the budget.

Now, those don’t give you – that’s keeping the same number of people and operating the same number of systems. So you can see that there’s going to be pressure. And if you had to draw a line on the top of that those would – and you didn’t cut forces – that would squeeze procurement more and more.

And I want to show you just very briefly, this is an example of one of the things that’s driving costs. And this is the defense health care system. Again, well, you can see where the costs really start rising because some benefits were added in the early 2000s that have really driven costs up.

But they continue to rise, and you can see again the two dotted lines there. The costs are expected to – they’ve doubled since they were – since 2006 and they will double again by 2030, just given the growth rates. So this is something – even if you keep the same number of people in the military, these are going to keep pushing costs higher and higher and give you less room to do things like buying systems, acquisition. OK.

This is just the acquisition piece of the budget. And by the way, the early stuff there is – you can see the buildup during the Reagan years. You can see the drawdown during the Clinton years. You can see the buildup during the – during the war years in – well, the start before 9/11 and then after.

But what you can see there is that procurement will continue to rise, again unconstrained. And this sort of gives you the relative pieces. The part that we care about for missile defense is that light band down at the bottom. And it’s actually just part of that light band. That’s everything other than the – that’s sort of defense-wide procurement, as we call it.

So you can see that if you had to put a lid on procurement there, because you drew the line – or more like because those numbers are going to come down – that there’s going to be real pressure on all procurement and all acquisition, including missile defense. Now, how those work out, which one – you know, does everything get cut by the same amount? Does missile defense escape large cuts? Does missile defense absorb larger cuts?

We just don’t know. But it’s in that context – and remember, you’re going to keep getting more and more pressure from the operations and maintenance piece of the budget and the pay piece of the budget that will make this stuff harder and harder to afford.

OK. This is missile defense – well, this is the other – this is defense-wide acquisition. And missile defense is the light – is the blue thing at the top there – the long blue band. The administration has planned to spend about $8 billion on – a little more – 8.4 (billion dollars) in 2012 for MDA. There’s another billion and a half or so that the Army has.

And that in the (fit up ?) – so in DOD’s own plan that number wasn’t going to change in nominal terms, which means once you start taking inflation out of that, by 2016 it would be spending about half a billion dollars less in today’s dollars than it’s planning to do. So there are already some planned reductions in the missile defense budget.

And then what happens going forward, of course, depends. But we’ve projected just using the plans that are in train now. We’re not – and the reason why our procurement line at the end drops off a little is we don’t know what the future is going to bring, and we can never create and invent all the systems that DOD invents in the process – so about $8 billion a year if you just go forward.

All right. Now, just given that sort of context within the budget itself, let me talk a little bit about this Budget Control Act. And I’m sorry I got a little wordy here, but the bottom line is that the Budget Control Act has two different pieces. One is that it establishes caps on how much can be spent. And for 2014 to 2021, when it ends, that could be defense spending or – it’s a combination of defense and non-defense spending. And I’m talking about what we call discretionary spending. It’s not entitlements.

So there’s a cap on that. And that’s come down from where it was. And the question is how much would defense get? It’s unknown. Congress could give all the money to defense and just cut non-defense programs or vice versa – defense could absorb all the cuts.

If you just look at (it ?) proportional and just assume that, you know, everybody is reduced proportionally, just to give you a sense, then DOD would look at a reduction of about $450 billion or about 45 billion (dollars) a year over 10 years – about 50 billion (dollars) a year over 9 years, you know, that it goes. So that’s on top of a budget that is – the base budget that’s over 500 (billion dollars). It’s about – it’s less than 10 percent decrease and down. So, you know, it’s not the end of the world but it certainly would be difficult to swallow if it had to happen quickly.

The second piece of this, and this is the part that everyone’s focusing on now, is there’s this joint committee which is supposed to be coming up with $1.2 trillion worth of reduction in deficit. It could be due to – they could raise it all by increasing taxes, they could do it all by cutting entitlement spending, they could do it all by discretionary spending. We just don’t know.

What we do know though is if the committee fails to achieve any savings then the act is very clear about what happens, and that uncertainty about how much DOD gets versus – DOD – defense. I’m using the term “defense;” it also includes Department of Energy in these particular numbers. But what defense gets is very clear in the act. And so they are cut by a level.

And then CBO has estimated another, basically, $500 billion would have to come out – so another 50 billion (dollars) a year. So that’s 100 billion (dollars) a year if you – on average, if you took those numbers – that DOD would have to be reduced by. Just – I’m talking – now, those savings are relative to some line – the CBO calls it – it’s a – you take the 2011 spending and you adjust for inflation.

If you took DOD’s plans, which I showed go up, actually there’s an additional $25 billion a year that that reduction would be relative to what DOD hopes. And if you look at our projection, which we think is more expensive than DOD’s, it’s another 24 (billion dollars) on top of that, so another 50 billion (dollars.) So we’re talking about, potentially, some serious cuts.

Now, of course, I’ll say that Congress – the future Congresses are never bound by the actions of previous Congresses. So Congress could decide that this is something that’s not tenable and they try some other avenue. We just don’t know. So there’s a lot of uncertainty, but I think one thing is clear – that there’s going to be downward pressure on defense budgets and probably downward pressure on acquisition budgets in general, which could affect missile defense – both what we spent on our own programs and what we’re contributing in NATO.

