[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
REAUTHORIZATION OF THE
DEFENSE PRODUCTION ACT OF 1950
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
DOMESTIC MONETARY POLICY, TECHNOLOGY,
AND ECONOMIC GROWTH
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
JUNE 13, 2001
__________
Printed for the use of the Committee on Financial Services
Serial No. 107-24
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73-241 WASHINGTON : 2001
_______________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MICHAEL G. OXLEY, Ohio, Chairman
JAMES A. LEACH, Iowa JOHN J. LaFALCE, New York
MARGE ROUKEMA, New Jersey, Vice BARNEY FRANK, Massachusetts
Chair PAUL E. KANJORSKI, Pennsylvania
DOUG BEREUTER, Nebraska MAXINE WATERS, California
RICHARD H. BAKER, Louisiana CAROLYN B. MALONEY, New York
SPENCER BACHUS, Alabama LUIS V. GUTIERREZ, Illinois
MICHAEL N. CASTLE, Delaware NYDIA M. VELAZQUEZ, New York
PETER T. KING, New York MELVIN L. WATT, North Carolina
EDWARD R. ROYCE, California GARY L. ACKERMAN, New York
FRANK D. LUCAS, Oklahoma KEN BENTSEN, Texas
ROBERT W. NEY, Ohio JAMES H. MALONEY, Connecticut
BOB BARR, Georgia DARLENE HOOLEY, Oregon
SUE W. KELLY, New York JULIA CARSON, Indiana
RON PAUL, Texas BRAD SHERMAN, California
PAUL E. GILLMOR, Ohio MAX SANDLIN, Texas
CHRISTOPHER COX, California GREGORY W. MEEKS, New York
DAVE WELDON, Florida BARBARA LEE, California
JIM RYUN, Kansas FRANK MASCARA, Pennsylvania
BOB RILEY, Alabama JAY INSLEE, Washington
STEVEN C. LaTOURETTE, Ohio JANICE D. SCHAKOWSKY, Illinois
DONALD A. MANZULLO, Illinois DENNIS MOORE, Kansas
WALTER B. JONES, North Carolina CHARLES A. GONZALEZ, Texas
DOUG OSE, California STEPHANIE TUBBS JONES, Ohio
JUDY BIGGERT, Illinois MICHAEL E. CAPUANO, Massachusetts
MARK GREEN, Wisconsin HAROLD E. FORD Jr., Tennessee
PATRICK J. TOOMEY, Pennsylvania RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut KEN LUCAS, Kentucky
JOHN B. SHADEGG, Arizona RONNIE SHOWS, Mississippi
VITO FOSSELLA, New York JOSEPH CROWLEY, New York
GARY G. MILLER, California WILLIAM LACY CLAY, Missouri
ERIC CANTOR, Virginia STEVE ISRAEL, New York
FELIX J. GRUCCI, Jr., New York MIKE ROSS, Arizona
MELISSA A. HART, Pennsylvania
SHELLEY MOORE CAPITO, West Virginia BERNARD SANDERS, Vermont
MIKE FERGUSON, New Jersey
MIKE ROGERS, Michigan
PATRICK J. TIBERI, Ohio
Terry Haines, Chief Counsel and Staff Director
Subcommittee on Domestic Monetary Policy, Technology,
and Economic Growth
PETER T. KING, New York, Chairman
JAMES A. LEACH, Iowa, Vice Chairman CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California BARNEY FRANK, Massachusetts
FRANK D. LUCAS, Oklahoma GREGORY W. MEEKS, New York
RON PAUL, Texas BERNARD SANDERS, Vermont
STEPHEN C. LaTOURETTE, Ohio JAMES H. MALONEY, Connecticut
DOUG OSE, California DARLENE HOOLEY, Oregon
MARK GREEN, Wisconsin MAX SANDLIN, Texas
CHRISTOPHER SHAYS, Connecticut CHARLES A. GONZALEZ, Texas
JOHN B. SHADEGG, Arizona MICHAEL E. CAPUANO, Massachusetts
VITO FOSSELLA, New York RUBEN HINOJOSA, Texas
FELIX J. GRUCCI, Jr., New York WILLIAM LACY CLAY, Missouri
MELISSA A. HART, Pennsylvania MIKE ROSS, Arizona
SHELLEY MOORE CAPITO, West Virginia
C O N T E N T S
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Page
Hearing held on:
June 13, 2001................................................ 1
Appendix
June 13, 2001................................................ 11
WITNESSES
Wednesday, June 13, 2001
Brown, Michael D., General Counsel, Federal Emergency Management
Agency......................................................... 5
Fygi, Eric J., Deputy General Counsel, Department of Energy...... 4
Juster, Kenneth I., Under Secretary for Export Administration,
Department of Commerce......................................... 3
