The Insider

Former Sen. Chuck Hagel (R-NE) today called cyber threats as big a deal as any other threats facing the United States.

Responding to a question posed by Sen. Mark Udall (D-CO) during his confirmation hearing, Hagel said a cyber attack could paralyze an entire nation "in a second."

Hagel also moved beyond the "larger threat" posed by cyber attacks themselves to the issue of who does what within the U.S. government to combat them. Noting the large number of agencies that play in this area, along with a host of competing and conflicting legal and regulatory issues to be sorted out, Hagel said Congress and the administration face a dilemma they've "never had to face before" in dealing with other national security threats, and pledged to work hard on the matter if he is confirmed.

Sen. James Inhofe (R-OK), the ranking member of the Senate Armed Services Committee, delivered a tough opening statement at today's hearing, accusing the nominee of believing in a worldview predicated on "appeasing our enemies," among other things.

The full statement, as prepared:

Thank you, Mr. Chairman. I join you in welcoming Senator Hagel before this committee and appreciate his continued willingness to serve the United States and the men and women of our Armed Forces.

Before I continue with my opening statement, I’d like to raise concern about the sufficiency of the materials provided to this committee by our nominee. Senator Hagel only provided four speeches to the committee even though his financial disclosure form reveals that he received honoraria for giving 12 speeches in the last year alone. Late last night just hours before the today’s hearing began the committee received nearly 230 pages of additional speeches given by the nominee.

In my judgment, the Committee cannot vote on this nomination until we have received full and adequate disclosure and have sufficient time to review and consider the contents of materials provided. I understand from discussions with my colleagues that there are additional requests for information that have not received a response.

Thanks, Mr. Chairman. The President’s nomination of Senator Hagel to serve as the next Secretary of Defense comes at a critical juncture for our military and national security interests. Senator Hagel is a good man who has a record of service and sacrifice that deserves respect. And while his service is commendable, the fate of his nomination should be decided by the totality of his record. It is the votes he has cast and the statements he has made over the many years of his career that will inform us of his judgment, his view of America’s role in the world and his view of the military required to support this role.

As I told him during our meeting in my office, after a long and careful review of his record, we are just too philosophically opposed on the pressing issues facing our country for me to support his nomination.

His record demonstrates what I view as a lack of sound judgment and steadfast support for policies that diminish U.S. power and influence throughout the world, as well as a recent trend of policy reversals that seem based on political expediency rather than core beliefs.

On the defense budget and sequestration, Senator Hagel’s views are contrary to the judgment of our top civilian and military leaders. According to Secretary Panetta, the impact of sequestration to our military would be “catastrophic” and “devastating” to the military. General Dempsey, Chairman of the Joint Chiefs of Staff, stated that we are “on the brink of creating a hollow force” and that sequestration would pose “unacceptable risk.” Senator Hagel, instead, has stated that the Defense Department is “bloated” and that “the Pentagon needs to be pared down.” I couldn’t disagree more. We need a Secretary of Defense who will stand up and work with Congress to avert this unacceptable outcome.

On many of the security challenges facing U.S. interests around the world, Senator Hagel’s record is deeply troubling and out of the mainstream. Too often, it seems, he is willing to subscribe to a worldview that is predicated on appeasing our adversaries while shunning our friends.

In 2000, when an overwhelming majority of Senators sent a letter to President Clinton affirming American solidarity with Israel in the face of Palestinian aggression, Senator Hagel was one of just four who refused to sign.

In 2001, he was one of just two Senators who voted against a bill extending harsh sanctions against Iran. A year later, he urged the Bush administration to support Iran’s membership in the World Trade Organization.

He voted against a resolution designating Iran’s Revolutionary Guard Corps – a group responsible for the killing of American soldiers in Iraq and Afghanistan—a terrorist organization.

And, on multiple occasions, he has advocated for direct negotiations with Iran—a regime that continues to repress its people, doggedly pursue a nuclear weapons capability, and employ terrorist proxies, including Hamas and Hezbollah, to threaten the security of Israel and the region.

Senator Hagel has also been an outspoken supporter of nuclear disarmament and the Global Zero Movement. At a time when North Korea’s belligerent actions threaten our allies with their nuclear capabilities, the security of our own nation and that of our allies requires us to be vigilant with our own nuclear weapons and defense systems.

