The nation is facing a complex security environment driven by four nation state challenges and the threat of violent extremism, and that has major implications for the Army and the joint force, the chairman of the Joint Chiefs of Staff said Wednesday. Marine Corps Gen. Joseph F. Dunford Jr. spoke during the sustaining member luncheon at the Association of the U.S. Army’s 2016 Annual Meeting and Exposition.

“We need a balanced portfolio of capabilities” able to deal with a range of adversaries across the full range of military conflict, Dunford said

The joint force also must try to balance the needs of today’s high operational tempo while building the forces it will need in the future, Dunford said. Those tasks are hindered by the tough fiscal environment. While the two-year budget agreement passed in 2015 “might get us through 2017,” he said, the threat of sequestration remains, and the military is facing a major “bow wave of modernization” programs.

But to meet the emerging challenges, “We’re going to have to do more than buy hardware” and will have to develop new ideas and concepts as well as a new generation of leaders.

Dunford restated the now-familiar “four-plus-one” security challenge, presented by the four state powers: Russia, China, North Korea and Iran; and the continuing threat of violent extremists.

He said Russia and China are modernizing their militaries, developing long-range strategic strike capabilities, and taking actions that are aimed at undermining alliances the nation has built since World War II and nullifying the U.S. military’s ability to project power.

Iran seeks to become the dominant power in its region, and North Korea’s nuclear and ballistic missile development threatens America’s allies.

Russia and China also are engaging in a range of actions that conflict with the U.S. military’s traditional ranking of the scale of conflict, from peace to full war.

Although some military analysts call that hybrid warfare, Dunford said he terms it adversarial competition that has a military dimension.

“We think of being at peace or war … our adversaries don’t think that way,” he said.

That will require major changes in how the joint force plans to fight future wars, which he said will be transregional and transdomain—covering land, sea, air, space and cyberspace.

Meanwhile, Dunford said, “We’re all going to have to live on a fixed income.”

In this environment, he said, Army Chief of Staff Gen. Mark A. Milley “is absolutely right to make readiness the No. 1 priority. Our forces have to be ready to fight anytime” for what will be “come-as-you-are fights.”

The military is also burdened by the impact of a tremendous operational pace since the 9-11 terrorist attacks that is putting stress on service members and their families and wearing out equipment that is overdue for replacement, Dunford  said.

All of this will require “some hard choices” for military leaders as they seek to adapt the force to the future, which will be “job one for me as chairman.”

Despite the challenges, Dunford said, “Your Army, and the joint force, remains the most capable, professional force in the world” and maintains “a competitive advantage over any enemy.”

That fact “shouldn’t be lost on any potential adversary” or on the American people, nor on the men and women of the joint force, the chairman said.

Dunford saluted Milley, saying, “I’m proud to have you on the team. You’re the right man at the right time.”