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00:00Joining us now is Bloomberg Economics Defense Lead, Becca Wasser, and retired Brigadier General Mark Kimmett.
00:04He served as Assistant Secretary of State for Political and Military Affairs and as Deputy Assistant Secretary of Defense for
00:09Middle East Policy.
00:09Becca, let me start with you. The verb is ask. Christina used just a moment to go.
00:16How difficult is it going to be to accelerate this process?
00:19I mean, the rap that the defense industry has in Washington is that things take way, way, way longer than
00:24one might hope or won,
00:25and that's been the case for a very long time.
00:27Steve Feinberg making this ask, what difference is it likely to make?
00:31I think in some ways it is a signal to defense industry that any efforts they take to ramp up
00:37production,
00:38whether that is trying to improve facilities, procure long lead items where there's oftentimes, you know,
00:45some of these, you know, kinks in the supply chain bottlenecks,
00:49all of this are going to be signals for them to take steps that production is needed
00:55and that, you know, the demand is there.
00:58But I think it's really interesting that Deputy Secretary Feinberg focused not necessarily on some of the equipment that is
01:05most needed today.
01:07You know, obviously there's been so much focus on munitions consumed in the Iran war,
01:12but he really focused on some of those next generation weapons trying to speed production
01:18so that it becomes ingrained within those production cycles for those to be delivered faster.
01:24The problem is he's looking at some of the most complex weapons,
01:28including things that are needed for air defense systems that could be part of Trump's Golden Dome project,
01:34which is intended to protect all of America from all-out aerial attack, which is a pretty big ask.
01:40So all of that to say is these are good efforts.
01:43These are steps in the right direction.
01:45Are any of these weapons going to materialize tomorrow?
01:49Absolutely not.
01:49But all of this is needed if there is going to be a sea change in how the U.S.
01:54defense industry operates.
01:56It seems a lot of those components, too, especially for the more complex weapons, are coming from single suppliers.
02:02General Kemet, I keep asking this question, but I'm not sure I've gotten an answer yet.
02:07So we're going to play you some sound from the Army Secretary Driscoll with our colleague Tyler Kendall on this,
02:11and then I have a question for you when we get back.
02:14When we slow things down in the innovation loop by 12 or 18 months at a time, that is just
02:19bad for soldiers,
02:20it's bad for taxpayers, and it's bad for companies.
02:22And so what we're announcing today is basically a new front door to access all of the U.S. Army's
02:28or many of the U.S. Army's ranges.
02:30We're layering in international partners.
02:32We're going to give concierge access, and we are going to aspire to get these companies onto our range within
02:3730 days every single time.
02:39So, I mean, fixing the system is good, and these sound like steps, but if you're a commander being asked
02:45to carry out the policy of the president
02:48in a theater like Iran or maybe even Cuba or the Indo-Pacific, what do you do in the meantime?
02:53Because even if they cut that gap from five years to two years to a year, that's still a lot
02:57of months you don't have the correct supplies
02:59for the mission you're being asked to carry out.
03:01Are there other ways they can accomplish this?
03:03What do you do?
03:04Yeah, you know, I think the president made a good comment.
03:07He said, we've got lots of other weapons that are available.
03:11And what was he referring to there?
03:13So instead of using precision ATACMS missiles against targets because we're running low on ATACMS,
03:20he's going to use JDAMs, which are those big, fat 2,000-pound bombs with very cheap guidance system on
03:28it.
03:28So as a commander on the ground, what do you do?
03:31If you don't have the perfect ammo, you use the less-than-perfect ammo.
03:35We've got plenty of it in inventory.
03:38As an artilleryman, I always worried about artillery rounds.
03:41We may not have had the most precise artillery rounds where you could fire one and knock out the target.
03:48You fire five of the old ones and knock out the target.
03:51You know, you improvise on the battlefield.
03:55I'm going to put up a chart here.
03:56This is a chart kind of illustrating the stockpiles that are left after what we've seen, the adventurism in Iran
04:01thus far.
04:02And, Becca, let me turn to you.
04:03I mean, this has been a week when we've seen a lot of reporting on the state of that stockpile,
04:06the quantity of munitions that we have.
04:07We've seen the blowback from the president as well.
04:09And a big piece of the New York Times this weekend, kind of looking again at sort of what weapons
04:14are there, what have been used.
04:15I was struck by this line in particular.