Oliver, David R. Jr., Principal Deputy Under Secretary for
Acquisition,
Technology and Logistics, Department of Defense................ 2
APPENDIX
Prepared statements:
Brown, Michael D............................................. 38
Fygi, Eric J................................................. 26
Juster, Kenneth I............................................ 21
Oliver, David R. Jr.......................................... 12
REAUTHORIZATION OF THE DEFENSE PRODUCTION ACT OF 1950
----------
WEDNESDAY, JUNE 13, 2001,
U.S. House of Representatives,
Subcommittee on Domestic Monetary Policy,
Technology, and Economic Growth,
Committee on Financial Services,
Washington, DC.
The subcommittee met, pursuant to call, at 3:00 p.m., in
room 2220, Rayburn House Office Building, Hon. Peter T. King,
[chairman of the subcommittee], presiding.
Present: Chairman King; Representatives Grucci, Capito, C.
Maloney of New York, J. Maloney of Connecticut, and Capuano.
Chairman King. The hearing will come to order.
I've been advised that Mrs. Maloney will be arriving in a
few minutes. She has no objection to starting this meeting.
The subcommittee is meeting to consider reauthorization of
the Defense Production Act of 1950. I will make a brief
statement and then I will ask each of the witnesses to testify.
Hopefully there will be no major incidents at the subcommittee
hearing and we can move forward.
The Defense Production Act is a little-known bill of great
national significance. It has provided vital support to the
United States military in every conflict since it was enacted
in 1950 during the Korean War. It also holds the promise of
helping to mitigate civil emergencies during peacetime.
DPA gives the President a vital set of tools to insure the
constant readiness of those portions of our industrial base
that support national security. The tools include production
priorities and financial incentives, but also extend to
monitoring the increasing effects of globalization on the
defense base. It falls under the jurisdiction of this
subcommittee, and I should say that to date the subcommittee is
unaware of any significant adverse impact on the economy caused
by DPA. All Administrations since President Truman have used it
carefully and prudently.
It's important to note that in the reauthorizing of DPA and
monitoring, this subcommittee makes no judgments about
particular defense programs. Those decisions are left to the
President, who has delegated the job to the appropriate
departments: chiefly the Defense Department, of course, but
where appropriate the Departments of Commerce, Energy,
Transportation, Agriculture and so forth, under the
administration of the National Security Council and FEMA.
At this stage I believe the DPA should be reauthorized
virtually unchanged from its current form. Through a mishap of
timing, the legislation did lapse briefly in 1990 during the
buildup to Desert Storm. That was quickly corrected, however,
as the Defense Department used the production priorities
extensively to acquire items as diverse as computers and
communications equipment, satellite-based mapping systems and
materials to help protect our troops against chemical weapons.
Fortunately, we do not appear to be in that situation now,
but geopolitical situations can change quickly. Also, civil
emergencies are particularly hard to predict. For those
reasons, I expect a speedy and non-controversial
reauthorization process for this year, and that can be almost
guaranteed if we finish this hearing before anybody else
arrives.
[Laughter.]
Chairman King. It is my hope the subcommittee will see a
legislative proposal from the Administration soon. Given the
short number of legislative days left in the fiscal year, I
would start moving the bill before midsummer.