MR. PAVEL: Great. Thanks very much, Dave. Dov, I wanted to give you a chance to weigh in on this picture.

DOV ZAKHEIM: Sure. I’ll try to deal with both of – sort of both areas that have just been discussed. I’ve got three questions. Last time I spoke at this conference was two years ago, and I basically had questions about the new plan, the phased adaptive approach. I still have three questions. The first one deals with the plan itself. The second deals with the technology. And the third deals with the money.

So on the plan itself – you’ve got to remember that until 2009, MDA was telling us that the optimum way to deal with Iranian and North Korean missiles was the third-side approach. They were telling us this for about six years, maybe more. Then overnight it all changes. It’s no longer the optimal approach. And, you know, the Czech Republic is not going to host the early warning site, and missiles are not going to be based in Poland – at least not when we predicted they would be. And now we have this new system, this phased adaptive approach, with Aegis ships and the land-based standard missiles and so on.

And it’s geared to a very specific time table. If you look at the NATO announcement, you look at the White House announcement, you know, if we weren’t part of NATO we’d accuse NATO of plagiarism. They’re exactly, almost word for word, the same – with specific time tables: Block 1B missiles in Romania by 2015, land-based SM-3 2A missiles – you know, Block 2A missiles in Poland by 2018 and then the Block 2B missiles by 2020.

And you’ve got Turkey now agreeing to an X-band radar for NATO, and Israel has got one already. And so the whole rationale is the Iranian threat has changed. It’s not as quick as we think; I mean, the papers today are saying how much slower the whole program is anyway. Long-range threat is even less imminent. And the plan, really, if you’ve been following this stuff forever, since the day it was announced by President Reagan, you see that it really looks once more like a distinction between national missile defense and theater missile defense – although we don’t say that because every few years we change the name.

But the question remains: Is this new plan really the most effective way to shoot down missiles once you move off of that very specific time table? Suppose it’s not 2020; suppose it’s 2019? Suppose you can’t get your systems by 2020? Suppose you can only get them 2022 or 2023 or – what then happens? Everything is so geared to specific points that you’re running a very high risk of falling on your face if somebody does something that you didn’t expect, like maybe the Iranians do hurry up a little more than we thought.

What we have, of course, are PowerPoint slides. We’re very, very good at PowerPoint slides. (Laughter.) I mean, no question about that. Even CBO is good at PowerPoint slides. And what we don’t have is any real analysis that’s been made public of the relative effectiveness of the two approaches. What kind of tests – well, we can’t have tests because we don’t have the systems to test them. So we don’t really know. We’re operating totally in the dark. And we’re being asked to believe viewgraphs.

We got some other questions. The Turks and the Israelis aren’t really thick with each other these days. So what happens if the Turkish X-band radar picks something up? Do we hand it over to the Israelis or not? If we do, we might find Turkey walking out of NATO. If we don’t, we might find a real problem with the Israelis. We’re damned if we do and we’re damned if we don’t. And we don’t even want to think about it.

So – and then there’s NATO’s role. To say that NATO has budget constraints is to be diplomatic beyond belief. When I came into this business – more years ago than I would like to admit – the goal was 3 percent for NATO – 3 percent of gross domestic product. The goal now is 2 percent. And we’re hoping that they come up with 1 percent. And that’s if the euro zone holds, which I don’t know if it will unless the Chinese bail out the entire euro zone.

Now, if the euro zone does not hold – and even if it does – the pressure that you saw in our budgets is that much greater on European budgets. What do you think is going to go first? As it is, we’re subsidizing the Europeans, we just heard that. So if our pressure goes – increases, the first that’ll go on our side are subsidies to the Europeans. But the pressure is already there on the Europeans.

I mean, ask the British and the French how much money they now have left for defense – now that they’ve spent a few more than the 10 million pounds that Mr. Osborne said he was going to spend on Libya. So we don’t have anything like what we think we’re going to get out of NATO with this new plan. We don’t have anything to test the plan against. And that’s just the plan.

Now, let’s look at the technology. And I admit, I’m not a technologist, but I can read reports of test results. So I will ask you this: Standard Missile 3 Block 1B – which is sort of the next thing down the pike – failed its test – its first test in April. Did General O’Reilly tell you how long the program is going to be set back? The assumption is, fine, it failed the first test. Every other test will succeed. If you believe that, there’s a bridge I’ll sell you.

Every time a test doesn’t succeed, the schedule gets pushed back further. Then there’s the one that we’re – Block 2A – the one that we’re co-developing with the Japanese. We’ve just told the Japanese we’re going to delay it by a couple of years. So now the 2018 goal has been pushed to 2020. I hope the Iranians agree and they’ll push their goals to 2020 – because it’s all coordinated. But if they don’t, we may have a problem.

