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General Lorenz: My name is Major General Steve Lorenz and I've been the Air Force Director of Budget—until Monday—for four years. I always used to ask everybody, “what makes you think that four years ago with my 2.34 undergraduate GPA that should I be the Director of Budget?” But I learned that all you needed to know was third grade math. The reason being, you don't learn multiplication and division until fourth grade. I could do addition and subtraction.

The topic here is "Inside the Air Force Budget", and what I'm going to talk about is basically '05 and '06. During the first part of this briefing I'm going to describe the experiences I’ve had when I’ve gone to Capitol Hill for four years to sell them on what the Air Force is doing, because I'm telling you there are lots of people external to the institution who don't understand that the Air Force participates in the Global War On Terrorism (GWOT). I'm not exaggerating. People on Capitol Hill … You've got to remember that you're in marketing, telling the story of what Air Force people do for our nation and you have to do that every day.

Today, all over the world, besides the hurricane which is the one occupying most of our minds, we are fighting the Global War On Terrorism. Air and space power is participating and helping ground forces all over the world fight the GWOT.

There are other things on the horizon. People are focused today with the hurricane and the like, but there are other things like emerging cruise missiles, access to space. You can see these low cost, sophisticated air defense systems. I've heard USAF Chief of Staff General T. Michael Moseley say that for about $400 or $500 million Saddam Hussein could have had an SA-5 system and it would have made the whole world different in the war that we fought in April of 2003.

Ballistic missiles, nuclear, radiological, biohazard, network attacks, failed states. What’s going to happen in North Korea? Rogue states. Advanced fighters, SU-30s and beyond. The fighters that the other side is putting out are quite impressive. We put out impressive fighters, too, but they're putting out some very impressive fighters. A lot of hybrids.

Where are Air Force people engaged today? People need to know this. You can see 100,000 plus members of our Air Force are engaged. Look at the numbers. We support the combatant commanders. We are enablers, the joint force enablers. You can see our numbers in NORTHCOM, EUCOM, CENTCOM. I'm going to talk a little bit more about that. But overseas there are about 81,000 people deployed, OCONUS, in AEFs, and I'll talk a little bit about that. About 28,000 fielded. That number rises and falls over time.

In air and space power we've done incredible things. You've read about it. Our Combined Air Operations Centers (CAOCs) are the finest command and control system in the world.

We’ve built 50 airfields. I think we have about eight left open today. The B-2—longest missions flown from Knob Noster, Missouri, all the way around the world. People do not realize this, but we are flying about 200-plus combat sorties in Afghanistan and Iraq, every day. Just pumping them out. Combat support through C-130s, C-21s, UAVs, Predators, Global Hawks, F-16s, A-10 sorties, the whole bit. Our fighters are flying missions from Kuwait and they flew all the way to Afghanistan and back again. It's amazing. And our largest combat drop since World War II was dropped by the 173rd—2.4 million pounds of rations that we dropped to the Afghanis.

So we're Airmen, but we're engaged beyond the wire. This is something you need to know. We're helping to defeat IEDs with technology. There are 2,668 billets where Airmen, transporters, are driving Army trucks with guns and they're guarding convoys.

I recently met a young captain. She had spent six months in a transportation company over there. She had in that time two people killed, 23 Bronze Stars and 21 Purple Hearts. Those were Airmen doing Army jobs. People don't realize that we're doing that. Bright, young, shiny Airmen; bright, young, shiny officers; leading our people all over Iraq.

And because we're flying C-130s and other aircraft, C-17s, doing intratheater airlift around the country, 350 fewer trucks are on the road in convoys. We're also working very closely with our Joint Terminal Attack Controllers, both with the Army and the Marines. And during the elections last fall we helped transport the voter lists and ballots around.

There's something that we've been doing since September 11th and we take it for granted now, and that's Operation Noble Eagle. You can see we've flown over 37,000 sorties. You can see post-9/11 about 30 fighters on alert, eight tankers, and about two AWACS on any given day, and those are the radar sites. By the way, that costs about $1.2 billion. That’s the first number that I’ll use. That's about $100 million a month, give or take a few.