I thank all the witnesses for appearing. I will now
recognize Mrs. Maloney, who is not here, as soon as she comes
to make a statement or insert a statement in the record.
I will now ask the witnesses to testify. We have copies of
all your statements, so I would strongly suggest that you keep
your statements under 5 minutes. There is a vote on the House
floor probably in about 45 minutes. It will be in everyone's
interest, primarily the interest of making sure that ultimately
this legislation is reauthorized, to keep your statements under
5 minutes. Your statements will be inserted in the record and
considered as read.
With that, I would call the first witness, the Honorable
David R. Oliver, Jr., the Principal Deputy Undersecretary of
Defense for Acquisition, Technology and Logistics. Mr. Oliver.
STATEMENT OF HON. DAVID R. OLIVER, JR., PRINCIPAL DEPUTY UNDER
SECRETARY FOR ACQUISITION, TECHNOLOGY AND LOGISTICS, DEPARTMENT
OF DEFENSE
Mr. Oliver. Mr. Chairman, I appreciate the opportunity.
We'd like to see it reauthorized for 3 years, if possible.
The key issue has to do with, under no other legislation are we
able to maintain an assured supply for our allies when they buy
our equipment and we want them to operate with us. And there
are other problems that exist.
But what I would like to share with you is the Kosovo
incident. When we needed to reprioritize some suppliers for
various precision weapons, and it was really important to do
so, the Act enabled me to get the contractors' attention.
Without that authority, we might have been able to work it out,
but it was much more effective to have their attention right
from the beginning.
There are other issues that I've looked at in the last 3
years that are directly affected by the Act, but this is a
significant facilitator, and we ask that it be reauthorized.
Chairman King. How about Bosnia?
Mr. Oliver. The same thing, sir. In both cases, within a
few days after we started hostilities, we were finding areas
that we needed the Act's legislation in order to take immediate
action. We even went with flat panel displays--I'm not sure the
Chairman is aware of that problem over the last few years.
But essentially, small key businesses and key technologies
I don't think about 2 years in advance. And then something
comes up in terms of a problem, and it is a very small area,
but it's terribly important to the military, and the Act
permits us to take action.
Thank you, sir.
[The prepared statement of Hon. David R. Oliver can be
found on page 12 in the appendix.]
Chairman King. The Under Secretary for Export
Administration in the Department of Commerce and a fellow New
Yorker, Ken Juster.
STATEMENT OF HON. KENNETH I. JUSTER, UNDER SECRETARY FOR EXPORT
ADMINISTRATION, DEPARTMENT OF COMMERCE
Mr. Juster. Mr. Chairman, I appreciate the opportunity to
be here today to testify on reauthorization of the Defense
Production Act. As with Mr. Oliver, we too would like to see
the DPA reauthorized for at least a 3-year period.
Let me briefly discuss the aspects of the DPA that are
relevant to the Department of Commerce. We really have four
areas that are relevant to us.
First, under Title I of the DPA, we administer the defense
priorities and allocation system. Second, under Title III, the
Department reports on defense trade offsets. Third, under Title
VII, the Department analyzes the health of U.S. industrial base
sectors. Also under Title VII, the Department plays a
significant role in analyzing the impact of foreign investments
on the national security of the United States. I cover these
areas in my written statement.
Briefly touching on each of these points for a minute or
two, the Defense Priorities and Allocation System, which is
known as DPAS, has two primary purposes. First, it ensures the
timely availability of products, materials and services that
are needed to meet current national defense and emergency
preparedness requirements with minimal interference to the
conduct of normal business activity. Second, it provides an
operating structure to support a timely and comprehensive
response by U.S. industry in a national emergency situation.
The Commerce Department administers the system in
accordance with the priorities and allocations provisions of
the DPA. Those provisions provide authority for requiring U.S.
companies to accept and perform contracts or orders necessary
to meet national defense and civil emergency needs. They also
provide authority for managing the distribution of scarce and
critical materials in time of emergency.
The second area is the defense trade offsets. The
Department provides Congress with an annual report on the
impact of offsets in defense trade. The defense trade offsets
are industrial compensation practices required as a condition
of purchase in either government-to-government or commercial
sales of defense articles or services.