04:18It could take more than two years for the U.S. to replenish the more than 1,500 Patriot air
04:22defense interceptor missiles that have been used in the Iran war.
04:26I'm curious if your sense of that is similar to what the Times is reporting this morning.
04:30What that means for Ukraine, where we've seen really stark relief here, that deficit playing out on the battlefield over
04:35the course of the last few days.
04:38At Bloomberg Economics, we've got a big piece of research that's coming out where we are also looking at available
04:43stockpiles and estimates of how much of that have been consumed.
04:48And our best estimate is that at least half of the U.S. Patriot stockpile has been used in the
04:54Iran war thus far.
04:56And that's a pretty scary place to be, because it's not just the stockpile of what's earmarked for operations in
05:02the Middle East.
05:03Instead, that is what is available all around the globe.
05:06And air defense is always so high in demand.
05:09There are never enough air defenses to go around.
05:12So here is where it forces really hard problems for U.S. forces, as the general had mentioned.
05:19And it also forces really hard choices when it comes down to how the U.S. protects allies and partners.
05:26So already there are going to be choices about who gets Patriots in terms of foreign military sales next, with
05:33the Gulf states most likely being at the top of that list.
05:36But Ukraine is desperate right now for Patriot interceptors, but the U.S. just doesn't have a lot of slack
05:43to give.
05:44And so that's going to create some really interesting problems for the foreseeable future when we are looking at the
05:51future of defense.
05:52But it also might spur some interesting innovation when it comes down to looking at what are the next generation,
05:58you know, air defense interceptors for ballistic missile attacks that could be created.
06:04And can they actually be produced on a faster timeline than Patriot, than THAAD, than some of the traditional air
06:11defenses that we think about?
06:13And, General, it's not just how many weapons you have.
06:16Readiness has a lot of components to it, including the morale of your fighting forces and how they're doing.
06:22And I've heard this secondhand from a couple places, but MSNBC, excuse me, MSNOW now, has some reporting this morning
06:29talking about the conditions on some of these battleships,
06:32especially the USS Abraham, saying families are complaining to military leadership back in San Diego about the sailors' mental health,
06:38safety on deck, lack of supplies, food shortages, water contamination, disruptions in the mail system.
06:43We heard from the chief of naval operations. He is concerned about these long deployments.
06:48How much longer can these same vessels and these same sailors and soldiers be put on these deployments before you
06:54need fresh people in there
06:56and before you need to start rotating and looking holistically about deployments and how long they're lasting?
07:02Yeah, there is a natural rotation cycle that's three to one.
07:07You have one out on the water, you have one in dry dock, and you have one training to go
07:13out.
07:13So these extended deployments are much like what happened in Iraq 20 years ago.
07:20We had to keep the soldiers on the ground for much longer than we had anticipated.
07:24But the military is a self-correcting organization, and the real barometer of whether it's working or not with morale
07:33and other such issues is enlistment and re-enlistment rates.
07:39That's where you're going to find out if there's a systemic problem or an episodic problem.
07:45When you get to the point where people are unwilling to join the military, you've got a problem.
07:50But if you have these episodic times of, as you say, extended deployments, the military has a good way of
07:59correcting that.
08:00But if we start losing re-enlistment numbers, as we have under the last two administrations, I think we might
08:06have a problem.
08:07General, we've seen reporting about General Dan Cain, Chairman of the Joint Chiefs, going to the President and his team
08:12before the start of this war to raise concern about how long it could last,
08:17given how big these stockpiles are, how much they've been under stress here.
08:21We've seen pushback from the White House since then, and certainly in light of this reporting, saying there really isn't
08:26any sort of crunch or difficulty here.
08:28That's not influencing the way that the White House is planning for perhaps more military action in Iran.
08:34I'm curious your read on that, your sense of the degree to which this is kind of weighing on or
08:38shaping the White House's strategic direction right now, the state of these stockpiles.
08:44Yeah, and I think Becca referred to it a bit.
08:47The one issue about reducing stockpiles is, of course, what we can support to our allies.
08:54But even more important is what we can't be doing or what we need to be worrying about in Pacific
09:01Command, in European Command, in Africa Command.
09:04All of those commanders that are not in a current fight have contingency plans that are dependent on large stockpiles
09:11of weapons.