We're doing other contingency operations around the world simultaneously—fighting the war on drugs, bolstering regional security. When they pulled the brigade out of Korea, we sent people to Guam with B-52s and B-1s. We're still in the Balkans from 1999. We're still there doing our bit. And during Unified Assistance, over 1,000 Airmen deployed for the tsunami relief and flew 1100 sorties. We've by far passed that on the latest hurricane down in Biloxi and New Orleans. We're moving thousands of people and millions of pounds of cargo every day supporting that. There are about 6,000 Total Force people—Guard, Reserve, active duty, and Air Force civilians—participating in that as we speak.

Global Mobility, every day. It's just another day in Air Mobility Command (AMC). You can see that since September 11th, we’ve flown over 200,000 missions. We refuel every week, and about 21 million pounds of gas gets passed around. About a thousand sorties a day ... It just keeps clicking up all over the world.

On top of that, there is space support. Air and space power. The world's greatest air and space power today. 38,000 people doing weather, comm, early warning navigation and recon—they are the ones who support the combatant commanders around the world.

How do we do this every day?

People in the Pentagon on the third floor talk about transformation ... The Air Force has transformed and continues to transform itself. How are we doing it? New things, old things, new ways. We primarily did it through reorganization, technology and ConOps. That's how we've done it. Those three things, the synergy of those three things together, and during the Air Command and Staff College (ACSC) students’ tenure in the Air Force, they have watched this evolve.

Air Expeditionary Forces (AEFs). Everybody raise their hand, and especially the ACSC students know which AEF they're in. I'm in five. Ten equally capable pairs with command and control, the iron, the actual aircraft, the expeditionary combat support and the equipment. How does this all fit in? It fits in for joint warfighters, who also have 12 carrier groups, the seven Marine Expeditionary Units (MEUs), and currently ten divisions, and they're trying to change those to brigade combat teams. The Army is transforming itself, but we've done a lot of that through the AEF concept.

There are many issues on the technology side, but let’s talk about sorties per targets to targets per sortie. A B-17 in World War II took 1,500 of them to hit a bridge and knock it down because of the 9,000 bombs they dropped, 50 percent of them hit outside 3,300 feet. It took 9,000 bombs to bring that bridge down. That's why you see all the films of World War II and all these cities are obliterated. They were going after targets and it took that may bombs to kill "the target" and they had a lot of collateral damage.

During Vietnam, it took 176 F-4s to get 50 percent of their bombs within 400 feet. Retired General Larry D. Welch said to me one time when I was giving a briefing, “do you know the probably of an F-4 hitting its target? .05 percent.” He said if you lose 12 F-4s, you're not losing much. I've never forgotten that statement, especially if you're an F-4 driver.

In Operation Desert Storm, we had C-117s, a night VFR laser, and two bombs hit within nine feet of the targets. Now when you get small diameter bombs in the B-2, you can hit 80 simultaneous targets and all get within nine feet of it. It's an amazing process. Command and control becomes more important because you need fewer airplanes to do an exponentially greater amount of damage. That's something to think about.

My father is a retired colonel who retired in 1980. He keeps saying we need more bombers. And we do. We need long range strike. But every fighter is in essence a bomber, and every fighter can put their bombs right through the frapping window. It's just an amazing process, and that technology gives us the capability to do that. When you do that, that’s where air integration comes in. You want to be able to see first, understand first, and act first anywhere in the globe 24/7. That's where your command and control and your Intelligence Surveillance Reconnaissance (ISR) systems comes in, and that gives us the synergy, and that's what makes us so capable today as an Air Force.

The way we use that technology and those capabilities is through our national strategy that fits through the ConOps. Global Strike, homeland security—it all fits through the ten Air Expeditionary Forces—it all fits together.

I see a lot of my friends who have gone on to work in the second part of their life in civilian industry, and the point of the matter is they're concerned about weapon systems and programs. We all are concerned. You're worried about where the money goes. It's all supposed to fit towards a common goal and objective, to put fire and steel on the target to achieve your national objectives.

Persistent C4ISR. That's see first, understand first, and act first. We should be able to do those things. Global Mobility. We should be able to do that anywhere in the world at any time. Finally, Global Strike, Rapid Strike, that 24/7. It all should fit together.

So that's what I talk about when I go over to the Hill, and I've given this briefing, parts of this briefing, 40 times this year to sell this for ’05 and ’06. I’ve put it all together so that the staffers understand and the Members understand that there's a plan and it's all supposed to fit together, so that when you're at Base X, all that money that flows down, they're flying their mission or in the missile silo or watching a computer or flying the Predator, and it's all supposed to fit together towards a common goal and objective. That's what it's supposed to do.