The Senate ratified the New START treaty on the condition that the president would carry out a nuclear modernization program. The Global Zero report, of which Hagel was involved, does not fully support even the President’s commitment to nuclear modernization. How can we in Congress be confident he will carry out these important modernization efforts?

Of late, however, Senator Hagel has expressed views in meetings with my Senate colleagues and through the press that appear glaringly at odds with many of his long-held positions, particularly on issues dealing with Israel, Iran, and our nuclear arsenal. This apparent willingness to walk-back or alter his positions for the sake of political expediency on such important issues is deeply troubling and sends a concerning message to our allies and adversaries alike.

Though I respect Senator Hagel, his record to date demonstrates he will be a staunch advocate for the continuation of the misguided policies of President Obama’s first term. Retreating from America’s unique global leadership role and shrinking the military will not make Americans safer. On the contrary, it will embolden our enemies, endanger our allies, and provide opportunity for nations that do not share our interests to fill the global leadership vacuum we leave behind. It is for these reasons, that I believe he is the wrong person to lead the Pentagon at this perilous and consequential time.”

We've obtained and posted the prepared testimony that Hagel is reading today.

An excerpt:

As I told the President, I am committed to his positions on all issues of national security, specifically decisions that the Department of Defense is in the process of implementing. This includes the Defense Strategic Guidance the President outlined in January 2012. Allow me to briefly address a few of those specific issues now.

First, we have a plan in place to transition out of Afghanistan, continue bringing our troops home, and end the war there – which has been the longest war in America’s history. As you know, discussions are ongoing about what the U.S. presence in Afghanistan will look like after 2014. The President has made clear – and I agree – that there should be only two functions for U.S. troops that remain in Afghanistan after 2014: counterterrorism – particularly to target al Qaeda and its affiliates, and training and advising Afghan forces. It’s time we forge a new partnership with Afghanistan, with its government and, importantly, with its people.

Second, as Secretary of Defense I will ensure we stay vigilant and keep up the pressure on terrorist organizations as they try to expand their affiliates around the world, in places like Yemen, Somalia, and North Africa. At the Pentagon, that means continuing to invest in and build the tools to assist in that fight, such as special operations forces and new intelligence, surveillance, and reconnaissance technologies. And it will mean working hand-in-hand with our partners across the national security and intelligence communities, to confront these and other threats, especially the emerging threat of cyber warfare.

Third, as I have made clear, I am fully committed to the President’s goal of preventing Iran from obtaining a nuclear weapon, and – as I’ve said in the past – all options must be on the table to achieve that goal. My policy is one of prevention, and not one of containment – and the President has made clear that is the policy of our government. As Secretary of Defense, I will make sure the Department is prepared for any contingency. I will ensure our friend and ally Israel maintains its Qualitative Military Edge in the region and will continue to support systems like Iron Dome, which is today saving Israeli lives from terrorist rocket attacks.

Fourth, while we pursue the reductions in our deployed stockpiles and launchers consistent with the New START Treaty, I am committed to maintaining a modern, strong, safe, ready, and effective nuclear arsenal. America’s nuclear deterrent over the last 65 years has played a central role in ensuring global security and the avoidance of a World War III. I am committed to modernizing our nuclear arsenal.

As we emerge from this decade of war, we also must broaden our nation’s focus overseas as we look at future threats and challenges. As this Committee knows, that’s why DoD is rebalancing its resources towards the Asia-Pacific region. We are in the process of modernizing our defense posture across the entire region to defend and deepen our partnerships with traditional allies, especially Japan, South Korea, and Australia; to continue to deter and defend against provocations from states like North Korea, as well as non-state actors; and to expand our networks of security cooperation throughout the region to combat terrorism, counter proliferation, provide disaster relief, fight piracy, and ensure maritime security.

I will continue this rebalancing, even as we continue to work closely with our longtime NATO allies and friends, and with allies and partners in other regions. At the same time, we will continue to focus on challenges in the Middle East and North Africa, where we have clear national interests. Rather, it is a recognition that the United States has been and always will be a Pacific power, and the Asia-Pacific is an increasingly vital part of the globe for America’s security and economy. That’s why we must become even more engaged in the region over the coming years.

