A former General Dynamics Corp. executive vice president and twice secretary of the Navy, Gordon England has been the Pentagon’s No. 2 ranking official for the past two years, replacing former Deputy Secretary of Defense Paul Wolfowitz.

He sat down with Roll Call Executive Editor Morton M. Kondracke on May 9 for a wide-ranging discussion of everything from military modernization to troop strength to the evolving role of the National Guard and Reserves.

What follows is an edited transcript of the interview.

ROLL CALL EXECUTIVE EDITOR MORTON M. KONDRACKE: So what have we learned from Iraq and Afghanistan about the future of defense and the way we wage war?

DEPUTY SECRETARY OF DEFENSE GORDON ENGLAND: Well, we’ve done a couple things, Mort. First of all, we’ve obviously increased our special forces for COIN-type operations. …

ROLL CALL: For what kind of operations?

ENGLAND: COIN. Counterinsurgency-type operations. … And by the way, I think [Multinational Force Commander — Iraq] Gen. [David] Petraeus says this as well, he says any COIN operation is 20 percent military and 80 percent everything else — political, economic, winning hearts and minds.

And I believe that is right and we agree with him here as a department. When we did the 2006 [Quadrennial Defense Review], which we did in 2005, we reallocated a lot of money. People didn’t realize we made a lot of changes, [but] we greatly increased partnership capacity building, languages, cultural understanding. So we are actually working very hard to build a military that has a much broader knowledge base in terms of cultures and understanding and the value of economic development and partners … building institutions of government.

So we had and we are now broadening the base of the military. I mean, back then we didn’t have anything in terms of Arabic speaking classes and now they are all jam-packed. We are trying to adjust to this. We have a strategic communications group now in the Pentagon because it is an integral part of warfare. It used to be an adjunct of warfare. It used to be that the press reported on things. But now it is an integral part of warfare and other people use it as an integral part of warfare, and like I say, they are better at it then we are.

ROLL CALL: Well, I am told, for example, that the jihadist Web sites produce DVDs that they pass around in markets that show blood and guts, you know, Muslims getting killed, and that they are stirring up resentment against the United States and the West. And I wonder whether we have learned anything about communications skills with those kind of populations as a result of this war?

ENGLAND: I think we have, but I tell you I think that is something that you would talk more authoritative[ly about] with our combatant commanders and our people in the field. That is not something I can help you a lot with except from a policy point of view. It is of great interest and we spend a lot of energy on this. And by the way there is a whole lot of legal and moral and ethical things that guide us that don’t guide them.

I mean, we only put out truthful things. … And, of course, they can do anything they want. I mean, they can make all this up if you want and put it out. … So, to some extent, we have on one hand a disadvantage because you can’t participate. Now on the other hand we have an advantage because we actually have the moral high ground, which is hugely important to us both as a fighting force and a nation. But it is this difficult situation nonetheless.

ROLL CALL: Do you accept the charge … that we had al-Qaida on the ropes in Afghanistan and al-Qaida has had a resurgence because of Iraq, that Iraq has become a training ground for a new al-Qaida?

ENGLAND: I just had Ambassador Ron Newman for lunch today because Ron has now left Afghanistan and he retires at the end of this month from the State Department. I believe he was [there] 16 months. … So I asked Ron to come in to get his feedback. I knew him when he was in Bahrain, and then he went to Iraq and I knew him in Iraq, and then he went to Afghanistan. So I’ve known Ron Newman for probably five, six, years and so I just wanted to get his views.

I think his view is, you know, we are making great progress in Afghanistan. Large parts of the country are doing very well. Helmand [Province] is still a problem, you know, but NATO forces are there and they are there in pretty significant numbers and the Afghan army is coming up. He is very hopeful that the Afghan army is developing. They are very good. They seem to be loyal and committed. So he was very hopeful in this whole area of Afghanistan. Now, that said, things are still obviously uncertain in Afghanistan. I mean, they are certainly not done in Afghanistan.

The Taliban isn’t going to go away. So, again, it is going to take us a long time with commitment, determination and resolve. I mean, they think in long time periods. I mean, unfortunately, [our] national focus is on the next election. They are not thinking about the next election, right? They are thinking back. I mean, if you’re a real jihadist and you are an extremist, you are thinking about 1,500 years ago to Karbala. Most people of the Islamic faith, Muslims, are terrific. But if you take the extremist, their timeline is 1,000 years. They are not worried about what happens next year.