09:12And I'm certain that the Pacific commander is chewing on Dan Cain's ear every day saying, look, if I don't
09:20have air defense, I can't defend Taiwan.
09:23And so we've had this problem in the last couple of wars where you have different commanders competing for the
09:29same bucket of ammunition or ISR with the predators.
09:34So I think we need to take a hard look.
09:37And candidly, my uninformed view is this is the reason that China continues to support Iran with this type of
09:46equipment,
09:46because they are having a field day watching the United States bleed these capabilities.
09:52And every patriot that's shot in the Middle East is one that can't be shot at an incoming Chinese missile.
10:00And the president and the administration looking at possibly opening some other fronts, including Cuba.
10:05Becca, we want to get to that in a second.
10:06But first, you and your very smarty pants colleagues have done an analysis looking at the different factors that could
10:15potentially shift the president's Iran war calculus.
10:18One of the biggest ones, frankly, is just the president's approval rating.
10:22But there are some others in there, too.
10:24What do you think has a high chance of shifting the calculation with that policy and what is likely to
10:29be less impactful?
10:31Listen, I think it comes down to really being about the economy.
10:34That is the thing that the president seems to care the most about.
10:37We see that even in the way that the Iran war has been prosecuted in sort of this post-Operation
10:44Epic Fury time period during these ceasefires,
10:47where when there's action, it's oftentimes on the weekend when markets are closed.
10:52So really, it's about the economics of it, because that goes back to approval ratings.
10:58You know, to a lesser extent, it is some of these military factors, these ideas of stockpiles.
11:03I think at the end of the day, military material is not going to be the thing that's going to
11:08change the president's mind.
11:09But it does constrain his choices.
11:12And I think we've already seen that with the president being counseled against escalating in the Iran war and going
11:18for a big all-out attack
11:20because of some of the lack of air defense interceptors and the U.S. concerns
11:25about whether it could sufficiently protect U.S. forces who are giving their all right now in the Middle East.
11:30I'm going to pull up a chart here.
11:32What it shows is going to be immediately evident to those watching on television or streaming the show for radio
11:36charts on the radio are hard.
11:37So the x-axis here is temporal.
11:39It's time.
11:39On the y-axis, it's kind of level of intensity or escalation.
11:42Here I'm talking about what we've seen in terms of U.S. policy toward Cuba.
11:46So, Becca, you and your team have prepared this chart.
11:48And I do think it's fascinating in light of what we've been talking about here for the last few minutes
11:52just about the way that the U.S.'s attention is being wholly shifted toward the Middle East right now,
12:00that this is happening.
12:01But get us up to speed here on the attack that the U.S. is taking toward Cuba right now
12:04and what these escalatory measures are telling you about what the U.S. might do next potentially.
12:10It's telling me that there is a pressure campaign on Cuba, and that is going to continue.
12:15The president might be more focused on the Middle East, but there are certainly members of his cabinet
12:19who might still be very focused on Cuba, largely looking at Secretary of State Rubio there.
12:26But, you know, we do see this being multi-pronged.
12:29We're seeing a bunch of things in the security space.
12:32We're seeing potential reporting about increased intelligence assets in Cuba.
12:38But we also see this continued economic squeeze on Cuba, trying to see if that in itself will lead to
12:45some form of regime change.
12:47But I think ultimately, at the end of the day, what we need to be concerned about is not that
12:52the U.S. is going to launch a war on Cuba.
12:54I think, if anything, this administration would be looking at Cuba with Caracas-colored glasses,
13:00where really it would be some type of more covert operation if the U.S. were to do anything.
13:07But even then, I'm not sure that's necessarily in the offing.
13:11But it does seem as though pressure is continuing, as well as starting to put the drumbeat towards the ways
13:17in which Cuba could be seen as a malign actor to the United States.
13:21General, I apologize. We're almost out of time. We've only got about 30 seconds.
13:24But I did want to ask you if you think, tactically, with everything we've talked about,
13:28the U.S. can open another front and go after Cuba.
13:33Well, if that's a question for me, look, I think the administration, all administrations,
13:39are not just single-focus administrations.
13:41They can juggle the balls.
13:43We just have to be prepared for a two-front war, one with Korea, one in Western Europe.
13:49So there's nothing that I see right now going on in Cuba that would tell me
13:54that anything is being drawn away from the Iran effort to focus on the Cuba effort.
13:58I think they could do both at the same time.
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