Doing all of this and much more will require smart and strategic budget decisions. I have made it clear I share Leon Panetta’s and our service chiefs’ serious concerns about the impact sequestration would have on our armed forces. And as someone

who has run businesses, I know the uncertainty and turbulence of the current budget climate makes it much more difficult to manage the Pentagon’s resources. If confirmed, I am committed to effectively and efficiently using every single taxpayer dollar; to maintaining the strongest military in the world; and to working with Congress to ensure the Department has the resources it needs – and that the disposition of those resources is accountable.

Sen. Carl Levin (D-MI), the chairman of the Senate Armed Services Committee, has delivered his opening statement, which we've reprinted below.

Today the committee meets to consider the nomination of former Senator Chuck Hagel to be Secretary of Defense. But before we begin, I want to first welcome Senator Inhofe as the new Ranking Republican on our committee, succeeding Senator McCain. Senator McCain has been a great partner over the last six years, and I thank him for all he has done to get our bills enacted, for all of his leadership on a host of issues, for his support of the work of this committee, and for always keeping our hearings lively! Senator Inhofe has shown his strong commitment to the national defense over his 20 years on the committee, and I know that we will work well together to continue the bipartisan tradition of the committee.

We are also pleased to welcome the eight Senators who are joining the committee this year – both those who are new to the Senate and those who are new to our Committee – Senators Donnelly, Hirono, Kaine, and King on the Democratic side, and Senators Blunt, Cruz, Fischer, and Lee on the Republican side. You will find this that is a wonderful committee, where we work across party lines to support our troops and their families, and their national defense mission.

I would also like to pause for a moment to offer my thanks and the thanks of the Committee to Secretary Panetta, who delayed his retirement and his return to California, to serve our country – first as Director of Central Intelligence, and then as Secretary of Defense. Secretary Panetta has provided a steady hand at the Department of Defense through two very difficult years, and has earned our great respect and appreciation.

Finally, before we get started, I would like to announce that the committee will be holding hearings next week and the week thereafter on Benghazi and on the impact of a sequester on the Department of Defense.

Senator Hagel, we welcome you to the Armed Services Committee as an old friend of those of us with whom you served during your years in the Senate. There are few jobs that are more demanding than the position to which you have been nominated: the hours are long and extremely challenging, and require sacrifices from both the Secretary and his family. We traditionally give our nominees an opportunity to introduce their families at these hearings, and we would welcome your doing so during your opening statement.

If confirmed, Senator Hagel would be the first former enlisted man, and the first veteran of the Vietnam War, to serve as Secretary of Defense. You can’t read Senator Hagel’s account of his military service and not be impressed by it. As Senator Hagel explained a few years ago:

“[P]robably most fundamental for me . . . when we talk of going to war . . . we need to think it through carefully, not just for the political and the geopolitical and the diplomatic and the economic consequences – and those are important. But at least for me, this old infantry sergeant thinks about when I was in Vietnam in 1968 . . . . Someone needs to represent that perspective in our government as well. The people in Washington make the policy, but it’s the little guys who come back in the body bags.”

Senator Hagel’s background provides an invaluable perspective not only with respect to the difficult decisions and recommendations that a Secretary of Defense must make regarding the use of force and the commitment of U.S. troops overseas, but also with respect to the day-to-day decisions a Secretary must make to ensure that our men and women in uniform and their families receive the support and assistance that they need and deserve. It would be a positive message for our soldiers, sailors, airmen and marines in harm’s way around the world to know that one of their own holds the highest office in the Department of Defense and that he has their backs.

Senator Hagel, you would be in a position to make key recommendations regarding Afghanistan, where we are down to the pre-surge level of troops, with 66,000 military personnel in the country. The Secretary of Defense is called upon to advise the President on the size and mission of a post-2014 so-called “residual” force and the pace of the drawdown between now and the end of 2014. The key to this transition is ensuring the readiness and ability of Afghan security forces to take over the defense of their own country. I have always believed that should be our main mission and its key to success. During my trip to Afghanistan with Senator Jack Reed last month, we heard from U.S. commanders on the ground that Afghan security forces are operating on their own on most operations, including conducting more than 85% of operations with limited or no U.S. support in the difficult Regional Command East.