ROLL CALL: Let’s go to military stuff. The Democrats say, and [House Armed Services] Chairman [Ike] Skelton [D-Mo.] said the other day, that the military is broken as result of the Iraq War, from the standpoint of readiness and equipment and personnel and so on. What do you say about that?

ENGLAND: I would disagree with the chairman. Here is what has happened. We have literally rebuilt the Army. This is a different Army than existed five years ago. So part of this has been the rebuilding of an Army from what was a garrison Army to what are now highly mobile brigade combat teams, right?

I mean, an entirely different Army structure has been created while at war. And that new Army has different equipment and different standards than the old Army.

If you were to measure this Army against the old standard this would be an Army in excellent shape, frankly. When we started this, the Army estimates it was $56 billion in the hole from the ’90s when nobody was investing, right? So the Army was not in good shape as an old Army.

But if you think about what has happened, I mean we had like 300 armored (other than tanks) vehicles. We have something like 40,000 now. So the concept that we are worse off is absolutely not correct. We are vastly better equipped but we also have much higher standards.

So if all of a sudden we decide we want 50,000 armored vehicles rather than 40,000 and tomorrow we will be 10,000 short, we will be way below standard. So we keep raising the standard as we both modify the Army and equip it.

And by the way we’ve changed our National Guard. I mean, the National Guard used to be a strategic reserve. Now the National Guard is part of this. So we’ve been also equipping the National Guard at the same time. So we’ve been equipping for a new mission and we’ve been replacing equipment damaged and lost and doing all of this at the same time. There are also time lags on this, Mort. I mean, when equipment is damaged or lost there is a finite time to replace it.

ROLL CALL: We know that some weapons are coming in from Iran, but were these people engineers in Saddam’s army who are developing [improvised explosive devices] and seem to be so smart in staying ahead of us?

ENGLAND: Well, first off we know arms are coming in from Iran, so we know there is sophisticated equipment that comes in from Iran. And we know that there is al-Qaida, we know that there are criminal elements, and there are all sorts of people in Iraq.

ROLL CALL: Some of these people must be fairly sophisticated military inventors?

ENGLAND: I would expect most of this either came in from Iran, but some of the Iraqi people are smart people. I mean, never undersell your adversary. You know, Saddam had a first-class military and one of the best in the world. Not at our level, but … And the Iraqi people are very smart and inventive, just like we are, so I am not sure I would assume all this has to be imported. I mean, never undersell your adversary.

ROLL CALL: It seems a settled matter both with the administration and for Congress that we went into this war with too few troops and that we didn’t have enough active duty strength at the beginning. And [then]-Secretary [of Defense Donald] Rumsfeld wanted to cut back the size of the Army and now it seems agreed that we needed a larger Army. Is that a fair assessment?

ENGLAND: I think that is a fair assessment. It is pretty well agreed that we need a larger Army. At the end of the day you have to ask, what do you want the Army for and what is the technology going to do and what is the size going to be?

My own view is this is something that you have to continuously assess. Armies are expensive in wartime, generally cheap in peacetime. That is just the nature of it. So you do have to be careful that you size it properly, otherwise resources will be going where you don’t need them. And this is the conundrum you always have, which is trying to balance across strategic needs and tactical needs. But I don’t think there is a fixed answer to this, Mort.

Military personnel are very, very expensive now. Very expensive. So it is a factor. We certainly are not going to jeopardize national security because we think it is an expensive military. … It is still relatively small. We are still under 4 percent of [the gross domestic product]. Even with the war costs we are under 4 percent of GDP. … But the consensus is today that the Army should be larger and the Marine Corps should be larger so that we have more boots on the ground.

ROLL CALL: In future wars are we going to rely as much as we have on National Guard and Reserves to go into active duty and leave their jobs, leave their families, and have to do multiple tours? Or are you going to change National Guard policy?

ENGLAND: Well, we have changed the policy. We actually have standards now for the National Guard. One in five, right? And we are already trying to hold to that …

ROLL CALL: One in five means one year …

ENGLAND: One year and five off. Five home and one away. And we tell people they won’t serve any more than that.

ROLL CALL: Chairman Skelton says that he thinks that you are in real retention trouble, especially with senior captains, junior majors, staff sergeants, those kind of people who are just burned out and are leaving and are hard to replace. Is that true?

ENGLAND: I don’t know the specific numbers. I wouldn’t be surprised if it is certainly more in the Army than other services because they are people who have the greatest demands on them. The Army recruits, say, 80,000 people a year. So a lot of people turn over in the Army on a regular basis. So even if a unit is sent back, all the same people are not going back because people retire, people move on, new people come in so you get some rotation of people just because you are recruiting 80,000 people every year.

