[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



                    DEPARTMENT OF TRANSPORTATION AND

                    RELATED AGENCIES APPROPRIATIONS

                                FOR 2003

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS
                             SECOND SESSION
                                ________
 SUBCOMMITTEE ON THE DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES 
                             APPROPRIATIONS
                    HAROLD ROGERS, Kentucky, Chairman
 FRANK R. WOLF, Virginia             MARTIN OLAV SABO, Minnesota
 TOM DeLAY, Texas                    JOHN W. OLVER, Massachusetts
 SONNY CALLAHAN, Alabama             ED PASTOR, Arizona
 TODD TIAHRT, Kansas                 CAROLYN C. KILPATRICK, Michigan
 ROBERT B. ADERHOLT, Alabama         JOSE E. SERRANO, New York
 KAY GRANGER, Texas                  JAMES E. CLYBURN, South Carolina
 JO ANN EMERSON, Missouri
 JOHN E. SWEENEY, New York          
                         
 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
  Richard E. Efford, Stephanie K. Gupta, Cheryle R. Tucker, and Leigha 
                      M. Shaw, Subcommittee Staff
                                ________
                                 PART 3

 DEPARTMENT OF TRANSPORTATION:
                                                                   Page

   Office of Inspector General....................................    1
   Office of the Secretary........................................  173
   Coast Guard....................................................  513
   Saint Lawrence Seaway Development Corporation..................  773

 RELATED AGENCIES:

   Architectural and Transportation Barriers Compliance Board.....  821
                                ________
         Printed for the use of the Committee on Appropriations
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 82-305                     WASHINGTON : 2002





                      COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                  DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California             JOHN P. MURTHA, Pennsylvania
 HAROLD ROGERS, Kentucky             NORMAN D. DICKS, Washington
 JOE SKEEN, New Mexico               MARTIN OLAV SABO, Minnesota
 FRANK R. WOLF, Virginia             STENY H. HOYER, Maryland
 TOM DeLAY, Texas                    ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                  MARCY KAPTUR, Ohio
 SONNY CALLAHAN, Alabama             NANCY PELOSI, California
 JAMES T. WALSH, New York            PETER J. VISCLOSKY, Indiana
 CHARLES H. TAYLOR, North Carolina   NITA M. LOWEY, New York
 DAVID L. HOBSON, Ohio               JOSE E. SERRANO, New York
 ERNEST J. ISTOOK, Jr., Oklahoma     ROSA L. DeLAURO, Connecticut
 HENRY BONILLA, Texas                JAMES P. MORAN, Virginia
 JOE KNOLLENBERG, Michigan           JOHN W. OLVER, Massachusetts
 DAN MILLER, Florida                 ED PASTOR, Arizona
 JACK KINGSTON, Georgia              CARRIE P. MEEK, Florida
 RODNEY P. FRELINGHUYSEN, New Jersey DAVID E. PRICE, North Carolina
 ROGER F. WICKER, Mississippi        CHET EDWARDS, Texas
 GEORGE R. NETHERCUTT, Jr.,          ROBERT E. ``BUD'' CRAMER, Jr., 
Washington                           Alabama
 RANDY ``DUKE'' CUNNINGHAM,          PATRICK J. KENNEDY, Rhode Island
California                           JAMES E. CLYBURN, South Carolina
 TODD TIAHRT, Kansas                 MAURICE D. HINCHEY, New York
 ZACH WAMP, Tennessee                LUCILLE ROYBAL-ALLARD, California
 TOM LATHAM, Iowa                    SAM FARR, California
 ANNE M. NORTHUP, Kentucky           JESSE L. JACKSON, Jr., Illinois
 ROBERT B. ADERHOLT, Alabama         CAROLYN C. KILPATRICK, Michigan
 JO ANN EMERSON, Missouri            ALLEN BOYD, Florida
 JOHN E. SUNUNU, New Hampshire       CHAKA FATTAH, Pennsylvania
 KAY GRANGER, Texas                  STEVEN R. ROTHMAN, New Jersey    
 JOHN E. PETERSON, Pennsylvania
 JOHN T. DOOLITTLE, California
 RAY LaHOOD, Illinois
 JOHN E. SWEENEY, New York
 DAVID VITTER, Louisiana
 DON SHERWOOD, Pennsylvania
   
 VIRGIL H. GOODE, Jr., Virginia     
   
                 James W. Dyer, Clerk and Staff Director

                                  (ii)





 
 DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 
                                  2003

                              ----------                              

                                      Wednesday, February 13, 2002.

     OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION

                                WITNESS

KENNETH M. MEAD, INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION

                            Opening Remarks

    Mr. Rogers. The Committee will be in order.
    This afternoon we will hear from DOT Inspector General Ken 
Mead about management and budget issues facing the Department 
this year. We may be interrupted by voting bells all afternoon, 
so I hope you will bear with us as we struggle through things 
on the floor.
    It has become an annual ritual of this subcommittee, one 
that is always useful to us in helping to focus on what needs 
to be fixed at the Department, to have the IG up early in the 
hearing process. It is an extremely valuable element of our 
oversight duties.
    It is an unusual time at DOT of rapid growth. DOT next year 
will experience the largest staffing increase of all cabinet 
level agencies. Staffing will be up 31 percent, increases, of 
course, from the new Transportation Security Administration and 
the Coast Guard. On the other hand, there are down sides to 
this budget as well, and serious pressures. Amtrak is teetering 
on the edge of bankruptcy, desperately mortgaging its assets 
and converting its capital appropriations just to pay the 
monthly bills.
    The Administration's budget request is less than half of 
what Amtrak says is needed just to stay alive past Christmas, 
and that does not address the serious debate needed now about 
how to restructure Amtrak in a lasting way to establish viable, 
long-term rail service, if in fact that is the route we decide 
to go.
    Then there is the serious question of what to do about the 
highway funding shortfall due to the RABA provisions of TEA-21. 
A huge shortfall. $9 billion was wiped out of the highway 
program in a single year; more than a quarter of the annual 
appropriations eliminated just when the economy, it would seem, 
needs it most. That is what TEA-21 has brought us.
    Frankly, I do not know how it will be fixed, but we will 
try on this subcommittee to investigate ways to address that 
shortfall, and hope that the next authorization bill will think 
twice about tying highway spending directly to tax revenues 
without some leeway. That is exactly why annual oversight and 
annual appropriations are needed. There are some big swings in 
this budget. Some programs are up dramatically, others are down 
dramatically.
    We want to welcome the IG back before this subcommittee. 
Mr. Mead served at the GAO for 22 years, most of it in 
transportation before becoming the DOT IG in May of 1997. He 
has served as the head watchdog for the department for almost 
five years now, in both Democratic and Republican 
Administrations. He is a true professional, and we value has 
hard work, his independent judgement and his dedication.
    Ken, your complete written statement will be inserted in 
the record without objection, and we would welcome, if you 
wish, an oral summary of your testimony at this time.

                   Inspector General Opening Remarks

    Mr. Mead. Thank you, Mr. Chairman. It is good to be back. 
Much has happened since we last met at the end of August.
    At this time last year, the spotlight and intense 
congressional scrutiny was clearly and unequivocally on an 
aviation system in gridlock and----
    Mr. Rogers. We solved that problem.
    Mr. Mead [continuing]. Intolerable delays and 
cancellations. Yes. 9-11 took care of that.
    Seriously, I think the committee held very effective 
oversight hearings. They were among the most effective in my 
career. Of course, the events of 9-11 changed that focus.
    What I would like to do today is provide an oral summation 
of topical areas covered by our testimony and then move 
directly to questions that you might have.
    First and foremost is strengthening transportation 
security. I think you all know that the preeminent focus right 
now is on aviation security, albeit the other modes--port 
security and shipping, rail, transit, motor carriers and those 
shipping containers that are used by all of them--need 
attention as well.
    For aviation, I think we need some yardsticks or metrics 
for measuring progress, and I would like to address these 
later. This succeeds what the subcommittee used last year in 
following progress with delays and cancellations.
    I would like to offer some slides just for your 
consideration on TSA that are broken out into three categories. 
One category is the actual deadline dates established by the 
law. Another category would include the hiring of screeners and 
the explosive detection machine deployments. The third category 
would be bottom line issues, that we could not talk about in an 
open hearing. We would probably need a closed one for it. Such 
a hearing would discuss results from our security audits, as 
well as some material on air marshals, but we would not want to 
do that in an open session.
    I think you are aware of what a formidable challenge it is 
going to be. Good security is going to cost money. The $2 
billion to $2.4 billion in estimated funding for this year is 
much less than will be required. The combination of passenger 
security fees and airline contributions will not be sufficient 
to cover the costs.
    Our testimony also covers computer security at DOT, which 
did not receive very high marks by OMB; in fact, some very poor 
marks. Computer security at DOT contained some material 
weaknesses. That is an area that is going to need attention as 
well; possibly not by the Transportation Security Agency, but 
by the Chief Information Officer.
    Next, the statement covers other pressing aviation matters, 
such as continuing the steps the committee took last year 
because there is going to be a rebound of air traffic, and we 
are going to be facing some of the same capacity issues again.
    I would just like to mention some of the metrics of where 
we are this year. For 2001, even excluding the 9-11 period, 
delays and cancellations, chronically delayed flights and time 
spent on the runway were down substantially. That is totally 
excluding the 9-11 period. I think the reasons for that were 
good weather, a softening economy, no labor stoppages and more 
sensible scheduling practices, and FAA initiatives.
    For the pre 9-11 period, scheduled flights were up a 
fraction. After 9-11 and through the end of the year, they 
declined 14 to 20 percent with a number of major airports 
experiencing decline of 25 percent or more.
    I think it is going to be important in the months ahead to 
keep a close eye on service to small and medium sized 
communities. Overall passenger load factors in December, 2001, 
were just about what it was in January, 2001, except there were 
fewer flights, so there are fewer seats to fill.
    The big issue right now is airline finances. Business 
travel is down, or at least the number of people paying 
business fares is way down. That is a big hit for those 
airlines that rely on having about 20 percent of their 
passengers be business travelers, to makeup 40 to 50 percent of 
their revenues.
    FAA has made some progress in free-flight. There are a 
number of other acquisitions that I know have experienced 
schedule slippages and budget increases. FAA still does not 
have a chief operating officer. The agency has made some 
progress with its cost accounting system, but its cost 
accounting system still has some material weaknesses on the 
labor distribution front.
    On the safety front, runway incursions are down largely due 
to 9-11, but also due in part to some strong actions that FAA 
took. Operational errors--that is where the planes come too 
close together in the air--were up despite 9-11. I do not know 
quite how to explain that except that there was more 
disciplined and rigorous reporting.
    There is still a concern, Mr. Chairman, about the 
``controller-in-charge'' issue. That is where some facilities 
have designated 100 percent of the staff as ``controllers-in-
charge''. I do not know why they need that many. The committee 
has expressed concern about this in the past. There are a lot 
of facilities out there where 100 percent of the controllers 
are ``controllers-in-charge''. I also do not know what FAA's 
intentions are relative to following the committee's admonition 
not to reduce the number of supervisors.
    Moving to Amtrak. Bottom Line 1 is that passenger revenue 
and ridership are up, but it has been outpaced by cash 
expenses. For every additional dollar they take in, $1.05 goes 
out, which is a problem when you are trying to dramatically 
reduce expenses.
    Interest payments on debt alone have doubled since 1995 and 
are projected to nearly triple from current levels by 2005. In 
2005, almost half their current subsidy will go for interest 
payments alone. The largest operating loss in Amtrak's history 
was in 2001. Amtrak will not make operating self-sufficiency 
and has run out of options.
    Bottom Line 2. The operating losses are a small part of the 
problem. The real problem is access to capital for the track, 
the track bed, overhead areas, bridges, tunnels and rolling 
stock. This is at least a $1 billion a year problem. The 
backlog of capital on the northeast corridor alone is estimated 
to be about $5 billion.
    Bottom Line 3. Beware of proposals that seek to solve the 
Amtrak problem without addressing where the capital money will 
come from. Beware of just shuffling chairs around on the deck.
    Motor carrier and vehicle safety. Three big issues there. 
The southern border. The Administration wants to open it. I 
think you know we have audit responsibilities there before the 
border can open. We have to report to the Secretary. He has to 
make a certification to you that opening the border will not 
pose an undue security risk or safety risk and how he is 
planning to address any recommendations we make.
    Commercial drivers license program. We are very disturbed 
about the number of people getting fraudulent licenses in this 
program. We have found fifteen states with scams where people 
are making payoffs to get their licenses. We are not talking 
about small numbers of commercial truck drivers. The problem in 
some cases, is direct payoffs to state officials. In other 
cases it is payoffs to the third party testers.
    Finally, this year, mid year, big milestones for NHTSA 
meeting the TREAD Act. The big milestone comes in June when a 
final rule is to be issued that requires the auto manufacturers 
to report on all sorts of information that they have about 
defects or alleged defects in automobiles they produce.
    Coast Guard. The emphasis is placed on security--you 
probably all know that--and simultaneously embarking on the 
most expensive acquisition in its history. It is uncertain 
whether or not Coast Guard will be seeking a funding stream for 
its big acquisitions over the next 20 or the next 30 years, but 
we are talking more than $10 billion.
    The Coast Guard is also overhauling the national distress 
system. That is similar to calling the 911 system where 
mariners in distress call the Coast Guard. Right now, there are 
about 21,000 nautical miles around the coast of the United 
States where if you dial 911, no one will hear you. The Coast 
Guard is trying to fix that. Their search and rescue program, 
as previously noted by this committee, also needs considerable 
strengthening.
    Finally, a major unexpected funding problem that you noted, 
Mr. Chairman, in the highway program: increasing numbers of 
highway mega projects over $1 billion and the compelling need 
for a stronger federal and state accountability of taxpayer 
funds.
    We see some signs of improvement in the Department in the 
accountability area. Just some quick statistics. Indictments 
increasing 225 percent from 12 in 1999 to 39 in 2001. 
Convictions increasing 117 percent from 12 in 1999 to 26 in 
2001. Monetary recoveries increasing 173 percent from $15 
million in 1999 to $43 million in 2001, and that is just from 
our office.
    Currently, there are 14 active highway mega projects 
generally defined as projects over $1 billion. There is 60 
planned in the near future, so it is time to gear up and 
provide the oversight.
    Finally, I know you have to face some tough decisions on 
what to do with the revenue aligned budget authority problem 
(RABA). That is a congressional call. I do want you to know, 
though, that the states and DOT need to scrub existing 
obligations for money pledged to projects, but no longer 
needed. Every year we have to render an opinion on the 
Department's financial statements, and in that process we look 
at what we refer to as inactive obligations. That is money that 
has been not touched in an account for over 18 months.
    Last year we looked at $670 million in obligations and 
found $238 million that could be freed up to other TEA-21 
projects or returned to the Treasury. The states agreed. Our 
work was just a sample, Mr. Chairman. We did not review the 
whole universe.
    I do not have a solution for the RABA program. It is not my 
place to offer a solution--but the dollar impact is large. I am 
just pointing out the inactive obligations because it might 
take the edge off the problem.
    Thank you, Mr. Chairman.
    [The prepared statement of Kenneth Mead follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Rogers. Thank you very much.
    We have a vote on the Floor, so we will take a short recess 
and will return immediately.
    [Recess.]

                        TRANSPORTATION SECURITY

    Mr. Rogers. The hearing will be in order.
    When Undersecretary Magaw was up here last week, I told him 
I did not think it was humanly possible for TSA to meet their 
December 31 deadline for installing explosive detection 
systems. What do you think?
    Mr. Mead. It will be a tough challenge. I do not think it 
is reasonable to expect that sufficient EDS machines that cost 
$1 million each can be put in airport lobbies by the end of the 
year.
    I think an achievable combination would be EDS machines and 
what is called trace detection. Trace detection is considerably 
cheaper, but it is fairly effective if used properly.
    I think what the American public wants and I think what the 
American expects is an aggressive, very good faith effort to do 
everything we can. We have to be careful, Mr. Chairman, that we 
do not go out spending money, lots of money, on technologies 
that we may not need a year from now.
    Mr. Rogers. Do you think there is technology on the horizon 
that would obviate the need to buy these very expensive, very 
big, present day EDS machines?
    Mr. Mead. I do not know. You have probably had as many 
visitors to your office as I have claiming to have the best 
answer to security. It sounds very good when you get the 
presentations, but they all would have to be fully tested. That 
is one of the things that I think the Department needs to 
prudently go forward and do.
    Mr. Rogers. Has anyone ever tried to analyze a dog's nose 
and see if they could duplicate that somehow?
    Mr. Mead. I think one issue that I have tried to explain in 
testimonies on the explosive detection machines is that the 
approach that FAA was taking with these machines was to put 
them in the lobby. Well, that works okay when you are only 
talking about checking or screening less than five percent of 
the checked baggage, but Congress has stepped forward and said 
we want you to do 100 percent.
    Wholly apart from the date, just imagine what we are 
dealing with here. We have a billion bags of checked luggage a 
year. The machines we have now are capable of screening maybe 
125 bags an hour if they are properly staffed, which probably 
means at least two staff.
    You take Dulles Airport. The entire lobby would have these 
machines, and there would be two or three staff at each 
machine. If you picture trying to maneuver around, it just is 
not going to work that way. You need to integrate this into the 
baggage systems, and that is going to require construction. I 
do not think all that construction can be done by the end of 
the year.
    Mr. Rogers. Well, what would it cost if we did?
    Mr. Mead. If you were able to do everything, buy all these 
machines and do all the construction this year, we are probably 
talking in the neighborhood of $5 billion or $5.5 billion.
    Mr. Rogers. Do you support the use of systems other than 
EDS, such as backscatter x-rays or trace systems or other types 
of----
    Mr. Mead. We know more about trace than we do about 
backscatter. I am very interested in the backscatter 
technology. This is the technology that looks like an x-ray. 
You may have seen it in various presentations. It almost 
disrobes you. I think you have seen a presentation on that, Mr. 
Chairman.
    The trace technology is a swabbing. You are familiar with 
it, its application, when you walk through the screening 
checkpoint. They may ask you to see is it okay to check your 
briefcase. They will take out a little swab, and theywill rub 
it around on a briefcase. Then they put it in the machine, and the 
machine says the bag is okay to go.
    Well, the discussion now is should we use this in 
combination with these explosive detection machines to check 
out the checked baggage, not just to screen the bags that you 
check at the x-ray machines. I think that is something they 
should consider doing.
    You should know, though, there are going to be issues on 
whether you have to swab on the inside of the bag, as well as 
the outside of the bag. In other words, do we have to open your 
bag in order for it to be effective? In other words, what is 
the delta of efficiency or what effectiveness do you lose if 
you just swab the outside of the bag?
    It is also staff intensive. Take your clothes bag. You 
check your clothes bag. It is going through. They do not have 
any explosive detections machines, so they have somebody that 
is going to swab it. They have to open it up. Then they have to 
go all around the circumference of the zipper, which is on 
three sides of the bag. Then do you further require that they 
unzip it and swab throughout the interior of the bag?
    You can see how this could have exponential consequences in 
terms of time and the staff required. That is being examined 
now by the TSA as to how efficacious that would be, but I think 
that trace is promising. Frankly, I think the only way you are 
going to accomplish a December 31 deadline is some combination 
of EDS, and trace.
    Mr. Rogers. Well, what are the ways to make it work other 
than swab? Do you know whether it would be feasible, practical, 
effective, for example, if you ran that bag through a machine 
that used a spray of some sort, that would then be read in 
order to speed the process? Would that work?
    Mr. Mead. I do not know. If I might ask some of my staff 
periodically to join me when their expertise is needed.
    Mr. Rogers. You actually have staff?
    Mr. Mead. I have lots of staff. [Laughter.]
    Actually, Mr. Chairman, I am just the tip of the iceberg up 
here. I think we have a very good staff, and they are 
responsible for putting out all this work during the year.
    If I might introduce Alexis Stefani? She is the Assistant 
Inspector General for our entire audit division, and she has 
been with security for a long time. I bet she can give a more 
thorough response to that question.
    Mr. Rogers. Welcome.
    Ms. Stefani. Thank you. I have seen various things, and I 
will call them sniffers, that they are developing. They are 
looking at different technologies, some in hand helds and 
others, that would take the concept like a plume and bring it 
off the machine, but they are nowhere near the point of being 
able to be mass produced. They are more experimental type.
    Mr. Rogers. Well, this is of urgent importance, obviously, 
because before we embark on buying $6 billion worth of these 
enormous machines that are going to fill up the entire lobbies 
of airports, not to mention requiring the reconstruction of 
every airport in the country to accommodate this requirement, 
we need to know if there are alternatives that are cheaper, 
quicker, less intrusive.
    Of course, an open hearing probably is not the place to 
talk about that, but do you agree that this is of urgent 
importance?
    Mr. Mead. Oh, absolutely. The wild cards here in terms of 
funding and better security are the number of people. You 
probably heard when we came up and we testified we said the 
number is going to look at at least 40,000. Thirty thousand had 
been bandied around at the time the legislation was being 
passed.
    I can tell you I cannot represent with confidence today 
that 40,000 people is it. That is one wild card. The machines, 
the reconfiguration, the construction that is going to have to 
be done in airports throughout the country, is another wild 
card.
    USA Today in today's edition is saying there are going to 
be thousands of law enforcement officers that this agency is 
going to require as well. Well, they are not screeners, and 
they are not exposed to the detection machines, so in the 
coming months it is going to be important for the committee to 
get a concrete statement of needs and requirements and be able 
to scrutinize those.
    Yes, it is of urgent importance, and so are all these other 
variables.
    Mr. Rogers. I will pass the baton to others here for now, 
but I appreciate your willingness that you testified to earlier 
to work with the subcommittee to develop some concrete 
measurements, mileposts if you will, by which we can all try to 
judge and measure the progress of TSA and the department and 
maybe construct a process similar to last year's airline delay 
panel. We will have periodic hearings, and put a chart on the 
wall, to try to measure how these things are going.
    Mr. Mead. For your staff, in front of you I think in your 
packages is a package that looks like this, Potential Security 
Metrics.
    Mr. Rogers. Yes.
    Mr. Mead. Do you see that?
    Mr. Rogers. Yes.
    Mr. Mead. These are hypotheticals, and we would invitethe 
committee's feedback on these perhaps not today, but it gives you an 
idea of what some of the metrics might look like.
    The first one is planned number of screeners. Now, the 
lines that we have put in here are hypothetical lines, but you 
are going to need to know what is the goal and what is the 
hiring plan so that we could track this month by month by 
month. You could see by the month of November, which is the 
statutory due date, just where we were in proceeding towards 
that goal.
    The next one is number of screeners hired and trained. Just 
hiring them is not enough. Before we can make them operational, 
we are going to have to train them. We would suggest a metric 
on that.
    You are going to need somebody to run the security program 
at each airport. I know you have read about that, but we have 
to hire these people and get them trained in operations, so 
there is a metric on that.
    We could track the EDS deployment. Of course, we need to 
know what the Transportation Security Agency objective is 
because we do not want to substitute our judgement for that. We 
need to have the game plan for where they want to be and when.
    Another one, and this one interests me particularly, is 
kind of a bottom line chart. It is the number of airports which 
are ready to do the checked baggage and have the people in 
place. The chart with the blue lines would be percentage of 
bags screened May through November so you could actually watch 
the progress.
    Then we could have a closed hearing where we could share 
with you, with TSA, metrics of the undercover operations, you 
know, and how much tighter is security getting. As I indicated 
in my oral statement, I imagine there would be some interest in 
air marshals, too, and a closed session would be a more 
appropriate forum for discussing that. We could come up with 
charts and show it to you. In fact, I believe I shared one with 
you in the office.
    Mr. Rogers. We will talk about that further.
    Mr. Sabo.
    Mr. Sabo. Thank you, Mr. Chairman. Ken, welcome again.
    Mr. Mead. Thank you, sir.

                        FY03 FUNDING CHALLENGES

    Mr. Sabo. I have been on this subcommittee 24 years, and I 
have never had a session where I feel sort of so overwhelmed by 
potential funding problems for the subcommittee.
    In other years we have had budget proposals, and in the 
margins they are changed. Those margins are important. This 
year we are looking at this massive uncertainty, whether it 
relates to the security program, Amtrak and the problem that 
has to be solved of highway funding. I do think in the end any 
way we can let that drop by $8.5 billion. The end will not 
happen. The dollars we are looking at are more than marginal 
changes in terms of what we have from the Administration.
    At what point do we need to get a supplemental to deal 
with, even if it is in some modified form of what the goals are 
for this year? How far can they get on the money that is 
available at this point?
    Mr. Mead. Not much further. I cannot speak for the 
Administration. From the numbers I see, I think you are going 
to need to have an idea of what the supplemental request will 
be in 30 to 45 days. You know, under the law you cannot spend 
money unless it has been appropriated.
    I think they have between $2.2 billion and $2.3 billion, 
and $1.2 billion of that is supposed to come in from a fee that 
will be charged passengers that will not exceed $5, and another 
$700 million can come in from the airlines. That is 
theoretically the contribution that they made when they were 
running airline security. Well, that is not going to be enough. 
That means you are going to have an incursion into the general 
fund.
    Just to reinforce your point, this is the most dramatic 
situation in my years coming before this committee too. The 
incursion into the general fund when you add up the 
Transportation Security Agency, that is a multi-billion dollar 
incursion. We know that Amtrak wants $1 billion a year, maybe 
more.
    In addition, this year, because of the growth in FAA's 
operations costs and the downward plummeting of aviation trust 
fund revenues, you are going to be asked to hit up the general 
fund for $4 billion. Last year you hit it up for $1 billion. 
Then they have presented you with this highway trust fund or 
highway receipts problem. That, too, is going to require some 
outlays.
    Mr. Sabo. Where is the $4 billion? I have not looked at 
funding sources on the FAA budget, but are they using $4 
billion of general revenue in the regular budget for FAA?
    Mr. Mead. When they passed AIR-21, they said that you would 
spend the money that came in first on the AIP program----
    Mr. Sabo. Right.
    Mr. Mead [continuing]. And then the facilities and 
equipment, which is the air traffic control modernization.
    Mr. Sabo. Right. Yes.
    Mr. Mead. They set levels that you had to spend at. They 
said that anything left over you could spend on the operations 
account, which is the salaries. You could spend up to the 
amount of the trust fund revenues plus the interest, and 
anything else had to go to the general fund.
    In 2002, you are going to go to the general fund for about 
$1.1 billion, but because the revenues did not come in you are 
going to have to use the general fund to pay for more of the 
salaries and things at FAA than you had planned on.
    Mr. Sabo. It makes the Amtrak request for general revenue 
look fairly modest.
    Mr. Mead. Yes. It is interesting. This year nobody can say 
that only Amtrak is the one that gets the subsidy.
    Mr. Sabo. Let me ask another question. As we dealt with 
this issue, the whole debate got caught up in a debate of 
whether personnel should be federal employees or private 
contractors. I thought the most fundamental issue, and both 
bills said the federal government assumed the responsibility 
for airline security and transferred that from the airlines. I 
thought that was a big issue, and that was not talked about. I 
do not know any place else where we have said to an industry 
the federal government assumes all your security 
responsibilities.
    My assumption is that with that assumption of 
responsibilities goes also significant liability obligations. I 
am just curious if you have looked at the issue at all of what 
happens to our federal government's liability and how people 
deal with it, I would assume, from lost luggage, as we have 
become part of the handling of it, content of luggage, unruly 
passenger if the one who tried to get into the cockpit attacked 
a passenger or two. I just do not know what the potential there 
is, or if you went to a tragic event like September 11 I would 
assume that the basic liability there would rest in total with 
the federal government and not with the carrier.
    I am curious if anybody has looked at that issue. Maybe I 
am all wet and it is not an issue, but I have to believe that 
there are significant liability obligations that rest with the 
federal government today--not today, but by the time we assume 
full responsibility for security--that does not exist today.
    Mr. Mead. I would think so. We have not looked. We have not 
examined the specific question you raise, and I do not know 
whether anybody in the Department has.
    That is a good question. I mean, normally the FAA gets sued 
all the time for acts or omissions in connection with running 
the aircraft control system. The Federal Bureau of 
Investigation gets sued for acts or omissions.
    I do not know of any provision in the law that says the 
Federal Government is not responsible, but I will get back to 
you on the issue.
    Mr. Sabo. Thank you.
    Mr. Mead. I thought you were going somewhere else with 
that.
    Mr. Sabo. Where did you think I was going, and what is the 
answer?
    Mr. Mead. I thought you were setting my mental gears in 
motion and saying well, you know, where else does the Federal 
Government provide all the security?
    Mr. Sabo. Yes.
    Mr. Mead. I was thinking the next question he is going to 
ask is are they paying enough?
    Mr. Sabo. Well, I will ask that question.
    Mr. Mead. I think it is a good question. This is going to 
cost a lot more than $2.5 billion a year. The aviation trust 
fund and the tax structure to support it is not sufficient as 
it is presently set up to finance this.
    We are going to be looking to the general taxpayers to 
finance it; either that or a user fee. I mean, the airlines are 
going to benefit from this, just as the traveling public will.
    Mr. Sabo. Most of my constituents do not fly.
    Mr. Mead. In aviation, what we have historically done is 
most of the cost, ever since the aviation trust fund was set 
up, have been levied on the airlines or the passengers.
    In recent years, we are making more of an inroad, as I 
pointed out, to the general fund, which is most of your 
constituents that do not fly.
    Mr. Sabo. Yes.
    Mr. Mead. I should mention one other thing while we are on 
the financing. This is a very unusual situation because you do 
have an opportunity here to pay for this through a mix of 
appropriated and non-appropriated funding sources.
    You have your traditional sources, which are direct 
appropriations. You have the FAA airport improvement program. 
You have passenger facility charges, which are not the ones 
that are mentioned in the security bill, but the ones that were 
authorized under AIR-21, and you have assessments that you can 
make on the airlines and contributions that can be made by 
them, and then you also have the charge that was authorized to 
be levied on passengers by the Transportation Security 
legislation, so you have about four or five funding sources 
that you can juggle around to see if they can cover the bill.