The strategic level. I always talk in short term, mid term, long term. '04, '05, '06. Now I'm moving to '05, '06, and '07, because '04 is closed. So let's look at this and I'm going to do a comparison of the budgets, and I'll walk you through '05 and '06.

Executing now, '05. You're a budget guy and you've got two weeks to go. You're worried about how you’re going to close out the year right now. Oh, by the way, we'll talk a little about Hurricane Katrina because that just shoved another $400 million inside our Operations and Maintenance (O&M) top line.

The members of the press always see the two numbers. There's this Air Force budget of $126 billion—that's not really true. There are classified programs that are passed through our budget to go to other places. We have what is in our baseline of what we send over every year on the President's Budget. Then there are supplementals. The last few years there have been huge supplementals to fight the Global War On Terrorism.

Let's do an apples to apples comparison of peacetime to peacetime between primarily '05 and '06. Let's talk about '05. $96 billion. Not chump change, not budget dust. That's real money. Always remember, that's from the national treasury and hard earned tax dollars, and we have to make sure that we spend them as efficiently and effectively as we can because the citizenry of our country depends upon us to do the right thing. So these were the challenges. We had $96 billion, our Global War On Terrorism was $7.5 billion. Really, we had a lot more requirements than that, but that's what was allowed to go across the river. Then we were short $3.7 billion. How many people saw Air Force Times and said, “there's a $3.7 billion shortfall?” I was the senior budget expert. I never want to get in the press, but that was what it is.

Here's where it came from, we were over end strength. In FY03 and FY04 we had 24,000 people more in the Service than we had the money to pay for. We went over to Capitol Hill and asked for the money. Ten thousand people costs you about $1.5 to $1.7 billion. So we went over and they supported us. Just like the Army is trying to get larger and the Navy and the Marine Corps.

In '05 they would not let us go get the money for that, so we had to find the resourcing. In the end, when it all shook out, we went and we primarily elicited separations, gave a lot of opportunities for our officers to get out, and we drove that number from 24 down to our top line, which is about 358,000 people. That's where we're at, but it still costs a chunk of change, $700 million, to pay for that. So we had to find that money. There were also things we tried to get in the supplemental and we could not get to and we had to absorb those.

Finally, we had to go to the transportation working capital fund and get $1 billion to pay it back to the Air Force O&M accounts because basically Congress said we needed the billion dollars to pay off our bills and directed the Office of the Secretary of Defense (OSD) to pay us back out of the transportation working capital fund. That was a tough battle to fight, but we did get it.

What did we do to close the gap, the $3.7 billion? We sought new money from the Hill, and we were able to get a couple hundred extra million dollars when we went on supplemental. We worked with OSD in mid-year review because remember, OSD doesn't care if the Air Force makes it to the end of the year. OSD cares if OSD makes it to the end of the year. They care about the Army, Navy and Air Force equally, and the Marines. So that's what we've got to do. We had to fight for it.

We identified Air Force reprogramming sources to pay for the $700 million in MilPers—you have to pay the troops first. We had to reprogram out of the investment accounts and send it to pay the troops, and we did that. We scrubbed Global War On Terrorism and peacetime bills. In other words, different commands. People came in from the field, you went and you had requirements and you asked for this and we said, “no, we'll push it to '06 or we just can't fund it this year.” That's what happens. Then we slowed down Air Force operations. I bet you there are people in this room who in the spring-time were pushing it up and flying their sorties or doing this and all that good stuff and then we throttled back. Remember that? Then we squeezed some more money out and we pushed it up again. So our goal was that no Air Force squadron would go below C2 at the end of the year, and that's what's happened. We were able to do that.

We're on track to close out a tough year, but there's a new dynamic and that’s Hurricane Katrina. There was extensive damage to 12 Air Force bases. We've evacuated 16,000 personnel and over 300 aircraft and the like. The latest statistics I received today: We've received $412 million in the supplementals and we've moved over 14,000 people currently and about 14 or 15 million pounds of cargo and it grows every day.

We're working on the supplementals to do things like evacuation facilities, equipment, repair, replacement, claims, cleanup, logistics, and medical support. I do not know what the final bill will be for the Air Force. There's a bill for the nation. There's a bill to clean up the actual environment, Keesler Air Force Base, for example. There was three feet of mud inside the base housing. The wing commander's house I understand was totally flattened. He lost both his cars. These are the type of things—I'm just using them as an example. That happened to a lot of people, and a lot of you probably have friends, so we'll work hard to get them reimbursed, but also to pay for the O&M, for all the MREs, the gas to get the troops down there, the gas to get them back, moving people, civilians through, etc. How many of you saw pictures in Air Force Times that showed everybody in the C-17 sitting on the floor? Those things cost money, so we're doing that.