We believe that offsets generally are not efficient
economically, because the foreign customer bases the purchase
decision on something other than the quality of the product or
service being provided.
The third area applies to the Department of Commerce's
defense industrial base studies under Section 705 of the DPA.
The Department of Commerce conducts analyses and prepares
reports on individual sectors of the defense industry. These
studies provide a comprehensive review of specific sectors
within the U.S. defense industrial base, and they analyze the
current capabilities of these sectors to provide defense items
for the U.S. military services.
The final area that's relevant to the Commerce Department
is the Committee on Foreign Investment in the United States,
known as CFIUS, which was originally established by executive
order in 1975. The Department of Commerce is a member of the
CFIUS process chaired by the Department of the Treasury.
The provision that provides for CFIUS relates to a national
security review of foreign mergers or acquisitions of U.S.
companies. The intent of the provision is to provide a
mechanism to review and, if the President finds it necessary,
to suspend or prohibit a foreign direct investment that
threatens the national security, but not to otherwise
discourage foreign direct investment. The Department of
Commerce's contribution to the CFIUS process includes providing
a defense industrial base perspective as well as export control
perspective.
In sum, we believe all of these are very important
authorities to the Department in terms of the programs we carry
out. And as I mentioned at the outset, we fully support
reauthorization of the Defense Production Act for at least a
period of 3 years.
Thank you.
[The prepared statement of Hon. Kennith I. Juster can be
found on page 21 in the appendix.]
Chairman King. Thank you, Mr. Secretary.
We've been joined by Ranking Member, Mrs. Maloney. Do you
want to make an opening statement at this time?
Mrs. Maloney. In the interest of time--and I want to hear
from the panelists--I request permission to put my opening
statement in the record.
Chairman King. Without objection.
Chairman King. I call on the Honorable Eric Fygi, Deputy
General Counsel for the Department of Energy.
STATEMENT OF HON. ERIC J. FYGI, DEPUTY GENERAL COUNSEL,
DEPARTMENT OF ENERGY
Mr. Fygi. Thank you, Mr. Chairman, and Congresswoman
Maloney.
As you suggested, I will summarize very briefly the
prepared statement which responded to particular elements of
the subcommittee's invitation to address the Energy-related
experiences of the Defense Production Act. Most prominent of
these recent events, of course, was our use--that is to say,
the President's use--of the Defense Production Act in January
of this year to avoid a very serious breakdown in the northern
California natural gas distribution system that was prompted by
the insolvency of the combined gas and electricity utility that
services that part of the state. Those particulars are
described thoroughly in the prepared statement, and I will not
now repeat them here.
But, I think it's fair to note that there were two
particularly controversial aspects of our use of the Defense
Production Act authority in that setting. The common thread of
them was that the authority is being used to compensate for
financial breakdown rather than a shortage, and because the
authority was used in a novel way that placed at risk the
economic circumstances of the natural gas providers who were
ordered to continue making their deliveries to Pacific Gas &
Electric.
In the event, however, I am pleased to report that the
apprehensions about the gas producers--and even more
significantly on a volumetric basis, the natural gas resellers,
which included some major financial institutions-- proved ill-
founded. The overall approach that was hammered out to deal
with that emergency resulted in each natural gas supplier being
paid in full within the normal business cycle that hitherto had
obtained for all of PG&E's natural gas purchases.
In terms of other prior instances in which the Energy
Department has employed this scheme set forth in Sections
101(a) and (c) of the Defense Production Act, this has been
sporadic with respect to our organization, in contrast to for
example the Defense Department. These authorities were used
from time to time during the nuclear weapons buildup and
production acceleration period in the early 1980's, and
likewise were used in the early 1980's to accelerate
development of Alaska North Slope energy reserves, particularly
natural gas reserves.
In conclusion, as the chair observed a moment ago, we
regard the Defense Production Act as an extremely important
element of the toolbox that's available for utilization by the
President, in addition to being the foundation for the
priorities and allocation systems that were described a moment
ago. And therefore we wholeheartedly join in the recommendation
that the statute be extended for a period of 3 years.