                          HARDENED CONTAINERS

    Mr. Sabo. Let me ask one technology question. My 
understanding is that there is the ability to have containers 
that contain explosions that you can put in a plane, or you can 
either coat the entire cargo hold with equipment that controls 
any explosion. Have you evaluated any of that and looked at the 
potential of the cost?
    Mr. Mead. I have some preliminary information for you. As 
you know, we are doing some work for you after we come up for 
air on that very question.
    On the containers, you have containers now that run between 
$2,000 and $3,000 apiece. These are what the airlines like to 
use. There is a certified container that can take an internal 
explosion of considerable force that is certified and is 
available for 777 and 747 service, but not the other models. 
That runs a little over $20,000, so there is a big cost 
variable.
    I have seen videos which at least conveyed a pretty big 
explosion, and the hull of the aircraft did not explode.
    Ms. Stefani. I understand that recently another container 
type was also approved for the same concept of being able to 
contain the explosion within the cargo hold of the aircraft. 
Besides the price differential another disadvantage from the 
airline perspective has been the weight. They are much heavier 
than the existing containers.
    The people that we have talked to, there has not been that 
much demand. But that is one alternative to screening bags is 
to put them in the containers in the hold of the aircraft.
    Mr. Sabo. Thank you, Mr. Chairman.
    Mr. Rogers. I mean, for the kind of money we are talking 
about spending to screen checked baggage--$6 billion, $7 
billion, $8 billion--we could afford to not allow checked 
baggage and hire separate planes to fly your baggage.
    Mr. Mead. You could. Also to comment and come back to Mr. 
Sabo's question, at least on 777 and 747 service those 
containers at $20,000 apiece are a lot cheaper than some of the 
other things we are talking about.
    Mr. Rogers. Mr. Sweeney.

                        DEPARTMENTAL PRIORITIES

    Mr. Sweeney. Thank you, Mr. Chairman. Ken, good to see you. 
Welcome.
    As my colleague, Mr. Sabo, said, we have a lot of 
challenges, as does the department, that have changed 
drastically. I have a simple question. I am just wondering if 
you feel that the department has been able since September 11 
to handle its traditional roles? Is it functioning efficiently? 
Is it dealing well with every day management issues?
    There were questions, as you know, that this committee had 
and Congress has had on efficiencies both at the Department and 
the FAA and some of the bureaus. Are they conducting internal 
performance audits? How are they operating?
    Mr. Mead. Well, it has been pretty much a 24/7 operation 
since September 11 up through Christmas. It seemed to me an 
almost exclusive focus on security, both in dealing with 
threats, as well as figuring out what are we going to do and 
implementing the new law.
    You see, I think it would be a mis-statement to say that 
everything was running around as normal, and we were attending 
to all our other missions. That is not to say they are 
neglecting things, but we have a lot on our plate.
    We have the North American Free Trade Agreement (NAFTA). I 
thought that was going to be the heavy hitter item: deploying 
all the inspectors to the border and getting the space down 
there. I thought Amtrak was going to be a heavy hitter. We saw 
the signs last year. We may have even testified before you 
after Amtrak mortgaged Penn Station. I mean, that was a sign 
and kind of a no-brainer that things were going in the wrong 
direction there.
    Then we had Firestone, and that certainly took up an 
enormous amount of time. Then 9-11 came, and now on top of that 
we find out that there is a potential $9 billion hit on the 
highway trust fund that is going to cascade into the states. 
There is a confluence of all these things.
    I have not even gotten into the normal budget 
deliberations. In a normal year, if we came up and said, by the 
way, the Coast Guard would like you to commit to $10 billion on 
a 15, 20 or 30 year acquisition to replace its entire fleet and 
aircraft, that is a pretty big deal, but I think in some ways 
it pales in comparison to the other issues on our plate.

                           AVIATION SECURITY

    Mr. Sweeney. I am wondering in terms of back into the 
security realm and the effectiveness and what our expectations 
ought to be on the Department.
    On the 11th, there were no regulations that the terrorists 
violated under the FAA, so how confident should we be? How 
confident are you that something like this is not going to 
happen again? In the context of what the regular order is 
supposed to be and now these new responsibilities and new 
focuses, what is realistic here?
    Mr. Mead. Well, I can tell you I thought that was a total 
cop out to say well, no rules were violated. You know, it was 
okay to take a box cutter on the plane. I am not sure I find 
that particularly----
    Mr. Sweeney. Comforting.
    Mr. Mead. Comforting, yes. It is more of a statement of a 
laxity on our part, not a statement of gee, the system worked.
    We have been doing security audits around the country at 
the request of the President and the Secretary and reporting 
these to the Secretary, to GSA and the new agency in FAA. I can 
tell you that security is unquestionably much tighter. People 
should feel better about it, but the focus is on lapses. Lapses 
automatically become national news.
    Mr. Sweeney. Right.
    Mr. Mead. I am fond of telling Members of Congress that a 
year ago at this time our office announced a felonyplea 
conviction by a firm called Argenbright Security in Philadelphia. They 
were faking background applications and the training records of 
screeners. A felony conviction plea and fine of $1 million. It was a 
blip on the radar screen. Today, I would probably win a bet if I said 
that almost every Member of Congress knows the name of Argenbright 
Security.
    My only point is that I think there is a lot more attention 
being paid to lapses now. We have a long way to go. You should 
all feel better about the attention the Department has been 
paying to this. It is getting tighter.
    We have seen improvements even on the usage of the EDS 
machines we have already bought, the 160 or so. I think you 
have heard me testify before that we spent $1 million each. Why 
do we not use these things? We see the usage increasing. It 
went from about 25 or 26 percent of the time they were being 
used to it is now about 56 or 57 percent of the time.
    Mr. Sweeney. I concur very strongly with the Chairman that 
this committee is going to need to be very proactive in its 
oversight responsibilities and developing some sort of tangible 
measurements as we go along. I look forward to working with you 
on that as we face these challenges.
    Mr. Chairman, thank you.
    Mr. Rogers. Mr. Olver.

                    WHISTLEBLOWER PROTECTIONS OF TSA

    Mr. Olver. Thank you, Mr. Chairman. Ken, thank you for 
being here again.
    You had commented earlier that you think the number of 
screeners to deal with the airport security is just one bit. I 
concur totally with my ranking member, who has become 
overwhelmed today, and so have I, with what the testimony 
indicates about the number of things that are on the plate all 
at the same time and the lack of funding for them. You 
indicated that you thought they would need something like 
40,000 screeners.
    My recollection is that you were instrumental in insuring 
that FAA employees were protected for whistle blower incidents. 
The Undersecretary, Undersecretary Magaw, has indicated that he 
does not believe that the screeners being brought in should be 
afforded full whistleblower protection.
    Do you have a sense of what he is concerned about there? Do 
you have any sense of how to meet that and still give them 
whistle blower protection? Are those concerns of his legitimate 
or not?
    Mr. Mead. A good and important question. Yes, your 
recollection is correct. We were instrumental in recommending 
the change of the law so that FAA employees under personnel 
reform got whistle blower protection.
    I think there is a middle ground here. I think it is 
important in any organization that people be able to come 
forward without fear of retribution to report on negative 
operations. I do not think it is right that somebody who has a 
performance problem can come forward at or about the same time 
and say I am blowing the whistle. You have to keep me on the 
job.
    I do not believe that it would be in the best interest of 
TSA or the Department to have TSA investigating itself when 
somebody blows the whistle. I think you need a third party. I 
do not think that third party needs to have the authorities to 
force TSA to keep that employee on the job.
    Under the law, there is still whistle blower protection 
provided. They can come to the Inspector General. I think we 
could work out some type of memorandum of understanding with 
the Office of Special Counsel, which handles whistle blower 
complaints. I would not want to be in the position of telling 
the TSA that from the moment somebody complains they have to 
keep them on the job, especially with all the problems we have 
found with screeners.
    The Office of Special Counsel finds somewhere between five 
and ten percent of the complaints they get to be meritorious. 
This is long and drawn out, Mr. Olver, but I do think you need 
a third party to investigate complaints. Otherwise it is going 
to be a nightmare for Congress and TSA.
    Mr. Olver. You have just exponentially increased the 
problems that go inherent I think in what I was asking about, 
but okay. That is okay. That is fair enough. I think that that 
is useful insight as to how that might work. You have some real 
experience with that.
    I wanted to ask something about Amtrak, but I do not know 
whether it is time to move on to anything else here. Maybe I 
should just pass and let me come back what that in the next 
round.
    Mr. Mead. May I ask? I know it is not my place to ask 
question, but I was curious as to what you meant by what I said 
made it sound more problematic.
    Mr. Olver. Well, I thought there might be a relatively 
simple answer, and I am not sure that working out the way you 
have described it may be a much more enticing answer, but 
obviously not a simple answer.
    Mr. Mead. I have seen situations where it becomes very gray 
where the employee does in fact have a legitimate complaint 
with the agency, and I am not speaking of TSA. I am speaking of 
FAA now. Actually, I am speaking specifically of a security 
related one where I think an individual did make a complaint, 
and it should have been checked out. It was not checked out 
properly, and that employee, in my judgement, received 
retribution.
    It is an entirely separate question in my mind whetherthat 
means that that employee was performing well, but there is no question 
that there were some performance issues associated with that employee. 
Then there becomes this melding, and the bureaucracy gets scared and 
decides that they cannot move this person. They tend not to, because 
they fear that the person will sue or something, so that was what I 
meant by it being somewhat gray.
    If you have a third party investigating it, at least you 
get rid of the conflict of interest.
    Mr. Olver. Well, the Undersecretary had commented I think 
in quite a different way about what the concerns might be. My 
recollection was that he had commented that people might 
divulge national security material or shut down a system or 
something like that. I did not have a chance to explore exactly 
what that might mean.
    You have raised an entirely different thing; that this 
might be used by people who were not performing well and knew 
they might be under duress for non-performance putting in a 
claim and then being in a position of holding the agency in a 
position of keeping them on throughout whatever was going to go 
on for a long time.
    Mr. Mead. Yes. I mean, I think that----
    Mr. Olver. I had not even thought of that, but that was not 
what I understood the Undersecretary was concerned about.
    Mr. Mead. I could see an employee coming forward and saying 
that security at this checkpoint is lax. I told my supervisor 
two months ago that security at this checkpoint was lax. Then 
you find out that the supervisor came in and found out this guy 
had let a test weapon through. He did not detect it in 
screening or did not swab properly. Then the employee comes 
back and state that he was not trained well. The supervisor 
fires him.
    That is how many of these things unfold. They get pretty 
complicated. My point is----
    Mr. Olver. I guess I had not asked the question.
    Mr. Mead. My point is it is good that there be a third 
party investigation. If I was the Congress, I would not make 
the decision that that third party investigator's findings 
would automatically result in the complaintee staying on the 
job.
    I would not go that far if I was Congress. I would have a 
third party investigator and leave alone the flexibility of the 
TSA Undersecretary to fire that employee until you have had 
some experience with this.
    Mr. Olver. Thank you, Mr. Chairman.

                          PASSENGER PROFILING

    Mr. Rogers. Thank you.
    Now quickly back to air security. The failure that happened 
on 9-11 had nothing to do with checked baggage or an explosion 
on the plane. It had to do with a person getting on the plane 
and transforming it into a weapon. Obviously the airline-
developed Computer Assisted Passenger Prescreening System 
(CAPPS) did not work very well last year, did it?
    Mr. Mead. No, it did not.
    Mr. Rogers. What actions is DOT undertaking to develop a 
better way to screen out undesirable people from getting on a 
plane, as opposed to baggage? Can we talk about this in open 
session?
    Ms. Stefani. Only in very general terms.
    Mr. Rogers. Yes.
    Ms. Stefani. They have looked at CAPPS, and they are trying 
to analyze changes. They have made some changes, but they are 
also looking to see what additional changes they can make to 
help better pinpoint undesirable people and they are also 
looking at different sources of information and how to weave 
them together.
    Mr. Rogers. Well, if I could say this? The failure of 9-11 
specifically was the non-coordination of intelligence that we 
had in hand, that was not communicated to the people that let 
people on airplanes. Is that generally correct?
    Ms. Stefani. I think that was one factor.
    Mr. Rogers. At least in a couple or three of the 
hijackings.
    Ms. Stefani. It was discussed, yes.
    Mr. Rogers. Since that time, the intelligence agencies have 
stepped up their intelligence gathering on bad actors. My 
question is how can we get that information to the system that 
keeps those people off planes, and is DOT working on that?
    Mr. Mead. I do not know how far they are along on this, but 
this, as you know, requires coordination of databases from 
several agencies, including one of your favorites.
    Just judging by our own experience with the Immigration and 
Naturalization Service (INS) over the last few months where we 
have identified folks at airports that at first seemed to be 
illegal aliens. You have to drill down into their database, Mr. 
Chairman, several times over several days before you are really 
comfortable with the information INS is providing.
    I think the first order question is to get all these 
databases together and then to do a common feed into DOT. That 
is all I would want to talk about on these databases in open 
session.
    Mr. Rogers. Well, it is more than just the INS database.
    Mr. Mead. Yes, sir.
    Mr. Rogers. It is the FBI. It is the agency.
    Mr. Mead. It is the states.
    Mr. Rogers. States, local police. Is that being worked on 
by people other than DOT? In other words, that should really be 
done by Homeland Security----
    Mr. Mead. Yes.
    Mr. Rogers [continuing]. On a much higher level, but the 
net result should be that that data gets to somebody who is 
privy to that kind of data at the airport where people get on 
the plane and check that person against the database. Is that 
not correct?
    Mr. Mead. Yes.
    Mr. Rogers. Are they working on that?
    Mr. Mead. Yes. Yes. That is why Undersecretary Magaw points 
out at almost every opportunity that he is going to have 
airport security directors in place. That is going to be very 
important to have somebody on the scene that can receive that 
information on a real time basis.
    Plus, a lot of these are advance bookings so you need it 
even before that flight takes off because that can provide an 
important lead to the enforcement agencies.
    Mr. Rogers. How are they going to be sure that I am who I 
say I am when I get on the airplane?
    Mr. Mead. I think eventually you are looking at a 
technology solution there. I know you have seen some. I know 
there is a range of different technologies that people talk 
about. I have seen some that seem impressive. You know, there 
is one on the fingerprint. I have seen the retinal one. I have 
seen the palm print.
    We have to realize though that none of the demonstrations 
we have seen are backed up with a database of information about 
people. When the vendor is demonstrating the machine basically 
all they have is your name and maybe you give them the social 
security number, but their demonstration is not drawing off any 
database at INS or the FBI or the state enforcement officials 
or anybody. To make the system reliable, you have to be drawing 
from all these other databases. It is going to take a while.

                         NON-AVIATION SECURITY

    Mr. Rogers. Let me switch from aviation. TSA was given 
responsibility over security in all modes of transportation, of 
course. Have they done anything much beyond aviation, do you 
think?
    Mr. Mead. Not that I am aware of.
    Mr. Rogers. What should they be doing? What should we 
respond to most quickly outside aviation?

                           CONTAINER SECURITY

    Mr. Mead. I think transit containers and HAZMAT 
endorsements on commercial drivers licenses. The container one 
is a fascinating issue because in today's environment the 
containers can come in by ship, and that same container can be 
put on a railroad car or that same container can end up getting 
put on a truck, so they are cross modal. That is an area where 
I think both the Coast Guard and TSA could make a lot of 
inroads, but it is a big issue.
    The export/import deficit raises an interesting question 
here too because since the United States has this deficit, this 
trade deficit, we have all these containers that have come over 
here that are empty, and we do not have anything to put in them 
to ship them back so they are sitting idle in yards, for 
example in New Jersey. The container issue is one that makes me 
nervous.
    Mr. Rogers. I do not follow you. What is wrong with those 
sitting in New Jersey empty?
    Mr. Mead. Well, the containers are not being shipped 
anywhere because there is not enough goods being exported to 
make it worth their while. It is a hollow container.
    Mr. Rogers. So? What is wrong with that? Where is the 
danger there?
    Mr. Mead. Well, what somebody could do with that container. 
They could come and take it.
    Mr. Rogers. I see. And put their own things in it?
    Mr. Mead. Yes.
    Mr. Rogers. I see. You say these empties are sitting around 
unguarded?
    Mr. Mead. No. I did not say that.
    Mr. Rogers. Yes.
    Mr. Mead. I do not think I spoke to the question either 
way.

                    COMMERCIAL DRIVERS LICENSE FRAUD

    Mr. Rogers. Yes. The CDL, commercial drivers license 
program, is subject to fraud, is it not?
    Mr. Mead. Yes.
    Mr. Rogers. Not only subject, but some people would say 
rife with fraud. Is that correct?
    Mr. Mead. Yes.
    Mr. Rogers. What is DOT doing about it?
    Mr. Mead. Well, they have been encouraging the states to 
tighten up their commercial drivers license programs. We are 
about to issue a report finding that there is a lot of 
inconsistencies between the states.
    We need to improve the federal standards to insure that 
when you get one of these licenses you have proof of legal 
presence in the U.S. Some states require that. Others do not. 
Verification of social security numbers. Some states require 
that and others do not. Some states require you to speak and 
read English, but then some states let you take the exam in 
your native language.
    I think the Federal Motor Carrier Safety Administration 
needs to take action and use sanctions when the states are not 
in compliance. We cannot have this. Fifteen states with scams.
    Mr. Rogers. Are they moving in that direction?
    Mr. Mead. Yes.
    Mr. Rogers. Do you think they will do it?
    Mr. Mead. I do not know. I think it is a point that this 
committee should emphasize with them, as you did last year.
    Mr. Rogers. Yes. Well, we had them this morning testifying.

                REVENUE-ALIGNED BUDGET AUTHORITY (RABA)

    Now on RABA. TEA-21's formula provisions ostensibly would 
result in a cut in new obligations of $9.2 billion. The highway 
groups are predicting huge job losses. The Federal Highway 
Administration, however, believes the impact will be much less 
because cash payments to construction firms, they say, will 
only be down three percent during the year because obligations 
made in previous years will still be paid out in 2003, even 
though new obligations will be cut severely.
    How do you read that?
    Mr. Mead. Well, every coin has two sides, and this is one 
of them. There is truth in that. At the same time, a cut of 
this magnitude will constrain the states in terms of what they 
can obligate funds for.
    It is true that on any first year infrastructure project, 
you do not spend 100 percent of the funds that you have 
allocated to the project. You may not spend that 100 percent 
tail of funds for six or seven years. I think it will have a 
big impact on the states.
    Another place that it will have a big impact on is in these 
huge projects that the Congress requires finance plans for, 
such as Central Artery, or Wilson Bridge. I am familiar with 
the details of the finance plans in those, and I can tell you 
they were counting on this amount of money from RABA. In the 
next finance plans, people are going to start asking questions. 
Where is this money going to come from?
    Mr. Rogers. Well, many people predict the economy will 
rebound slowly over the next few years and may not reach a boom 
cycle until the next decade or later, so if we were to restore 
RABA monies for fiscal 2003, would we not be just putting off 
the inevitable for a longer time? A one year bailout is not 
going to solve the problem, is it?
    Mr. Mead. No.
    Mr. Rogers. It is a systemic problem, is it not?
    Mr. Mead. Yes. I think when you are talking about a surplus 
in any trust fund, you want to leave enough money in there for 
an emergency.
    Now, I know one of the proposals on the table is to 
basically authorize the TEA-21 level as distinguished from the 
higher RABA projection level, which seems like it is an 
approach to a compromise, because the RABA money for 2003 that 
was projected is not going to materialize. I do not know if 
there was any point in giving it to them.
    Mr. Rogers. On AMTRAK, what do you think of the Reform 
Council's recommendations?
    Mr. Mead. In my oral statement, I said that there were 
three bottom lines, and I suggested that you be aware of 
proposals that do not provide the money. The ARC proposal is 
fundamentally organizational in nature. It says well, we are 
going to split up Amtrak. We are going to franchise routes 
outside the northeast corridor, and we are going to form an 
infrastructure company.
    My question to the ARC and my question to anybody that is 
proposing a solution on Amtrak is where is the money? Where is 
the capital? Where is this infrastructure company supposed to 
get the capital money from? It is not going to be generated by 
profits from the railroad, guaranteed.
    I am really hopeful that the decision makers up here will 
decide what they want, what they see as the appropriate size 
and scope of the rail network, and then decide on the capital. 
Then we can do the shuffling of the chairs and the deck and 
talk about the organizational setup that we want.
    I am not suggesting for a moment that organizational change 
is not necessary. I am saying that it would be extremely hollow 
and would be a shell game unless you deal with the capital 
situation in Amtrak.
    Mr. Rogers. We have a vote in a few minutes. I think we can 
finish with questions for the record. I do not want to hold you 
here because we have votes coming up on the campaign finance 
bill, that may be very interruptive for the next few hours.
    I thank you much for your testimony. You are a great help 
to this subcommittee in helping us lay out our work for the 
year. That is the reason we have you up here first. We thank 
you for your testimony.
    Mr. Mead. Thank you, sir.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                                       Thursday, February 14, 2002.

                   U.S. DEPARTMENT OF TRANSPORTATION

                                WITNESS

MICHAEL P. JACKSON, DEPUTY SECRETARY, U.S. DEPARTMENT OF TRANSPORTATION
    Chairman Rogers. Good morning. Today, we are honored to 
have the Deputy Secretary of Transportation here before us to 
present the department's $59.3 billion budget request for 
fiscal year 2003.
    While the budget is $4.3 billion below last year's level, 
largely because of a significant reduction in highway receipts, 
it does go a long way to fund new and accelerated security 
initiatives within the department. Overall, I think the budget 
is fair. But there are some glaring problems that this 
committee will need to address as we go along.

                                 AMTRAK

    As you know, Amtrak is in dire financial shape, even after 
a $5.1 billion cash infusion over the past five years. Both the 
Inspector General and the Amtrak Reform Council have reported 
that Amtrak will not be able to reach operational self-
sufficiency as mandated by Congress in 1997.
    In fact, the Inspector General reported that Amtrak's 
operating losses are greater now than they were prior to the 
mandate being established.
    This shaky condition has shown itself repeatedly over the 
past year. Last May, Amtrak had to mortgage Pennsylvania 
Station to obtain sufficient funds to remain operational for 
the last three months of fiscal 2001. And just two weeks ago, 
Amtrak announced $285 million in operating cuts, capital 
deferrals and maintenance actions so that it would have enough 
money to get through the fiscal year.
    Amtrak's financial condition and its underlying structure 
have got to be dealt with and yet your budget punts the issue 
to us by recommending an appropriation of $521 million and 
stating that this is a place-holder until Congress decides how 
Amtrak should be structured in the future.
    Mr. Jackson, you and the Secretary have a larger 
responsibility when it comes to Amtrak. The Secretary is 
Amtrak's Chairman of the Board. We need your department 
squarely facing this unprecedented situation for the railroad 
and with that in mind I hope to see your long-term proposal for 
restructuring Amtrak in front of us very shortly.

                                SECURITY

    While the budget before us requests $4.8 billion for the 
new Transportation Security Administration, it is abundantly 
clear that this is not going to be enough. This new agency will 
have almost 30,000 screeners and a substantial number of air 
marshals on-board by the end of the fiscal year and they are 
required to install a variety of security equipment to screen 
all checked baggage at huge costs.
    Your proposal before us cannot adequately fund all of these 
people and this new equipment. We are anxiously awaiting a 
clearer proposal from the department that better reflects the 
true need of this agency for the remainder of this fiscal year 
and 2003 because we are going to have to face up to it.
    This budget includes what frankly appear to be gimmicks 
that are used to disguise the true costs of programs or that 
Congress has rejected previously.
    For example, while the budget funds the essential air 
service at the same level as last year, $113 million, you 
request the majority, $83 million of it, to be provided from 
the Airport Improvement Program. The AIP program is guaranteed. 
This committee will have to replace your proposal with non-
guaranteed dollars, which will be difficult to find in these 
very, very tight budgetary times.
    Likewise, the budget assumes $230 million in new user fees 
which Congress has repeatedly denied and this committee will 
have to fill that hole as well.
    In addition, the committee would like to hear any ideas 
that the department is going over about bailing us out of the 
mess that TEA-21 put us in this year, that is, the mandatory 
reduction of $8.6 billion in highway dollars.
    Without further ado, let me welcome Deputy Secretary 
Jackson today before the subcommittee. We hope the Secretary is 
doing nicely in his recovery from the hip surgery. We wish him 
well and we hope you will convey that to him.
    We will make your written statement a part of the record. 
Let me first recognize my colleague, Mr. Sabo.
    Mr. Sabo. Well, thank you, Mr. Chairman, and welcome, Mr. 
Jackson.
    The Chairman, outlined major problems that this committee 
faces. That is by far the largest list of unresolved problems 
that I have observed in 24 years on this subcommittee. They are 
large, they are major. The funding for what the Administration 
and Congress said we should do on security is very unclear. We 
do not have details. We heard yesterday from motor safety 
people that they are expecting money from the security agency 
to fund part of their work. It is not in their current budget. 
At some point we have to know the details.
    Clearly, a supplemental is needed for this year if we have 
any hopes of coming close to targets for this year. We need to 
see that supplemental quickly.
    Amtrak is a problem we have to solve. The highway problem 
obviously has to be dealt with. And the list goes on and on. 
Most years, we find problems like the proposed fees. I think 
they have been here every year for 24 years and I am not sure 
if they come from the department or from OMB. But the same 
gimmicks appear every year and the Congress says no and then 
every successive year the same gimmicks reappear. But we have 
to deal realistically with the funding to make your agencies 
work.
    The task before this committee is huge, and I think weneed 
solid recommendations from the Administration as we proceed.
    And I might add that there is one issue that has concerned 
me on the security issue from the beginning. Unlike most modes 
of transportation where we try to be helpful, the Federal 
Government assumed all responsibility for air security. I 
assume with that goes significant change in liability from air 
carriers to the Federal Government.
    From such little things as what happens to missing luggage 
once we are involved in the luggage process to who is liable 
for any passenger who gets on the plane that creates some 
problem, whether it be minor, major or catastrophic such as 
September 11th. I am very curious whether the Department is 
looking at what those obligations might be for the future.
    But I welcome you and look forward to working with you.
    Chairman Rogers. We look forward to hearing your summary of 
your testimony. You are recognized.