And that’s if you assume that the Japanese – that the Iranians will not be ready until 2018 or so. There are a lot of people who say they’ll be ready by 2015. I don’t know. Nobody knows. But what I do know is that this program seems to have been pushed back. And then you’ve got the Block 2B. And – excuse me – that’s the one that’s being co-developed with the Japanese and that’s the one that’s being delayed. No, excuse me. I was right the first time.

The Block 2B is even worse because if the Block 2A is delayed two years the Block 2B is going to be delayed a couple years – minimum. Has anybody seen a Block 2B? Has anybody seen it fired? Anybody seen it tested? Seen it on a PowerPoint. So, again, I’m not the world’s greatest physicist or technologist. But if we fail tests I do know this, I’ve seen enough of it – tests that fail mean schedule delays.

And, oh, by the way, when you delay your schedule, your costs go up. Right, David? So now you not only will have downward budget pressures, you’re going to have upward cost pressures each time a test fails, because what we have are what are called, euphemistically, success-oriented schedules.

And now let’s talk a little bit about funding. I totally agree with what David said so I’m not going to repeat any of that. But I would point out to you that in many ways I think a sequester is actually better than the alternative. And the reason for that is if there’s a sequester Congress has a year to get out from under it. But if there’s a deal and that deal involves, say, a couple hundred billion of defense spending, it’s going to be much harder for Congress to get out from under it. Now you’ve got a specific deal – much, much harder.

And again, what do you think will go first? This administration is not exactly going to fall on its sword over missile defense. And so it’s not just procurement, by the way, as David knows, it’s R&D. And so much of MDA is R&D money. And it’s so much easier to kill R&D than to kill mil-purse accounts or to cut back on O&M, particularly when we’ve got kids fighting overseas.

So if you’re going to go after R&A and you’re – and you’re the Army, Navy and Air Force and R&D is coming out of defense-wide spending, do you really think you’re going to fight to the death for defense-wide spending? Who is going to fight to the death for defense-wide spending other than the Missile Defense Agency? And with all due respect, I haven’t seen the head of MDA wear four stars.

So you’ve got a real internal budget problem that is going to complicate everything. So what’s my bottom line on this? You have so many questions. We’re stuck, we’ve committed. We’ve committed NATO. But I think we have to keep our options open. I think that if this program continues to have either budgetary or technology problems or complicated political problems we may have to consider going back to the original plan. It may not be an easy thing to do, but if we’re serious about missile defense we can’t rule it out.

MR. PAVEL: Thanks, Dov. John, would you like to have the last word on –

JOHN PLUMB: Yes, I would. (Chuckles.) So there’ll be no questions after this; we’ll be done. Thanks, Barry. Thanks, everybody, for being here. Let me just say that I don’t think Dov and I are going to agree on a whole lot of things today but –

MR. ZAKHEIM: You’re lucky I’m not – (inaudible).

MR. PLUMB: I did not bring any PowerPoint slides, so that should be welcome. I think I’d like to just lay the groundwork of where we were a year ago, where we are now and where we see we’re going. And then we can get into more of these questions in the Q&A that follows. So one year ago when this forum met, NATO had not even decided yet whether or not they wanted to do missile defense. We are a long way from there 12 months later, all right?

The NATO summit in Lisbon happened in November, so maybe it was a couple weeks away. And at that time the alliance decided, yes, they would pursue a missile defense capability. That’s a huge commitment by NATO and it’s a big decision to look forward into the future and look at the emerging threats of the 21st century and say that the alliance is here for that as well. We’re going to shift our security commitments as the world security situation changes around us.

So that was the first point. And from then there’s been a string of successes that have been listed by James and by Undersecretary Tauscher already. So let me just list them off without giving all the details. But we deployed the Monterey in early spring of last year – of this year, actually, which was the first ship in support of the EPAA, and those deployments continue.

We have agreements now with Turkey to host the radar for phase one of the EPAA; with Romania to host the first land-based site for phase two of the EPAA; with Poland to host the land-based site for phase three of the EPAA; and then just at the defense ministerial a couple weeks ago Spain has announced that they’ve come to an agreement with us on hosting four forward-deployed naval force – forward-deployed Aegis ships to do ballistic missile defense for NATO as well as the other missions that these ships are capable of.

That is a significant difference from where we were 12 months ago. And so I think that the broad support that the EPAA already enjoys in NATO and already enjoys here on the Hill, frankly, is going to continue – successes breeding success and more allies are more interested.

The other thing that’s interesting is that the debate has changed, and that’s been mentioned by several people here – is that we have changed both at NATO as an alliance and both – and here in D.C. between Republicans and Democrats, generally speaking, on missile defense. The debate is no longer should we do it, it’s how is – what’s the best way to go forward on doing it. And that is, frankly, the product of a lot of good work done by a lot of people over the past 10 or 20 years.

Both sides of administration, people that have believed in missile defense all the way through, have laid a lot of groundwork and set the stage for this type of success where we have actually shifted the debate. It’s not, are we going to do missile defense; it’s really become how are we going to do it. And I think that is a really important point as well.