The number of sorties, rescues, passengers flown, tons of relief cargo ... Over 6,400 people are participating. We’ve treated 14,300 personnel.

So that's '05 … Let's talk about '06 and those dynamics because '05 is closing out.

We normally split the budget into four areas—people, readiness, MilCon, military family housing, and modernization.

In those four areas, military pay is up $2.3 billion, flying ops is $4.7, MilCon is about $300 million, then procurement, Research, Development, Test & Evaluation (RDT&E), is $400 million below—but that's not really true because a lot of the money we transferred out of RDT&E has gone to O&M to pay for the C-17 and F/A-22. All told, a plus-up of about $6.9 billion in then-year dollars. Or a plus-up of about $4 billion...

I want to stress to you, when it goes across the river to the Hill, all the Services are competing. I just want you to put this in context. The Army got $40 billion in the supplemental, whereas we only got $7.5 billion. Their baseline budget only went up from $100 billion to $100.3—it basically flatlined, whereas ours went up $4 billion. $4 billion is a lot of money.

Military pay, I'm not going to waste your time on this. But you can see, it basically pays for the pay raise.

An Air Force Total Force of 704,000. The military—a decrease of about 4,300. The most expensive thing we have is our troops. Every blue suit costs a lot of money to maintain. Guard, Reserve, active duty, civilian... The pluses and minuses, they're on the margins. Mostly the decrease is Mil to Civ conversions, where we're trying to take military jobs that are not necessarily inherent to us alone and convert them to civilian.

Readiness, a plus-up of 4.7. You can see it, it's Space Ops, and by the way, Space Ops is just operations. The real plus-up in space, for those of you concerned, is in the weapon systems like Space Radar and the like. I'll show you that in a little bit.

Contract Logistics Support. You can see it's an increase of $1.1 billion. This has come out of RDT&E and the investment accounts into O&M.

By the way, all of you young officers, and I'm not trying to allude to the other people in this room, but this is for them—I was a tanker pilot. I didn't know squat about being a Director of Budget until they said, “you're the Director of Budget.” You need, if you want to learn how to resource your dreams, to understand what O&M is, what investment is, what RDT&E is. I know that most of your eyes will glaze over when you start talking about stuff like this, but if you want to make dreams come true in the future when you're in command, it's better that you know this stuff. Then as soon as you retire, it will become even more important. Who knows?

Flying hours. The plus-up from '05 to '06 is about $800 million. Where is that? That $800 million is fuel increase. You get nothing value added. Just like you're paying more at the pump, so are we.

For every $10 increase in a barrel of gas, it's a $600 million increase for the United States Air Force. Since I built this briefing, we're short another $800 million. What we're doing is we're in the process of working with OSD to try and get OSD to go to Office of Management and Budget (OMB) and say, “look, fuel, we need more money from OMB out of the national treasury instead of us having to eat it.” But that drama is still going on because we may have to absorb the $800 million in addition to this plus-up. Remember, the Air Force is just part of the national treasury and the national priorities of America. When you have a $62.5 billion supplemental in the last week that wasn't even planned on, the hurricane has certainly thrown another dynamic into the budget and deficit spending and tax cuts and the whole picture. So it's an interesting dynamic. I do not know how it will play out.

Military family housing, a plus-up of about $300 million. It's basically in two areas…

Military construction—about $1.3 billion in FY06. Congress has done some adds for supplementals over the years. We’re getting 40 new missions, current missions, 48. Quality of life, the number of dorms and fitness centers, you always have to have design and minor construction which occurs for the years that are going to be FY07, '08, and '09.

Military family housing. You can see in the amount of money there. It's $1.9 billion, and you can see what it does. Basically, there are 90,000 units in the Air Force and we're buying 300 build-to-lease units, replacing 2,600, renovating 2,000, privatizing 2,200 for a total out of that 90,000 of about 7,241 units. That's a lot of units to rehab in one year. Our goal is to be done for the entire United States Air Force by 2009.