Thank you very much.
[The prepared statement of Hon. Eric J. Fygi can be found
on page 26 in the appendix.]
Chairman King. Thank you very much, Mr. Fygi.
Mr. Michael Brown, General Counsel to FEMA.
STATEMENT OF MICHAEL D. BROWN, GENERAL COUNSEL, FEDERAL
EMERGENCY MANAGEMENT AGENCY
Mr. Brown. Thank you, Mr. Chairman, Congresswoman Maloney.
I'm honored to be here today and appreciate the opportunity
to testify today on behalf of Director Allbaugh, the new
director of the Federal Emergency Management Agency, and to
tell you I'm a little intimidated and overwhelmed by the
expertise in this room regarding DPA.
I've learned all that I can in the past 120 days in coming
on with Director Allbaugh, and find out that I have much, much
more to learn. They've tasked me well and they've advised me
well.
Rather than go through my prepared statement, I'd like to
just make a few comments that I think reflect the views of the
Administration and Director Allbaugh.
We also request a 3-year extension of the Act,
reauthorization of the Act. We believe it is important to carry
out the duties and obligations of FEMA as the lead coordinating
agency for consequence management in the United States. We are
prepared to carry out our responsibilities under Executive
Order 12919, which indeed involve such things as coordinations.
We are a coordinating agency. We think we do that job very
well. The expiration of the Act would hinder us in our full
capacity to do that type of activity.
The DPA itself gives us the additional tools we need in the
event of a catastrophic event that goes beyond the Stafford Act
and goes beyond the capability of FEMA to react properly.
Therefore, we believe that its expiration will have dire
consequences for us.
In addition, you may recall that the President has tasked
the Office of National Preparedness, and we believe the
reauthorization of the DPA is important to the continued
function of that particular office. We may be looking to
authorities under the DPA to respond to the consequences of
weapons of mass destruction or other terrorist attacks on the
United States, and believe that these authorities are vital to
our coordinating function in that consequence management role.
On behalf of the Administration, we would ask for
reauthorization for 3 years. Thank you, Mr. Chairman.
[The prepared statement of Michael L. Brown can be found on
page 38 in the appendix.]
Chairman King. We're joined by Mr. Maloney from
Connecticut. Do you have any opening statement?
Mr. Maloney. No, sir.
Chairman King. I have a series of questions, but in the
interest of speed, I will submit these questions to you in
writing.
I have one question I would ask each of the four of you.
Just turn this around and ask you, what would be the situation
if this Act were not reauthorized?
Mr. Oliver.
Mr. Oliver. We have certain authorities that we don't have
in any other way, Mr. Chairman. We do not have something that
applies to service contracts. We don't have something that
applies to maintaining continuity or surety of supply. Or,
let's say I've sold England U.S. helicopters, which gives us a
significant interoperability. It gives us significant military
capability in addition to maintaining the defense industrial
base. I have to be able to then make sure they have the parts,
particularly if I'm going to ask them to do something.
Take, for example, the Australians in East Timor, where
it's in the United States' best interest for them to go do
something essentially all by themselves, although they used
equipment they had bought from the United States, which was
essential. If they have a problem with supply, it's in our best
interest to be able to divert support for that, and I don't
have that capability without this Act.
In addition, there's a legal problem if they're not
provided complete liability coverage to the contractors if I
ask them to divert from one source to another.
The other thing that's terribly important to me is that,
when we have issues come up, for example--flat panel displays
or radiation-hardened chips for these satellites coming in--
when a problem comes up, I don't have authority without this
Act to take the necessary quick action to get industry's
attention and keep them alive until such time as I can consult.
Mr. Juster. Let me just reiterate what Mr. Oliver has said.