So here we are, a year later. And the question now, isn’t part of this forum is supposed be, what are the challenges that lie ahead? All right, so the immediate challenge is really a U.S. challenge on how are we going to get this – getting this radar deployed to Turkey. We have the agreement with Turkey and we now need to make sure that it gets deployed – by which I mean, keep ourself on timeline – that’s internal timelines that I worry about every day. But we are moving forward with that deployment because when that radar is finally operational, now phase one can be realized in full.

The next challenge – and this second challenge is actually for NATO – is what can we establish for the Chicago summit in May of 2012? And James already spoke a little bit about that so let me just say that the 2012 summit is a good milestone on progress for NATO missile defense. And the alliance has already declared what the goal for that summit is. And it’s – the goal is to be able to declare that NATO missile defense is up and running. That doesn’t mean up and running in the 2020 version of it, but it means enough capability within NATO to be up and running.

And let me tell you what that means specifically – at least the way we’re thinking about it right now, I can’t speak for the whole alliance, just the way we’re talking about it right now. You know that the U.S. has said that the assets of the EPAA itself will be our national contribution to NATO. But there is a command and control piece to that that we – when we make that national contribution, NATO has to be able to exercise some type of command and control.

ALTBMD, which is the NATO command and control technical backbone, will not be ready to do upper-tier missile defense for several years. So there has to be a way for NATO to do some type of command and control, or at least control, without having to use a technical NATO backbone. And so what we’re looking at is an initial operational control capability for NATO where NATO-agreed rules of engagement, NATO-agreed pre-planned responses and NATO-agreed ballistic missile defense readiness conditions would be the construct under which we operate.

So here’s an example in this future situation where NATO has this operational control. Indications and warning from the Middle East that a ballistic missile threat may – that the threat of a ballistic missile attack is growing – perhaps it’s from direct statements from an Iranian leader, for example. But whatever your I&W is, we have – we recognize that there’s a growing threat and so NATO agrees to raise its readiness condition on ballistic missile defense.

And I don’t know what those readiness conditions are. I don’t know if they’re red, blue, green; three, two, one. But whatever they are, raise the posture. That gets decided by NATO and is transmitted to forces assigned to this mission, which in this case we can say certainly would include a Aegis ballistic missile defense ship, which then is going to increase its missile defense readiness posture based on these tethers (ph). And so you can imagine a system where, as the readiness condition goes up, you’re more and more – you’re closer to where you need to be, you’re repositioning ships and you’re getting closer, ready to be able to engage in case of an event.

So ships reposition based on NATO-approved plans. Of – possibly pre-approved plans, but still a ship that might be doing a U.S. mission now becomes repositioned based on these NATO pre-approved plans. If the crisis erupts into an actual attack, the ship will respond, U.S. forces in command of the ship of course, but respond under NATO-agreed rules of engagement. So it’s a NATO control of forces, just like we do with other force. I think General O’Reilly mentioned the way we do – or did air defense for NATO. It’s a very similar situation.

I did want to add one piece to a question that was asked earlier about weapons release type of authority. I do want to point out that once a ballistic missile is launched, that is an attack. Air defense, you might have a problem worrying that it might be a civilian passenger jet. You might have a problem thinking that it’s just a challenge; it’s not actually an attack. There is no question when a ballistic missile is launched at you that this is an attack. There is no – there is no other possibility here.

So the ability to respond on that is going to be based on pre-approved responses because there’s not enough time to – our joke is, there’s not enough time to assemble the North Atlantic Council and come to agreement on whether or not this is a ballistic missile. All right. So that’s the summit goal, is to be able to declare missile defense up and running.

Past the summit, a couple simple goals – and I only say simple because they’re easy to say ,not necessarily easy to execute.

The first is, ALTBMD needs to be developed to be able to do territorial missile defense as well. And that was a commitment that we had with the – at the Lisbon summit from NATO itself. And that is something that will progress over time. And so that is the first part. The second part is being able to make sure that our system is able to accommodate a growing number of alliance contributions that will become possible over the course of the decade.

There’s already several allies interested in supporting through various ship radars. We talked about the Netherlands already making a commitment to upgrade their radars to do search and track. And there are other assets as well. Allies have PAC-3, allies have different capabilities. And we can see some coming in the future.

And then, of course, the third challenge is making sure that we’re responding to the growing threat. And the growing threat really is growing in a regional basis. All right, the regional ballistic missile threat from the Middle East, and I’ll just say and in particular Iran, is real, it’s now, and it’s growing. And those range rings that you can draw on a map continue to grow. So more and more of Europe, including our deployed forces in Europe and our allies, are threatened by these things. And so being able to develop this missile defense capability is an important piece of our alliance.

And the other thing – I do want to – I do want to say one more thing. I think everybody in here should be pleased with the progress we’re making on the EPAA. And I really do think it is a product of work on both sides of the aisle. And we have reached a point where we have the technology to be able to actually intercept ballistic missiles in these regional ranges. We are developing that over time. Dov points out that, what if the timeline slips? Well, if the timeline slips, we still are developing these missile defenses.

So if the 1B happens to slip by a month, the 1A will be available, OK? This is not a binary thing where we take missiles out and then wait for the next missile to appear. It’s a phased system. So as new technology becomes available, we phase that in. And so I think that provides a continuum of missile defense coverage that improves over time. And other than that I’m open to your questions. Thanks you very much.