                  Deputy Secretary's Opening Statement

    Mr. Jackson. Thank you for having me here today and thank 
you for your kind words about Secretary Mineta. He is doing 
well and I will certainly convey the sentiments of the 
committee for his speedy recovery.
    Before I start with my summary, let me say something first. 
This is an unprecedented year for the Transportation Department 
and as we come to you with our budget proposal for 2003, we 
recognize that there are still very significant unknowns about 
how we are going to make it through 2002, and that is 
unprecedented. What I pledge to you, and what the Secretary 
pledges to you, is that we will remain in absolute close 
coordination with you, we will work through these issues. I 
very much respect and am grateful for the attitude of 
cooperation that you bring to try to help us figure these 
problems out, and we are going to work with you very closely to 
show you how we think we can make that work.
    So I will just simply say that we are requesting, as you 
said, Mr. Chairman, $59 billion for DOT this year, an 8 percent 
increase over 2002 if the TEA-21 formula adjustments for 
highways are excluded. With those required adjustments we are 
tightening our belts, particularly on highway spending. Most 
DOT programs will nonetheless see an increase in the 
President's budget.
    In his recent State of the Union address, the President 
focused on three important priorities: winning the war at home 
and abroad, improving homeland security, and ensuring that we 
revive the economy.
    The Department of Transportation plays an unusually 
important role in all three of those objectives and our budget 
reflects that fact.

                           HOMELAND SECURITY

    The events of September 11th certainly underscore the 
importance of the new Transportation Security Administration 
(TSA) in providing for homeland security. The $4.8 billion that 
the President is requesting for TSA is a substantial 
commitment.
    We believe that it is a good and strong commitment and, as 
I will talk, Mr. Chairman, in response to some questions 
perhaps, part of how 2003 breaks down will depend upon how much 
capital cost we pick up in 2002. So there are some assumptions 
about the $4.8 billion that we can explore further.
    TSA has been given an unprecedented task in standing up a 
full federal takeover of the airport security responsibility, 
including all passenger and baggage screening functions for the 
first time. Starting on Sunday, the Federal Government will be 
responsible for all of the passenger and baggage screening 
functions in the secure zone of airports.
    The President's budget also includes the largest increase 
ever in spending to support the Coast Guard. It provides $7.1 
billion in search and rescue enhancements and increased port 
security. We proposed $500 million for the Coast Guard's 
Deepwater project, a crucial project to modernize the Coast 
Guard's assets.
    Our budget also includes a $90 million initiative to 
improve maritime safety with a ``911'' system for maritime.

                                HIGHWAYS

    Of course the department's budget is focused on many other 
priorities this year. First is the issue which you have raised 
and that is on the minds of many of us, the required adjustment 
under TEA-21 to the highway trust fund spending.
    TEA-21 guaranteed that highway funding would be tied to 
highway trust fund tax receipts and this committee knows that 
it accomplishes it through a series of annual adjustment 
mechanisms. We have enjoyed the benefit in the past several 
years of the strong plus-up in the revenues flowing to highway 
spending and even with the adjustment that comes this year, 
which is $4.4 billion below the anticipated obligation level, 
we will see, over the period of TEA-21 reauthorization, a 
substantial net benefit above the projected obligation limits 
in the authorizing statute.
    I will talk a little bit more about that as, Mr. Sabo, you 
have requested in questioning.

               AVIATION AND SURFACE TRANSPORTATION SAFETY

    Safety remains a cornerstone priority at DOT. Nearly $8 
billion of the President's request is dedicated to improving 
transportation safety for all Americans. Aviation has certainly 
been a major focus of that investment and the 2003 budget 
request for the Federal Aviation Administration (FAA) reflects 
the Administration's continued commitment to improving the 
safety and efficiency of air travel.
    Recovering from the events of 9/11, air traffic is now 
beginning to grow again. The FAA must continue to provide a 
focus on increasing capacity and I hope that we will be back to 
the conversation, sir, later this year about capacity growth 
and the issues that we have there.
    The total FAA program budget requests $14 billion, 1.7 
percent higher than 2002 when adjusted for changes in the 
mission of FAA after we transfer the security responsibilities 
to TSA.
    The budget also requests $371 million for activities of the 
Federal Motor Carrier Safety Administration (FMCSA), or 8 
percent more than 2002. I again want to thank the Congress for 
their commitment to helping us launch compliance with the North 
American Free Trade Agreement (NAFTA) obligations. In this 
year, I can report that we are making very good progress. Last 
week, I met with my counterparts from two departments of 
government from Mexico and with our FMCSA Administrator, Joe 
Clapp, and I think we are on target to do what we have to do to 
meet all of the requirements of the statute and to begin to 
offer operating authority to Mexican carriers in a safe and 
effective manner.

                     PUBLIC TRANSPORTATION AND RAIL

    For 2003, the President is proposing a record $7.2billion 
for public transportation. This request includes funding for 29 New 
Starts, projects that will carry 190 million riders and save over 61 
million hours in transportation travel time.
    Within the 2003 budget, $145 million is dedicated to the 
President's New Freedom Initiative. This program will make 
transportation more accessible for persons with disabilities. 
The competitive grant program will make $100 million available 
for alternative transportation services and the remaining $45 
million will go toward pilot projects to promote innovative 
approaches to moving people with disabilities in our transit 
system.
    On the Amtrak issue, the Administration's budget does 
include aplace-holder on the glidepath level of funding of $521 
million. It is evident that this would not be sufficient to 
continue operations at the current level.
    When we say that we have a placeholder, that comes with a 
commitment on our part, Mr. Chairman, to work with you, to work 
through the options on the passenger rail service and to figure 
out how to address what has been a 30-year problem for funding 
and managing intercity passenger rail services.
    All up, this is a strong 2003 budget supporting the 
President's goals for air, land and sea transportation. My 
remarks for the record focus only on a part of this, but to 
conclude, Secretary Mineta and I believe that the 2003 budget, 
replete with all the challenges that we have acknowledged, will 
clearly enhance homeland security--significantly. But more, it 
will improve transportation safety, maintain our critical 
transportation infrastructure, increase transportation 
capacity, protect the environment, and improve mobility. In 
short, it is going to do the job.
    We look forward to working with this subcommittee in making 
this work.
    [The information follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                       AMTRAK LONG-TERM PROPOSAL

    Chairman Rogers. Thank you, Secretary Jackson.
    To paraphrase Groucho Marx, who said one time before he 
made a speech,``I have something important to say'' and that is 
you have been very easy to work with and helpful and take your 
job very seriously. You have a talented staff and we appreciate 
the hard work that you and your folks have put in.
    As I mentioned, the Secretary is the Chairman of Amtrak's 
board and we are looking for the Department to submit a long-
term proposal for Amtrak through proposed reauthorization 
language.
    Do you not think the Department has a responsibility to 
come up with some sort of a plan so that we can consider a 
budget request that would support such a plan?
    Mr. Jackson. We are committed to providing a complete 
assessment of the options, as we understand them, for providing 
intercity passenger rail in an effective fashion.
    Secretary Mineta believes, and I certainly concur in his 
judgment, that intercity passenger rail is an indispensable 
component of our transportation system. We must figure out how 
to address these complex issues. But the financing issues for 
them are extraordinarily large.
    We are trying to ask this question: what is it we 
absolutely need, what is it going to cost, and how are we going 
to pay for it?
    We are committed to presenting options and to engaging in a 
dialogue very closely with you, sir, on answering those 
questions and trying to figure out how to move forward here.
    Last summer, the secretary called for a winter/spring focus 
on these issues and early authorization with the conviction 
that we could not wait any longer. The events of recent months 
show that we absolutely cannot wait to address them and so we 
will work closely with you on these issues.
    Chairman Rogers. Well, do you not think it is pretty plain 
that Amtrak is not going to make it as it is?
    Mr. Jackson. Yes, sir. I do.
    Chairman Rogers. And so we are going to have to do 
something about it, either replace it, do away with it, or 
modify it to some fashion, fairly radical surgery. Would you 
not agree?
    Mr. Jackson. I agree.
    Chairman Rogers. The Amtrak Reform Council, of course, came 
up with their plan earlier this month. They recommended three 
entities: (1) a government program to administer a restructured 
rail program; (2) a train operations company; and, (3) an 
infrastructure company to manage the Northeast Corridor. Have 
you had time to digest their report?
    Mr. Jackson. Yes, sir. I have begun to try to do that. I 
met with them in the Secretary's absence on the day thatthey 
released their report. I have had ongoing conversations with their 
Chairman and with their members, and our staff has been working with 
them as they develop their options. We are now reviewing their final 
report.
    I will say this much, that the question of how to structure 
Amtrak or subsequent organizations that handle these functions 
is an indispensably important question, but it is not the most 
difficult question.
    The most difficult question, sir, resides in this 
committee's lap which is how do we fund it, how much do we 
need, how can we afford to pay for it, and what type of 
mechanisms for funding will give the stability necessary to 
plan with the states who have a role in funding our intercity 
passenger rail needs in a predictable and clear way.
    The funding issues are really not addressed in the report 
of the ARC in any systematic way.
    Chairman Rogers. Well, as you know, this Committee does not 
make policy. We try to fund policy that is made by others.
    Mr. Jackson. Yes, sir.
    Chairman Rogers. And if you will tell us what kind of a 
railroad you want, we will try to find the money to pay for it, 
but we do not know how much money to find because we do not 
know what you are going to recommend.
    So what is the bottom line? Are you ever going to come 
forward with a recommended scheme? Are you going to leave that 
to the Congress to decide entirely or will there be a 
collaborative effort?
    Mr. Jackson. There will be a collaborative effort. We are 
not going to start by throwing draft legislation on the table. 
We would like to have a dialogue with Congress, with 
authorizers and appropriators, to figure out viable approaches 
to dealing with this issue. We have a working group that has 
completed its preliminary work in the Department to understand 
the issues, the drivers of costs, and we have an internal White 
House group working with us, a multi-disciplinary group, in 
assessing options.
    Chairman Rogers. Do you anticipate a system that will 
continue to be subsidized by taxpayers or do you foresee a 
system that would be self-sufficient?
    Mr. Jackson. I think that we have to break it into 
component parts. There are elements of the existing Amtrak 
system which can be self-sufficient on an operating basis.
    Chairman Rogers. There is only one.
    Mr. Jackson. Well, there are actually two: the car train to 
Florida can make money, and then the Northeast Corridor.
    Chairman Rogers. What about all the others?
    Mr. Jackson. The others have enjoyed a cross-subsidy and 
are not currently able to sustain operations without----
    Chairman Rogers. Should we continue to subsidize routes 
that do not pay for themselves?
    Mr. Jackson. That is an issue which I would not want to 
judge at this point. I think that we have considerable 
operational and capital needs to manage, and we have to look at 
that combination of operational and capital needs. We also have 
some genuine commitment on the part of states to contribute to 
the cost of helping us operate these systems, and we need to 
find a way that allows states to make reasoned and deliberate 
investments in rail in partnership with us. Those are all 
issues that I think we have to sort out in an effective way.
    Chairman Rogers. Well, the taxpayers of the country are 
subsidizing the riders on the Sunset Limited, which runs 
between New Orleans and California. We are subsidizing each 
ticket to the tune of $347.45. Is that fair to the taxpayers of 
Kentucky to do that?
    Mr. Jackson. I would refrain from making a judgment about 
specific routes until we found an approach that was fair 
overall. I think it is clear that we need to find a new 
paradigm for dealing with how to maintain intercity passenger 
rail, but I think we have to remain open to some type of 
subsidy, but not what we have right now. It just does not work 
and it has hit the wall.
    Chairman Rogers. Mr. Sabo.
    Mr. Sabo. Thank you, Mr. Chairman and Mr. Jackson.
    Just let me add on the Amtrak problem, I am not sure what 
our schedule is for marking up bills, but I assume probably the 
end of May or early June. This process seems to take a long 
time when it requires a legislative change and we are going to 
have a different timeframe for needing recommendations than 
some other committees.
    Mr. Jackson. Yes, sir.

                     SEAPORT SECURITY SUPPLEMENTAL

    Mr. Sabo. Let me ask a couple of questions about things we 
did in the supplemental. We provided $93 million for seaport 
security and my understanding is that the money is still with 
the department, nothing has happened.
    Mr. Jackson. We have not obligated those funds. However, we 
have a very detailed plan about how to move forward and use 
those funds.
    Mr. Sabo. Is that plan available now?
    Mr. Jackson. We are just about finished. We need to talk to 
the Secretary about it. We propose to bring that to him very, 
shortly. I have discussed this plan with the Coast Guard, with 
the Maritime Administration and with the Transportation 
Security Administration, and we have a three-part approach to 
how to divide the money and to use it effectively to increase 
security at the ports and to get it out this year in a way that 
will be an effective enhancement for security in ports.

                         AIRPLANE COCKPIT DOORS

    Mr. Sabo. One of the most important things we did, I 
thought, for trying to make certain future hijackings do not 
occur, I suppose the most important, was to change the policy 
as it relates to hijacking, but second was strengthening 
cockpit doors.
    Mr. Jackson. Yes, sir.
    Mr. Sabo. We provided $100 million in the supplemental. 
What is the status of that money? My understanding of that is 
it has not been distributed yet.
    Mr. Jackson. We have tackled this problem in two phases and 
the first phase was completed relatively shortly after the 
September plan was put in place to strengthen cockpit doors 
with bars and other mechanisms.
    Mr. Sabo. I think that predated our $100 million.
    Mr. Jackson. It did. Yes, sir. And then we have a plan and 
a regulatory action which we have announced, that will require 
the hardening of the doors with a new door. What had to happen 
was some engineering work that allowed the door to equalize the 
pressure in the aircraft cabin.
    The first approach we took was an intermediate step 
thataddressed that concern about the pressure equalization in deference 
to the security issue. Now we are harmonizing those two in a new design 
which the manufacturers have completed and which we are obligating the 
carriers to embrace. Those enhancements will begin to be put into the 
entirely new door with the money that the Congress has given us.
    Mr. Sabo. And do you have a written plan?
    Mr. Jackson. Yes, sir. We have a published plan. I would be 
happy to provide the details of that to you.
    [The information follows:]

    The FAA issued an immediate final rule on January 15, 2002 
that mandated all airlines and cargo operators that carry 
people behind a flightdeck door to install a newly designed 
flightdeck door that will meet recently established intrusion 
and ballistic standards.

    Mr. Sabo. And what do you expect the timeframe to be?
    Mr. Jackson. I believe that the final installation is about 
a year away, sir, but I can get you the exact date. We will 
start earlier, obviously, but this is reconfiguring the entire 
fleet for large passenger aircraft.
    [The information follows:]

    100 percent of the affected airplanes must be in compliance 
to this new standard by April 9, 2003, or they will not be able 
to legally operate in revenue service and will be subject to 
enforcement action.

                   FEDERAL SECURITY LIABILITY ISSUES

    Mr. Sabo. Is my concern over increased federal liability 
with our total assumption of security a legitimate concern or 
am I off the mark?
    Mr. Jackson. No, sir. You have an important point.
    Mr. Sabo. Because there was no discussion of that issue at 
all as that authorization bill passed.
    Mr. Jackson. It was discussed a little. We had several 
pieces of that discussed in the legislation prior to that that 
provided some assistance to the airlines through the war risk 
insurance program.
    Mr. Sabo. That is a different kind of problem. I am not 
sure if we would not have initial liability almost today.
    Mr. Jackson. Well, we are looking at several component 
parts of it. One part that you raise deals with any liability 
that we may have during this transitional period relative to 
the operation of third-party screeners that we are retaining. 
And so we have put in place a mechanism through the war risk 
insurance program to provide third-party terrorism insurance 
for those parties so that they would be covered.
    There are some issues we are looking at related to 
performance when we move to full federalization of the 
screening workforce. You raised the question about liabilities 
for folks who are inspecting or opening baggage. We have 
considerable discussions underway on both the legal issues and 
on process issues that can mitigate that. For example, we are 
looking at, in some instances, where we are doing checked 
baggage inspections, and we are looking at having video 
surveillance of our own employees so we can record and monitor 
performance. We have put in place some plans for investigatory 
oversight of those type of activities.
    So your question is a valid one. We are looking at various 
parts of it. I would be happy as we begin to bring that to 
closure in our work with the TSA to continue to talk with the 
committee about that.
    Mr. Sabo. My fundamental concern goes beyond the baggage 
question. I am not sure what happens with liability for more 
serious events, a major disruption by a passenger or something 
as catastrophic as September 11th where we have in effect 
assumed responsibility for the security clearance of everybody 
who is on that plane.
    Mr. Jackson. On legal issues I would like to be able to get 
General Counsel to give you a more precise legal response, so 
if I can take a chit on that one, I will do that.
    Mr. Sabo. Yes. I guess I would not expect precise answers 
at this point. I am more curious on whether it is being worked 
at and explored.
    Mr. Jackson. Yes, sir. It is.
    Chairman Rogers. Ms. Emerson.

                   STATEWIDE TRANSPORTATION PLANNING

    Ms. Emerson. Thanks, Mr. Chairman, Mr. Jackson.
    I am sure you know what I am going to ask you about.
    Mr. Jackson. I have a guess.
    Ms. Emerson. And I feel like a broken record here, but I 
will start all over. Back in TEA-21 we wrote in a provision 
with regard to rural consultation.
    Mr. Jackson. Yes, ma'am.
    Ms. Emerson. And we have had numerous conversations and 
meetings over the years since then and we keep saying, well, we 
will have an answer for you next week, next month, two months. 
I am really pretty fed up with it and I am cranky and tired 
today, so you will have to forgive me if I get a little bit 
testy. What is going on and where are we in the process?
    Mr. Jackson. Congresswoman, you would be entitled to be 
cranky at how long this one has taken us to bring to 
resolution. I am a little constrained in a public setting at 
this particular day to talk about a docketed item, so I am 
going to try to walk gently but convey to you that we have made 
some progress and a commitment that that progress will be 
evident publicly in the very near term.
    I am going to start by saying that I have some experience 
in working on National Planning Organization (NPO) issues for 
transportation, and I recognize the strong message which you 
have been making as a valid and important message, which is 
that this process needs to be inclusive. It only works when the 
entire community and the state can have visibility input into 
planning in an appropriate way.
    I will tell you that I am personally sensitive to, and 
supportive of, trying to grapple with this issue in a good way. 
We have looked at the rule that conveys the mechanism for 
dealing with the issue that you raise, and we have made a 
decision in the department about how that rule can be 
effectively moved forward.
    Ms. Emerson. Well, let me just make a comment. I represent 
26 counties and that is a whole slew of local officials who 
have the right to be included, in my personal opinion, in 
decision-making processes with regard to transportation and I 
feel a lot more strongly about them having a voice than the 
bureaucrats at the state department of transportation. Although 
they are professionals and they obviously deserve their day in 
court, they do not often know what is going on in each 
community. And I feel quite frankly that the department, both 
during this Administration and the last, are hostage to the 
state departments of transportation, and I am pretty sick of 
it, to be honest with you.
    So when you say in the very near future, could you define 
in the very near future for me?
    Mr. Jackson. Within the next several weeks.
    Ms. Emerson. So does that mean by Easter? That is the last 
weekend in March.
    Mr. Jackson. I think that we can make a public announcement 
by that timeframe, generally. Yes, ma'am.
    Ms. Emerson. Generally?
    Mr. Jackson. I do not have a specific date. The regulatory 
process requires some work with OMB to be able to bring it to 
closure. So I cannot commit to all of the moving parts.
    Ms. Emerson. Is there anything that we can do to be helpful 
to move the process along any more?
    Mr. Jackson. No, ma'am. I think your sustained interest in 
it has been helpful.
    Ms. Emerson. So you are telling me we are not going to have 
to redo this language in the next authorization of the highway 
bill, are you?
    Mr. Jackson. Well, you will be able to draw conclusions 
about whether a more substantive or different approach would be 
necessary as we go into reauthorization, but I hope that you 
will find that what we do is sensible and I would be happy to 
visit you when we get past the point of the docketed 
announcement.
    Ms. Emerson. You are making me nervous. Okay. Well, I 
appreciate that and hopefully I will hear from you by Easter 
time.
    Mr. Jackson. Yes, ma'am.

                  RENTAL OF AIRPORT SPACE FOR SECURITY

    Ms. Emerson. Okay. I have one more question, if you do not 
mind, Mr. Chairman. Hopefully, I have enough time.
    When we were having the meeting with Mr. Magaw the other 
day, he talked about the department or the Transportation 
Security Administration renting space from the airports. 
Specifically, is that the position of the department, that TSA 
will be renting space from airports?
    Mr. Jackson. I hope we do not have to rent space from 
airports. I hope airports will step up to the plate and give us 
the facilities and the space that we will need to do our jobs 
there.
    In the current circumstances, as I understand it, the 
airlines do rent space in some cases, for example, storage 
closets for security equipment, spare parts, that type of 
thing. We are going on a case-by-case basis through all 429 
airports to figure out what we have to do, and I hope that 
airports would be able to provide the necessary space for us to 
do our work without an additional charge.
    I have had some very good support from a number of airport 
directors who I have been meeting with recently that suggest 
that we will see that type of good cooperation.
    Ms. Emerson. Well, you may run into some problems, though, 
in some of the smaller community airports.
    Mr. Jackson. Yes, ma'am.
    Ms. Emerson. And with our very precarious situation in so 
many of our state budgets, I am concerned that there may be 
undue hardship placed on some of those airports.
    Mr. Jackson. We are sensitive to that issue. I recognize 
that in a small facility if we need a large amount of space 
that it could pose a disproportionate burden on those airports. 
That is why I think we really need a case-by-case analysis. We 
will be starting with our team in place tomorrow at each of 
these 429 airports, and among the things that they will do 
initially is walk through a checklist of assessment items. 
Space is on the checklist of issues that each of them will 
report back to us, and we will make judgments about how to 
proceed.
    Ms. Emerson. I do understand we all have to work as a team, 
but, you know, we do have this tendency sometimes on the 
federal level to place unfunded mandates on our states and our 
local communities and I just do not want to come up short or 
place undue pressure on them because they have already put out 
a lot of money that they had not budgeted for in the past.
    Mr. Jackson. Yes, ma'am. They have. And we recognize that 
there are significant burdens on airports right now, 
operationally, financially, and every way possible. Our jobis 
to try to make this work with common sense and prudence. The Congress 
has given us a significant amount of resources to do our job. We will 
use them as we need to to get the job done, and we will report back to 
you as we get this issue tracked.
    Ms. Emerson. I appreciate that. Thank you.
    Chairman Rogers. Mr. Olver.

                   FY 2002 SUPPLEMENTAL APPROPRIATION

    Mr. Olver. Thank you very much, Mr. Chairman.
    Secretary Jackson, as I look at the budget that has been 
proposed for 2003, the holes that I am most concerned about are 
the homeland security hole and the Amtrak hole and then the 
highway hole, not necessarily in that order of important.
    I would like to pass on, the homeland security budget, and 
ask you, are we going to have a supplemental budget in this 
year, in 2002, in order to cover the needs of bringing the 
Motor Carrier Safety Administration up to where they need to be 
by commitments that have been made during the course of this 
year and to deal with needs in TSA?
    Mr. Jackson. Congressman, I do not want to dodge a 
question. I always believe in blunt and candid answers, so I am 
going to give you the best answer I can give you on this one.
    The decision to submit a supplemental appropriation rests 
with the President and what the President has said to Secretary 
Mineta and to our team is that he intends to support funding 
for TSA's crucial transportation needs and the start up and 
operation of this program.
    Last December Governor Ridge said publicly that it was 
highly probable that there would be a need for a supplemental 
appropriation this year. So without getting in front of my 
President on any announcements, I would just say that I hope 
that the Administration and the Congress, and the Congress has, 
of course, been very supportive in this area, can get together 
quickly on this.
    Mr. Olver. And can you tell me whether the department 
thinks there is a need in 2002?
    Mr. Jackson. I can tell you that the need that we have to 
meet the statutory requirements is not covered by the 
appropriation that we have at our disposal.

                            HIGHWAY FUNDING

    Mr. Olver. All right. Let me try on the highway situation. 
The amount that is in the President's budget in this instance 
is about 30 percent off the total of what was appropriated in 
the last year, including the RABA monies, and that is a very 
large hole going back to the states. The states put in a whole 
lot of money to go along with it.
    Well, the states have, one right after the other, I do not 
know of anybody who is announcing surpluses these days. It is 
all a question of how large the deficit is and how large the 
numbers are that they are having to deal with and I really do 
not know of any states that are not in that kind of a position. 
Relatively, some of them are in very bad shape. And this 9 
billion dollars is the nearest thing to a stimulus package in 
the sense that if we are not doing the work out there, they do 
not have the money to pick up that piece because they are all 
under constitutional requirements for a balanced budget. We 
worked very hard politically to get to the point where we could 
have a balanced budget and it has been shot to hell now.
    So I just want to lay that one out as a core issue. I am 
not telling you anything new, obviously.

                                 AMTRAK

    And the third issue is Amtrak. The Reform Council has come 
up with its recommendations. It is easy to create an 
organization to deal with the corridor if you are only 
interested in the operating aspect of it because that is 
running profitably on the operating budget.
    The second part of it, if you take that out of what is 
being done by Amtrak, that remaining group of things is a 
national passenger rail company, which was sort of what we had 
in a transitional way. It is sort of what we have with Amtrak 
at the present time. There is no way that that can succeed, 
given the mandates. Just none, as far as I can see, because 
almost all of those lines run at deficit. One little one 
between Fort Worth and Oklahoma City apparently is a positive.
    And then the third item is a pilot on franchising with the 
idea that maybe over time we will move to more franchising. In 
all of this, there is not one recommendation on what you do 
about capital. No franchiser can make a profit on those lines 
if franchised to them. As far as I can see, they have to at 
least have a major capital program which we provide through 
taxation at the airports in a very complicated way and for 
highways and so forth. We just do not have that kind of a 
system.
    So it looks like a great big sore thumb, but it is 
providing a piece of what is necessary. And as far as I can 
tell, there is nothing in there to deal directly with the major 
losses on many of the lines, particularly on a per passenger 
basis in the long distance lines, which unless you deal with 
that, that means that that central piece cannot possibly 
succeed.
    It seems to be only a preliminary solution. It does not 
deal with the whole problem at all. And the amount that we have 
in there at the moment is clearly not capable of keeping the 
system going.
    If you would comment?
    Mr. Jackson. Yes, sir. Amtrak has had to in our Amtrak 
world, and those needs have to be addressed in some way in any 
meaningful plan, as well as the ongoing capital needs. It seems 
to me the investment here is really the decisive entry level 
set of questions. The structure and organization can follow in 
many other forms, depending upon how you resolve the other----
    Mr. Olver. So we could view this as somewhat of an 
opportunity because if there is any place for rail passenger 
service other than metropolitan transit per se, it is in the 
short distance, three to five hundred mile kinds of runs that a 
serious investment might make a reasonable high-speed rail to 
operate in that, and really be competitive with the airlines 
and carry a fair number of passengers. I do not know what the 
balance is on that, but it does not seem to me there is much 
hope in the long distance rail, and surely not for high-speed 
rail on a long distance kind of a basis that requires----
    Chairman Rogers. The gentleman's time has expired.
    Mr. Aderholt.

                        DIGITAL GLUE TECHNOLOGY

    Mr. Aderholt. Thank you for being here today.
    According to the House Report on Transportation 
Appropriations Bill for FY-02, there was language that 
wasincluded concerning further investigation of digital glue technology 
to coordinate various databases in order to provide timely information 
about flight schedules, for example.
    Do you have a time frame by which you expect to have tested 
some digital glue technologies with the funds that have been 
provided?
    Mr. Jackson. No, sir, I am sorry, I do not have an answer 
to that for you today, but I would be happy to provide an 
update directly to you.
    [The information follows:]

    FAA conducted a series of user focus group sessions to 
identify methods for providing timely information to airline 
passengers. FAA also used the focus groups to also examine 
potential uses for digital glue technologies. Changes that have 
been implemented as a result of those focus groups include the 
following:
     Delay information is currently being provided to 
CNN via a digital data feed any time airport delays exceed 45 
minutes. CNN broadcasts the information on a ticker at its 
airport channels.
     The same information is being provided for 
broadcast to the Weather Channel.
     The number of airports monitored for delays has 
increased to 299.
     The FAA website has been improved based on 
feedback from the user groups.
     FAA developed a Public Service Announcement (PSA) 
that provides information on accessing the FAA website. CNN is 
currently broadcasting the PSA at its airport channels.
    These improvements were accomplished with existing system 
capabilities. FAA has been unable to identify any additional 
advantages that digital glue technologies provide over our 
current capabilities.