But the career mid-range, I mean, they are not leaving in terms of, you know, they are not there for four and five and six years, right? They are career people. So a lot of demands are placed on them and particularly now, when the Army is using a lot of those experienced non-commissioned officers to train both Iraqi and Afghan forces.

So they literally have several brigade combat teams of trainers largely taken from this experienced middle ranks of both non-commissioned officers and officers. But I don’t believe there is any crisis in this, at least not at this point, and I believe we’ve been through sort of the worst of this long stretch at this point.

ROLL CALL: At least by reports we may have 35,000 more troops in Iraq going into 2008?

ENGLAND: Those are replacing current troops. So people will come out and hopefully some of those people who are having the greatest demands on them will come out. But Mort, I’ll tell you, God bless these great people who serve, they’ve been very resilient. Their families have been very resilient. And they are committed to the country and they are committed to the force and they have done extraordinarily noble service. Many of them serve many times.

ROLL CALL: OK. Let me go on to a couple of other issues. The Congress apparently wants to cut back on ballistic missile defense and apply some of that money to nonproliferation of nuclear weapons and chemical weapons in the former Soviet Union. Why do you think the BMD is more of a priority than the decommissioning of weapons?

ENGLAND: Just think of the world around us. What more can I say. Everybody knows there is a great threat …

ROLL CALL: But this is a system, I mean, these would be interceptors based in Poland. Do we really think there is an imminent or any kind of short-term threat from Soviet missiles?

ENGLAND: No, no. This has nothing to do with …

ROLL CALL: Well, there are Iranian missiles.

ENGLAND: Yes. This has nothing to do with … it doesn’t intercept Soviet missiles. It has absolutely no relationship to Soviet missiles. This is really a protective against rogue countries or rogue organizations. I mean, if you look at the most significant threat to America, it is going to be missile threats to this country. So my view is, and by the way look what happened to the Israelis, I mean, those missiles, right, from Hezbollah.

So this missile threat is the greatest threat to the nation, and I am sort of astonished that people don’t want to support missile defense in outer space when that is probably the largest single military threat to the country.

ROLL CALL: So a BMD installation in Poland would be directed against whose missiles?

ENGLAND: I got to make sure I am not getting classified.

ROLL CALL: It wouldn’t be North Korea or Iran?

ENGLAND: No. Obviously not.

ROLL CALL: You are a former secretary of the Navy. Do we need more submarines?

ENGLAND: Well, the plan is to build more submarines, but they don’t start building two a year, I think, for a couple of years yet. So the Navy shipbuilding plant is actually much more robust now. I think they are close to $14 billion a year. And I am not against more ships, but at the end of the day, Mort, it is about striking a balance across all the capability and that is what we do.

I mean, look, we actually need tankers and we need a new bomber and our fighters are getting too many hours, and ballistic missile defense, and we need to counter-proliferate. And so we have a myriad of requirements across the department and we try to balance across all that.

So I haven’t seen where the ships are being funded from, but the money must be coming from some other account and therefore something else will be wanting. So this is a judgment. I mean, obviously all of these are judgments in terms of how to strike this balance. But we spend a whole year doing this with an enormous amount of work and energy in this department, by an enormous number of people trying to strike the right balance. Obviously, sometimes the Congress has a different view. That is their constitutional right and at the end of the day we go with their decisions.

ROLL CALL: They are going to take something like $860 million out of the future combat system. Is that tolerable? Will the future combat system survive with that kind of cut?

ENGLAND: Well, it will survive. Again, it will slow down the system. It will slow down the modernization of the Army so, you know, again the Army has been both restructuring itself, re-equipping itself, and modernizing all at the same time.

ROLL CALL: This is all very high-tech stuff.

ENGLAND: This is all very high-tech stuff. I mean, it will survive, but ultimately it will cost more. Here is the problem you run into, Mort. When you cut those dollars out then we are investing in buying things at a lower rate there, and typically, then the program moves to the right, so the cost goes up.

The cost goes up, so then we buy less of it because the cost goes up. On the other hand, I would like to buy more ships because then we get more efficiency in the shipyard. … Look, there is no easy answer to this. It is a judgment.

ROLL CALL: Just a couple of other questions that I want to cover. Should the Joint Strike Fighter engine be built by more than one company?

ENGLAND: No.

ROLL CALL: Why?