MR. PAVEL: Thanks very much, John. I think I’d like to ask each of the panelists one question, and then we’ll turn it over to discussion. The one question I have is sort of the big new elephant in the room on this question, which Dave and Dov addressed to a degree, but that is, the Congress is going to do what it’s going to do; but no matter what, we’re facing very severe and almost unprecedented fiscal constraints that’ll likely grow over the next, you know, one to – one to two or three years and, with sort of a different character in the Congress, not necessarily NATO as a priority for them, not necessarily international as a priority for them, but even for those internationalists, a significant focus on Asia as economic and other types of power shift that way.

So what’s your sense of whether this Congress or the Congress coming up is going to really fund missile defense in Europe as a priority or whether – if this program is cut in half or even by a third with – as Dov said, not a lot of – there’s not a lot of strong equities in the Defense Department for protecting this particular budget when the knives come out. So what’s your sense of how this is going to play out and what are the chances of this program being funded in accordance with the current – (inaudible)?

I think I’d like to go Dave, James, Dov, and then we’ll end with John and then we’ll open it up. (Chuckles.)

MR. MOSHER (?): I – unfortunately they don’t pay me to try to predict what Congress is going to do, so I’d – I have to demur here. I don’t know.

MR. PAVEL: OK.

MR. MOSHER (?): I mean, I will say that in this program, the Navy has a fairly large stake, so if you’re talking about internal players in DOD, I would think the Navy would be a player that would try to protect that aspect of its program. And you know, one of the – one of the characteristics of the Navy system is that it’s multipurpose so that, you know, keeping – it may be expanding the number of service combatants, which the plan in 2012 has – you know, has said we need to do their 30-year plan. Large surface combatants would provide you more of these ships, and that’s probably something the Navy would continue to push for. Whether the Congress funds it, of course, we don’t know.

MR. PAVEL: James?

MR. APPATHURAI: Well, I’m not even an American, so I’m even less likely to get this right, but I will say this: Despite the enormous financial pressure that all the allies are under, including the Europeans and the United States and Canada, and the number of cuts that have already been imposed – I think something like $50 billion has already been taken out in the last two years, out of total NATO defense spending and that’ll continue – programs have been cut, the American – sorry the French and the U.K. have gone into quite innovative cooperation plans to try to manage, but what you don’t hear in NATO is suggestions that missile defense will be cut, neither in NATO as an alliance or that the individual contributions of allies to a NATO missile defense system would be subject.

On the contrary, as you just heard, a number of countries have, even in this period of austerity – these are not old commitments, these are new commitments that they’re making – to do more when it comes to missile defense. So I think the allies quite clearly see missile defense as real value for money and as a project that is necessary. So they’re going to keep investing in it; at least we have not heard the slightest hint that, despite all these cutbacks in other areas, that missile defense is in any way at risk.

MR. PAVEL: Dov, do you share that view?

MR. ZAKHEIM: Nah, of course not. (Laughter.)

First of all, in terms of support on the Hill, nobody here mentioned the fact that the Senate Appropriations Committee just killed the Block 2B. Now, the House approved it, so there’ll be a deal. But even if they just split the difference, you’ve just pushed the Block 2B (ph) further out.

And it’s not – it’s a little disingenuous, quite frankly, to say, well, you know, we’ll have the Block 1A and, therefore, if everything else gets delayed, we still have the Block 1A. That’s not how it works. If the Block 1A could do the job, you wouldn’t have all these other phases. These other phases are meant for a reason. And the further they get pushed out, the more questionable the remaining program is relative to the development of the threat. So we’ve already seen Congress cut back money before all this other stuff that Dave has talked about has actually hit.

You mentioned Rota, and that’s absolutely true. But we haven’t had ships in Rota since 1979 and, if you’ve been out to Rota in the last few years, you’ll see that they’re going to need MILCON, military construction. They’re going to need probably family housing. They’ll need to expand the DOD schools, the educational system for the dependents. They may need to do some stuff with infrastructure. All right, where’s that money coming from? MILCON is likely to be hit; family housing, less so, but MILCON will be hit on the Hill. So there are questions there as well.

In terms of the overall view, it’s not clear to me that Congress, particularly if it’s a Republican Congress in both houses, will be wedded to this particular plan. I don’t know. It might be that there’ll be a push to go to the original version; as I said, it’s an option that just has to be left open. So, you know, to predict any – look, anybody who knows anything about Congress knows it’s the last thing you can predict. But clearly the action of the Senate Appropriations Committee on September 15th, which was about a month ago, is an indicator that there is not rock-solid support for this program as it’s been identified.

And I won’t get in now, but I hope somebody will ask me about the whole idea of NATO raising its posture. Sounds good on paper, but I’d like to talk about implementation.

MR. PAVEL: Tom, any last words before we open it up?

MR. : I will just say that all agencies and services are obviously under some type of budget pressure here, and it is in order – a measure of prioritization, I think, as the general said before, but the idea that missile defense will somehow be killed as a project is – it’s just not conceivable.

MR. ZAKHEIM: Who said it would be?