Yet, significant obstacles remain to the process of reducing our forces and shifting responsibility to Afghan forces, including the difficulty of negotiating a status of forces agreement, including recent reports that the Afghan government might slow down a successful program of growing and training the Afghan Local Police, and including questions about the current plan to reduce the size of the Afghan National Security Forces from 352,000 to around 230,000 after 2015.

We face a number of new and growing threats elsewhere, such as the ongoing threat posed by Iran’s nuclear weapons program, and the increasingly destructive civil war in Syria, with the risk that that conflict could result in the loss of control over that country’s substantial stockpile of chemical weapons. There is also the continuing instability in other countries affected by the Arab Spring, the growth of al Qaeda affiliates in ungoverned regions including Yemen, Somalia, and North Africa, and the continued unpredictable behavior of the nuclear-armed regime in North Korea.

We face these challenges at a time when the DOD budget is under unique pressure as a result of cuts previously agreed upon by Congress, the budgeting by continuing resolution, and the impending threat of a sequester. Secretary Panetta has said that a sequester would be devastating for our military. Senator Hagel’s views today on the continuing resolution and the sequester will be of great interest to this committee and to the nation.

Those of us who have served with Senator Hagel in the Senate know that he is a man who is not afraid to speak his mind. Senator Hagel has made a number of statements over the course of his career which committee members will ask him about during today’s hearing.

For example, Senator Hagel has stated that unilateral sanctions against Iran “are exactly the wrong approach,” and that the “worst thing we can do” is to try to isolate Iran. While effective multilateral sanctions are preferable, unilateral sanctions are an important part of the approach that the Obama Administration has followed and Congress has supported, and it appears that sanctions are producing tremendous pressure on Iran.

Another statement which has raised concern is Senator Hagel’s recommendation that we conduct “direct, unconditional and comprehensive talks with the Government of Iran.” While there is value in communicating with our adversaries, the formulation used by Senator Hagel seemed to imply a willingness to talk to Iran on some issues that I believe most of us would view as non-negotiable, and therefore any willingness to talk to Iran would need to be highly conditional.

Your reassurance to me in my office that you support the Obama Administration’s strong stance against Iran is significant and we look forward to hearing from you in some depth on this subject.

We will also be interested in Senator Hagel’s addressing troubling statements he has made about Israel and its supporters here in the United States, a statement in 2008 that our policy of non-engagement with the Syrians “has isolated us more than the Syrians”, and a 2009 statement that we should not isolate Hamas – a terrorist organization.

There is much to be explored at this hearing. But as we struggle with the difficult security challenges facing our nation, the President needs to have a Secretary of Defense in whom he has trust, who will give him unvarnished advice, a person of integrity and one who has a personal understanding of the consequences of decisions relative to the use of military force. Senator Hagel certainly has those critically important qualifications to lead the Department of Defense.

Deputy Defense Secretary Ashton Carter is heading to Europe for several days of meetings on security issues, Pentagon Press Secretary George Little announced today.

Carter will travel to France, Germany, and Jordan from Jan. 31 to Feb. 6. The trip will provide "an opportunity to continue U.S. defense consultations on a range of common security challenges," Little said, and help "reinforce our strong commitment to our allies and partners in Europe and the Middle East."

In Germany, Carter will participate in the 49th Munich Security Conference. He also is slated to visit with U.S. service members to thank them for their service.

Northrop Grumman officials aren't quite ready to tell Wall Street that sequestration will absolutely impact their financial forecast for 2013. As Northrop's fourth-quarter 2012 earnings statement -- released this morning -- reads:

The company's 2013 financial guidance is based on the assumption that the current six-month Continuing Resolution (CR) will be immediately followed by appropriations, which, even if in the form of a full-year CR, will provide for program spending levels consistent with those set forth in the President's FY 2013 Budget request (PBFY13) and that support and fund the company's programs. Guidance for 2013 also assumes there is no disruption or shutdown of government operations resulting from a federal government debt ceiling breach or lack of immediate appropriations following the current CR, that sequestration is not triggered, and any budgetary approach agreed by Congress to address longer term spending does not result in significant reductions to our customers' FY13 budget levels.

Northrop reported that fourth-quarter 2012 earnings per share from continuing operations increased by 2 percent compared to the same quarter the previous year, and overall 2012 earnings per share from continuing operations went up 5 percent compared to the year before.

View the full statement, along with those of other defense contractors (including Boeing, which also released its earnings report today).