When you're in Washington, D.C. inside the Beltway, people start to really get interested. They focus on okay, how much is in there, the particular weapon system that they're interested in? It’s split up into RDT&E and procurement. Buying the stuff and research and development.

An Air Force briefing would not be complete if you weren't talking about the Raptor and trying to explain what we're doing here.

You'll notice that in FY06, on the far right, we're procuring 25, up from one last year; but you see the numbers have gone down because they took that money and they moved it to O&M because they changed the contractor support from interim to contractor logistic support. So about the same amount of money is in the program, but you're buying 25 airplanes. The Initial Operational Capability (IOC) of this aircraft is December of 2005. It's doing a wonderful job.

I went over to Tyndall Air Force Base and visited the squadron there that's flying Raptors. Our previous USAF Chief of Staff, General John P. Jumper, had gone and flown them. He likes to tell the story that he and his wingman on his third sortie went and they had eight F-15s coming at them. The F-15s couldn't find them. It was a day VFR. They overflew the F-15s, and then they lobbed a small diameter bomb—this was in the air but using a computer generation—and destroyed the SA-10 site. They flew back and the engagement lasted six minutes. It was two minutes for lock-on and four minutes for all eight F-15s to run away and go down. It is an amazing machine, with its stealth and its speed, and you can put eight small diameter bombs on the newer mods. And to me it's transformational.

Joint Strike Fighter. The IOC on this sucker is about 2013. If I were a betting man, I think it would move a couple of years to the right because we're early in the fight, but that's the way it is with every weapon system. Air Force money only, about $2.6 billion. The Navy has an equal amount. So this fund, initial items for five aircraft.

C-130J. This made the news on PBD-753. What is a PBD? A Presidential Budget Decision. They took two percent of the Air Force Total Obligational Authority (TOA) and moved it to other locations outside of the Air Force. When they did that, they terminated the F/A-22 buy in FY08. Nothing changed for FY06. You were only going to buy 15 of the planned 42 buy of the C-130J. The number in FY05, we're going to procure 11. In FY06, there's maintenance and money for mods, but there's no procurement. Those went to the Marines.

In the discussion that occurred on the Hill in some of the marks-ups, three of the committees—the Senate Appropriations Committee Subcommittee on Defense (SAC-D)—has not done a mark-up yet) have added the money back in to keep the C-130J multi-year alive. So this drama plays out one day at a time.

There's nothing original in building budgets, and in 1787 the Coast Guard Cutter Revenue Service, the precursor to the Coast Guard, there was some guy who was trying to plus-up his budget. Nothing happens. This country is 239 years old? But budget-wise, it's one year old 239 times. I'm telling you, that's the way it is. The budget is a 365 day act play, and it plays out one day at a time and you cannot rush it. It is an amazing process.

Space Radar. Look at '04, $165 million, look at '05 and then look at '06. You can see the plus-up. On this one is, we're going to do a demonstration, that was the proposal. I think this will take some major hits in the FY06 marks when the satellite comes up, but I don't know that for a fact. I'm just saying they'll be taking some money out of this program.

TSAT, the Transformational Communications Satellite. Same drill. There are some congressional concerns. So what they're trying to do is extend preliminary design nearly one year. And it moves the launch further to the right. We'll see how that one plays out, too.

That was a fast and furious on the FY06 budget. There are hundreds of items and each one of them has ramps and the like, but it's all supposed to fit into these four areas to make the whole joint team better.

Here's where we're starting out. Take $102.9 billion, supplementals and adds. That’s already almost out of date because of Operation Katrina. Our real-time growth was 4.1 percent. We're starting out because we were short a billion dollars in O&M in ‘05. Then the fuel, I told you about that, and there are some things in the Global War On Terrorism and the storms that we just can't absorb.

So here's the atmospherics for FY06. This one is very important. The President's budget for DoD is $407 billion. The House Appropriations Committee (HAC) marked it at $407, but they took about $3 billion out of it. The Air Force share is $1.4 billion. The Senate is marking at $400.7 billion, about seven billion less. We don't know what the SAC-D is going to mark. What they're doing is they're trying to take money out of Department of Defense and move it into peacetime operations outside the department.

I don't know how this will play out with the hurricane, but the SAC-D marks were supposed to be in August. They’re probably going to be next week. It's going to be a very interesting September. It's going to be a very different situation. Congress returned from recess and the focus was going to be on the hearing. If you watched the Supreme Court hearing today, now it's also on the hurricane and non-defense appropriations. I think we'll start FY06, I think there's almost, I won't say a 100 percent, but there's a 99 percent chance we'll start out FY06 with a continuing resolution.