    Mr. Aderholt. And then also, if you do not know now, if you 
could find the answer or get back with us with what potential 
do you see using this existing technology to coordinate not 
only flight schedule information but information from federal 
government databases which would help locate potentially 
dangerous passengers?
    Mr. Jackson. I can comment on the latter a little bit here 
today. We are using a series of funds available through the 
Transportation Security Administration to evaluate digital 
mining and digital analysis tools that will help us bring a new 
generation of CAPS scrutiny, the computer-assisted passenger 
profiling system that is currently in place. We are working 
very aggressively in that area, and I do see that as a very 
promising area for enhancing security.
    Mr. Aderholt. All right, thank you. That is all I have.
    Chairman Rogers. Mr. Serrano.

                                 AMTRAK

    Mr. Serrano. Thank you, Mr. Chairman.
    Thank you, sir, for being with us today. I fancy myself as 
the Amtrak poster child. For 12 years, I have done most of my 
traveling to New York City on Amtrak. And as a passenger, I am 
personally very satisfied with the service. Maybe it is because 
the Metroliner starts from one city that I travel to and ends 
in the other, so it is always on time. But that works.
    And the more I read and the more I hear and the more 
reports I see, not only as a member of this committee but as a 
passenger, I have to ask what is the future of Amtrak in 25 
words or less. Are we heading toward a major disaster here, a 
period problem?
    It is your sense as a lobbyist, if you will, on this and 
other issues that there is any congressional will to help 
Amtrak or is Amtrak heading into a very serious situation?
    Mr. Jackson. Sir, George Warrington, the president of 
Amtrak, made a speech about a week ago in which he talked about 
the serious confluence of needs for Amtrak--to fund it and to 
maintain it going forward. I thought it was a good and candid 
speech. He says aptly that we have reached a period where a 
fundamental look at how to make this work is absolutely 
indispensable.
    I will say that Secretary Mineta certainly agrees that 
Amtrak's mission of intercity passenger rail is an important 
mission for the country, and that we must support a rail system 
that is part of our overall transportation network. There is a 
need, there is a problem, and I believe there is a will in the 
Congress to work through the options that need to be looked at 
to make this work.
    I believe that we are significantly short of a consensus, 
or even clarity, about the options on how to proceed, but I am 
hopeful that we can stimulate this important debate, and reach 
conclusions in a timely fashion this year.

                            HIGH SPEED RAIL

    Mr. Serrano. I know that the question I want to ask you now 
is one that probably would require a hearing all by yourself, 
but again, in the limited time that we have, and as one who in 
administering and doing what you do you also set forth a vision 
for the leaders in your department. I have often said that two 
of the issues I deal with in my personal life, Amtrak and the 
fact that I speak Spanish, indicate to me that this country, as 
great as we are, has two major fears. That is the fear of high-
speed rail to be with other countries, and the fear of foreign 
languages.
    Why is it that we Americans like to bypass or go ahead in 
growth all nations of the world in every department, and 
rightfully so, but not when it comes to rail service? We seem 
to shy away from trying to do that.
    I mean, we discussed high-speed rail. We roll out the 
Acela. Everybody thinks that it's the greatest thing since 
sliced bread, and then there is no excitement about it going 
across the country and making it something that competes with 
other forms of travel.
    Mr. Jackson. I think there is a substantial ground spring 
of support for high-speed rail in the country, and a number of 
states have made very significant investments to support high-
speed rail. But the solution on how to finance it has alluded 
us.
    Part of this is a function of the geographic size of this 
country. We are widely dispersed over a large geographic region 
and the size of the financial investment to create a national 
passenger rail system in this country is significant. We have 
not cracked the puzzle of how to do it.
    I think there is very strong interest in doing it, and that 
is what I think the mission at hand is for us collectively this 
year to work our way through.

                          TREN URBANO PROJECT

    Mr. Serrano. One last question. Chairman Rogers and I have 
an ongoing discussion about how we always manage to either 
mention Cuba or Puerto Rico at every hearing. I tried 
mentioning Cuba. I cannot find a way for your department. 
Butthis committee will try Puerto Rico. This committee has been very 
helpful to the commonwealth in its building of Tren Urbano which in 
many cases some people believe could be the transportation model for 
other places in the Caribbean just as Puerto Rico, many believe, would 
be a democratic model for other places in the Caribbean.
    How is that project going from your point of view, and is 
it on time? What has been the cost problems, if any?
    You know what we read and what they tell us. What do you 
folks say?
    Mr. Jackson. I know that we have had a team working very 
closely with them, and I believe that the project is on track, 
but I do not have specific details on its performance to 
meeting this month's deliverables or to the immediate short-
term deliverables. I would be happy to get a detailed briefing 
on that particular project for you if that would be of 
interest.
    Mr. Serrano. Is my time up, Mr. Chairman?
    In that case I will stop. Thank you.

                        BUDGET SHORTFALL IN 2002

    Chairman Rogers. Thank you, Mr. Serrano.
    Let me briefly follow up on a point that was asked about, 
and that is the budget shortfall. We all know and you today 
have said that the monies you have on hand will not fund what 
you have to do this year. We all know that. And yet this being 
the practical ``where the rubber meets the road'' Committee, we 
have to write some numbers down, that must pass through 
Congress to get your money to you. That time is fastly 
approaching. We will do this in the springtime.
    [The information follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Jackson. Yes, sir.
    Chairman Rogers. And I realize that, as we have said here 
before, none of us, including you, have seen the challenges 
that faced DOT like this year. There are all sorts of potential 
disasters waiting for us financially: the deployment of the 
40,000 screeners; the purchase of the explosive detecting 
machines, whatever that may be and that is due to cost millions 
of dollars; the restructuring of airports to accommodate 
whatever we do with those machines; the shortfall in the 
Highway Trust Fund, the shortfall in the Airport and Airway 
Trust Fund; and so forth. We have some huge multibillion dollar 
hits that we know are coming, and yet we cannot seem to get any 
hard numbers from you on what to expect.
    I know you are going through the process and you have some 
things you have yet to decide. But I do not want us to be hit 
three days before a markup with a huge bill that we did not 
anticipate and cannot find the money for.
    We have to start building a case with the full committee--
--
    Mr. Jackson. Yes, sir.
    Chairman Rogers [continuing]. And the leadership in order 
to tell them what may happen.
    What do you think?
    [The information follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                       ADDITIONAL SECURITY COSTS

    Mr. Jackson. I propose to stay in almost weekly contact 
with you, Mr. Chairman, to make sure that you understand the 
process and the timing for our arrival at realistic numbers and 
estimates for what we have to do. I believe I can give you a 
little bit of a road map on how that will unfold, and then I 
pledge to you, and the Secretary pledges to you, that we will 
stay close. We need your help and cooperation. You have been 
generous in offering it, and we are going to take you up on it.
    Here is how I see it, if I could talk about the 
Transportation Security Administration first. That is the 
principal issue for '02. I am going to divide it into three 
component parts that are the large drivers of expense for us 
for this year that we have to nail down. Our first stated 
principle is that we do not want to speculate about a number. 
We want to give you facts. We want to be able to bring a 
spreadsheet up and show you the details and show you how it 
rolls up and show you our best estimates.
    When we do not know for sure about an assumption or a 
number, we will tell you that. When we have a preliminary shot 
at one of these three big categories that I am going to 
describe to you now, we will talk to you about that too. Here 
are the three big drivers that I see.

                       ADDITIONAL PERSONNEL COSTS

    The first big driver is personnel costs, and those 
personnel costs can be divided into two or three parts. The 
first part is during the transitional period, which begins at 
midnight on Saturday night when we assume the contractual 
responsibility for management of the third party screeners who 
work at airports to provide screening. We will be moving to 
full federalization of all those positions over the course of 
the next several months, and that will be completed by the end 
of the one-year anniversary on November 18.
    The first tier of costs have to do with the third party 
screening services that we must retain to provide stability in 
the system as we make this transition towards federalization.
    The mechanism that we are using to make this happen is as 
follows: We are going to have signed by this week, and we have 
already completed the negotiations with a number of the 
important firms, so-called bulk contract or an indefinite-
delivery indefinite-quantity (IDIQ) contract, which is the 
terms and conditions for our relationship with these existing 
third party screening companies.
    We have decided not to sign such a contract with one 
screening company, Argenbright. Those services will be 
transitioned to other firms as fast as we can do it in a 
reasonable way. The contracts then will have at each location 
an addenda that allows us to say we need this many screeners 
doing these type of functions, and if this person is not doing 
the job, out they go. If we have a surge, we can bring some 
more in. If we have a fall-off of needs, we can drop those 
down.
    We are going through an exercise through this week and 
weekend to assess the cost of those services. We have been 
negotiating, I think, fairly with the parties that are working, 
and they have been very committed to this process. I have been 
gratified by the patriotism and commitment that they have 
shown. So we will have those costs first.
    And we also are executing some contracts with the major 
airlines so that the security screening services that they 
provide right now, for example, the coordinators at each of the 
check points, can remain in place for a time until we can 
gradually replace those with our own supervisory personnel. 
Those contracts have basically been negotiated and executed so 
we will have some expense that flows through that category as 
well.
    Those are the roll-up costs on the screeners. In the 
nextseveral weeks we will have a better idea of that, although we will 
have to figure out the precise deployment strategy which will affect 
how many weeks of work we have to get under each of these contracts. 
That is the first big driver.
    The second big driver is the cost of our federal employee 
force that is going to be deployed. One of the first things on 
the checklist that people are doing this week is that the team 
of interim federal security representatives at larger airports 
assess, count and figure out how many assets are currently 
being used.
    I can tell you there has been spectacular growth in the 
number of assets deployed in screening at airports since 
September 11. On the whole, typically it is at least double 
from where they were on the 10th. In some places, for example, 
Minneapolis went from about 88 employees to near 500 employees 
doing the screening functions. So we have seen some very large 
jumps and some significant salary enhancements to keep those 
companies working and to manage the retention as the airlines 
pass responsibility to us.
    We are doing a full drill-down assessment at 429 locations 
of who is doing what, how many FTEs there are, and what type of 
functions we think we need. And we will come up with a number 
for the federal employees, but this is going to take us a month 
or so to have preliminary good numbers.
    That is the first big bucket--personnel costs. And I have 
explained in a little way how we are getting at those. I will 
be happy to go into more detail if you would like either in 
this hearing or at another time.

                             STAND-UP COSTS

    The second big category of expense has to do with the 
standing up of the Transportation Security Administration. This 
is the largest federal agency created since World War II. In 
order to make it work, and it is a very short time table to do 
it, we have a very aggressive and good plan to manage how to do 
this. We are using resources in the stand-up process to help us 
know where to allocate time, energy and dollars.
    For example, we have a pilot project at Baltimore-
Washington International Airport (BWI) to act as a laboratory 
at a major airport to work on technology and personnel 
deployment. We have retained an outside firm, or actually a 
collection of firms, to do a process map of how passengers move 
through airports at 15 airports, large and small, 
geographically distributed around the country. Those people 
will help us develop a template that will allow us to deploy 
the right type of people in the right type of way.
    Without trying to unpack the whole plan, there are a series 
of stand-up costs, one time expenses, that in the next month or 
two, we will have laid out with some degree of rigor. We can 
tell you about some of them right now, but obviously we are 
bringing closure to negotiations and planning on the rest of 
them in the very near term.

                     EXPLOSIVE DETECTION DEPLOYMENT

    That leaves then the third major category of expenses which 
has to do with meeting the one-year deadline of explosive 
detection deployment for all checked baggage.
    Secretary Mineta is absolutely determined that we are going 
to meet this, and I am driven to make it happen, as is the team 
of John Magaw and his folks, along with the FAA. We are not 
giving up on doing that. What we are talking about is how to do 
it and what tools we need to get it done.
    Those are large one time capital investment costs. We want 
to use the taxpayers' money effectively. We have brought 
McKinsey and Company in to do a baseline study of technologies 
that are used globally. We have brought the FAA Technical 
Center in to do some specific work to accelerate research and 
development on tools. We are looking at explosive detection 
capabilities across the whole spectrum to make this work, and 
to make an investment that will be fair for the taxpayers.
    We have to make security better every week, and that is 
what our objective is. And as we roll out this equipment, it 
will be improving.
    We have given letter agreement contracts for signature to 
the two companies that are currently certified for a 
significant jump start in their investment in this equipment. 
We have laid out a plan whereby they will provide us an 
intellectual property license that will allow us to use an 
integrator to meet the needs that they cannot meet with their 
current production capacity.
    So we have a plan, and we are working hard on bringing the 
details of that plan to you. But I will tell you, even today we 
have not yet completed the negotiation with these vendors on 
the discount that should come. It is absolutely unacceptable to 
pay the same price for many hundreds of machines as we are 
paying for just a handful, which was the past production levels 
that FAA had been purchasing.
    So there is a complex web of issues. We are hiring people 
literally to go out and help make those manufacturers more 
efficient and adept, look at their sourcing issues and to go 
behind the production capability. Those companies are 
cooperating very effectively with us.
    So that is the third big driver. And Mr. Chairman, I know 
that this is a web of work, but I think we can unpack on 
separate tracks for you those three categories: personnel, 
stand-up costs and equipment costs. And as we get preliminary 
views about how we see the costs, then we will share those with 
you.
    Chairman Rogers. Of the three elements that you mention, 
the one that I think is really the big variable is the EDS.
    Mr. Jackson. Yes, sir.
    Chairman Rogers. The explosive detection testing mandate 
that you are under. In this age of technology and rapid 
inventions, are we likely to see ourselves invest billions of 
dollars in some 2,000 plus of these enormous EDS machines, 
reconfigure the airports, I mean literally remodel every dog-
gone airport in the country to accommodate them, only to find 
at the end that somebody came up with a cheaper, quicker, 
smaller, more efficient, more productive way to do this? In the 
meantime, we will have spent zillions of dollars this year.
    Mr. Jackson. I think zillion is an Appropriations Committee 
term which means large, and that is one of the things that 
keeps me----
    Chairman Rogers. Well, zillion is a small figure. 
Godzillion is a bunch. [Laughter.]
    Mr. Jackson. Well, I am focused on the exact question that 
you asked and the Department has focused on the exact question 
you asked. We are trying to achieve a balance here.There is no 
rule book for doing this; we are inventing it as we go along. But with 
precision and with deliberate work. That is why we have not jumped out 
to buy a bunch of machines and just place an order and let it go. We 
need----
    Chairman Rogers. That is what you are preparing to do 
though.
    Mr. Jackson. We are going to have a plan that shows the 
whole deployment, and I think that what you will see in this 
plan is a couple of elements.
    One, a receptivity and a commitment to look over the 
horizon and see what type of tools might be used; and two, a 
commitment for this year that we deploy multiple tools to 
provide layers of security which are not simply a ``kill that 
with a hammer solution'', which is put in EDS machines there 
and just crank all things through them.
    We are looking at trace detection as a way to reconcile 
false positives and to augment the system. We are doing a pilot 
with two airlines in Salt Lake City right now. We have done lab 
tests on those. I had a several hour briefing with John Magaw 
and our technical folks on that earlier this week.
    So I think that we will see a multiplicity of tools in 
place, and we are going to try to keep our eye across the 
horizon to make sure that those are----
    Chairman Rogers. Well, just to be sure that everyone knows, 
before we try to find the billions of dollars that it would 
take to do the EDS machines, before we appropriate those 
dollars, you can expect that we are going to squeeze you until 
it hurts to be sure you have exhausted every other possible 
angle to get away from buying these enormous, big machines. You 
cannot get them in place all this year. Those two companies 
only make what, a couple hundred a year? You can out-source, 
but you cannot get on board 2,000 plus machines in these 
airports by the end of this year, can you?
    Mr. Jackson. I have not given up on that task.
    Chairman Rogers. I know, I know the line.
    Mr. Jackson. No, this is not a line, honestly. We have this 
mandate from Congress and it is the right mandate, which is to 
improve the security and get it done this year. And I think we 
have totally internalized this. This is not my ``dog and pony 
show'' speech for you. I am telling you that I believe that 
until we prove to ourselves that we are going to fail, we 
believe that we are going to make it.
    It means that we are going to have to take some very 
dramatically different steps to make it work. If we cannot put 
that into place, we will not meet it. But I believe we can, and 
so I have not given up on it.
    Chairman Rogers. Well, I salute you.
    Mr. Jackson. And you will watch me. That is good, and it 
will be helpful.
    Chairman Rogers. Watch you like a hawk.
    Mr. Jackson. Yes, sir.
    Chairman Rogers. I do not think it is going to work. I do 
not think you can make it happen, although your zeal and your 
dedication is what I like. I do not think it is practically 
possible to do.
    So assuming that I am right, I do not ask you to agree, but 
assume that I am right, we are going to require that you give 
us the options. If there are other ways to find bombs in bags 
than to build these enormous machines and tear up airports all 
over the country to put them in, which is going to be required 
in many airports. You will fill the whole lobby with these 
machines, and not be able to check every bag in these machines.

                      PASSENGER BAGGAGE SCREENING

    Mr. Jackson. We will be there with that plan and we will 
walk you through those details in gruesome detail, sir.
    I will tell you we are looking at these from multiple 
angles right now, and I will give you an example. I know that 
our Inspector General has testified with this Committee about 
the physical limitations on putting machines in lobbies. We 
cannot do that at many locations and make that work in a 
meaningful fashion.
    We have to look at all the tools that we have to put some 
below, some above, and also to reconfigure the types of tools 
that we throw at it and the policies that drive it. I am going 
to give you an example of a policy that is a provisional 
decision of this Department.
    The current process is to have passengers next to their bag 
if that bag has to be opened for an inspection. We are 
entertaining on a pilot basis the suspension of such a 
requirement so that we can have a bag checked, for example, in 
the baggage screening area below the check-in level, which is 
out of bounds to the public. There would be a great deal of 
scrutiny so that if we have to open a bag to check, we do not 
have to bring the passenger down to the lower level and 
associate the bag and the passenger together.
    That process worked when we were screening a small portion 
of bags. When we screen every bag, that process would bring us 
to our knees in many locations.
    So we are going to have to change the contract of carriage 
with the carriers to make it clear to their passengers what is 
going on. We have worked through those details with the airline 
industry. They are very supportive of this approach. This is 
just one example of why we have to move every lever that we can 
find to make it work. I am telling you, we are not giving up on 
making all those levers come together, and we will bring all 
the details of all the options and the cost back to this 
committee.
    Chairman Rogers. Well, I just do not want to--the trace 
machinery to me has great promise.
    Mr. Jackson. Yes, sir.
    Chairman Rogers. It is simple, it is quick, it is 
efficient, it is cheap, but apparently very effective. The 
back-scatter x-ray systems. There are other ways to do this 
than build these enormous machines at tremendous cost.
    Mr. Jackson. And we expect to have multiple tools in that 
tool kit to get the job done; yes, sir.

                      PENNSYLVANIA STATION TUNNEL

    Chairman Rogers. Okay. Chairman Wolf.
    Mr. Wolf. Thank you, Mr. Chairman, I will be very brief. I 
apologize for being late, and I know maybe some of the question 
were asked.
    Please give my best to Secretary Mineta. Hopefully he is 
recuperating and----
    Mr. Jackson. He is doing well. Thank you, Mr. Chairman.
    Mr. Wolf. On the Penn Station tunnel issue which ties into 
Amtrak, how much progress have you made? Have you ever been 
down in the station to----
    Mr. Jackson. I have. Yes, sir.
    Mr. Wolf. How is that going?
    Mr. Jackson. Well, we have $100 million for this year on 
that project, and that will be spent. It is about one-tenth of 
what is needed to do the three major tunnel projects in the 
northeast corridor: the New York, the Baltimore and Washington, 
D.C.
    Mr. Wolf. What one is the priority?
    Mr. Jackson. I cannot honestly make an assessment between 
those three, sir. I would be happy to try to look at that.
    [The information follows:]

    Of the three major tunnel projects on the Northeast 
Corridor, the project that has the highest priority is making 
fire and life safety improvements to the North Hudson and East 
River rail passenger tunnels in New York City. Although this 
tunnel project is assigned the highest priority, it is also the 
most costly--an estimated $898 million is needed for completion

    Mr. Wolf. No, that is okay. But if you have been down, I 
think you might think Penn Station might be?
    Mr. Jackson. Penn Station needs to be done, yes, sir.

                      OTHER SECURITY TECHNOLOGIES

    Mr. Wolf. The other thing is homeland security, what Mr. 
Rogers was saying, yes, FAA came up here, different machines 
and that just never--so hopefully you can do what you said that 
fast in a way that is productive and not--but FAA administrator 
has been talking about that. Of course, as you know, the 
security at the FAA has not been that good.
    Have you considered having some sort of forum or 
opportunity where companies who have the technology can come 
and take a day, take two days, and let you know what is going 
on, what they have on the shelf, what may be used other places 
because everyone is tying the technology to homeland security? 
Things that did not work before are coming out with homeland 
security, but there are a lot of good things going on out there 
in the private sector.
    Have you thought of taking the time where different 
companies can come in to tell you what they are doing whereby 
you put out a proposal, here are our concerns, here are our 
needs?

                         SECURITY TECHNOLOGIES

    Mr. Jackson. Yes, sir. You are right on target and we have 
been doing that in a couple of ways. I will try to describe 
those.
    Initially, right after September 11th, the Secretary 
commissioned a rapid response team, and one of those teams 
looked at a range of technologies that could be helpful for 
security of the aircraft and our airport operations. That 
provided a baseline of data which we have been using to go 
mine.
    Second, we put out a large solicitation out of our Research 
and Special Programs Administration for technology ideas of 
every sort that could be effective in homeland security across 
all modes of transportation. And we have about 600 what we 
think are solid ideas. They have been peer evaluated. They have 
been prioritized for some further work, and we are looking at 
those.
    In addition, in the Transportation Security Administration, 
we are identifying clusters of technology for specific ideas; 
for example, biometric identifiers, explosive detection 
equipment or screening for passengers or bags. Those are major 
categories of ongoing research and outreach.
    So we are looking at multiple tools. I recognize that 
members of Congress and certainly the transportation department 
has seen a lot of folks with good ideas, and we are trying to 
do that in a systematic way. There is a lot out there.

                              TRUCK SAFETY

    Mr. Wolf. Okay. The last few things, one is truck safety. I 
think it is important. Your administrator was here yesterday. 
He seems like a pretty good fellow; knows the industry 
obviously; came out of the industry. But truck safety should be 
a goal by the end of the year. You have really knocked those 
figures down. And I am concerned, particularly with the trucks 
coming in from Mexico, that that may not happen.
    And so hours of service has been kicking around so long. 
Truck safety ought to be a major priority. The administrator 
said 100 people die every week in accidents with trucks.
    Do you live in northern Virginia?
    Mr. Jackson. I do, sir, in your State.
    Mr. Wolf. The traffic, is one of the priorities. We put in 
language and Mr. Rogers was helpful, to ask the FTA to work 
with the State of Virginia, which is beginning to have a 
financial problem, if you have been reading the papers.
    Mr. Jackson. Yes, sir.

                   MASS TRANSIT IN NORTHERN VIRGINIA

    Mr. Wolf. And the localities, to come up with a way to 
rapidly develop mass transit, Rapid Bus Transit (RBT) initially 
and moving to rail in the Dulles corridor.
    Mr. Jackson. Yes, sir.
    Mr. Wolf. It would help us if you can have FTA, your best 
people working with the State, Fairfax County and Loudon County 
to make sure that we have something that is ready in time for 
reauthorization, something that is sound that moves a lot of 
people, that moves toward getting us that rail. I think it 
would be a big----
    Mr. Jackson. I would be happy to, and I live in the Dulles 
corridor so I know that----
    Mr. Wolf. Where do you live?
    Mr. Jackson. I live right on the other side of Tysons 
Corner.
    Mr. Wolf. Outside of?
    Mr. Jackson. Outside of the Beltway.
    Mr. Wolf. Okay, so you know. I do not have to tell you.
    Mr. Jackson. Yes, sir. I know the need, and I will tell you 
that I have spoken to Administrator Dorn about these issues, 
and I know that it is very much on her mind. The Congress has 
provided some money for the Environmental Impact Statement 
(EIS) and for the planning work for this corridor project, and 
we think we have a good start on the funding. We are working 
with Virginia effectively, I believe, and we are committed to 
supporting that project.
    Mr. Wolf. Okay, thank you very much. Thank you, Mr. 
Chairman.
    Chairman Rogers. Chairman Callahan.

                   AIRPORT SECURITY AT SMALL AIRPORTS

    Mr. Callahan. Thank you, Mr. Secretary, Mr. Chairman.
    Mr. Secretary, just briefly I would like to address three 
points. One, airport security at some of these smaller towns 
like Mobile, Alabama, andSummerset, Kentucky. I think that the 
FAA and the Department of Transportation have gone a little 
overboard on some of their security requirements in these 
areas. Mobile, Alabama is not an area that gets threats often. 
Yet they have reduced parking, and will not even let a cab park 
within 100 yards of the airport. I think that is going a little 
bit too far. The car rental companies have to walk their people 
out in the rain for 100 yards to get to their car, which is 
going to force us to try to come up with some money to build 
passage ways or covered ways to these areas. I think that maybe 
we ought to realize that we ought to concentrate on the larger 
area size city airports rather than some of these smaller 
airports.
    We do not want to be derelict. We do not want anyone to 
have an opportunity to do any harm if we can help it. It is so 
severe that this week when I checked in with my ticket with my 
congressional I.D. card that they told me that a congressional 
I.D. card is insufficient identification; that I had to go back 
100 yards to my automobile and get my driver's license out of 
the car, even though I had a government pictured I.D. It might 
have been just an isolated event, but I think we ought to look 
at our priorities in that regard.

                   COAST GUARD JURISDICTION IN MOBILE

    Secondly, and maybe this should wait until the time that 
our Coast Guard gets here, but I am afraid this is going to 
have to receive some attention from the Secretary's level. The 
Coast Guard in Mobile is involved in a private land dispute. It 
has nothing to do with navigable streams. A guy on his own farm 
built a bridge--a road over a lake on his property, and the 
fishermen think that he ought not be doing that because they 
were fishing in his lake. It has nothing to do with a navigable 
stream, and it is going to court and it is going to cost 
somebody hundreds of thousands of dollars to take that thing to 
Court.
    I think the Coast Guard ought to be directing their 
priorities into areas where they are supposed to be directing 
them, like drug interdiction and homeland security. To have 
someone from the Coast Guard all the way from New Orleans, 200 
miles away, coming up and getting involved in what is clearly a 
fish and wildlife dispute that has nothing to do with the 
United States Coast Guard, we are going to have some real 
problems with that continuing.
    I am going to have to ask you if it gets serious. Now the 
Coast Guard is going to tear the bridge down. They are going to 
fine him $1,000 a day. That is not the commission of the United 
States Coast Guard on private property. We are going to have to 
ultimately ask for the intervention of the Secretary or someone 
at a higher level to overrule some of these local people who 
are enforcing laws that have nothing to do with the mission of 
the Coast Guard.
    So I just wanted to bring those two things out. I will 
discuss it with the Commandant when he comes before this 
Committee, and I will close by fulfilling the request of my 
secretary. For some reason she is asking if I could get your 
autograph.
    Mr. Jackson. I will be happy to give the autograph, but I 
fear he or she will be disappointed.
    Sir, I would just tell you that I will speak to the 
Commandant myself today about that issue, and I will ask our 
Assistant Secretary to get back to you right away on a more 
detailed assessment of what we have there.
    [The information follows:]

    The body of water in question in Alabama connects Jim Burr 
Lake with Doctor's Lake, which is a tidal waterway and 
therefore a navigable waterway of the United States in 
accordance with 33 CFR 2.05. The U.S. Coast Guard (USCG) is 
statutorily obligated to prevent any interference with the 
navigable waters of the U.S. absent express permission granted 
by a bridge permit. Federal Bridge Statutes (33 U.S.C. Sections 
401; 491-535) make it unlawful to construct any bridge over the 
navigable waters of the United States without the prior 
approval of the location and plans by the Coast Guard. The 
bridge over the slough in question was constructed without 
receiving a bridge permit or prior approval from the Coast 
Guard.
    The Coast Guard was initially notified of the obstruction 
in October 2000. 500 local fishermen who use the waterway 
petitioned the Coast Guard to have the bridge owner of the 
unauthorized culvert bridge blocking the waterway to remove the 
obstruction because the bridge does not provide sufficient 
clearances for the reasonable needs of navigation. The Coast 
Guard finds itself in a position of having to respond to the 
complaints of the fishermen.
    The bridge owner has been notified that civil penalties 
will be assessed for building the bridge without prior Coast 
Guard approval. The Coast Guard is hopeful the bridge owner 
will cooperate with the 8th Coast Guard District Commander to 
remove this obstruction in order to avoid the assessment of 
civil penalties. The 8th Coast Guard District Bridge 
Administrator has been routinely corresponding with the bridge 
owner since being notified of the obstruction. To date, the 
owner has failed to remove the bridge. According to standard 
procedures, the Coast Guard is now pursuing administrative 
penalties for failure to remove the bridge.