The loss of the Defense Production Act would significantly
weaken our ability to support national defense programs and
civil emergency preparedness, and our overall industrial base
capability. I think as you had mentioned earlier, without the
DPA, we'd still have some authority under the Selective Service
Act of 1948, but it is very limited. And in addition to what
Mr. Oliver mentioned, we would have no allocation authority for
possible use in a national security emergency without the
Defense Production Act.
Also, there would be no civil emergency preparedness
programs that we could draw upon, or defense-related programs
for agencies such as the FBI or the National Security Agency.
In addition, from the perspective of the Department of
Commerce, we would not have the authority that we need to
collect the necessary data for our analyses of industrial base
sectors or defense offsets. So again, we regard the DPA as a
very critical authority that's essential to our programs.
Chairman King. Mr. Fygi.
Mr. Fygi. Well, I don't expect us to confront in the near
future an event, a set of circumstances as peculiar as the
earlier emergency in California. But there are other instances
that our experience indicates are very plausible, in which
these authorities would be of crucial importance.
Let us suppose, for example, that world circumstances were
such that we had to draw down the Strategic Petroleum Reserve,
and coincident with that realization, directions from the
President to take that action. Then there's a significant
equipment breakdown in the facility on that installation.
That would be the type of circumstance, if it were urgent
to replace scarce and backlogged specialized pumps and other
apparatus, where we rely upon the Defense Production Act to
bring the facility back on line in an operational sense as
promptly as we could. And absent the Defense Production Act, it
would be exceedingly difficult, as has been pointed out by the
prior witnesses, to persuade vendors to let our order come to
the head of the line for fear of the third-party contract
liability that they might otherwise expose themselves to, even
if they were willing to cooperate with us in the interests of
the country.
So that's one example that occurs to me.
Chairman King. Mr. Brown.
Mr. Brown. Mr. Chairman, Members of the subcommittee, from
FEMA's point of view, if we were to experience a truly
catastrophic event, something beyond the magnitude of the
Northridge Earthquake or Hurricane Hugo--a Northridge expanded
all the way from San Diego to Seattle and truly devastated the
West Coast--a terrorist attack, a truly frightening situation
like the WMD situation, it would limit our ability to really
coordinate and provide the kinds of coordinating responses that
we could in terms of consequence management. It is a piece of
legislation that allows us to do what we need to do to respond
appropriately.
I can't imagine an event--I don't want to imagine an
event--of that size. But if an event of that size were to
occur, the DPA is necessary for us to make that type of
coordinating effort beyond the Stafford Act to do what we need
to do to respond appropriately.
Chairman King. Thank you, Mr. Brown.
I have no further questions today. As I say, I will be
submitting questions to you, and I'd appreciate your response
to them.
Mrs. Maloney.
Mrs. Maloney. Thank you, Mr. Chairman. Here's my opening
statement.
I would just like to state that I am supporting this bill,
and I support the 3-year reauthorization. But there are some
Members of Congress who don't support it, most notably Senator
Gramm. He objected publicly.
I understand he's held public hearings on it, and he
expressed concern apart from the crisis about, and I quote,
``expansive reach of the statute.'' And he announced that he is
going to continue to look at it.
I would like to know your responses to his concern. He's a
serious leader in our legislature.
Mr. Fygi. Perhaps I can begin, because I spent several
hours with Senator Gramm having an interesting conversation on
this point on the 9th of February.
His concerns were directed to the use of the Defense
Production Act to deal with the California emergency that I
have described extensively in our prepared statement. His
concerns seemed directed primarily to the prospect that some of
the gas vendors assumed a risk of uncompensated losses of
property by reason of the orders.
As I indicated earlier in a summary of my statement, those
risks proved unfounded in that all vendors were, in fact, paid
by Pacific Gas & Electric.
I think it fair to say that his descriptions during that
hearing indicated a philosophical view that was broader than
just those sorts of adverse consequences, in which he felt it
an inappropriate power for the Government to retain--to direct
individual participants in the private marketplace to contract
with others in the private marketplace.
Mrs. Maloney. I guess another part of it is, it's very
clear that he thought it was an inappropriate time to use the
DPA. But why did the situation in California warrant the use of
the DPA by the Clinton and Bush Administrations?