MR. : Fifty percent cut, I think, is – would be the same as just about killing the program, so –

MR. : Hey –

MR. PAVEL: We’ll open up to questions. Will give Ian Brzezinski the first one; then we’ll take others.

Q: Thanks, Ian Brzezinski, fellow at the Atlantic Council.

I’d like to follow up on the assertion that Europeans are putting their money where their mouth is; they’re buying into missile defense. And link that to your theme – the secretary-general’s theme of smart defense, which he’d like to institutionalize at the Chicago summit and that is greater pooling. How does missile defense fall under that, just thematically? Because if it was just simply thematically, it’s an American contribution and 200 million – a $10 to $20 billion American contribution and a $200 million European contribution. That’s smart for the Europeans; I’m not sure it would resonate that well across here.

Are there practical initiatives (than ?) just tying up the Dutch and the Germans and their missile defense programs, Polish potential procurement and missile defense, Aegis buys – packages like that under smart defense? And then second, is there – and this is – gets more to John – is there a roadmap for European contributions? What we’ve seen over the last year is one or two allies coming and saying, maybe we’d like to have an Aegis – a contribution to it. There isn’t – doesn’t seem to be a roadmap for European procurement of those systems between now and 2020. That’s going to become even more important as budgets become tighter over these next years, if not decade.

MR. PLUMB (?): Thanks. You raise, I think, a very important question because how we conceptualize smart defense is still something that’s being debated. I mean, the secretary-general has already come to the end of his conceptualization, and he knows where he – where he wants to go and – (audio break) – prioritization, it involves collaboration, and it involves specialization. So, you know, smart defense can mean different things for different projects.

He sees missile defense as a sort of a flagship smart defense project not because it’s necessarily all three of those things, but, A, for the political linkage that it offers; second, that if you add all the pieces together, you get more than the sum of the parts. If you go beyond that to some of the issues that you have mentioned, which is, what if you pooled asset – pooled funding to develop some assets? I’m pretty sure he wouldn’t exclude that because pooling of assets is – or pooling of money to acquire assets – sorry – is something which he thinks we should absolutely do. I’m not sure necessarily that that applies here, but I’m not also the missile defense technology side of NATO.

But there are many other areas under the smart defense umbrella where he thinks pooling money to buy assets jointly or having a group of nations contribute capabilities, but then have common funding for the running and the maintenance of that – of those assets where they serve NATO purposes, that’s something we’re discussing actively, as you know very well, for specific projects and where we could see it applied to other joint projects.

So there’s many ways to skin the cat. You buy it together or you buy it separately and link it up. Or you buy it separately, link it up, but have everybody pay for the operations-and-maintenance aspects of running it, and I think we at NATO would be very open to looking at configurations of that. But what is clear is smart – I mean, missile defense stands as an example of how you can, at the very least, plug in the different parts, do more together than you could separately – and that’s at least the first step of how we need to look at smart defense.

MR. PAVEL: Any thoughts for the panel on that? If not, we had a question in the middle, along the aisle.

Q: Thank you. It’s Ehan Turner (ph) from Turkish – (inaudible) – Daily. I just want to follow up on Mr. Dov Zakheim’s remarks on one of the challenges of Turkey and Israel. As I understood from morning – (inaudible) – undersecretary’s remarks, it looks like U.S. command and control system will share the intelligence with Israel, this – the understanding and probably is going to be headline. I’m just wondering what would Mr. John Plumb respond to this? What’s your understanding on this specific issue? Can you – is there any way you can elaborate on that – how this intelligence sharing will be done to satisfy Turkey and Israel together? Thank you.

MR. PLUMB: All right, sure. The radar for Turkey is for NATO missile defense, designed there for the defense of NATO. The United States has a separate and, as I’m sure many people here know, extremely robust missile defense cooperation program with Israel, including a separate missile defense radar in Israel that the U.S. operates for the defense of Israel. Israel also has its own radars obviously.

So Israel does not need the data from this radar because we have this separate and robust system. So it does not need the data from the Turkey radar.

However, data from all of our U.S. missile defense radars around the world are fused to maximize our missile defense system and make them as effective as possible. So there’s nothing in the agreement that restricts the ability of the United States to assist with the defense of Israel.

MR. : And that was exactly my point. First of all, if the United States wants to fuse all its information, you can understand why the Israelis would want to fuse all their information that might be available and therefore would want the information from the Turkish radar. But that creates the problem that I think you’re driving at and that I spoke about earlier, which is, OK, now how do you manage this?

And of course if Israel and Turkey make it all up and everybody’s happy, there’s no issue, but we don’t know that. And therefore, there becomes a challenge, and that’s exactly – and I want to make clear: It’s not that I’m against missile defense; I’m very strongly for missile defense. I just want a program that actually might work, and I have a lot of questions – political, like the one you raised, and some of the others – that make me wonder; don’t give me a warm and fuzzy feeling in my stomach that this is something that’ll actually pan out. If it does, fantastic, but what if it doesn’t? We need a backup plan.

MR. PAVEL: Question over here.

Q: Thanks. Tom Collina, Arms Control Association. Dave, I won’t ask you to predict the future. So I’ll –

MR. MOSHER: Thank you.