    Mr. Jackson. On the issue of the small airports, when we 
put our people in place as federal representatives we will be 
happy to listen to any concerns that the local airport 
executives have.
    Your experience with the identification card points to 
something that we think will be an advantage of the federal 
deployment, which is consistency and common sense. We have to 
have both in larger measures, and having screenersdeployed and 
trained in the right way can address both of those needs.
    Mr. Callahan. Thank you.
    Mr. Jackson. Sir.
    Chairman Rogers. Thank you, Chairman Callahan.
    Ms. Granger.

                                 AMTRAK

    Ms. Granger. Thank you, Mr. Chairman.
    If we adopt the current budget, what is going to happen to 
Amtrak in 2003 and how will that occur?
    Mr. Jackson. The $521 million, Congresswoman, is a place-
holder so that we could have this conversation about what the 
future of Amtrak ought to look like, how much it needs, and how 
we are going to fund it, and provide a stable source of funding 
for the real needs. We are very open to the conversation about 
how to allocate funds and what we need to do once we find a 
solutionfor the fundamental problem.
    Amtrak can not continue to operate the system that they 
have today. I represent the Secretary on the board of directors 
at Amtrak, and I can tell you that they could not run the 
system that they are running today next year on $521 million, 
and that is what the president of Amtrak said.
    So they are facing in this----
    Ms. Granger. Let us say that we stay with the $521 million, 
however. Then what is the time frame?
    Mr. Jackson. George Warrington from Amtrak said that if 
they were funded at $521 million next year, that it would 
require the substantial elimination of long distance rail 
service next year.
    Ms. Granger. And that would occur where?
    Mr. Jackson. It would occur all across the grid.
    Ms. Granger. Thank you.
    Chairman Rogers. Thank you.
    Mr. Sabo, do you have anything further?

                       AIRPORT SCREENER CONTRACTS

    Mr. Sabo. Thank you, Mr. Chairman.
    The contracts go into effect this Sunday. How soon can we 
get the cost of those contracts? I assume you have a pretty 
good handle on those at this point?
    Mr. Jackson. We have good estimates, and it will be another 
week or so until I think we get it all packaged up and sorted 
out.
    One of the ambiguities about it, Congressman, is that they 
have been bid generally in this way: If you use the people that 
we have in place for the full nine months, here is the 
aggregate cost and here is the monthly burn rate for those 
contracts.
    So what we expect is some modifications airport-by-airport 
in those contracts. For example, as I mentioned earlier, we 
have not signed a contract with Argenbright, and some of the 
companies who are currently doing work for us. For example, I 
am going to use BWI again because it is where our laboratory 
work is going on, and I know a little bit more about that one.
    Argenbright serves that as one of the locations where they 
perform very badly. We are trying to use existing contractors 
serving that airport or other local airports to bid on that 
piece of work.
    The contract amendments that we have, or the contract 
proposals that we have right now, do not include filling that 
gap. We have to take a month or so to work our way through each 
of those particular circumstances that have a more detailed 
game plan so we will have greater and greater levels of 
granularity. We will have a big picture within the week of some 
macro costs, and then we will have a greater degree of 
granularity as we work through the roll-out of these screeners 
to federal employees.
    We are going to be starting in May with an initial brace of 
about 15 airports for deployment, and we will schedule all 429 
out through the end of November. And those decisions, which 
have not yet been made, will drive the cost equation for third 
party services. It will be a continually evolving process of 
bringing a greater degree of granularity.
    I know that it is a little frustrating for all of us right 
now, but that is the truth. That is what we have and we will 
share it with you as it unfolds.
    Mr. Sabo. Thank you, Mr. Chairman.

                         ESSENTIAL AIR SERVICE

    Chairman Rogers. Thank you. Let me change the subject to 
essential air service. After September 11, you issued a wide 
range of costs for the program from about $80 million to $120 
million, depending on how many communities lost service and the 
rising cost to provide service at the remaining ones.
    From what you know now, how many new EAS communities will 
be subsidized in '02, and what is the total cost?
    Mr. Jackson. I do not have a final number on new EAS 
communities, but I believe that the need that we expect for 
existing EAS communities and potential new entrants will be 
covered by the money that we have available to us this year, 
and that is why in our '03 budget we have proposed essentially 
a continuation at that baseline level.
    We built a modest cushion for new communities to come in, 
and we think that we will have covered the existing service 
areas. We have been reconfiguring the program to make it fit 
into the confines of the current appropriation and some of the 
report language. And we are imminently poised to release the 
results of the reshaping of the program for this year.
    Chairman Rogers. Now, you are requesting broad legislative 
authority to alter the program as the Department sees fit. Why 
is that necessary?
    Mr. Jackson. This is a program in which we have competing 
tension, and Mr. Chairman, I apologize in advance, I am going 
to give you my macro level understanding of it. I am not an EAS 
expert. I know enough just to be dangerous here.
    The law requires us to pay carriers and communities 
eligible for the program itself, and to do so independent of 
the question of whether we have an appropriation necessary and 
sufficient to cover those costs.
    It turns out anecdotally that our current General Counsel 
once engaged in a lawsuit with the Department of 
Transportation, representing an air carrier over precisely this 
issue, and forced the Department to find the funds to pay for 
it.
    So we believe that we need a little flexibility to 
structure this program that makes it operate in alignment with 
our available resources, and to do it in a fair and equitable 
way. I would be happy to work in more detail with you about the 
structure of those proposed flexibilities.
    [The information follows:]

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               HIGHWAY AND AVIATION TRUST FUND SHORTFALLS

    Chairman Rogers. All right. Now, with the problems in the 
Highway Trust Fund and the Airport and Airway Trust Fund, what 
options do we have to cure the shortfall?
    The Airport Trust Fund provides monies that run the FAA. 
These are not negotiable costs. We have got to have the money. 
If we have shortfalls, which we do in these two trust funds, 
what do you suggest?
    Mr. Jackson. Well, we are looking at reauthorization of 
both of them. I will try to unpack it with a couple of 
observations.
    First, on the Highway Trust Fund, and in general some of 
the same observations pertain to both, we have enjoyed the 
benefits of the plus-up that has come with the flow of funds 
into the trust funds, and now in the '03 budget we are facing 
for the first time a shortfall in revenue compared to the 
projected obligation limits that were part of the 
authorization.
    We believe that two important facts are at play in the 
discussion about the '03 budget.
    First, we are facing a very difficult year as an 
Administration and as a Congress to fund the priorities that we 
have because to continue the wartime footing before us, to 
fight the war abroad, and to win the battle domestically, the 
President is making some difficult choices about the overall 
amount of money that is in his budget.
    So breaking through the Highway Trust Fund to provide extra 
funds is really an important function about the commitments 
that the President has made overall and the judgments that the 
Congress will have to work with us on at the macro level.
    Second, I believe that the payout in the trust fund and the 
coincidence of '03 and reauthorization allows us an opportunity 
to diminish the effect upon states of this shortfall. The 
Administration believes that it will be important in the 
reauthorization to look at the mechanisms that we could put in 
place to diminish the variability that has taken place in this 
particular year, the $4.4 billion drop from the projected 
level. We think that we should take that on as part of the TEA-
21 reauthorization, to figure out how we can diminish the 
variation and smooth out any curves of that sort in the future.
    Chairman Rogers. Would that be in the form of new fees or 
increased fees?
    Mr. Jackson. We do not have an Administration proposal to 
lay on the table today. We would like to work through that with 
our authorization process, but----
    Chairman Rogers. The alternative is taking it out of the 
general treasury?
    Mr. Jackson. Well, I think what we are talking about is a 
smoothing mechanism that prevents the wide swings from year-to-
year.
    Chairman Rogers. Would that be in the form of sort of a 
rainy day fund?
    Mr. Jackson. I am open to every reasonable idea, Mr. 
Chairman.

                         TEA-21 REAUTHORIZATION

    Chairman Rogers. Well, as you know, I think, when passing 
TEA-21, few people realized what could happen. In fact, 
Chairman Shuster said during the debate on TEA-21 that there 
will come a time, or could come a time, when the revenues will 
be less than the year before, and we will have to deal with it 
at that time. But no one anticipated it, and there was nothing 
built into TEA-21 that gave us the flexibility to take away the 
roller coaster ride----
    Mr. Jackson. Yes, sir.
    Chairman Rogers [continuing]. In the economy, which we are 
into now.
    So when we reauthorize TEA-21 should there not be some sort 
of a fund that is set aside to cover such times as we are in 
right now, and subject to annual appropriating process?
    Mr. Jackson. I think that is one approach that we should 
look at carefully, and we will be happy to look at that with 
you. There are other ways that you might be able to address the 
look-back and look-forward mechanism which drives this 
variability to adjust the formula itself to smooth out these 
variations.
    I will tell you one other important point in thinking about 
it from our perspective, and this is reauthorization that would 
offer a chance to address this correction without taking away 
the discipline that has come with the TEA-21 mechanism of 
spending.
    You could look at the reauthorization as a chance to 
mitigate the effects of the '03 variation because if I have 
these numbers right, it is roughly 27 percent of the total 
funds that are obligated in the first year, 41 percent in 
subsequent years, and then trailing off to over a total of nine 
years.
    So the full impact of the total $4.4 billion drop off from 
the TEA-21 guarantee would not be recognized in '03. It would 
be recognized in '04, and subsequent years as well. So a change 
in '03----
    Chairman Rogers. An outlay variation.
    Mr. Jackson. Yes, sir.
    A change in '03 could offer a very significant opportunity 
in the reauthorization to address a one-time correction on the 
variability problem. So if we have that problem generically to 
fix in the new legislation, we also have this issue that could 
be addressed without breaking the firewalls, breaking the 
discipline, and breaking the budget.
    Chairman Rogers. Well, you understand that in this process 
there needs to be annual oversight. TEA-21 was passed almost 
five years ago. And the mechanisms it set up afforded us no 
overview, no annual review of the process, no adjustments as we 
go. It is a one-time shoot or miss, and that is where we got in 
trouble.
    And it seems to me if we go back to that same process we 
are being very, very foolish. But when you get in trouble, you 
know, you rely upon the formula. When you get in trouble who do 
you come to? Poor little appropriators to try to find a way to 
get you out of your mess that TEA-21 created.
    So if we are going to have to bail you out in the bad 
times, we would like a say so in the good times. Am I making 
myself clear?
    Mr. Jackson. You are absolutely clear, sir, and reasonable.

                    AIRPORT AND AVIATION TRUST FUND

    Chairman Rogers. And the Aviation Trust Fund, what are we 
going to do there?
    Mr. Jackson. Well, the expenses in Facilities and Equipment 
(F&E), in our operations account, and the airport grant program 
are not growing but they are basically stable when you account 
for the transition from the FAA of the funds that need to go 
into the Transportation Security Administration, and the work 
that has to be done there.
    We will be sending you a letter tomorrow from Secretary 
Mineta telling you that we have begun the transition on an 
interim basis through a memorandum of agreement between the FAA 
and the TSA, giving John Magaw some oversight over the people 
and the tools that he needs to make this transition work. But 
we will be coming back later this spring with a reprogramming 
request to make the formal transition of employees from one 
agency to the next later this year.
    I think that if you account for the movement of funds to 
TSA, we are not growing, but we are in the same range.

                UNDER SECRETARY OF TRANSPORTATION POLICY

    Chairman Rogers. Why should we approve your reorganization 
proposal; that is, fund the new office of the Under Secretary 
of Transportation Policy without knowing of any clear benefit 
from that?
    Mr. Jackson. This is a proposal that I have a personal 
passion about. I am a retread at DOT, sir, as you know. I was 
there under the previous President Bush, working for Andy Card 
as his chief of staff. And I believe that the transportation 
department has never built the type of aggressive, forward-
leaning, systematic policy shop that we need, frankly, to be a 
significant support to the Congress as they take on major tasks 
such as reauthorization of our core programs.
    For the Under Secretary job, we have recruited a 
tremendously effective fellow willing to take on that task, and 
this shop is going to become a magnet for some of the best 
people in the Department to come in for two months at a time, 
six weeks at a time, six months at a time on some occasion, to 
reconfigure how we do business and to be an internal think tank 
to manage transportation policy and planning in a more 
effective fashion.
    I think it is a very important initiative of the Secretary 
to give the Department the type of intellectual assets we need 
to meet the challenges that are so clearly strewn about the 
horizon of our work.
    [The information follows:]

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                       NEW HEADQUARTERS BUILDING

    Chairman Rogers. On the new building, have you signed the 
occupancy agreement with GSA?
    Mr. Jackson. No, sir, we have not.
    Chairman Rogers. Or a contract?
    Mr. Jackson. No, sir, we have not.
    Chairman Rogers. When do you anticipate that?
    Mr. Jackson. We are in ongoing negotiations with GSA, and 
we do not have a date certain to do this. We have some new 
needs that the department is grappling with, and GSA is working 
with us to address in terms of housing the Transportation 
Security Administration and meeting some post-9-11 security 
requirements that we have for protecting some of the assets 
that DOT must manage.
    [The information follows:]

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    Chairman Rogers. The Washington Post is not too happy about 
your selection. They say that the Southeast Center ``is located 
in a commercial wasteland with few amenities compared to your 
current site.''
    Would you worry about being there and the safety of your 
employees?
    Mr. Jackson. I think that is an area that is going to go 
through a very, significant change, revitalization and 
transformation over the period of time that this building will 
be under construction, and we are very hopeful that it will be 
an absolutely appropriate place to house our employees safely 
and to provide a great working environment.
    Chairman Rogers. The Mayor and the City Council do not like 
it either. [Laughter.]
    Mr. Jackson. I guess I live in an environment where 
sometimes people do not like everything that we decide.
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    Chairman Rogers. Well, we have questions that we can make 
for the record. We appreciate very much your testimony here 
today, and the work your staff did. We know you will stay in 
touch. You and we face the biggest challenge, I guess, that the 
Department has ever faced and certainly this subcommittee has 
ever faced this year----
    Mr. Jackson. Yes, sir.
    Chairman Rogers [continuing]. In meeting some huge 
problems. So good luck to you.
    Mr. Jackson. Thank you. We appreciate your support and 
help.
    [The information follows:]

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    Chairman Rogers. Thank you.

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                                          Wednesday, March 6, 2002.

                            U.S. COAST GUARD

                                WITNESS

ADMIRAL JAMES M. LOY, COMMANDANT, U.S. COAST GUARD
    Mr. Rogers. Good afternoon. The subcommittee will be in 
order. This afternoon, we are here to receive testimony on the 
Fiscal '03 budget request of the United States Coast Guard. 
That request totals $7.2 billion, a $1.9 billion, 36 percent 
increase over Fiscal '02. However, the real increase is much 
less than it appears due to a proposed accounting change for 
retirement benefits.
    This government-wide change adds about $1.1 billion to the 
Coast Guard budget, while removing it from mandatory accounts. 
So a more accurate statement of the increase is about 800 
million, or about 15 percent above the current year. The 
increase is offset by a proposal to collect $165 million in new 
user fees to cover the cost of Coast Guard navigation services.
    The Coast Guard continues to provide, year after year, 
critical safety and security services to the American people. 
Especially after the September 11th terrorist attacks, the 
Coast Guard has stepped up their activities to protect our 
vital ports and waterways. However, we need to make sure that 
they have adequate resources to take on this new challenge 
without seriously cutting back on other equally important 
missions, such as drug interdiction and search and rescue.
    The budget before us helps restore funding to these other 
missions, but there are still holes that need to be filled. 
Small boat stations and command centers require commitments 
over three to five years to address the serious staffing and 
training issues they face. Drug interdiction funding is still 
down, and we cannot restore the shortage of spare parts 
overnight. So we must work to rebuild the Coast Guard 
gradually, and this budget begins to do that.
    The Fiscal '03 budget proposes to increase capital funding 
as well. The Deepwater program would receive 500 million 
compared to 320 in the current year, and the National Distress 
System Modernization Project would receive 90 million, up from 
42. This comes at a price, though, as funding for shore 
facilities and housing is being reduced significantly.
    We want to make sure that the Coast Guard maintains a 
balanced acquisition program, so we will have some questions 
about that, I am sure. As the Coast Guard rebuilds and expands, 
we must also be mindful of economy and efficiency. When budgets 
are tight, there are inherent pressures to economize. As they 
go up, though, more scrutiny is needed. And we will be 
providing that scrutiny over the next few months, beginning 
today.
    This very well may be Commandant Jim Loy's last appearance 
before this subcommittee, as his term expires in a few short 
months. He has been an able and a visionary steward of the 
Coast Guard during his tenure, and the American people are 
better off because of your leadership.
    Admiral Loy. Thank you, Mr. Chairman.
    Mr. Rogers. We will be sorry to see you leave this post 
because you have been a hard worker and a determined supporter, 
pusher of programs, renovation of the Coast Guard. Under your 
command, the Coast Guard has entered into the biggest expansion 
program. And we wish you well, whatever life holds for you. But 
we hope that you will be back with us in an official or an 
unofficial capacity always to give us your best views.
    Admiral Loy. Thank you, sir.
    Mr. Rogers. We will be sorry to see you go, but that is the 
nature of the job, and we wish you well in your next endeavor. 
We will enter your written statement in the record without 
objection. And before we hear from you, I would like to yield 
to my partner, Mr. Sabo.
    Mr. Sabo. Well, thank you, Mr. Chairman. And to Admiral 
Loy, welcome to the committee. And let me share with the 
Chairman in thanking you for a job well done.
    Admiral Loy. Thank you, sir.
    Mr. Sabo. And congratulations, I wish you the best in 
future endeavors. But we still have a few important months 
ahead of us.
    Admiral Loy. A lot of work still to be done, yes, sir.
    Mr. Sabo. We look forward to hearing from you. Thank you.
    Mr. Rogers. You are recognized to summarize your written 
statement.

                            Verbal Statement

    Admiral Loy. Thank you, sir. Good afternoon, Mr. Chairman 
and distinguished members of the subcommittee. It is a pleasure 
to appear before you today to discuss the Coast Guard's Fiscal 
Year 2003 budget request and its impact on the essential daily 
services we provide the American public.
    My first responsibility today is to thank you, Mr. 
Chairman, for your personal effort and that of the committee 
membership and staff during the post-9/11 period, when the 
Transportation appropriation and then the fall supplemental 
appropriation was being negotiated. I am especially pleased 
with the structure of the $209 million supplemental, as it 
reflected not only our immediate maritime security 
requirements, including paying reservists that we called to 
duty, but also one-half of the FY '02 National Defense 
Authorization Act exposure. And that effort has enabled us to 
put the full capability of the Coast Guard, including solid 
maintenance accounts into the war on terrorism. And you were 
there when we needed you, Mr. Chairman, and we thank you very 
much for that support.
    Working with Secretary Mineta and the Department of 
Transportation, the Coast Guard's Fiscal '03 budget first and 
foremost represents significant increases to address our 
homeland security responsibilities. We are in a resource crisis 
to stand up the permanent capability to deal with our maritime 
security challenges, and this budget addresses it strongly.
    When the president said that the budget being sent to the 
United States Congress has the largest increase in spending for 
the Coast Guard in our nation's history, our ports, waterways, 
and coastal security, including approaches through our EEZ, are 
the focus of that plus-up.
    Last year, I spoke about the Coast Guard's multiyear plan 
to transform our organization by restoring our readiness and 
shaping our future to enable the Coast Guard as a multimission 
maritime service to adapt to the needs of our nation. This 
budget methodically continues that strategic effort, and also 
concentrates on our efforts to rebuilt our search and rescue 
program, a clear administration and congressional priority.
    All those intentions were shocked by the future that 
arrived unannounced on September 11th of last year. The 
transformation that we had designed occurred sooner, faster, 
and with greater force than we might have anticipated, but it 
did not alter our fundamental vision. We must continue that 
transformation. And as we bolster the foundation of our 
service, we will simultaneously enhance our increased maritime 
homeland security capabilities.
    Mr. Chairman, if I may, I will make just a couple of 
remarks about four items that I believe frame this budget. 
First, maritime security. The Coast Guard, with strong support 
from Secretary Mineta and Governor Ridge and the president has 
developed five key goals, which when met will radically improve 
the security of our nation's ports and waterways. This FY '03 
budget will make significant strides toward those five goals.
    They are: to build maritime domain awareness--and I will 
look forward to any questions that might be part of the 
exchange we have today to help all of us understand that; to 
control the movement of high interest vessels in our ports and 
waterways; to enhance the Coast Guard's presence on those 
waterways for the deterrent and response capability value that 
it represents; to protect the critical infrastructure and to 
protect Coast Guard forces; and last, to outreach, both at home 
and abroad, to help everyone understand that our ports and 
waterways and the new security paradigm there must become an 
all-hands evolution. Everyone must make a contribution for us 
to do that well.
    Second, our Search and Rescue Program. This committee 
focused very strongly on our SAR program last year, and I want 
to report back that I was listening carefully. The enacted '02 
budget and the supplemental and the FY '03 request are 
systematic steps in the five-year plan that we have developed. 
We just recently offered a review of that plan to the IG staff, 
and my feedback directly from Mr. Mead is that they were very 
pleased with what they say.
    More importantly, clear capability improvements, 
significant head count additions, solid training investments 
and very real equipment and technology improvements have been 
made and will continue in FY '03 with this budget.
    Third, the National Distress and Response System 
Modernization Project. This project will modernize the capital 
infrastructure that enables effective safety and security 
response capability. Many call it our maritime 911 system, and 
it is that, and it will be more than that. This budget, 690 
million, as you mentioned, Mr. Chairman, to accelerate the 
project, as this committee has requested.
    There are still three areas of seeming concern here. Did we 
eliminate important capabilities in the phase II RFP of that 
project? Will there still be coverage gaps? And is our adjusted 
standard for system restoration from 6 to 24 hours a reasonable 
decision to have taken? We have spent an awful lot of time on 
all three of these questions as the requirements were modified 
and the RFP was issued last month. I believe we made solid, 
cost-effective decisions on each of those. And the new system 
is enormously important, not only for SAR, but as the command 
and control system for all of our missions, including maritime 
security. And we are on track to complete the system by the 
fourth quarter of '06, as directed by the Congress.
    And fourth and last, the Integrated Deepwater System 
project. On his recent trip to Portland, Maine, President Bush 
said, ``We must make sure our Coast Guard has a modern fleet of 
vessels.'' The administration and the Congress have helped us 
move in that direction. We have reached out time and time again 
to get advice and to gain counsel from experts, and we are now 
only three months away from an award for this project. We are 
on track with very progressive thinking and a strongly 
applauded acquisition strategy.
    Last year, I was cautioned to be meticulous, methodical, 
and not rush to decisions. And we have done that and more. At 
the request of OMB, Acquisition Solutions, Incorporated 
conducted an independent review of the IDS phase II RFP. It 
delayed our timeline, but I believe it was time well spent. The 
review concluded the project was well conceived, well 
developed, and well managed. They strongly supported the 
acquisition strategy and said they felt IDS would be a model of 
performance-based success for others in the government to 
emulate. And as we speak, our team is reviewing the three 
proposals offered to that RFP.
    We remain ready to award in June, and this budget supports 
the next step. IDS will provide capability across all mission 
areas, including maritime security. We have scrubbed the 
requirements set hard since 9/11, and find IDS to be even more 
important to the Coast Guard and the nation.
    The global mission task sequence on which the 
contractspecifications and RFP were built actually focuses on the so-
called asymmetric threats. C-4 ISR is a fundamental core for that 
project. And for all the right reasons, 9/11 actually provides an even 
greater impetus for us to get on with IDS. It is the right project 
whose time has come.
    Mr. Chairman, my written statement closes with a quote from 
the president. He said, `I saw how the Coast Guard responded 
after 9/11, and I know how important the Coast Guard is for the 
safety and security and well-being of American citizens.'
    I am very proud of what every member of my service has been 
doing before and after 9/11. Our great strength is our 
multimission capability and the inherent flexibility to shift 
focus to the nation's immediate maritime need. That is what we 
did on 9/11, and this budget will underpin that capability for 
FY '03 and beyond.
    Thank you, Mr. Chairman, and I look forward to your 
questions.
    Mr. Rogers. Thank you, Admiral. Well, let me add to the 
president's commendations those of myself and the subcommittee, 
I am sure, for the great response that the Coast Guard provided 
the country on and after 9/11, particularly in New York. It has 
been an enormous challenge for you and your staff and your 
colleagues, but you have responded magnificently, and we 
appreciate the service that you and the others are giving the 
country.
    Admiral Loy. Thank you, sir.

                             PORT SECURITY

    Mr. Rogers. You have one of the heaviest responsibilities 
now for homeland security that exists, and that is to try to 
protect the coast and the shipping that comes into the country, 
and that is a huge undertaking, and you are severely 
undermanned for that purpose.
    Give us the broad parameters of how you are handling the 
additional port security duties since the 11th.
    Admiral Loy. All right, sir. Immediately after the 11th, on 
an operational mode, sir, we have surged as an organization 
almost in the same fashion that we surged for search and rescue 
cases from a given station or from a given locale. That surge 
at the organization level included--within minutes after the 
planes hit the towers, I was on the phone with Secretary Mineta 
to gain his permission, which is called for in his domestic 
authority, to activate Coast Guard reservists.
    Since then, we have had sort of on the average about a 
third of our SELRES on active duty supplementing and 
complementing Coast Guard active duty forces around the nation. 
We designed as quickly as we could a maritime security plan for 
the nation. That has been briefed, including its progress, 
several times up through and including Governor Ridge and the 
Office of Homeland Security. There are five basic principles to 
it, sir.
    I am of the mind that on 9/11, we were still very strong as 
a nation with respect to prevention and response and 
consequence management kind of skills, but somehow we had 
eroded our capability to know what was going on in the domain 
around us. So the first order of business was to design 
maritime domain awareness improvements for the maritime sector 
which we are responsible for.
    I sat with Governor Ridge and suggested to him that as the 
legally founded lead agency for port security, I should be 
working that issue and bring it as if it were a puzzle piece to 
him as he puts it in place with all of the other things that he 
is responsible for, and he agreed for me to do that.
    So Maritime Domain Awareness for us, sir, is about 
vehicles, people, and in our case, ships, people and cargo 
coming toward the United States. And we have been working with 
a host of federal agencies, port authorities, private sector 
folks, and international outreach as well to devise better ways 
to stay abreast of people, cargo, and ships coming at the 
United States.
    The second pillar, if you will, of our plan is about 
controlling the movement of high interest vessels in our ports 
and waterways. So we have devised notions like sea marshals, 
escort services for those high interest vessels such that 
depending on the pieces of information we know as they approach 
our coast, we escort some quickly to their berth because they 
appear to be totally benign and not have a problem, and in 
other instances we may have as many as a 10- or 12-person 
boarding team made up of multiple agency members led by the 
Coast Guard Captain of the Port to guarantee that that vessel 
as it comes toward the United States is secure, the people that 
are on board that are supposed to be in charge are on board and 
in charge, and we may actually have people in the steering 
room, the engine room, and on the bridge to make absolutely 
certain that as they go to the pier, they do so in a safe 
manner.
    What we tried to do, sir, was take the scenario of planes 
hitting towers in the aviation sector and imagine what could be 
the nightmare scenarios in the maritime sector and begin to 
build programs to prevent and guard against those things.
    The third thing, sir, was about presence and the simple 
notion of having more visible Coast Guard presence on our ports 
and waterways. So that is about head count and small boats in 
particular, port security units, marine safety and security 
teams that we have formed to augment the visible presence of 
the Coast Guard in our ports and waterways.
    The fourth is about understanding what constitutes the 
critical infrastructure of our ports and waterways and doing 
something as best we can to prioritize very difficult lists 
that include everything from the Golden Gate Bridge and the 
Statue of Liberty to container terminals and nuclear power 
plants and be about the business of assuring, ensuring, 
adequate waterside security to those kind of assets.
    And lastly, sir, as I mentioned, this notion of outreach 
for me is very critical. We just had our fourth annual Harbor 
Safety Committee Conference down in Houston, wherein I 
encouraged all of those people to understand that the Congress 
is never going to be able to give the Coast Guard everything it 
needs to guarantee 100 percent port security for our country. 
We are just widely vulnerable in that sense. And the way we 
will get better is to not only have the Coast Guard meet its 
contribution to the overall paradigm of a raised security 
profile, but all of the rest of them have to do as well.
    So if you are an owner of a container terminal, if you are 
the owner of a petroleum handling facility alongside the 
Houston ship channel, you have to find a way to make your 
owncontribution to the things that you are responsible for.
    So those five things, sir, have become the hallmarks of our 
effort since 9/11.