The mark-ups at the macro level. Those issues that I've talked about. They plussed up the C-130J, the Predator, that's $100 million. The F/A-22 stayed the same. Global Hawk, they took a little money. O&M they took about a billion bucks in the HAC and they do that routinely.

There is another thing in play that has nothing to do with the supplementals that just got played. It's a bridge supplemental. What you're looking at is burn rate in O&M and MilPers and we can't absorb it all, the Army especially can't. So for the Army, the HACD marked at $45 billion. It's going to come across the river the same time the regular PB comes across, and we get $4.7. What this equates to is about six months of our burn rates.

So in summary, our budget's seen a tough year. Operation Katrina's making it even more challenging. And FY06 still is taking shape.

At the speed of light, in order to fit in this amount of time, that's how the budget plays out at the strategic 50,000-foot level.

Do you have any questions? On any subject?

Q: I want to talk about the increasing dependence on supplemental funding. Because there's a lot of downward pressure on finances, we are losing money for our security forces, and we depend on supplemental funding. If that money goes away, we're in deep trouble. Lieutenant General Roger A. Brady, the Deputy Chief of Staff, Personnel, said this morning that Global War on Terrorism money is like crack cocaine. It is for us, too. I wonder if the GWOT funding is going to continue in the future, and if you think that way of doing business is a good way of doing business.

Major General Lorenz: Did everybody hear what he had to say? He asked a question about GWOT funding, and what were the words you used? “It's like crack cocaine.”

I don't think it's like crack cocaine, but what you're saying is that it's creating a lot of bad habits that are teaching a whole generation of young officers and wing commanders that this is the way we're doing business at this time, and that when the GWOT funding goes away it will cause great consternation in our Air Force and our budget processes are not the way they should be. Is that what you just said?

Q: Yes, sir.

Major General Lorenz: That's what I thought you just said. [Laughter]

Agreed. You do not fight wars in baselines. There were times when Operation Southern Watch and Operation Northern Watch, which was about $900 million a year, eventually worked its way into our baseline because it became steady state. What's the steady state for the Global War On Terrorism? Nobody knows.

Remember, deficits play in here because there are certain laws that go with Presidential Budgets, and what counts or doesn't count against the Deficit Reduction Act (it’s always going to count against the deficit itself). If it's a supplemental or an emergency supplemental, it doesn't count. This is about how you score things. There's a lot of budget talk in there.

But yours is a valid question. In '02 our supplemental was about $18 billion. This year it's about $7.5 billion. Of course it should have been higher then. We were at a higher OpsTempo fighting the war. But you're exactly right. What will they get reimbursed with and what if they don't?

The way I look at this, I look at it as personal finances. I make this amount of money, I should not spend above that line. Then they have these credit cards, right? And you spend on the credit card then you're paying back a high interest rate. That's what, as a nation, sometimes we're doing. And it's a tough thing to call.

So the issue is should the supplementals go away? You bet they should, and we're going to have to change the way we do business. Remember, it's a national treasury. These are hard-earned tax dollars, and we don't want to waste them. We want to spend them the most efficient and effective way we can. This is a drama that's playing out because there is a lot of downward pressure on our budgets, just like you said.

Now, that said, let me throw this at you ... The Air Force FY05 budget, when you put it together, is $105 billion. The GNP of Chile is $70 billion. Now we have a lot of requirements and we have a lot of things we have to do for the Global War On Terrorism. We just have to work harder—I'm preaching to the choir here—to be more efficient and effective. I totally agree. And I don't know how to handle this.

One of the things they say the Director of Budget always comes up against and has been for 200 years. The first briefing of the year, “oh, it's going to be a tough year. Oh, geez.” Then the next briefing, halfway through the year, “I came up with this plan and I think it might work.” The third briefing at the end of the year is, “I saved you. We made it. “ We always make it, it's just that it's very painful. As I said, it's a 365-act play, and it plays out one day at a time.

It's not crack cocaine, it's just we need to have a better process in which we do this more efficiently and effectively. Fair?

Q: When you talked about military housing, do those numbers affect privatization?

Major General Lorenz: That included privatization. I think there were 2,200 slots of houses that were going to be privatized, in the total of 7,200 houses that we're working on. A subset of that is privatization.

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