Q: – leave you out of this question. (Laughter.) But for the rest of you – OK, looking forward to the Chicago summit, NATO says EPAA is up and running. We haven’t worked out a deal with a Russia by that time, and so Russia says, fine; we go off and we do our own thing – very realistic probability at this point, in my opinion.

Has NATO or has the Pentagon worked out what you predict to be the Russian response – other than just walking out, then what do they do? OK, do they freeze arms control negotiations? Do they freeze cooperation on Iran, on Afghanistan, you name it? So have you done that assessment and, two, have you done a net assessment to say, what are the benefits of EPAA and what are the drawbacks of what the Russia’s – Russia’s going to do and how does that affect NATO and U.S. security? Excuse me; thanks.

MR. PAVEL: James? John?

MR. APPATHURAI (?): It’s a very important question and, of course, we are committed to following track 1, right? Plan A, which is that we work out a framework for cooperation which benefits Russia and us. So, just to be clear: That’s our main effort.

We also believe that our bilateral cooperation with Russia – from a NATO point of view; I don’t mean the United States – is well developed; it is developing more. When it comes to Afghanistan, there’s new ideas on the table, which come from Moscow, on how – what more we could do, which we’re just going to look at now. So it – the relationship has not suffered on issues that matter to us and to them because of the, let’s say, relative lack of progress on missile defense. Because when it comes to Russia, it is in – sorry; yet, when it comes to Russia – it is in their strategic interest that Afghanistan is stabilized and that’s not going to change after May, and we need to cooperate together on that to counter narcotics in particular, but also just to stabilize the country because Russia will feel, does feel already, the spillover of instability in Afghanistan. So I’m quite confident that that cooperation will continue as well.

When it comes to fighting terrorism, we’re developing new technologies together. That problem’s not going to go away in June 2012 either. And there is a general desire, I think, on the part of all of our governments to work together. We are quite convinced that the EPAA, the NATO missile defense plan, pose(s) not the slightest strategic threat to Russia, technically or politically, and a number of offers have been made to Russia to, in essence, come and see for themselves and to demonstrate it and to offer assurances that address the Russian concerns. We hope that they accept that offer both for the assurances, but also to come and look for themselves because I think that that will really help us to move the discussion forward.

So I – like I say, we’re focused on Plan A, and we think that we can get to Plan A.

MR. PLUMB: (Inaudible.)

MR. PAVEL: Please.

MR. PLUMB: So, thanks, and that is a – it’s a very interesting question.

I think there’s a couple things to keep in mind here. The first is we could pretend to predict a Russian reaction, but that is up to them, and part of it occurs to me that the idea that the summit is the end-all and be-all of whether or not we’re going to do missile defense cooperation is probably a false assumption.

The other thing that is really important though is that we can’t let the U.S., Russia or the NATO-Russia relationship rise and fall or live and die based on this one issue. This is a very intriguing issue; it’s been worked on by the past several administrations. Guys in my office that do missile defense policy have badges on their wall from exercises with the Russians in the early part of the 2000s. So Clinton administration, Bush administration – people have been working on missile defense cooperation with Russia for a long time because it’s intriguing because as Undersecretary Tauscher said, we can see it’s game-changing possibility; you can imagine it really being a break from the Cold War.

But at the same time, the U.S. and Russia have other military cooperation. We just did a submarine rescue exercise with the Russians. We have exercises where we hand off a hijacked aircraft between U.S. forces and Russian forces across the Pacific, and I don’t think that we should let the hype around missile defense cooperation potential get so high that these other pieces suffer, and I don’t think there’s any reason they should. So –

MR. PAVEL: Question in the front here.

Q: Hello, I’m Gilmer Abbott (ph) from the University of Kent. I actually have a question for James regarding the NATO-Russia relationship because you said that politically the missile defense cooperation could be a fundamental breakthrough in how we look at each other if, for example, NATO and Russia were defending European territory together. I’m just wondering if there’s just too much emphasis here today on what missile defense can achieve politically in terms of the NATO-Russia relationship because surely there are other things that impact the relationship such as the way Russia looked at the whole operation in Libya, talking about the way that NATO has overstepped its mandate there, and then recently not supporting the resolution against Syria. So there are really fundamental differences on how Russia and NATO look at the region, and I’m just wondering if missile defense alone, politically, can be the driver to change that?

MR. APPATHURAI: Thanks. Of course, you’re right that there’s much more politically to the relationship than missile defense; I mean, there’s no doubt about that, though, I must say, the Syria issue is not a NATO issue in any way.

But my own feeling – but I’m not the only one who has this – is that we show – also (shouldn’t ?) underestimate – this is not just a technical thing. I mean, the – Russia and its predecessors and NATO have for many decades – or had for many decades – oriented their – the way they looked at the world as being against each other, zero-sum, looking inwards, looking this way.

To start to look outward together, and everything that that implies for linking up the two systems, for exchanging intelligence – whatever you call it – information and to planning together how to defend the same space, in cooperation, is, to my mind, really a mind shift and a political mind shift, which is substantial – and put it another way, with the proper public diplomacy. You know, my neighbor in Brussels and somebody in downtown Moscow would know that NATO and Russia are cooperating together to defend them. Two pillars of – are holding up the same roof.