                        SURVEILLANCE OF WEAPONS

    Mr. Rogers. In particular, what are you doing to raise our 
level of surveillance of possible chemical/biological/nuclear 
weapons?
    Admiral Loy. We are working with the Nuclear Regulatory 
Commission. We have been activated in a lot of different ports 
where the concerns that were generated from NRC suggested that 
there were waterside issues to be dealt with. And we have 
worked hard with those folks. There is a call that the 
Secretary put out to gain good ideas from the private sector in 
terms of sensors and such things as will help us with the CBRN. 
And we are especially focusing on contributions we as a service 
can make.
    We are not nuclear capable, Mr. Chairman, and we are 
essentially not really CBR in total capable. But the strike 
teams that we do have have excellent capability, and we have 
strengthened those, and the budget request offers an 
opportunity to do even more.
    If you look at the post office in Florida, the Hart Office 
Building here in town, and even Wall Street going back to work, 
they did so in the aftermath of Coast Guard strike team members 
clearing the air quality for them to be able to do so.
    So within the skill sets that we think are appropriate to 
our service, which in fact to date at least does not include 
nuclear sensoring, we are attempting to build those skills to a 
higher degree, work with others who have them as well, 
including the Army and the Marine Corps, to make the response 
capability available for any mayor, for any governor that finds 
himself in the first responder situation.

                        HOMELAND SECURITY BUDGET

    Mr. Rogers. And how much are you requesting for homeland 
security activities in your budget, and how does that compare 
to '02?
    Admiral Loy. The total dollar value is about $250 million, 
sir, as an upward tick focused directly on port security. '02, 
sort of at the half year point, if you look at the 
Transportation appropriation plus the half year supplemental 
passed in the fall, if we annualize that across the four-year--
and there is an attendant spring supplemental that supports 
that--we will be up about $250 million in terms of homeland 
security things in the '03 budget.
    Mr. Rogers. Many of the activities, such as the reserve 
activization----
    Admiral Loy. Yes, sir.
    Mr. Rogers [continuing]. Funded by the supplemental last 
year were provided funding for only six months.
    Admiral Loy. That is correct, sir.
    Mr. Rogers. Which expires right away here. Will you be 
asking additional funds in the supplemental to continue those 
activities through the end of the year?
    Admiral Loy. Yes, sir. We have made a request through 
Secretary Mineta. And I believe he is actually sitting down 
with Mr. Daniels today to close the numbers in, if you will, of 
that request. What we did is take the lead from the Congress, 
sir, with respect to the half year efforts that were funded for 
half years. For example, the six months worth, if you will, of 
the FY '02 NDAA exposure, the six months worth of reserve 
funding, the six months worth of those things. And we want very 
much to not only annualize them, but there are a small number 
of new initiatives that we think are appropriate that we have 
learned about since then that would offer us the last six 
months worth of capability to hold our contribution level where 
it is today.
    Then the '03 budget request annualizes all of that, 
assuming that second spring supplemental will be coming our 
way, sir.

                              NEW NORMALCY

    Mr. Rogers. I am looking at your pre-September 11th posture 
map, or slide. And then compared with your post-September 11th 
deployment, I guess, picture. And obviously, you shifted your 
forces dramatically in that period of time. And obviously some 
of the more traditional missions of the Coast Guard have 
suffered.
    Admiral Loy. Yes, sir.
    Mr. Rogers. Tell us about that.
    Admiral Loy. All right, sir. On the 10th of September, in 
terms of our operating expense budgeted capability, we were 
spending around 2 percent of that budgeted capability on what 
are port security, class port security, things. Within days, 
that figure had risen to over 50 percent, and probably peaked 
out around 57 or 58 percent of our budgeted capability 
addressing specifically port security things.
    That is that notion I was offering before, sir, where we 
sort of surged everything we had as an organization. And ever 
since then, we have been gradually relaxing to the point where 
we will find the new normalcy in terms of our dedication to 
port security activity. We think and have reflected that in the 
'03 budget request to be somewhere around 23, 24 percent.
    There is a chart, Mr. Chairman, that has three sort of 
budget wheels that I would offer as a bit of an explanation 
here. It offers us a chance to note that 22 percent of the '03 
President's request would be devoted to port, waterways, and 
coastal security. And you get a feel, sir, for what '02 would 
have been normally, and what it will end up in for the other 
mission areas as well.
    [The information follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Admiral Loy. So our intention, sir, is to as a multimission 
service refocused on the nation's highest priority 
concentratetowards about a 22 percent budgeted capability devotion to 
port security, and borrow where we need a percentage or two or three 
from drug interdiction from Fisheries enforcement and the other high 
intensity law enforcement missions that we have, understanding that as 
those vessels return to do that work, they will represent sensing 
capability in the exclusive economic zone of our nation and other 
places as well.
    So the loss, if you will, in terms of focus from those 
other mission areas is a very real thing for us to comprehend. 
And over the course of this three year build, we have designed, 
Mr. Chairman, a three-year program that will build what we 
think is the adequate Coast Guard contribution to homeland 
security and have at that point returned to the full capability 
in our other mission areas.
    So '03 is the first year of that three-year process.
    Mr. Rogers. So at the end of three years, what will we see?
    Admiral Loy. I think at the end of three years, sir, we 
will be probably focusing a dollar value about constant, if in 
fact '03 in the ports, waterways, and coastal security piece of 
the pie will sort of hold constant. And as we continue to grow, 
we will be able to return completely to the other mission 
areas.
    We are doing this in bite-sized pieces, Mr. Chairman, 
because there are very real executability challenges associated 
with this for us, and we wanted to ask for logical steps. You 
know, the get-well-kick notion that would suggest, for example, 
we might come to you this year and seek 5- or 6,000 new 
positions for the Coast Guard, we probably can't recruit them, 
train them, and get them through the system to the point where 
they would actually be contributing members of the organization 
by one year's time. So we have taken three bite-sized pieces 
and arrayed them over this three-year build.

                        DRUG INTERDICTION EFFORT

    Mr. Rogers. Well, we are concerned about the drug 
interdiction mission, obviously, of the Coast Guard.
    Admiral Loy. Yes, sir.
    Mr. Rogers. As well as the others. Will the drug 
interdiction effort suffer? Has it suffered?
    Admiral Loy. Sir, it is very difficult--you know, what we 
don't get from that particular customer is sort of their bottom 
line at the end of any given year. What I can tell you, sir, is 
that at this point in this year, which is very close to half 
way through the fiscal year, we are actually ahead of the body 
count end of the metrics that we keep very carefully in terms 
of seizures of cocaine, seizures of marijuana, the number of 
illegal migrants interdicted at sea. We are actually ahead of 
what was record-setting years, as you know, for the last three 
so far this year.
    I attribute that to a number of different things, but the 
number of parameters associated with that formula are very 
complex, and we never know the denominator. You know, we never 
know what the effort of the bad guy is in terms of attempting 
to shift X number of tons of cocaine from the south.
    I attribute it to a much better performing intelligence 
apparatus. As you know, Mr. Chairman, over the last two years 
we have worked very hard to rerack and centralize--build very 
good requirements that the drug fighting agencies offer inside 
the intelligence community so that they can focus on the kind 
of deliverables they give us. That is what has yielded for us 
in the last several years multiple-ton seizures, you know, 250 
miles southwest of the Galapagos, when normally we would not 
have a cutter patrolling there.
    The other things that I would point to are much better 
cooperation from the Mexican government, much better 
cooperation from the Columbian government, and many more 
contributions from many of the South American and Central 
American governments as it relates to dealing in their own 
territorial waters.
    So there are many elements to that formula. So far we are 
ahead of the game in body count. And what I don't know, sir, is 
whether that is a reflection of a pressed flow that the bad 
guys are trying to take advantage of since 9/11, or whether the 
good things that we are doing, including the bilateral 
negotiations that we have had with so many of these countries, 
are beginning to take hold and give us some traction and 
productivity in that area.
    Mr. Rogers. Well, I want to come back to that after a 
while.
    Admiral Loy. Yes, sir.
    Mr. Rogers. I will yield to Mr. Sabo.

                              SUPPLEMENTAL

    Mr. Sabo. Thank you, Mr. Chairman. I am curious about the 
timing for the new supplemental. If the first supplemental 
takes care of the first six months of the year, that ends the 
end of March.
    Admiral Loy. I am curious as well, sir. And what I think, 
there are enough indicators of intention based on how the first 
one was structured, sort of presuming it would be a six-month 
one that ended in March, that I would like to think within days 
or a week or so the administration would have the spring 
request up here. And given the Congress's intent reflected in 
the way they structured the fall supplemental, with the way you 
structured the fall supplemental, and the president's request 
here, the spending patterns, if you will, I think would be such 
that we would hold onto--I won't say an assumption that the 
Congress is going to do what we need to do, but that is, I 
think, a very, very----
    Mr. Sabo. So you will maintain spending.
    Admiral Loy. Oh, yes, sir. That is the only choice we have. 
We are doing----
    Mr. Sabo. Yes. It is not likely to be passed soon--we are 
here this week, next week.
    Admiral Loy. Yes, sir. I understand.
    Mr. Sabo. Then we are gone for a couple of weeks.
    Admiral Loy. I understand.
    Mr. Sabo. It is probably going to be well into April or 
later before that bill is passed.
    Admiral Loy. Yes, sir. I have no intention to do anything 
other than continue the effort that we have undertaken, 
especially with respect to homeland security. That is not 
something we can interrupt at this point, sir.

                         BUY AMERICAN PROVISION

    Mr. Sabo. Okay. The Transportation appropriation bill has a 
Buy American provision. And my understanding is that on one of 
the bridges--it is the Burlington Northern and Santa Fe 
Railroad bridge----
    Admiral Loy. Yes, sir. Over the Mississippi?
    Mr. Sabo [continuing]. That the project has received $13.8 
million in bridge funding, and it is being used to buy 4,500 
tons of non-U.S. steel.
    Admiral Loy. Several things, sir. One, I think those 
dollars that you quoted were probably '98, maybe '99, dollars 
in terms of getting that project underway. I remember our 
request in '02 sought additional monies for that particular 
project, and the resultant bridge adjustments in the 
finalappropriation did not fund anything additional for the Burlington 
project, but I think inserted four or five other bridge projects that 
the Congress preferred the money to go to.
    But as it relates to buying American or buying 
international steel, I would say this. The Coast Guard role 
with respect to a bridge project is associated primarily from 
the Truman-Hobbs legislation. And there is no role for us to 
play as it relates to what the contractor buys in terms of 
American or foreign steel. I can probably just surmise, sir, 
that over time, certainly in the recent past, an awful lot of 
Canadian and Korean steel were probably procured for a lot of 
those projects.
    I am happy to look into that, Mr. Sabo, but we don't have a 
role to play in terms of what the contractor buys once the--our 
concern is whether or not the bridge to be built will be an 
obstruction to the safe negotiation of the waterway that it is 
going over. And having exercised that, then the follow-on 
challenges or decisions taken to buy steel in the United States 
or foreign is up to the contractor. And I am sure he has 
obligations under the Buy American plan, or I would think that 
was the case.
    And what I can tell you is that we encourage strongly--each 
time such a project is funded, we encourage any contractor 
under Truman-Hobbs projects to buy American. That is part of 
the process that we go through each and every time. But we have 
no authority to make certain that that happens.
    Mr. Sabo. Well, the language, as I understand it, has been 
in the bill for a while, and it says none of the funds 
available in this act may be expended by an entity unless the 
entity agrees that in expending the funds the entity will 
comply with the Buy American Act.
    Admiral Loy. Yes, sir.
    Mr. Sabo. That is what they should do.
    Admiral Loy. I think there has been what I will call 
traditional--and I don't mean hundreds of years; I mean for the 
last several years, perhaps a decade. There has been a 
traditional interpretation there that is currently under review 
by the department's general counsel. What I would be glad to 
do, sir, is take stock of that with what is happening with the 
review in the general counsel's office and get back to you, if 
I may.
    Mr. Sabo. Okay. Because that is of concern to many.
    Admiral Loy. Yes, sir.
    Mr. Sabo. One other question. The Coast Guard currently has 
42 people assigned to either the Office of Homeland Security or 
to the Transportation Security Administration. It just seems 
like quite a few folks. Will that continue in 2003?
    Admiral Loy. Those numbers are--on Governor Ridge's arrival 
in town, we have seconded to him on a temporary basis--I think 
the number is close to about 24 or 25. I can get you a firm 
number.
    Mr. Sabo. Okay.
    Admiral Loy. The principal absorber of those people was 
when he wanted to stand up a coordination center at the new 
office spaces that were just recently opened over on Nebraska 
Avenue. We committed some Coast Guard petty officers and junior 
officers to be the watch standers there to help them get off 
the ground. It is my understanding that as they bring people 
aboard and get them trained adequately in that skill set, we 
will get those folks back.
    On his personal staff, we have a single flag officer that 
has been sent over there who is paying enormous dividends to us 
and to the Secretary in terms of staying abreast of what the 
policy adjustments and thinking and issues are happening in 
OHS.
    With respect to TSA, sir, we have, I think, one person who 
has been working with Undersecretary McGaw to help him sort 
things out as they get things going over there. And I am aware 
of a number of folks who have recently retired or are about to 
retire who are looking and perhaps have already been selected 
for positions in the Transportation Security Administration.
    Mr. Sabo. But you only have one person over there at this 
point?
    Admiral Loy. A captain by the name of Steve Frolich, who is 
sort of working as an executive assistant for John McGaw, you 
know, just helping them work through issues as they come alive 
in an organization.
    Mr. Sabo. Okay. Thank you, Mr. Chairman.

                          SECURITY TECHNOLOGY

    Mr. Rogers. Thank you, Mr. Sabo. I remain very concerned, 
and I know you do, too, because we have talked about this, 
about the security of the millions of container freighter, the 
cargo containers that flow through the ports each year. What 
types of technology or other security enhancements should we 
put in place, and when, to raise the bar of security in that 
area? And I realize we are in an open hearing here and we can't 
go into much detail. But can you talk about that?
    Admiral Loy. Yes, sir. I think I can generally. First of 
all, I think we have to separate the notion of port of entry 
inspection capability from what I think must be new thinking 
brought to the idea of cargo security as a piece of that 
Maritime Domain Awareness issue that I spoke of at the 
beginning.
    I think there are technological advancements that are sort 
of available to us now. I was just down with Commissioner 
Boehner of the Customs Service in Charleston at a field hearing 
that Senator Hollings and Senator Breaux held two weeks ago and 
saw demonstrated a sensor which essentially allows a full 
container to be screened for gamma ray, a gamma ray-detector, 
basically, that screens and gives you an image of everything 
that is inside that container.
    There are lots of almost Radio Shack level kinds of 
technology elements available to us now so that--because I 
think our goal has to be severalfold. One of them is to take 
what have been essentially dumb steel boxes and translate them 
into something that can actually be more helpful to us.
    So the idea of electronic seals on those boxes when they 
are actually loaded, the notion of whether there could be a GPS 
indicator attached to the box such that we know if it would 
divert from its intended course from having been stuffed in 
central Germany and trucked to Rotterdam and shipped to Halifax 
and railed through Canada to Iowa City or wherever it is going. 
And if there was a diversion from that path, a GPS indicator 
could help us understand that.
    I think there are probably thermal and light kind of 
sensors that can be, without an awful lot of money, part of the 
system associated with tracking, and know whether or not that 
particular box has been violated, opened, in some fashion 
between intended stuffing and intended opening at the other 
end.
    I know Commissioner Boehner of the Customs Service, and 
Commissioner Boehner is first and foremost responsible for the 
port of entry inspection procedures, and they are working very 
hard on that. I think they have been given a little bit of a 
bum rap. A lot of us have heard about only 2 percent of the 
containers are opened and inspected as they come into the 
country. That is a body count and a capability issue. But 
perhaps more importantly, what is missing in that press kind of 
coverage is that the 2 percent is a targeted 2 percent. They 
have a very sophisticated targeting system. We need to get away 
from the impression that they just sort of open every 50th 
container. They open 2 percent, yes, but a very sophisticated, 
targeted 2 percent. And so it is a much better circumstance 
than might meet the eye in some of the press coverage that I 
have seen.
    And then the other notion, sir, to me is that we have to 
get into some kind of a point of origin to point of destination 
thinking pattern. And I am convinced the key to that is all 
about information. Somehow or other, sir, we need to be, and we 
are working very hard, with the commercial sector and with IT 
architecture type of people to help us understand what would be 
the critical data elements that could be provided that would 
enable the law enforcement agencies responsible to at the same 
time they are searching for the 2 or 5 or 8 percent of the bad 
guys, to at the same time turn that coin over and identify the 
92 percent or the 95 percent of the good guys.
    This balance between a higher security profile and 
maintaining our commercial flow is enormously important to us 
as a nation. And so part of the finding of the good guys is 
such that we can easy-pass them through the more sophisticated 
security profiles that we will be building.
    That is a general answer, sir. I think there are real port 
of entry inspection gadgetry sensor devices with respect to not 
only weapons of mass destruction in a CBR locker, but just to 
validate that if that container is supposed to be filled with 
two Volkswagens, that is what is in there.
    You know, we had an incident in Genoa, Italy, where they 
opened a container and found inside a guy in a pinstriped suit 
with a head and reading materials and water and food. And not 
only that, outlined reviews of airports in the United States 
and how-to books on being an aircraft mechanic and that kind of 
thing. So here is a guy who began a voyage in Egypt, happened 
to be--this container was opened in Genoa, and his destination 
was somewhere in Canada. He was going to Halifax, and Lord 
knows where he might have been going thereafter.
    I will be happy in a more closed session to give you a 
little bit more review of that. That was a very public case. 
But the challenge as to what is in those boxes is the biggest 
black hole we have, Mr. Chairman.

                           DRUG INTERDICTION

    Mr. Rogers. Well, I agree with you. Back to the drug 
interdiction question, you mentioned that your seizures--and I 
think you said your seizures of drugs is up.
    Admiral Loy. Actually ahead of last year's pace, yes, sir.
    Mr. Rogers. But it is below your performance plan goal, I 
think, for cocaine at least.
    Admiral Loy. Yes, sir.
    Mr. Rogers. And that is the third year in a row that you 
have missed or not got up to your performance plan goal, 
because the ONDCP estimates the amount of drugs that they 
expect to come in. And then you set your goal of seizing a 
certain percent of what is expected to come in.
    Admiral Loy. Seizure rate, yes, sir.
    Mr. Rogers. Seizure rate. And for Fiscal '99, your goal was 
12-1/2 percent. You got 12.2.
    Admiral Loy. Mm-hmm.
    Mr. Rogers. In 2000, you set your goal at 13 percent. You 
got 10.6. And then '01, the goal was 15 percent. You seized 
11.1. And, of course, that was taking place before 9/11.
    Admiral Loy. Correct, sir.
    Mr. Rogers. Explain that for us.
    Admiral Loy. Yes, sir. I think what I will call a static 
devotion of assets to the chore over the years that you 
describe would have us not be surprised if we were sort of 
about the same place each year in terms of 10\1/2\, 11, 12 
percent of what we know to be the seizure rate computation.
    When General McCaffrey was at ONDCP, he set these 10-year 
goals. We started with a baseline of 1996 such that the first 
five-year window should have been at the end of '02 we should 
have been up from about 8\1/2\ or so percent in '96 to about 18 
percent in '02 and onward to about a 28 percent goal in '07.
    The real challenge, Mr. Chairman, in between is that the 
Coast Guard has not been able to add additional resources to 
the game. One of my responsibilities outside my Coast Guard hat 
is as the U.S.'s Interdiction Coordinator, and I have an 
obligation to report to the drug czar each year as to how we 
have done with what we have had and what the shortfall of 
assets would be in order for us to meet those performance goals 
that you are describing.
    So in each case, in each of the last years that I have been 
responsible to the Drug Czar for that, I have made that report 
and cited shortfalls in military patrol aircraft or shortfalls 
in hauls, whether they are Navy, Coast Guard, or Dutch or 
anywhere else at sea that would enable us to add resources and 
therefore be more productive in the transit zone.
    Now what is very hard, Mr. Chairman, is for me to sit here 
and tell you that it is a static environment, and if we simply 
added ships and planes, cutter days and aircraft dollars, that 
we would do a better job in reaching those goals because the 
bad guys are making decisions about what they perceive to be 
the easier way or the easier path, and that is the way they go. 
And this is just the transit zone Coast Guard piece to the 
overall puzzle of reducing the supply of drugs as they come to 
the United States.
    I think the new drug policy will have to be watched very 
carefully. The President rolled out his drug strategy in 
overview form just about two weeks ago when Mr. Walters was 
confirmed and in his job. There will be a follow-on strategy 
piece, sir, that will come out and that will I believe include 
the metrics associated with the goals for all the agencies. I 
am watchful for that, and we will keep the committee posted as 
that occurs and how we should be doing against those goals.
    Mr. Rogers. Your performance plan says, and I quote, ``The 
dramatic increase in total flow of cocaine through the transit 
zone each year has outpaced the Coast Guard's increasing 
seizure successes, resulting in a corresponding drop in seizure 
rates.''
    Admiral Loy. That is correct, sir.
    Mr. Rogers. End of quote. We are falling behind inthis war, 
aren't we?
    Admiral Loy. I would say without the attendant investment 
against what we know to be the flow, certainly over the last 
two years, as we have watched the flow rate continue to include 
a drift of more and more and more, taking noncommercial 
maritime legs on their way principally into Central America and 
Mexico--what I am saying, sir, is we now are reading somewhere 
close to 90 percent or more of cocaine that is eventually 
coming to the United States will have a maritime leg to it as 
it leaves South America, whether it is in the Pacific or the 
Caribbean, and on its way to Central American and on into 
Mexico. Still in terms of immediate delivery into the United 
States, cocaine being what we know the most about, well over 75 
percent, probably closer to 80 percent, of the cocaine that 
comes into the United States crosses our southwest border.
    So the notion of aggressively dealing with that on the 
southwest border I think is important. But we have now 
recognized this maritime leg. That is an opportunity. If we had 
an adequate number of resources, we would be doing better.
    Mr. Rogers. And I notice that almost 90 percent of your 
seizures, of maritime seizures, in Fiscal '01, were in the 
Pacific, eastern Pacific.
    Admiral Loy. It has been a very interesting drift over the 
last three years.
    Mr. Rogers. A big change from the mid-90s, when the big 
problem was through the Caribbean.
    Admiral Loy. The Caribbean, yes, sir.
    Mr. Rogers. What is going on?
    Admiral Loy. We think it is simply what the bad guy 
perceives to be the path of least resistance is where he is 
going to go. There is no doubt that there are geographic 
advantages to us in the Caribbean. And if you look at Cuba, 
there is this little stretch of water known as the path between 
the western tip of Cuba and Mexico, and equally between Cuba 
and Haiti, and the Ramona Pass between the Dominican Republic 
and Puerto Rico, and the Anagoda Pass between Puerto Rico and 
the Virgin Islands.
    Each of those represents a tactical opportunity for us to 
shut down. The Pacific, in its vastness, is a much more 
challenging tactical area of operations. The bad guys have 
realized that, and we are now much more dependent on intel 
cuing. The good news is that we are much more capable with 
respect to intel cuing than we have ever been in the past.
    So my sense is they have simply made the judgment that they 
are going to be better off, potentially with more success on 
delivery, if they take the Pacific path. We have worked very 
hard to interrupt that line of thinking by some really 
significant seizures that we have had in the Pacific. Just two 
weeks ago, we had another 25,000-pound cocaine seizure well 
southwest of the Galapagos Islands. And just yesterday and 
today, we are working three other cases.
    So we are working those cases because we have a much better 
intel cell in Key West, Florida, supported inside by the 
community, producing tactically actionable products for us.
    Mr. Rogers. Ms. Emerson.
    Ms. Emerson. Thanks, Mr. Chairman. Admiral Loy, thank you. 
Sorry that I am late.
    Admiral Loy. Not a problem.

                      CUBA'S ANTIDRUG COOPERATION

    Ms. Emerson. Too many things to do at the same time. 
Speaking of Cuba, as you just mentioned, how would you 
characterize Cuba's cooperation in antidrug enforcement in the 
Caribbean?
    Admiral Loy. We as an organization, Ms. Emerson, have 
almost a daily contact with our counterparts in the Cuban 
border guard by way of communications capability from my 
district office in Miami, Florida, and the Cuban border guard 
in Havana. There is a Coast Guard officer that is assigned to 
the intersection in Havana, which his principal purpose is to 
facilitate a better cooperation or interaction between the 
Cuban border guard and the Coast Guard. In not only counter-
narcotics efforts, but in search and rescue efforts and in 
migrant mission efforts, I would characterize our interchange 
as being very good.
    In other words, we will fax or e-mail back and forth 
between those command centers information such that the other 
can be aware of whatever kind of case is working. And that 
process has actually yielded for us success in the drug war, 
successes in the drug war, successes in the migrant issues, 
which are very prevalent, as you know, in the straits of 
Florida, and often in the simple search and rescue issues as 
well.
    Ms. Emerson. Okay. Let me ask you then, during the past 
several years, has the Coast Guard ever come across a case 
where the Cuban authorities might have been deliberately 
withholding information about any kind of illegal drug 
shipments or concealing information or, to the best of your 
knowledge, collaborating with any kind of drug traffickers?
    Admiral Loy. To the best of my knowledge, no. We have had, 
as I say, sort of factually based exchanges almost on a daily 
basis with the Cuban border guard. And to my knowledge, that 
has not happened, no.
    Ms. Emerson. Okay. Thank you. And then let me just ask you 
one last question, if I could. Are you all in the Coast Guard 
contributing to the State Department's report on the U.S./Cuba 
drug issues that is being written I guess pursuant to the 
Foreign Operations Appropriations Bill? Or have you been asked 
to?
    Admiral Loy. I don't know. My personal read--I don't know 
the answer. I can get you a good answer to that.
    Ms. Emerson. Okay.
    Admiral Loy. My guess is because of that officer in the 
Cuban interest section and because the State Department is 
always on the phone when we are dealing in what we call a 
Presidential Decision 27 process, that they are clearly aware 
of the contributions that we have and make.
    Ms. Emerson. That is fine.
    Admiral Loy. And my guess is we are involved. But I will 
get you a final answer.
    Ms. Emerson. Thank you so much, Admiral. Thank you, Mr. 
Chairman.

                          SMALL BOAT STATIONS

    Mr. Rogers. Thank you. Admiral, it was pretty well 
documented last year that personnel of the small boat stations 
are overworked, undertrained, and fatigued. Any progress?
    Admiral Loy. Yes, sir. And I thank you for the question 
because I know it was a serious interest and concern for the 
committee, and the $14 million that was reflected by that 
concern in the '02 budget is a godsend for us in that regard.
    What we have done, sir, is build a five-year growth plan 
for our search and Rescue Program to get it back where I think 
it needs to be. '03 will be the third year of thatfive-year 
plan. Fiscal '02, we will add about 200 people into the body count, if 
you will, at our multimission stations, about $16 million worth of 
equipment, and standing back up a boatswain mate school, which is the 
school that teaches our coxswains all the skill sets they need to be 
very good at what they do.
    In '03, we will add about another 200 people and about 
another $12 million worth of capability to that list. So I am 
delighted with the fact that we have got a plan in place that 
is methodically making progress. We just had a very good 
briefing for the IG shop, who as you know wrote a report last 
year on which the committee based an awful lot of its interest 
and concern. And the staff report back to me, directly to me 
from Ken Mead and to the staff from his staff, was that they 
were very pleased with the structure that we have put together.
    Mr. Rogers. Well, last year the IG told us that 70 percent 
of the vacant positions at both stations were being filled by 
recent boot camp graduates, little or no training in 
seamanship, piloting and navigation, small boat handling, 
search and rescue.
    Admiral Loy. Mm-hmm.
    Mr. Rogers. Are we getting more training into those people 
now?
    Admiral Loy. Yes, sir. There are several places where that 
is occurring. As I just indicated, the most responsible 
position is always the coxswain of that 41-footer or 47-footer 
that takes the boat out and actually gets the job done for us 
at our lifeboat stations. We have put back where it used to be 
down at our training center in Yorktown a very strong boatswain 
mate school that is both the entry level coxswain and the 
sophisticated skill set of the superior coxswain, as we call 
them, class A and class C schools. And the second things we are 
doing, Mr. Chairman, is to take that curriculum on the road 
with a standardization team that is visiting literally every 
lifeboat station of the Coast Guard and validating the kinds of 
questions at that station that the inspector general brought to 
our attention in this report.
    We will find out precisely where our shortages are. And as 
the committee has generally supported us in the '02 budget, we 
would hope that the request line in the '03 would allow us to 
continue to grow.

