1. Deliberative Working Document - Predecisional FOUO Supporting the Secretary’s Top Priorities Eric Coulter, Deputy Director OSD Program Analysis and Evaluation

2. Deliberative Working Document - Predecisional FOUO Agenda Financial Realities QDR Themes

3. Deliberative Working Document - Predecisional FOUO

4. Deliberative Working Document - Predecisional FOUO

5. Deliberative Working Document - Predecisional FOUO U.S. Defense Spending as a Percentage of GDP Source: National Defense Budget Estimates for FY 2007, Office of the Under Secretary of Defense (Comptroller), March 2006. KoreaVietnam GWOT 0% 3% 6% 9% 12% 15% 194819531958196319681973197819831988199319982003 Reagan Build-up Gulf War

6. Deliberative Working Document - Predecisional FOUO

7. Deliberative Working Document - Predecisional FOUO Benefits Growth from Past Congressional Actions $22.8B $17.4B $12.7B $21.4B $20.0B $19.0B Growth between FY03 ~ FY10 $13.9 Billion $16.4B $8.9B

8. Deliberative Working Document - Predecisional FOUO Agenda Financial Realities QDR Themes

9. Deliberative Working Document - Predecisional FOUO Strategic Priorities The Quadrennial Defense Review – the first conducted in an era of global terrorism – continues this shift in emphasis by identifying strategic priorities The Fiscal Year 2007 Budget invests in capabilities and forces in these priority areas –Prevail in Irregular Warfare Operations –Defend the Homeland Against Advanced Threats –Maintain America’s Military Superiority –Support Service members and their families

10. Deliberative Working Document - Predecisional FOUO 1. Defeating terrorist networks 2. Defending the homeland in-depth 3. Shaping the choices of countries at strategic crossroads 4. Preventing the acquisition or use of WMD by hostile state or non- state actors QDR Four Focus Areas These areas provide a focus for the development of military capabilities to meet 21 st century security challenges

11. Deliberative Working Document - Predecisional FOUO Irregular  Unconventional methods adopted and employed by non-state and state actors to counter stronger state opponents. (erode our power) Disruptive  International competitors developing and possessing breakthrough technological capabilities intended to supplant U.S. advantages in particular operational domains. (marginalize our power) Traditional  States employing legacy and advanced military capabilities and recognizable military forces, in long-established, well- known forms of military competition and conflict. (challenge our power) Catastrophic  Acquisition, possession, and possible employment of WMD or methods producing WMD-like effects against vulnerable, high-profile targets by terrorists and rogue states. (paralyze our power) Security Environment: 4 Challenges LIKELIHOOD VULNERABILITY Lower Higher Lower Capabilities-based planning should apportion risk across challenges (e.g., terrorism, insurgency, civil war, and emerging concepts like “unrestricted warfare”) (e.g., conventional air, sea, land forces, and nuclear forces of established nuclear powers) (e.g., sensors, information, bio or cyber war, ultra miniaturization, space, directed-energy, etc) (e.g., homeland missile attack, proliferation from a state to a non-state actor, devastating WMD attack on ally)

12. Deliberative Working Document - Predecisional FOUO Disruptive Traditional Catastrophic Irregular QDR Focus Areas Today's Capability Portfolio Shape Choices Defeat Terrorist Extremism Counter WMD Defend Homeland

13. Deliberative Working Document - Predecisional FOUO New Investment in QDR Focus Areas –Defeat Terrorism ($12B) Increase SOF forces (10 K) and equipment, establish MARSOC, increase PYSOPS & Civil Affairs capacity Increase Predator procurement Enhance littoral warfare capability –Counter WMD ($2B) Invest in research into advanced biological threats –Homeland Defense ($2B) Invest in NAOC, conventional TRIDENT, distributed COMMS, E-6B –Shape Choices ($9B) SAP, IMINT, Long Range Strike, existing 3-Star Component Operational HQ to Deployable JTF HQ

14. Deliberative Working Document - Predecisional FOUO

15. Deliberative Working Document - Predecisional FOUO QDR Road Maps FY08-13 Irregular Warfare Locate, Tag, and Track Building Partnership Capacity Managing Intelligence, Surveillance, and Reconnaissance Institutional Reform and Governance Strategic Communications Joint Command and Control Authorities Focus of QDR Execution

16. Deliberative Working Document - Predecisional FOUO Final Thoughts Are We … In a War Likely to Fight Massed Armies / Navies Countering Nation States Dealing with a Distant, Short-Lived Problem Or … In a Struggle Likely to Fight Small Groups / Networks Countering Extremists (Supported by Nation States?) Dealing with a Threat to World Freedom While maintaining conventional forces that can deal with emerging world situations