I think there’s a real public diplomacy advantage or potential in that as well as the political potential of the militaries working together. So it’s not the only thing. And everything can blow us off course one way or the other. But it’s a structural link. We don’t have them now. And we would have it. And I think that’s very important.

MR. PAVEL: Yes, a question in the back.

Q: Amar Karashur (ph) with Sea Power Magazine. I’m on the road of forward basing. Dov and Dave both talked about the budget crunch and what can happen. That’s – forward basing is not a big – Congress isn’t particularly happy with overseas deployment or basing. Senator Levin demanded of Ash Carter that a reduction of forces in Europe was on the table. And he said it was. So, you know, with all the other budget problems we have, is it likely that Congress would fund both MILCON and the other expenses and allow ships to be based – sent from the United States over to Spain?

MR. MOSHER: I wouldn’t rule it out simply because I would have thought the argument’s going to be made, well, we need that so that we can assure one Aegis ship in the eastern Med all the time, and we need that for Israel. So once the Israeli equation – once Israel enters the equation, of course, discussions change in the Congress. So I wouldn’t rule it out, but I – your point is valid in two ways.

One is, Senator Levin has never been the strongest proponent of missile defense and so that’s something that has to be factored in. It’s not that he’s been a violent opponent, but he’s never manned the ramparts for missile defense, as I can recall. The second point is that even if they do go ahead with this, how much money is going to be available because, as I said, there are incremental costs. And you know this, and anybody who works with the Navy knows this. I mean, if we haven’t been in Rota in over 20 – in about 25 years, there’s going have to be money spent.

And it’s going to be Navy MILCON money. And the Navy’s got other MILCON priorities. And so how does that all play out? It probably plays out more slowly than people anticipate. And so you’re back to the scheduling problem. And, you know, you just cannot – I mean, you’ve got to deal with implementation. Policy is great, but you’ve got to implement. You know, NATO will agree that there’s a threat. When was the last time NATO agreed – when we were hit on 9/11? NATO couldn’t even agree on Libya for ages.

All it takes is a Greece or an Iceland to turn around and say, we don’t think the threat’s there yet, and this whole thing comes apart. So, you know, when you think about implementation you got to think about how people will behave, you got to think about where the money is going to come from, you got to think about time tables, you got to think about testing and scheduling. I’m not saying it’ll all be bad. I mean, Murphy doesn’t govern the Missile Defense Agency. But you can’t say it’ll all be good.

MR. PAVEL: We have time for one last question if it’s brief.

Q: Boykan Aif (ph) again. Doug (ph), I appreciate your questions. And I believe that most of them are relevant and unfortunately we didn’t hear your answers to the questions. I was impressed by one of – by one of them, when you questioned, you know, eventual change of the balance of power on the Hill, saying that with a full Republican Senate and Republican Congress you may see a change of policy on EPAA.

And I thought that one of the major differences between the GBR (ph) approach – the Bush administration approach – and the EPAA is that the first one was a U.S. approach. It was not an allied approach. Whether this was the reason for it fail, I don’t know. But now we have the EPAA, which is an allied approach. And you have the alliance embracing it. And as James said, we’re all happy and we believe this is a success story. Do you really believe that the Republicans would kill this success which would major hit on NATO?

MR. ZAKHEIM: I don’t think the Republicans will kill it. Of course, again, I can’t predict anything much less that the Republicans will have the Senate. But it does seem to me that if the program gets in trouble, and I pointed out lots of ways that it could, then I think Republicans would probably say let’s re-look at the original approach. And I – if you remember, the original third-side approach didn’t exclude allies. It couldn’t; it involved the Czechs, it involved the Poles. We’re going to have the X-band radar in Turkey – that’s there. We have the commitments from the Romanians; that’s there.

But, you know, people get worked. Let me give you an example. We’ve been flailing around with the MEADS program since the mid-’90s. We are now funding $800 million for MEADS not because we want it at all, just to keep the Germans and Italians happy. That’s on the record. Now, how long will Congress go on with that? I don’t know. In a budget crunch, I don’t know.

So you find ways around problems. It’s clear that it’s good that NATO is finally – has finally signed on to missile defense. That’s a major accomplishment. I wouldn’t detract from that at all. It’s huge. They’ve been trying to do that virtually since the mid-’80s. And it finally happened. But as to the specifics of the program, that’s a very different story. And I think if the program really got in trouble I think, frankly, NATO would also be willing to re-evaluate, stay in the program, but come up with something, perhaps, more akin to what was there before.

I just worry that there are so many imponderables related to this EPAA – so many question marks. And that’s going in. And we’re talking about something that’s not going to materialize for 15 years. That worries me. Fifteen years ago we weren’t in Afghanistan. We weren’t in Iraq. We couldn’t even spell Afghanistan.

MR. PAVEL: Dov, John, James and David, thank you very much for fleshing out the discussion and the briefings we heard this morning, and for giving us the parameters of where some of the challenging issues are ahead. So thanks very much.

(END)

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