                               DEEPWATER

    Mr. Rogers. Has 9/11 and your new homeland security duties 
caused you to reevaluate the requirements of Deepwater, given 
that that is a program for over 50 miles from U.S shores? Have 
you changed your requirements of Deepwater?
    Admiral Loy. Sir, we immediately on the aftermath of 9/11 
put a team together that scrubbed several of our projects and 
their specifications, including Deepwater. The question then 
became would there be a change to the RFP on the street as a 
result of that scrubbing process.
    The thing I think that is very important for us to 
understand here is that the premise on which Deepwater was 
built back when we began, sir, is what we have called our 
global mission task sequence. And that is about surveying, 
detecting, classifying, identifying, and prosecuting. And we do 
that almost with all of our missions. We do it in search and 
rescue. We do it in law enforcement. And that is a fundamental 
foundation of functional things that have to be done was the 
premise under which Deepwater was built.
    Also, Deepwater was actually built anticipating this 
asymmetric array of threats, one of which jumped up and grabbed 
us as a nation on the 11th of September. So frankly, what 
happened in the wake of 9/11 was that deep water was cloaked 
with yet another set of requirements for us to get on with 
providing the service the offshore capability that it needs.
    That offshore capability, as you just described, 50 miles 
and out, would not--there is almost a logic break between the 
notion of Deepwater and whether something called Deepwater is 
going to be a help, so to speak, in the homeland security 
mission. But as I have indicated, one of our great challenges 
is to push our borders offshore. And the capability represented 
in the Deepwater, including Exclusive Economic Zone 
environment, will be enormously important for us as part of 
Maritime Domain Awareness as we build that program.
    Beyond that, it is also about patrol boats. The low end of 
the Deepwater capability that is being described by our three 
proposers does include patrol boats. And if you think about 9/
11, the vessels that were surged to the scene was the Deepwater 
capability of the organization. The C-130 patrols offshore, the 
helicopter deployments, including directly in New York City--I 
think there were nine airplanes that were allowed to be in the 
air on the 11th of September, and six of them were Coast Guard 
aircraft, Coast Guard helicopters, in and around New York City.
    So we should divorce the notion that Deepwater is 
exclusively serving 50 miles offshore, and as required they 
will surge and become part of our insurance policy and homeland 
security.
    Mr. Rogers. Will it cause you to change the mix of types of 
aircraft cutters, equipment that Deepwater had originally 
anticipated?
    Admiral Loy. I don't think it will, sir, but we have lots 
of flexibility in the post-award environment to make those kind 
of adjustments if they appear to be appropriate, including the 
sequence with which they are brought aboard and the specific 
assets that will be procured.
    As you know, Mr. Chairman, after the proprietary brief we 
gave the committee in the wake of this hearing last year, we 
still sort of have three sets of specific asset inventories 
being proposed to us by the three proposing consortia. We are 
within, I would say, frankly, sir, days to a week to 10 days of 
making our judgment with respect to the competitive range. That 
is the next step in the process. And whether we are carrying 
forward one, two, or three of those proposals on towards award, 
we will know that here very quickly, and we are on track by 15 
June to make that award.
    With that in mind, thereafter we will be able to make 
adjustments if we think they are appropriate.

                           MAINTENANCE BUDGET

    Mr. Rogers. Now your maintenance budget goes up by a 
staggering 45 percent in a single year, from 398 million to 
578.
    Admiral Loy. Yes, sir.
    Mr. Rogers. Why is that?
    Admiral Loy. Mr. Chairman, we have stolen from the 
maintenance accounts of this organization systematically for 
the last decade. This opportunity that the supplemental and 
then the '03 budget provided us was a chance to make the 
maintenance account whole. We decommissioned two cutters and 
three C-130s last year primarily because we were not able to 
keep up with the maintenance requirements associated with those 
assets.
    I mean, as a sailor and as an operator of those craft, the 
last thing you would have ever expected from me was some kind 
of notion that it was okay to decommission 210-foot medium 
endurance cutters and C-130 aircraft. But we were forced there 
by the systemic shortfall that we have experienced in the so-
called 4X accounts, as we refer to them, the maintenance 
accounts.
    We have four of them associated with our civil engineering 
maintenance requirements, aviation, naval engineering, and 
electronics. The '02 supplemental and the '03 budget request 
restores to where they should have been for a long time those 
maintenance capabilities. Especially, sir, for example, when 
you look at the squeeze that we will have on the ACNI account 
for the next several years, a full-up civil engineering 
maintenance account will enable us to do some of the things 
that you mentioned in your opening statement as to keeping 
housing where it needs to be, making repairs and renovations to 
existing civil engineering facilities.
    So the maintenance accounts have been the place we have 
gone to keep airplanes flying and to keep ships sailing over 
the last decade, and it was long overdue that we reinvested in 
them.
    Mr. Rogers. Is that a one shot, one-year deal?
    Admiral Loy. We will get it to that annualized level in 
'03, sir, and hopefully that will be something that we can hold 
on to for the foreseeable future.

                           HEALTH CARE BUDGET

    Mr. Rogers. And then finally let me ask you about the 
health care budget. Enormous increase, 105 percent increase 
over current year, and then the current year was 21 percent 
over last year.
    Admiral Loy. Mm-hmm.
    Mr. Rogers. What is going on there?
    Admiral Loy. Sir, that is mostly a reflection of the health 
care industry. It is not something out of the ordinary, I don't 
believe, for our service. We are dependent to some degree on 
DOD facilities, and we sort of ride that horse as far and as 
hard as we can with respect to health care. But I don't have a 
good enough answer for you as I sit here this afternoon. Let me 
get you a better read on the specifics and the percentages that 
you mentioned. I am concerned that it is an industry-wide 
issue, a health care industry-wide issue.
    Mr. Rogers. It very well may be. I don't discount that. 
Boy, this is a big item, $430 million.
    Admiral Loy. It is, sir.
    Mr. Rogers. Which is 105.6 percent increase over current 
year. To put that in perspective, the growth in that one 
account, in the health care budget, is greater than the 
increase proposed for maintenance.
    Admiral Loy. Yes, sir.
    Mr. Rogers. Or for funds that the entire network of Coast 
Guard operational----
    Admiral Loy. Yes, sir. And as you know, this is not a 
matter of something that we choose or don't choose to do. These 
are essentially bills that come due whether we are dependent 
for those health care services from DOD or from other sources. 
As I say, those are bills that come due and must be paid.
    Mr. Rogers. Are those rates of increase consistent with 
those that other DOD branches are experiencing?
    Admiral Loy. Mr. Chairman, I don't know the answer to your 
question. I can get you a good answer.
    Mr. Sabo. I am not certain, but I think there is some 
accounting change similar to what occurred in retirement. I 
think they are adding some accrual costs for retirement costing 
into the ongoing budget on an annualized basis. They are still 
skyrocketing.
    Admiral Loy. There are people behind me shaking their 
heads. Am I correct?
    Mr. Sabo. I see some nodding heads. (Laughter.)
    Mr. Rogers. Well, I expect we will get a memo on this.
    Admiral Loy. I will get you one, sir.
    Mr. Rogers. So if you can explain that, we would need to 
have that for the record.
    Admiral Loy. Will do, sir.
    Mr. Rogers. I have other questions that I can file for the 
record, and let's hope that you can respond to them. Mr. Sabo 
may have some for the record.
    Mr. Sabo. We thank you.
    Admiral Loy. Thank you, sir.
    Mr. Rogers. Thank you, Admiral, for your testimony here 
today, and you and your staff. And again, accept the thanks of 
the nation for your valiant service since 9/11 especially, to 
the entire Coast Guard. And to you personally, we express the 
nation's thanks for a long, long career of service to the 
country, for great valor and brilliance, and we look forward to 
seeing you again soon, perhaps in another role. But in the 
meantime, as they say on land, God speed.
    Admiral Loy. Very kind, sir. Thank you very, very much.
    Mr. Rogers. Thank you.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





 DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 
                                  2003

                              ----------                              

                                      Wednesday, February 13, 2002.

     OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION

                                WITNESS

KENNETH M. MEAD, INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION

                            Opening Remarks

    Mr. Rogers. The Committee will be in order.
    This afternoon we will hear from DOT Inspector General Ken 
Mead about management and budget issues facing the Department 
this year. We may be interrupted by voting bells all afternoon, 
so I hope you will bear with us as we struggle through things 
on the floor.
    It has become an annual ritual of this subcommittee, one 
that is always useful to us in helping to focus on what needs 
to be fixed at the Department, to have the IG up early in the 
hearing process. It is an extremely valuable element of our 
oversight duties.
    It is an unusual time at DOT of rapid growth. DOT next year 
will experience the largest staffing increase of all cabinet 
level agencies. Staffing will be up 31 percent, increases, of 
course, from the new Transportation Security Administration and 
the Coast Guard. On the other hand, there are down sides to 
this budget as well, and serious pressures. Amtrak is teetering 
on the edge of bankruptcy, desperately mortgaging its assets 
and converting its capital appropriations just to pay the 
monthly bills.
    The Administration's budget request is less than half of 
what Amtrak says is needed just to stay alive past Christmas, 
and that does not address the serious debate needed now about 
how to restructure Amtrak in a lasting way to establish viable, 
long-term rail service, if in fact that is the route we decide 
to go.
    Then there is the serious question of what to do about the 
highway funding shortfall due to the RABA provisions of TEA-21. 
A huge shortfall. $9 billion was wiped out of the highway 
program in a single year; more than a quarter of the annual 
appropriations eliminated just when the economy, it would seem, 
needs it most. That is what TEA-21 has brought us.
    Frankly, I do not know how it will be fixed, but we will 
try on this subcommittee to investigate ways to address that 
shortfall, and hope that the next authorization bill will think 
twice about tying highway spending directly to tax revenues 
without some leeway. That is exactly why annual oversight and 
annual appropriations are needed. There are some big swings in 
this budget. Some programs are up dramatically, others are down 
dramatically.
    We want to welcome the IG back before this subcommittee. 
Mr. Mead served at the GAO for 22 years, most of it in 
transportation before becoming the DOT IG in May of 1997. He 
has served as the head watchdog for the department for almost 
five years now, in both Democratic and Republican 
Administrations. He is a true professional, and we value has 
hard work, his independent judgement and his dedication.
    Ken, your complete written statement will be inserted in 
the record without objection, and we would welcome, if you 
wish, an oral summary of your testimony at this time.

                   Inspector General Opening Remarks

    Mr. Mead. Thank you, Mr. Chairman. It is good to be back. 
Much has happened since we last met at the end of August.
    At this time last year, the spotlight and intense 
congressional scrutiny was clearly and unequivocally on an 
aviation system in gridlock and----
    Mr. Rogers. We solved that problem.
    Mr. Mead [continuing]. Intolerable delays and 
cancellations. Yes. 9-11 took care of that.
    Seriously, I think the committee held very effective 
oversight hearings. They were among the most effective in my 
career. Of course, the events of 9-11 changed that focus.
    What I would like to do today is provide an oral summation 
of topical areas covered by our testimony and then move 
directly to questions that you might have.
    First and foremost is strengthening transportation 
security. I think you all know that the preeminent focus right 
now is on aviation security, albeit the other modes--port 
security and shipping, rail, transit, motor carriers and those 
shipping containers that are used by all of them--need 
attention as well.
    For aviation, I think we need some yardsticks or metrics 
for measuring progress, and I would like to address these 
later. This succeeds what the subcommittee used last year in 
following progress with delays and cancellations.
    I would like to offer some slides just for your 
consideration on TSA that are broken out into three categories. 
One category is the actual deadline dates established by the 
law. Another category would include the hiring of screeners and 
the explosive detection machine deployments. The third category 
would be bottom line issues, that we could not talk about in an 
open hearing. We would probably need a closed one for it. Such 
a hearing would discuss results from our security audits, as 
well as some material on air marshals, but we would not want to 
do that in an open session.
    I think you are aware of what a formidable challenge it is 
going to be. Good security is going to cost money. The $2 
billion to $2.4 billion in estimated funding for this year is 
much less than will be required. The combination of passenger 
security fees and airline contributions will not be sufficient 
to cover the costs.
    Our testimony also covers computer security at DOT, which 
did not receive very high marks by OMB; in fact, some very poor 
marks. Computer security at DOT contained some material 
weaknesses. That is an area that is going to need attention as 
well; possibly not by the Transportation Security Agency, but 
by the Chief Information Officer.
    Next, the statement covers other pressing aviation matters, 
such as continuing the steps the committee took last year 
because there is going to be a rebound of air traffic, and we 
are going to be facing some of the same capacity issues again.
    I would just like to mention some of the metrics of where 
we are this year. For 2001, even excluding the 9-11 period, 
delays and cancellations, chronically delayed flights and time 
spent on the runway were down substantially. That is totally 
excluding the 9-11 period. I think the reasons for that were 
good weather, a softening economy, no labor stoppages and more 
sensible scheduling practices, and FAA initiatives.
    For the pre 9-11 period, scheduled flights were up a 
fraction. After 9-11 and through the end of the year, they 
declined 14 to 20 percent with a number of major airports 
experiencing decline of 25 percent or more.
    I think it is going to be important in the months ahead to 
keep a close eye on service to small and medium sized 
communities. Overall passenger load factors in December, 2001, 
were just about what it was in January, 2001, except there were 
fewer flights, so there are fewer seats to fill.
    The big issue right now is airline finances. Business 
travel is down, or at least the number of people paying 
business fares is way down. That is a big hit for those 
airlines that rely on having about 20 percent of their 
passengers be business travelers, to makeup 40 to 50 percent of 
their revenues.
    FAA has made some progress in free-flight. There are a 
number of other acquisitions that I know have experienced 
schedule slippages and budget increases. FAA still does not 
have a chief operating officer. The agency has made some 
progress with its cost accounting system, but its cost 
accounting system still has some material weaknesses on the 
labor distribution front.
    On the safety front, runway incursions are down largely due 
to 9-11, but also due in part to some strong actions that FAA 
took. Operational errors--that is where the planes come too 
close together in the air--were up despite 9-11. I do not know 
quite how to explain that except that there was more 
disciplined and rigorous reporting.
    There is still a concern, Mr. Chairman, about the 
``controller-in-charge'' issue. That is where some facilities 
have designated 100 percent of the staff as ``controllers-in-
charge''. I do not know why they need that many. The committee 
has expressed concern about this in the past. There are a lot 
of facilities out there where 100 percent of the controllers 
are ``controllers-in-charge''. I also do not know what FAA's 
intentions are relative to following the committee's admonition 
not to reduce the number of supervisors.
    Moving to Amtrak. Bottom Line 1 is that passenger revenue 
and ridership are up, but it has been outpaced by cash 
expenses. For every additional dollar they take in, $1.05 goes 
out, which is a problem when you are trying to dramatically 
reduce expenses.
    Interest payments on debt alone have doubled since 1995 and 
are projected to nearly triple from current levels by 2005. In 
2005, almost half their current subsidy will go for interest 
payments alone. The largest operating loss in Amtrak's history 
was in 2001. Amtrak will not make operating self-sufficiency 
and has run out of options.
    Bottom Line 2. The operating losses are a small part of the 
problem. The real problem is access to capital for the track, 
the track bed, overhead areas, bridges, tunnels and rolling 
stock. This is at least a $1 billion a year problem. The 
backlog of capital on the northeast corridor alone is estimated 
to be about $5 billion.
    Bottom Line 3. Beware of proposals that seek to solve the 
Amtrak problem without addressing where the capital money will 
come from. Beware of just shuffling chairs around on the deck.
    Motor carrier and vehicle safety. Three big issues there. 
The southern border. The Administration wants to open it. I 
think you know we have audit responsibilities there before the 
border can open. We have to report to the Secretary. He has to 
make a certification to you that opening the border will not 
pose an undue security risk or safety risk and how he is 
planning to address any recommendations we make.
    Commercial drivers license program. We are very disturbed 
about the number of people getting fraudulent licenses in this 
program. We have found fifteen states with scams where people 
are making payoffs to get their licenses. We are not talking 
about small numbers of commercial truck drivers. The problem in 
some cases, is direct payoffs to state officials. In other 
cases it is payoffs to the third party testers.
    Finally, this year, mid year, big milestones for NHTSA 
meeting the TREAD Act. The big milestone comes in June when a 
final rule is to be issued that requires the auto manufacturers 
to report on all sorts of information that they have about 
defects or alleged defects in automobiles they produce.
    Coast Guard. The emphasis is placed on security--you 
probably all know that--and simultaneously embarking on the 
most expensive acquisition in its history. It is uncertain 
whether or not Coast Guard will be seeking a funding stream for 
its big acquisitions over the next 20 or the next 30 years, but 
we are talking more than $10 billion.
    The Coast Guard is also overhauling the national distress 
system. That is similar to calling the 911 system where 
mariners in distress call the Coast Guard. Right now, there are 
about 21,000 nautical miles around the coast of the United 
States where if you dial 911, no one will hear you. The Coast 
Guard is trying to fix that. Their search and rescue program, 
as previously noted by this committee, also needs considerable 
strengthening.
    Finally, a major unexpected funding problem that you noted, 
Mr. Chairman, in the highway program: increasing numbers of 
highway mega projects over $1 billion and the compelling need 
for a stronger federal and state accountability of taxpayer 
funds.
    We see some signs of improvement in the Department in the 
accountability area. Just some quick statistics. Indictments 
increasing 225 percent from 12 in 1999 to 39 in 2001. 
Convictions increasing 117 percent from 12 in 1999 to 26 in 
2001. Monetary recoveries increasing 173 percent from $15 
million in 1999 to $43 million in 2001, and that is just from 
our office.
    Currently, there are 14 active highway mega projects 
generally defined as projects over $1 billion. There is 60 
planned in the near future, so it is time to gear up and 
provide the oversight.
    Finally, I know you have to face some tough decisions on 
what to do with the revenue aligned budget authority problem 
(RABA). That is a congressional call. I do want you to know, 
though, that the states and DOT need to scrub existing 
obligations for money pledged to projects, but no longer 
needed. Every year we have to render an opinion on the 
Department's financial statements, and in that process we look 
at what we refer to as inactive obligations. That is money that 
has been not touched in an account for over 18 months.
    Last year we looked at $670 million in obligations and 
found $238 million that could be freed up to other TEA-21 
projects or returned to the Treasury. The states agreed. Our 
work was just a sample, Mr. Chairman. We did not review the 
whole universe.
    I do not have a solution for the RABA program. It is not my 
place to offer a solution--but the dollar impact is large. I am 
just pointing out the inactive obligations because it might 
take the edge off the problem.
    Thank you, Mr. Chairman.
    [The prepared statement of Kenneth Mead follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Rogers. Thank you very much.
    We have a vote on the Floor, so we will take a short recess 
and will return immediately.
    [Recess.]

                        TRANSPORTATION SECURITY

    Mr. Rogers. The hearing will be in order.
    When Undersecretary Magaw was up here last week, I told him 
I did not think it was humanly possible for TSA to meet their 
December 31 deadline for installing explosive detection 
systems. What do you think?
    Mr. Mead. It will be a tough challenge. I do not think it 
is reasonable to expect that sufficient EDS machines that cost 
$1 million each can be put in airport lobbies by the end of the 
year.
    I think an achievable combination would be EDS machines and 
what is called trace detection. Trace detection is considerably 
cheaper, but it is fairly effective if used properly.
    I think what the American public wants and I think what the 
American expects is an aggressive, very good faith effort to do 
everything we can. We have to be careful, Mr. Chairman, that we 
do not go out spending money, lots of money, on technologies 
that we may not need a year from now.
    Mr. Rogers. Do you think there is technology on the horizon 
that would obviate the need to buy these very expensive, very 
big, present day EDS machines?
    Mr. Mead. I do not know. You have probably had as many 
visitors to your office as I have claiming to have the best 
answer to security. It sounds very good when you get the 
presentations, but they all would have to be fully tested. That 
is one of the things that I think the Department needs to 
prudently go forward and do.
    Mr. Rogers. Has anyone ever tried to analyze a dog's nose 
and see if they could duplicate that somehow?
    Mr. Mead. I think one issue that I have tried to explain in 
testimonies on the explosive detection machines is that the 
approach that FAA was taking with these machines was to put 
them in the lobby. Well, that works okay when you are only 
talking about checking or screening less than five percent of 
the checked baggage, but Congress has stepped forward and said 
we want you to do 100 percent.
    Wholly apart from the date, just imagine what we are 
dealing with here. We have a billion bags of checked luggage a 
year. The machines we have now are capable of screening maybe 
125 bags an hour if they are properly staffed, which probably 
means at least two staff.
    You take Dulles Airport. The entire lobby would have these 
machines, and there would be two or three staff at each 
machine. If you picture trying to maneuver around, it just is 
not going to work that way. You need to integrate this into the 
baggage systems, and that is going to require construction. I 
do not think all that construction can be done by the end of 
the year.
    Mr. Rogers. Well, what would it cost if we did?
    Mr. Mead. If you were able to do everything, buy all these 
machines and do all the construction this year, we are probably 
talking in the neighborhood of $5 billion or $5.5 billion.
    Mr. Rogers. Do you support the use of systems other than 
EDS, such as backscatter x-rays or trace systems or other types 
of----
    Mr. Mead. We know more about trace than we do about 
backscatter. I am very interested in the backscatter 
technology. This is the technology that looks like an x-ray. 
You may have seen it in various presentations. It almost 
disrobes you. I think you have seen a presentation on that, Mr. 
Chairman.
    The trace technology is a swabbing. You are familiar with 
it, its application, when you walk through the screening 
checkpoint. They may ask you to see is it okay to check your 
briefcase. They will take out a little swab, and theywill rub 
it around on a briefcase. Then they put it in the machine, and the 
machine says the bag is okay to go.
    Well, the discussion now is should we use this in 
combination with these explosive detection machines to check 
out the checked baggage, not just to screen the bags that you 
check at the x-ray machines. I think that is something they 
should consider doing.
    You should know, though, there are going to be issues on 
whether you have to swab on the inside of the bag, as well as 
the outside of the bag. In other words, do we have to open your 
bag in order for it to be effective? In other words, what is 
the delta of efficiency or what effectiveness do you lose if 
you just swab the outside of the bag?
    It is also staff intensive. Take your clothes bag. You 
check your clothes bag. It is going through. They do not have 
any explosive detections machines, so they have somebody that 
is going to swab it. They have to open it up. Then they have to 
go all around the circumference of the zipper, which is on 
three sides of the bag. Then do you further require that they 
unzip it and swab throughout the interior of the bag?
    You can see how this could have exponential consequences in 
terms of time and the staff required. That is being examined 
now by the TSA as to how efficacious that would be, but I think 
that trace is promising. Frankly, I think the only way you are 
going to accomplish a December 31 deadline is some combination 
of EDS, and trace.
    Mr. Rogers. Well, what are the ways to make it work other 
than swab? Do you know whether it would be feasible, practical, 
effective, for example, if you ran that bag through a machine 
that used a spray of some sort, that would then be read in 
order to speed the process? Would that work?
    Mr. Mead. I do not know. If I might ask some of my staff 
periodically to join me when their expertise is needed.
    Mr. Rogers. You actually have staff?
    Mr. Mead. I have lots of staff. [Laughter.]
    Actually, Mr. Chairman, I am just the tip of the iceberg up 
here. I think we have a very good staff, and they are 
responsible for putting out all this work during the year.
    If I might introduce Alexis Stefani? She is the Assistant 
Inspector General for our entire audit division, and she has 
been with security for a long time. I bet she can give a more 
thorough response to that question.
    Mr. Rogers. Welcome.
    Ms. Stefani. Thank you. I have seen various things, and I 
will call them sniffers, that they are developing. They are 
looking at different technologies, some in hand helds and 
others, that would take the concept like a plume and bring it 
off the machine, but they are nowhere near the point of being 
able to be mass produced. They are more experimental type.
    Mr. Rogers. Well, this is of urgent importance, obviously, 
because before we embark on buying $6 billion worth of these 
enormous machines that are going to fill up the entire lobbies 
of airports, not to mention requiring the reconstruction of 
every airport in the country to accommodate this requirement, 
we need to know if there are alternatives that are cheaper, 
quicker, less intrusive.
    Of course, an open hearing probably is not the place to 
talk about that, but do you agree that this is of urgent 
importance?
    Mr. Mead. Oh, absolutely. The wild cards here in terms of 
funding and better security are the number of people. You 
probably heard when we came up and we testified we said the 
number is going to look at at least 40,000. Thirty thousand had 
been bandied around at the time the legislation was being 
passed.
    I can tell you I cannot represent with confidence today 
that 40,000 people is it. That is one wild card. The machines, 
the reconfiguration, the construction that is going to have to 
be done in airports throughout the country, is another wild 
card.
    USA Today in today's edition is saying there are going to 
be thousands of law enforcement officers that this agency is 
going to require as well. Well, they are not screeners, and 
they are not exposed to the detection machines, so in the 
coming months it is going to be important for the committee to 
get a concrete statement of needs and requirements and be able 
to scrutinize those.
    Yes, it is of urgent importance, and so are all these other 
variables.
    Mr. Rogers. I will pass the baton to others here for now, 
but I appreciate your willingness that you testified to earlier 
to work with the subcommittee to develop some concrete 
measurements, mileposts if you will, by which we can all try to 
judge and measure the progress of TSA and the department and 
maybe construct a process similar to last year's airline delay 
panel. We will have periodic hearings, and put a chart on the 
wall, to try to measure how these things are going.
    Mr. Mead. For your staff, in front of you I think in your 
packages is a package that looks like this, Potential Security 
Metrics.
    Mr. Rogers. Yes.
    Mr. Mead. Do you see that?
    Mr. Rogers. Yes.
    Mr. Mead. These are hypotheticals, and we would invitethe 
committee's feedback on these perhaps not today, but it gives you an 
idea of what some of the metrics might look like.
    The first one is planned number of screeners. Now, the 
lines that we have put in here are hypothetical lines, but you 
are going to need to know what is the goal and what is the 
hiring plan so that we could track this month by month by 
month. You could see by the month of November, which is the 
statutory due date, just where we were in proceeding towards 
that goal.
    The next one is number of screeners hired and trained. Just 
hiring them is not enough. Before we can make them operational, 
we are going to have to train them. We would suggest a metric 
on that.
    You are going to need somebody to run the security program 
at each airport. I know you have read about that, but we have 
to hire these people and get them trained in operations, so 
there is a metric on that.
    We could track the EDS deployment. Of course, we need to 
know what the Transportation Security Agency objective is 
because we do not want to substitute our judgement for that. We 
need to have the game plan for where they want to be and when.
    Another one, and this one interests me particularly, is 
kind of a bottom line chart. It is the number of airports which 
are ready to do the checked baggage and have the people in 
place. The chart with the blue lines would be percentage of 
bags screened May through November so you could actually watch 
the progress.
    Then we could have a closed hearing where we could share 
with you, with TSA, metrics of the undercover operations, you 
know, and how much tighter is security getting. As I indicated 
in my oral statement, I imagine there would be some interest in 
air marshals, too, and a closed session would be a more 
appropriate forum for discussing that. We could come up with 
charts and show it to you. In fact, I believe I shared one with 
you in the office.
    Mr. Rogers. We will talk about that further.
    Mr. Sabo.
    Mr. Sabo. Thank you, Mr. Chairman. Ken, welcome again.
    Mr. Mead. Thank you, sir.