Mr. Fygi. Those circumstances were described, as I said,
extensively in our prepared statement.
Briefly summarized, they included the unique coincidence of
a major investor-owned utility on the brink of insolvency,
which investor-owned utility was a combined gas and electric
utility; and that even though, unlike its electricity sales, it
was guaranteed reimbursement for its natural gas acquisition
costs. Noneless, its otherwise parlous financial situation
resulted in its natural gas vendors threatening and beginning
to curtail service to PG&E, which culminated on the 19th of
January.
The prospect of curtailments of all deliveries to PG&E
presented the real likelihood that the electricity crisis in
California would further be exacerbated, because under
California law, if PG&E experienced a significant shortfall in
its natural gas supplies, it--PG&E--would have to seize natural
gas supplies not owned by PG&E, but owned by others, but being
delivered to industrial facilities through PG&E's system. That
in turn would have provoked a cutoff of those continued
industrial supplies, which in turn would have provoked the
cessation of substantial amounts of electricity generation in
the entire northern California area.
Never before had we in this country confronted such a
circumstance, which also had dire immediate prospects for
public health and safety throughout the entirety of northern
California.
Mrs. Maloney. I'd like to ask Mr. Brown, and then Mr.
Oliver--unfortunately, the State that I live in and the city
that I live in, New York City, has been a target repeatedly of
major terrorist attacks in recent years. Could you provide an
example of how the DPA could be used in the event of such an
attack, or a major natural disaster?
Mr. Brown. The primary example I can think of is, if it was
devastating to Manhattan--just destroys all of Manhattan--and
we need to make sure, in terms of consequence management, we're
going to get food, water, electricity, everything we need to
get in to a population of that size and magnitude, where we
cannot draw upon ordinary suppliers, ordinary contractual
agreements, ordinary arrangements of the staff, DPA would allow
us to do that.
That's the kind of event that we think, in terms of a
catastrophic event, the DPA may come into play. To take it down
to a slightly lower level, I've heard examples of where
Hurricane Hugo has been utilized to that purpose. We just could
not get enough tarps to prevent further damage, which would
further exacerbate the problem. DPA could be utilized in that
type of situation.
We would want to be prudent and very conservative in our
approach and use. That's why I keep throughout this hearing
using the term, a truly catastrophic event, which is the type
of situation we would utilize it.
Mr. Oliver. I have nothing to add to Mr. Brown.
Mrs. Maloney. Just finally, very briefly, Mr. Brown: In
1997, FEMA produced a report recommending modernization of DPA.
One of the report's recommendations was to change the Act to
reflect economic globalization and not to leave the term
``domestic'' as the sole focus of defense industrial
capabilities.
Would you like to comment on that? Do you think we should
expand the definition?
Mr. Brown. I would like to comment to this extent. I will
go back and ask the staff to give me this report, and I will
look at it and see what it says.
Mrs. Maloney. Get back to us in writing.
I have other questions, but I'll place them in writing.
Thank you, Mr. Chairman.
Chairman King. Thank you, Mrs. Maloney.
Mr. Grucci.
Mr. Grucci. I have no questions at this time, Mr. Chairman.
Chairman King. Mrs. Capito.
Mrs. Capito. I have no questions at this time.
Chairman King. The distinguished gentleman from
Massachusetts, Mr. Capuano.
Mr. Capuano. I never have any questions, Mr. Chairman.
[Laughter.]
Chairman King. Again, I want to thank the panel for your
testimony today. I believe there is consensus for
reauthorization. As Mrs. Maloney mentioned, there have been
questions raised by some Members and some Senators, but mostly
there is strong bipartisan consensus for reauthorization.
With that, I would thank you for your testimony today.
Members may have additional questions for the panel, which they
may wish to submit in writing. Without objection, the hearing
record will remain open for 30 days for those Members to submit
written questions to the witnesses and place their responses in
the record.
The hearing is adjourned.
[Whereupon, at 3:30 p.m., the hearing adjourned.]
A P P E N D I X
June 13, 2001
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