Below is a rush transcript of "Face the Nation" on January 8, 2012, hosted by CBS News chief Washington correspondent and "Face the Nation" anchor Bob Schieffer. The guests are: Defense Secretary Leon Panetta; General Martin Dempsey, chairman of the Joint Chiefs of Staff; and Sen. John McCain, R-Ariz.
for links to transcripts from earlier broadcasts.
SCHIEFFER: And good morning again. Joining us for their first Sunday morning interviews in the jobs they now hold, General Martin Dempsey, the Chairman of the Joint Chiefs of Staff, been on the job now about four months, and the Secretary of Defense, Leon Panetta. Gentlemen, thank you both for coming. Yesterday, you outlined not only a reduction in the size of our military forces, but really a whole new strategic idea of what we want our military to do. This is obviously going to be one of the major issues of the campaign, and it should be. But look at what Mitt Romney said just Friday morning about it.
MITT ROMNEY: Yesterday he announced a major program to reduce the capacity of our military. Inexcusable and unthinkable and it must be reversed. We have to protect our military. (APPLAUSE)
BOB SCHIEFFER: So that's just the first in a series of statements that have been coming from the Republican side. So what about that, Mr. Secretary?
SECRETARY LEON PANETTA: Well, I-- you know, I think this country has to deal with the reality of the situation that we're confronting. We're coming out of a decade of war. We're facing a huge budget crisis in this country. The Congress said to us that we have to reduce the defense budget by $487 billion. And I think the question isn't whether we're going to do this, the question is how. And that's something that frankly everyone is going to have to face.
BOB SCHIEFFER: One of the critics said this is not a strategy with a budget, it's a budget looking for a strategy. Is that overstating it?
SECRETARY LEON PANETTA: Well, clearly, we face the constriction of having to reduce the budget by almost a half a trillion dollars. The issue we had to face is-- do we do this by simply cutting across the board as we've done in the past in this country and created a hollow force, or do we develop a strategy as to exactly the kind of force we need for the future? And we decided we have to develop a strategy. I work with the service chiefs, with General Dempsey. And we developed a strategy that said it is going to be leaner, it is going to be smaller, but it has to be agile, it has to be adaptable, it has to be flexible, quickly deployable, and it has to be technologically advanced. That's the kind of force we need for the future.
BOB SCHIEFFER: General, let me ask you this as a military man. You know, we have always said in the past we had to be ready to fight two ground wars at once. Basically, the strategy you outlined and that the Secretary has outlined in this new policy envisions that not happening again. Are you concerned that if, I mean and we all hope it doesn't happen again, but there are no guarantees in this world. If it should happen again-- what do we do?
GENERAL MARTIN DEMPSEY: Well actually, I think it will happen again. And I didn't-- we didn't rule out a strategy that suggested that we wouldn't be able to more than one thing at a time. In fact, we were pretty adamant that we must be able to do more than one thing at a time. And by the way, not limit ourselves to two. I mean, the threat and the environment in which we find ourselves in this decade of the 21st century suggest to us that it's likely to be more than two. That-- so back to Secretary Panetta's point. This isn't about sizing ourselves against two particular scenarios. This is about building a force that is capable of doing more than one thing at a time, that has the leadership, the manning, the equipping, the personnel, the readiness to be able to provide options to the National Command Authority. And one other point, it's-- I think it may not have gotten the emphasis that it needed to yesterday, but we've learned an enormous amount over the last ten years about how to wage war. And it's not just in the traditional way, it's other capabilities that have, that have come into the force. It's capabilities of special operating forces. It's I.S.R. in a way that was unimaginable ten years ago. It's cyber. And so what we're looking to do here is not constrain ourselves to a two-war construct, but rather build a force that has the kind of agility the Secretary mentioned, that is a learning organization that will adapt itself to what it confronts it for the nation.
BOB SCHIEFFER: Are you worried, Mr. Secretary, that our adversaries might misread this? Because basically what it is talking about is increasing our presence in the Pacific. Are we going to just lead the Middle East to run itself? What will people in the Middle East think when they-- when they see our new strategy?
SECRETARY LEON PANETTA: I think the primary message to the world is that the United States is going to remain the strongest military power in the world. This strategy is going to give us the flexibility to continue to remain the strongest military power in the world. Yes, we have to prioritize in terms of the Pacific and the Middle East. Yes, we have to have a presence elsewhere in the world. Yes, we have to develop and invest in new technologies and new capabilities. But the bottom line is, when we face an aggressor, any place in this world, we're going to be able to respond and defeat them. And that's the lesson everybody ought to take home with them.
BOB SCHIEFFER: General, you know, some people would argue that we already have an army that's too small to do the missions that we've assigned to it. And, you know, when we were in Iraq and in Afghanistan at the same time, people talked about we were just wearing the army out, that we were having to send people into battle without the proper amounts of rest and all that sort of thing. Now it is getting even smaller. Are you concerned about that?
GENERAL MARTIN DEMPSEY: Well, you do know I was the Army Chief for a period of time...
BOB SCHIEFFER: I do know that.
GENERAL MARTIN DEMPSEY: ...and of course, we're always concerned about the pace at which we utilize the force. On the other hand, the demand is going down for a long-protracted stability operation in Iraq and Afghanistan. And I know that both while I was the chief and I know that what General Ray Odierno is doing now is taking a look at how to adapt the force. This-- this is the point. We're at a strategic inflection point, where we find a different geopolitical challenge, different economic challenges, shifting of economic and military power. And what we're trying to do is to challenge ourselves to respond to that shift and to react to that strategic inflection point and adapt ourselves. And so I suppose I would say of course I'm worried. But we do have a rather significant, capable guard and reserve component. And we do have an active component that has learned a lot over the last ten years. So if I take the template of 2001 and apply it now, I might have to come to that conclusion. What we're trying to do is break that template and think about different ways of accomplishing the task to give more options to our nation's leaders.
BOB SCHIEFFER: Mr. Secretary, let's talk a little bit about Iran. That is getting a lot of attention out on the campaign trail. Mitt Romney says we cannot tolerate a nuclear Iran. Ron Paul, at the other end says we just need to be nicer to them. We have put these big sanctions into place. And now the price of oil has shot up to over $100 a barrel again. It's pretty clear that we in the West are going to pay a price ourselves for having to impose these sanctions. Do you have any indication that that's beginning to work, that that's causing the Iranians to back off this idea of producing a nuclear weapon, if in fact, do you think that's what they're trying to do?
SECRETARY LEON PANETTA: I think the international strategy here, and this really has been an international strategy to apply sanctions, to apply diplomatic pressure on them, to try to convince Iran that if, you know, they want to do what's right, they need to join the international family of nations and act in a responsible way. I think the pressure of the sanctions, I think the pressure of diplomatic pressures from everywhere -- Europe, United States, elsewhere-- is working to put pressure on them, to make them understand that they cannot continue to do what they're doing. Are they trying to develop a nuclear weapon? No. But we know that they're trying to develop a nuclear capability. And that's what concerns us. And our red line to Iran is do not develop a nuclear weapon. That's a red line for us.