ENGLAND: Don’t need to. It is expensive and there is no need for it. So we don’t need a second Joint Strike Fighter engine and I have testified numerous times on this. We don’t need a second engine. It was added by the Congress at the very beginning. It has been added by the Congress every year. We have repeatedly said we don’t need a second engine. …

Here is a case where a second engine costs us several hundred million dollars a year. I think about $400 [million] to $450 million a year. There is no cost advantage to it. The fact is it will cost us money in the long term. So it is more expensive at a time when engines are very reliable. So this is money that could be better spent elsewhere.

ROLL CALL: Is the purpose of a second engine to give two different companies work? Or what is the purpose?

ENGLAND: I hate to say this but you would have to ask the Congress, “Who keeps adding the money.”

ROLL CALL: Is it possible to do procurement reform during wartime?

ENGLAND: I would say yes. Definitely yes.

ROLL CALL: And have we done it?

ENGLAND: Well, I would say, personally, in the early ’90s I personally ran about three defense science boards on procurement reform. And when I came in there had been 128 sort of major studies on procurement reform. So the question is what are we striving for? If we are striving to get the lowest cost in a short period of time then you have to be willing to take some risks if you are going to do it shorter, right? If you do it longer it costs more.

I believe we’ve made enormous progress quietly in terms of how we do procurement. [Joint Chiefs of Staff Vice Chairman Adm. Edmund] Giambastiani, myself, and [Undersecretary of Defense for Acquisition, Technology and Logistics] Ken Krieg, and [Director of Program Analysis and Evaluation] Brad Berkson have all worked to modify the way we do business in the Department of Defense in terms of our procurement. That said, I am not sure we will ever “not be in a mode of doing reform.” If things take a long time they take too long. If you try to do them quickly, well, how come we haven’t done the right amount of study and analysis.

So, look, there is probably never going to be a right way to go do procurement. So people will keep working [on this] long after me. That is OK. … But I am not sure you will ever get out of this constant critique. It has been going on as far as I know forever. And I do not believe you can satisfy all the criteria that people want you to satisfy. I don’t believe that is possible. There are too many competing interests and views. … So what you do is strike the best balance you can.

ROLL CALL: OK. Just two more. We are going to close Walter Reed [Army Medical Center]. Is that true? Is that a done deal?

ENGLAND: As far as the Department of Defense is concerned we close Walter Reed. We make Bethesda a world-class teaching research hospital and that is really important.

ROLL CALL: Is there a dispute about this?

ENGLAND: Well, some people in Congress talk about keeping Walter Reed open, but I hope we do not, because we are much better having a world-class hospital than two hospitals, neither one of which would be world class. Bethesda is today a teaching hospital. [The National Institutes of Health] is right across the street. All great hospitals are teaching and research hospitals. That is what we need to have as one integrated, comprehensive hospital here in national capital region. So I hope there is no dispute, but people do dispute it.

ROLL CALL: Final area. Looking back, Secretary Rumsfeld had in mind the transformation of the military, which was going to emphasize long-distance strikes, a reduced size of the ground forces. What transformation is still part of the Defense program and what is not?

ENGLAND: Well, look, I’ve been working every day, every single thing in this department we look at. And we get together every week now, I mean, part of the transformation is the way we do business fundamentally. I get together all the senior leadership in this department several times a week, right next door, which we call the dog, D-A-W-G. That is the Deputies Advisory Working Group. Because everybody knows deputies are deputy dogs.

So we took a variation of the deputy dogs and spelled it D-A-W-G. By the way, everybody takes great pride in it. It is nice if you can call it the dogs, right? We developed a senior leader … .We never used to do this before. I mean everybody today, every program, every process, the way we run this department we do all this through the DAWG and working groups. We look at every process, the way we do business in the department, the way we do procurement in the department, the way we build our budget, we review every program. We have milestones. We run these programs. So we continuously work to transform the department. …

Our objective is, my personal objective: I do not want to hand the next administration a bowl of spaghetti that is a whole bunch of just stuff at work. So we are taking every mission we have, we want to either bring it to completion by the end of next year so it is in place, or have it at a major milestone so we can hand a package to somebody in terms of ‘here is where we are’ and hopefully you can implement [it], even if it is only 30 percent of what you wanted implementable, so we leave it better than we found it.

But I will tell you again, between Giambastiani and all those civilian leaders … and Ed and are like this, I mean, military and the civilians have never been closer in this building, I don’t believe. [We] get together all the time, we talk, we debate, we discuss, we arm wrestle, but we end up most of the time with a consensus answer.

And if we all can’t get a consensus answer, I come up with a decision and we move on and everybody knows and respects it.