                        FY03 FUNDING CHALLENGES

    Mr. Sabo. I have been on this subcommittee 24 years, and I 
have never had a session where I feel sort of so overwhelmed by 
potential funding problems for the subcommittee.
    In other years we have had budget proposals, and in the 
margins they are changed. Those margins are important. This 
year we are looking at this massive uncertainty, whether it 
relates to the security program, Amtrak and the problem that 
has to be solved of highway funding. I do think in the end any 
way we can let that drop by $8.5 billion. The end will not 
happen. The dollars we are looking at are more than marginal 
changes in terms of what we have from the Administration.
    At what point do we need to get a supplemental to deal 
with, even if it is in some modified form of what the goals are 
for this year? How far can they get on the money that is 
available at this point?
    Mr. Mead. Not much further. I cannot speak for the 
Administration. From the numbers I see, I think you are going 
to need to have an idea of what the supplemental request will 
be in 30 to 45 days. You know, under the law you cannot spend 
money unless it has been appropriated.
    I think they have between $2.2 billion and $2.3 billion, 
and $1.2 billion of that is supposed to come in from a fee that 
will be charged passengers that will not exceed $5, and another 
$700 million can come in from the airlines. That is 
theoretically the contribution that they made when they were 
running airline security. Well, that is not going to be enough. 
That means you are going to have an incursion into the general 
fund.
    Just to reinforce your point, this is the most dramatic 
situation in my years coming before this committee too. The 
incursion into the general fund when you add up the 
Transportation Security Agency, that is a multi-billion dollar 
incursion. We know that Amtrak wants $1 billion a year, maybe 
more.
    In addition, this year, because of the growth in FAA's 
operations costs and the downward plummeting of aviation trust 
fund revenues, you are going to be asked to hit up the general 
fund for $4 billion. Last year you hit it up for $1 billion. 
Then they have presented you with this highway trust fund or 
highway receipts problem. That, too, is going to require some 
outlays.
    Mr. Sabo. Where is the $4 billion? I have not looked at 
funding sources on the FAA budget, but are they using $4 
billion of general revenue in the regular budget for FAA?
    Mr. Mead. When they passed AIR-21, they said that you would 
spend the money that came in first on the AIP program----
    Mr. Sabo. Right.
    Mr. Mead [continuing]. And then the facilities and 
equipment, which is the air traffic control modernization.
    Mr. Sabo. Right. Yes.
    Mr. Mead. They set levels that you had to spend at. They 
said that anything left over you could spend on the operations 
account, which is the salaries. You could spend up to the 
amount of the trust fund revenues plus the interest, and 
anything else had to go to the general fund.
    In 2002, you are going to go to the general fund for about 
$1.1 billion, but because the revenues did not come in you are 
going to have to use the general fund to pay for more of the 
salaries and things at FAA than you had planned on.
    Mr. Sabo. It makes the Amtrak request for general revenue 
look fairly modest.
    Mr. Mead. Yes. It is interesting. This year nobody can say 
that only Amtrak is the one that gets the subsidy.
    Mr. Sabo. Let me ask another question. As we dealt with 
this issue, the whole debate got caught up in a debate of 
whether personnel should be federal employees or private 
contractors. I thought the most fundamental issue, and both 
bills said the federal government assumed the responsibility 
for airline security and transferred that from the airlines. I 
thought that was a big issue, and that was not talked about. I 
do not know any place else where we have said to an industry 
the federal government assumes all your security 
responsibilities.
    My assumption is that with that assumption of 
responsibilities goes also significant liability obligations. I 
am just curious if you have looked at the issue at all of what 
happens to our federal government's liability and how people 
deal with it, I would assume, from lost luggage, as we have 
become part of the handling of it, content of luggage, unruly 
passenger if the one who tried to get into the cockpit attacked 
a passenger or two. I just do not know what the potential there 
is, or if you went to a tragic event like September 11 I would 
assume that the basic liability there would rest in total with 
the federal government and not with the carrier.
    I am curious if anybody has looked at that issue. Maybe I 
am all wet and it is not an issue, but I have to believe that 
there are significant liability obligations that rest with the 
federal government today--not today, but by the time we assume 
full responsibility for security--that does not exist today.
    Mr. Mead. I would think so. We have not looked. We have not 
examined the specific question you raise, and I do not know 
whether anybody in the Department has.
    That is a good question. I mean, normally the FAA gets sued 
all the time for acts or omissions in connection with running 
the aircraft control system. The Federal Bureau of 
Investigation gets sued for acts or omissions.
    I do not know of any provision in the law that says the 
Federal Government is not responsible, but I will get back to 
you on the issue.
    Mr. Sabo. Thank you.
    Mr. Mead. I thought you were going somewhere else with 
that.
    Mr. Sabo. Where did you think I was going, and what is the 
answer?
    Mr. Mead. I thought you were setting my mental gears in 
motion and saying well, you know, where else does the Federal 
Government provide all the security?
    Mr. Sabo. Yes.
    Mr. Mead. I was thinking the next question he is going to 
ask is are they paying enough?
    Mr. Sabo. Well, I will ask that question.
    Mr. Mead. I think it is a good question. This is going to 
cost a lot more than $2.5 billion a year. The aviation trust 
fund and the tax structure to support it is not sufficient as 
it is presently set up to finance this.
    We are going to be looking to the general taxpayers to 
finance it; either that or a user fee. I mean, the airlines are 
going to benefit from this, just as the traveling public will.
    Mr. Sabo. Most of my constituents do not fly.
    Mr. Mead. In aviation, what we have historically done is 
most of the cost, ever since the aviation trust fund was set 
up, have been levied on the airlines or the passengers.
    In recent years, we are making more of an inroad, as I 
pointed out, to the general fund, which is most of your 
constituents that do not fly.
    Mr. Sabo. Yes.
    Mr. Mead. I should mention one other thing while we are on 
the financing. This is a very unusual situation because you do 
have an opportunity here to pay for this through a mix of 
appropriated and non-appropriated funding sources.
    You have your traditional sources, which are direct 
appropriations. You have the FAA airport improvement program. 
You have passenger facility charges, which are not the ones 
that are mentioned in the security bill, but the ones that were 
authorized under AIR-21, and you have assessments that you can 
make on the airlines and contributions that can be made by 
them, and then you also have the charge that was authorized to 
be levied on passengers by the Transportation Security 
legislation, so you have about four or five funding sources 
that you can juggle around to see if they can cover the bill.

                          HARDENED CONTAINERS

    Mr. Sabo. Let me ask one technology question. My 
understanding is that there is the ability to have containers 
that contain explosions that you can put in a plane, or you can 
either coat the entire cargo hold with equipment that controls 
any explosion. Have you evaluated any of that and looked at the 
potential of the cost?
    Mr. Mead. I have some preliminary information for you. As 
you know, we are doing some work for you after we come up for 
air on that very question.
    On the containers, you have containers now that run between 
$2,000 and $3,000 apiece. These are what the airlines like to 
use. There is a certified container that can take an internal 
explosion of considerable force that is certified and is 
available for 777 and 747 service, but not the other models. 
That runs a little over $20,000, so there is a big cost 
variable.
    I have seen videos which at least conveyed a pretty big 
explosion, and the hull of the aircraft did not explode.
    Ms. Stefani. I understand that recently another container 
type was also approved for the same concept of being able to 
contain the explosion within the cargo hold of the aircraft. 
Besides the price differential another disadvantage from the 
airline perspective has been the weight. They are much heavier 
than the existing containers.
    The people that we have talked to, there has not been that 
much demand. But that is one alternative to screening bags is 
to put them in the containers in the hold of the aircraft.
    Mr. Sabo. Thank you, Mr. Chairman.
    Mr. Rogers. I mean, for the kind of money we are talking 
about spending to screen checked baggage--$6 billion, $7 
billion, $8 billion--we could afford to not allow checked 
baggage and hire separate planes to fly your baggage.
    Mr. Mead. You could. Also to comment and come back to Mr. 
Sabo's question, at least on 777 and 747 service those 
containers at $20,000 apiece are a lot cheaper than some of the 
other things we are talking about.
    Mr. Rogers. Mr. Sweeney.

                        DEPARTMENTAL PRIORITIES

    Mr. Sweeney. Thank you, Mr. Chairman. Ken, good to see you. 
Welcome.
    As my colleague, Mr. Sabo, said, we have a lot of 
challenges, as does the department, that have changed 
drastically. I have a simple question. I am just wondering if 
you feel that the department has been able since September 11 
to handle its traditional roles? Is it functioning efficiently? 
Is it dealing well with every day management issues?
    There were questions, as you know, that this committee had 
and Congress has had on efficiencies both at the Department and 
the FAA and some of the bureaus. Are they conducting internal 
performance audits? How are they operating?
    Mr. Mead. Well, it has been pretty much a 24/7 operation 
since September 11 up through Christmas. It seemed to me an 
almost exclusive focus on security, both in dealing with 
threats, as well as figuring out what are we going to do and 
implementing the new law.
    You see, I think it would be a mis-statement to say that 
everything was running around as normal, and we were attending 
to all our other missions. That is not to say they are 
neglecting things, but we have a lot on our plate.
    We have the North American Free Trade Agreement (NAFTA). I 
thought that was going to be the heavy hitter item: deploying 
all the inspectors to the border and getting the space down 
there. I thought Amtrak was going to be a heavy hitter. We saw 
the signs last year. We may have even testified before you 
after Amtrak mortgaged Penn Station. I mean, that was a sign 
and kind of a no-brainer that things were going in the wrong 
direction there.
    Then we had Firestone, and that certainly took up an 
enormous amount of time. Then 9-11 came, and now on top of that 
we find out that there is a potential $9 billion hit on the 
highway trust fund that is going to cascade into the states. 
There is a confluence of all these things.
    I have not even gotten into the normal budget 
deliberations. In a normal year, if we came up and said, by the 
way, the Coast Guard would like you to commit to $10 billion on 
a 15, 20 or 30 year acquisition to replace its entire fleet and 
aircraft, that is a pretty big deal, but I think in some ways 
it pales in comparison to the other issues on our plate.

                           AVIATION SECURITY

    Mr. Sweeney. I am wondering in terms of back into the 
security realm and the effectiveness and what our expectations 
ought to be on the Department.
    On the 11th, there were no regulations that the terrorists 
violated under the FAA, so how confident should we be? How 
confident are you that something like this is not going to 
happen again? In the context of what the regular order is 
supposed to be and now these new responsibilities and new 
focuses, what is realistic here?
    Mr. Mead. Well, I can tell you I thought that was a total 
cop out to say well, no rules were violated. You know, it was 
okay to take a box cutter on the plane. I am not sure I find 
that particularly----
    Mr. Sweeney. Comforting.
    Mr. Mead. Comforting, yes. It is more of a statement of a 
laxity on our part, not a statement of gee, the system worked.
    We have been doing security audits around the country at 
the request of the President and the Secretary and reporting 
these to the Secretary, to GSA and the new agency in FAA. I can 
tell you that security is unquestionably much tighter. People 
should feel better about it, but the focus is on lapses. Lapses 
automatically become national news.
    Mr. Sweeney. Right.
    Mr. Mead. I am fond of telling Members of Congress that a 
year ago at this time our office announced a felonyplea 
conviction by a firm called Argenbright Security in Philadelphia. They 
were faking background applications and the training records of 
screeners. A felony conviction plea and fine of $1 million. It was a 
blip on the radar screen. Today, I would probably win a bet if I said 
that almost every Member of Congress knows the name of Argenbright 
Security.
    My only point is that I think there is a lot more attention 
being paid to lapses now. We have a long way to go. You should 
all feel better about the attention the Department has been 
paying to this. It is getting tighter.
    We have seen improvements even on the usage of the EDS 
machines we have already bought, the 160 or so. I think you 
have heard me testify before that we spent $1 million each. Why 
do we not use these things? We see the usage increasing. It 
went from about 25 or 26 percent of the time they were being 
used to it is now about 56 or 57 percent of the time.
    Mr. Sweeney. I concur very strongly with the Chairman that 
this committee is going to need to be very proactive in its 
oversight responsibilities and developing some sort of tangible 
measurements as we go along. I look forward to working with you 
on that as we face these challenges.
    Mr. Chairman, thank you.
    Mr. Rogers. Mr. Olver.

                    WHISTLEBLOWER PROTECTIONS OF TSA

    Mr. Olver. Thank you, Mr. Chairman. Ken, thank you for 
being here again.
    You had commented earlier that you think the number of 
screeners to deal with the airport security is just one bit. I 
concur totally with my ranking member, who has become 
overwhelmed today, and so have I, with what the testimony 
indicates about the number of things that are on the plate all 
at the same time and the lack of funding for them. You 
indicated that you thought they would need something like 
40,000 screeners.
    My recollection is that you were instrumental in insuring 
that FAA employees were protected for whistle blower incidents. 
The Undersecretary, Undersecretary Magaw, has indicated that he 
does not believe that the screeners being brought in should be 
afforded full whistleblower protection.
    Do you have a sense of what he is concerned about there? Do 
you have any sense of how to meet that and still give them 
whistle blower protection? Are those concerns of his legitimate 
or not?
    Mr. Mead. A good and important question. Yes, your 
recollection is correct. We were instrumental in recommending 
the change of the law so that FAA employees under personnel 
reform got whistle blower protection.
    I think there is a middle ground here. I think it is 
important in any organization that people be able to come 
forward without fear of retribution to report on negative 
operations. I do not think it is right that somebody who has a 
performance problem can come forward at or about the same time 
and say I am blowing the whistle. You have to keep me on the 
job.
    I do not believe that it would be in the best interest of 
TSA or the Department to have TSA investigating itself when 
somebody blows the whistle. I think you need a third party. I 
do not think that third party needs to have the authorities to 
force TSA to keep that employee on the job.
    Under the law, there is still whistle blower protection 
provided. They can come to the Inspector General. I think we 
could work out some type of memorandum of understanding with 
the Office of Special Counsel, which handles whistle blower 
complaints. I would not want to be in the position of telling 
the TSA that from the moment somebody complains they have to 
keep them on the job, especially with all the problems we have 
found with screeners.
    The Office of Special Counsel finds somewhere between five 
and ten percent of the complaints they get to be meritorious. 
This is long and drawn out, Mr. Olver, but I do think you need 
a third party to investigate complaints. Otherwise it is going 
to be a nightmare for Congress and TSA.
    Mr. Olver. You have just exponentially increased the 
problems that go inherent I think in what I was asking about, 
but okay. That is okay. That is fair enough. I think that that 
is useful insight as to how that might work. You have some real 
experience with that.
    I wanted to ask something about Amtrak, but I do not know 
whether it is time to move on to anything else here. Maybe I 
should just pass and let me come back what that in the next 
round.
    Mr. Mead. May I ask? I know it is not my place to ask 
question, but I was curious as to what you meant by what I said 
made it sound more problematic.
    Mr. Olver. Well, I thought there might be a relatively 
simple answer, and I am not sure that working out the way you 
have described it may be a much more enticing answer, but 
obviously not a simple answer.
    Mr. Mead. I have seen situations where it becomes very gray 
where the employee does in fact have a legitimate complaint 
with the agency, and I am not speaking of TSA. I am speaking of 
FAA now. Actually, I am speaking specifically of a security 
related one where I think an individual did make a complaint, 
and it should have been checked out. It was not checked out 
properly, and that employee, in my judgement, received 
retribution.
    It is an entirely separate question in my mind whetherthat 
means that that employee was performing well, but there is no question 
that there were some performance issues associated with that employee. 
Then there becomes this melding, and the bureaucracy gets scared and 
decides that they cannot move this person. They tend not to, because 
they fear that the person will sue or something, so that was what I 
meant by it being somewhat gray.
    If you have a third party investigating it, at least you 
get rid of the conflict of interest.
    Mr. Olver. Well, the Undersecretary had commented I think 
in quite a different way about what the concerns might be. My 
recollection was that he had commented that people might 
divulge national security material or shut down a system or 
something like that. I did not have a chance to explore exactly 
what that might mean.
    You have raised an entirely different thing; that this 
might be used by people who were not performing well and knew 
they might be under duress for non-performance putting in a 
claim and then being in a position of holding the agency in a 
position of keeping them on throughout whatever was going to go 
on for a long time.
    Mr. Mead. Yes. I mean, I think that----
    Mr. Olver. I had not even thought of that, but that was not 
what I understood the Undersecretary was concerned about.
    Mr. Mead. I could see an employee coming forward and saying 
that security at this checkpoint is lax. I told my supervisor 
two months ago that security at this checkpoint was lax. Then 
you find out that the supervisor came in and found out this guy 
had let a test weapon through. He did not detect it in 
screening or did not swab properly. Then the employee comes 
back and state that he was not trained well. The supervisor 
fires him.
    That is how many of these things unfold. They get pretty 
complicated. My point is----
    Mr. Olver. I guess I had not asked the question.
    Mr. Mead. My point is it is good that there be a third 
party investigation. If I was the Congress, I would not make 
the decision that that third party investigator's findings 
would automatically result in the complaintee staying on the 
job.
    I would not go that far if I was Congress. I would have a 
third party investigator and leave alone the flexibility of the 
TSA Undersecretary to fire that employee until you have had 
some experience with this.
    Mr. Olver. Thank you, Mr. Chairman.

                          PASSENGER PROFILING

    Mr. Rogers. Thank you.
    Now quickly back to air security. The failure that happened 
on 9-11 had nothing to do with checked baggage or an explosion 
on the plane. It had to do with a person getting on the plane 
and transforming it into a weapon. Obviously the airline-
developed Computer Assisted Passenger Prescreening System 
(CAPPS) did not work very well last year, did it?
    Mr. Mead. No, it did not.
    Mr. Rogers. What actions is DOT undertaking to develop a 
better way to screen out undesirable people from getting on a 
plane, as opposed to baggage? Can we talk about this in open 
session?
    Ms. Stefani. Only in very general terms.
    Mr. Rogers. Yes.
    Ms. Stefani. They have looked at CAPPS, and they are trying 
to analyze changes. They have made some changes, but they are 
also looking to see what additional changes they can make to 
help better pinpoint undesirable people and they are also 
looking at different sources of information and how to weave 
them together.
    Mr. Rogers. Well, if I could say this? The failure of 9-11 
specifically was the non-coordination of intelligence that we 
had in hand, that was not communicated to the people that let 
people on airplanes. Is that generally correct?
    Ms. Stefani. I think that was one factor.
    Mr. Rogers. At least in a couple or three of the 
hijackings.
    Ms. Stefani. It was discussed, yes.
    Mr. Rogers. Since that time, the intelligence agencies have 
stepped up their intelligence gathering on bad actors. My 
question is how can we get that information to the system that 
keeps those people off planes, and is DOT working on that?
    Mr. Mead. I do not know how far they are along on this, but 
this, as you know, requires coordination of databases from 
several agencies, including one of your favorites.
    Just judging by our own experience with the Immigration and 
Naturalization Service (INS) over the last few months where we 
have identified folks at airports that at first seemed to be 
illegal aliens. You have to drill down into their database, Mr. 
Chairman, several times over several days before you are really 
comfortable with the information INS is providing.
    I think the first order question is to get all these 
databases together and then to do a common feed into DOT. That 
is all I would want to talk about on these databases in open 
session.
    Mr. Rogers. Well, it is more than just the INS database.
    Mr. Mead. Yes, sir.
    Mr. Rogers. It is the FBI. It is the agency.
    Mr. Mead. It is the states.
    Mr. Rogers. States, local police. Is that being worked on 
by people other than DOT? In other words, that should really be 
done by Homeland Security----
    Mr. Mead. Yes.
    Mr. Rogers [continuing]. On a much higher level, but the 
net result should be that that data gets to somebody who is 
privy to that kind of data at the airport where people get on 
the plane and check that person against the database. Is that 
not correct?
    Mr. Mead. Yes.
    Mr. Rogers. Are they working on that?
    Mr. Mead. Yes. Yes. That is why Undersecretary Magaw points 
out at almost every opportunity that he is going to have 
airport security directors in place. That is going to be very 
important to have somebody on the scene that can receive that 
information on a real time basis.
    Plus, a lot of these are advance bookings so you need it 
even before that flight takes off because that can provide an 
important lead to the enforcement agencies.
    Mr. Rogers. How are they going to be sure that I am who I 
say I am when I get on the airplane?
    Mr. Mead. I think eventually you are looking at a 
technology solution there. I know you have seen some. I know 
there is a range of different technologies that people talk 
about. I have seen some that seem impressive. You know, there 
is one on the fingerprint. I have seen the retinal one. I have 
seen the palm print.
    We have to realize though that none of the demonstrations 
we have seen are backed up with a database of information about 
people. When the vendor is demonstrating the machine basically 
all they have is your name and maybe you give them the social 
security number, but their demonstration is not drawing off any 
database at INS or the FBI or the state enforcement officials 
or anybody. To make the system reliable, you have to be drawing 
from all these other databases. It is going to take a while.

                         NON-AVIATION SECURITY

    Mr. Rogers. Let me switch from aviation. TSA was given 
responsibility over security in all modes of transportation, of 
course. Have they done anything much beyond aviation, do you 
think?
    Mr. Mead. Not that I am aware of.
    Mr. Rogers. What should they be doing? What should we 
respond to most quickly outside aviation?

                           CONTAINER SECURITY

    Mr. Mead. I think transit containers and HAZMAT 
endorsements on commercial drivers licenses. The container one 
is a fascinating issue because in today's environment the 
containers can come in by ship, and that same container can be 
put on a railroad car or that same container can end up getting 
put on a truck, so they are cross modal. That is an area where 
I think both the Coast Guard and TSA could make a lot of 
inroads, but it is a big issue.
    The export/import deficit raises an interesting question 
here too because since the United States has this deficit, this 
trade deficit, we have all these containers that have come over 
here that are empty, and we do not have anything to put in them 
to ship them back so they are sitting idle in yards, for 
example in New Jersey. The container issue is one that makes me 
nervous.
    Mr. Rogers. I do not follow you. What is wrong with those 
sitting in New Jersey empty?
    Mr. Mead. Well, the containers are not being shipped 
anywhere because there is not enough goods being exported to 
make it worth their while. It is a hollow container.
    Mr. Rogers. So? What is wrong with that? Where is the 
danger there?
    Mr. Mead. Well, what somebody could do with that container. 
They could come and take it.
    Mr. Rogers. I see. And put their own things in it?
    Mr. Mead. Yes.
    Mr. Rogers. I see. You say these empties are sitting around 
unguarded?
    Mr. Mead. No. I did not say that.
    Mr. Rogers. Yes.
    Mr. Mead. I do not think I spoke to the question either 
way.

                    COMMERCIAL DRIVERS LICENSE FRAUD

    Mr. Rogers. Yes. The CDL, commercial drivers license 
program, is subject to fraud, is it not?
    Mr. Mead. Yes.
    Mr. Rogers. Not only subject, but some people would say 
rife with fraud. Is that correct?
    Mr. Mead. Yes.
    Mr. Rogers. What is DOT doing about it?
    Mr. Mead. Well, they have been encouraging the states to 
tighten up their commercial drivers license programs. We are 
about to issue a report finding that there is a lot of 
inconsistencies between the states.
    We need to improve the federal standards to insure that 
when you get one of these licenses you have proof of legal 
presence in the U.S. Some states require that. Others do not. 
Verification of social security numbers. Some states require 
that and others do not. Some states require you to speak and 
read English, but then some states let you take the exam in 
your native language.
    I think the Federal Motor Carrier Safety Administration 
needs to take action and use sanctions when the states are not 
in compliance. We cannot have this. Fifteen states with scams.
    Mr. Rogers. Are they moving in that direction?
    Mr. Mead. Yes.
    Mr. Rogers. Do you think they will do it?
    Mr. Mead. I do not know. I think it is a point that this 
committee should emphasize with them, as you did last year.
    Mr. Rogers. Yes. Well, we had them this morning testifying.

                REVENUE-ALIGNED BUDGET AUTHORITY (RABA)

    Now on RABA. TEA-21's formula provisions ostensibly would 
result in a cut in new obligations of $9.2 billion. The highway 
groups are predicting huge job losses. The Federal Highway 
Administration, however, believes the impact will be much less 
because cash payments to construction firms, they say, will 
only be down three percent during the year because obligations 
made in previous years will still be paid out in 2003, even 
though new obligations will be cut severely.
    How do you read that?
    Mr. Mead. Well, every coin has two sides, and this is one 
of them. There is truth in that. At the same time, a cut of 
this magnitude will constrain the states in terms of what they 
can obligate funds for.
    It is true that on any first year infrastructure project, 
you do not spend 100 percent of the funds that you have 
allocated to the project. You may not spend that 100 percent 
tail of funds for six or seven years. I think it will have a 
big impact on the states.
    Another place that it will have a big impact on is in these 
huge projects that the Congress requires finance plans for, 
such as Central Artery, or Wilson Bridge. I am familiar with 
the details of the finance plans in those, and I can tell you 
they were counting on this amount of money from RABA. In the 
next finance plans, people are going to start asking questions. 
Where is this money going to come from?
    Mr. Rogers. Well, many people predict the economy will 
rebound slowly over the next few years and may not reach a boom 
cycle until the next decade or later, so if we were to restore 
RABA monies for fiscal 2003, would we not be just putting off 
the inevitable for a longer time? A one year bailout is not 
going to solve the problem, is it?
    Mr. Mead. No.
    Mr. Rogers. It is a systemic problem, is it not?
    Mr. Mead. Yes. I think when you are talking about a surplus 
in any trust fund, you want to leave enough money in there for 
an emergency.
    Now, I know one of the proposals on the table is to 
basically authorize the TEA-21 level as distinguished from the 
higher RABA projection level, which seems like it is an 
approach to a compromise, because the RABA money for 2003 that 
was projected is not going to materialize. I do not know if 
there was any point in giving it to them.
    Mr. Rogers. On AMTRAK, what do you think of the Reform 
Council's recommendations?
    Mr. Mead. In my oral statement, I said that there were 
three bottom lines, and I suggested that you be aware of 
proposals that do not provide the money. The ARC proposal is 
fundamentally organizational in nature. It says well, we are 
going to split up Amtrak. We are going to franchise routes 
outside the northeast corridor, and we are going to form an 
infrastructure company.
    My question to the ARC and my question to anybody that is 
proposing a solution on Amtrak is where is the money? Where is 
the capital? Where is this infrastructure company supposed to 
get the capital money from? It is not going to be generated by 
profits from the railroad, guaranteed.
    I am really hopeful that the decision makers up here will 
decide what they want, what they see as the appropriate size 
and scope of the rail network, and then decide on the capital. 
Then we can do the shuffling of the chairs and the deck and 
talk about the organizational setup that we want.
    I am not suggesting for a moment that organizational change 
is not necessary. I am saying that it would be extremely hollow 
and would be a shell game unless you deal with the capital 
situation in Amtrak.
    Mr. Rogers. We have a vote in a few minutes. I think we can 
finish with questions for the record. I do not want to hold you 
here because we have votes coming up on the campaign finance 
bill, that may be very interruptive for the next few hours.
    I thank you much for your testimony. You are a great help 
to this subcommittee in helping us lay out our work for the 
year. That is the reason we have you up here first. We thank 
you for your testimony.
    Mr. Mead. Thank you, sir.





                           W I T N E S S E S

                               __________
                                                                   Page
Jackson, M. P....................................................   173
Jacquez, Administrator A. S......................................   773
Loy, Admiral J. M................................................   513
Mead, K. M.......................................................     1


                               I N D E X

                               ----------

                      Office of Inspector General
                                                                   Page
Department of Transportation Budget for FY 2003, Inspector 
  General Mead's Statement.......................................     6
    Amtrak Charts................................................    56
        Amtrak's Operating and Cash Losses, 1990-2001............    57
        Growth in Depreciation Expenses, 1993-2005...............    61
        Growth in Interest Expense, 1993-2005....................    60
        Passenger and Non-Passenger Revenues, 1991-2001..........    59
        Systemwide Passenger Revenue and Ridership Growth, 1991-
          2001...................................................    58
        Total Minutes of Delay, Northeast Corridor, 1998-2001....    62
    Aviation Charts..............................................    48
        General Fund Contributions Needed for FAA Operations FY 
          2002 and FY 2003.......................................    55
        Monthly Passenger Load Factors...........................    49
        Operational Errors FY 1997 to FY 2001....................    52
        Percentage Change in Business and Leisure Travel from the 
          Prior Year.............................................    50
        Runway Incursions CY 1996 to CY 2001.....................    51
        Status of 14 Major Runway Projects as of February 2002...    53
    Balancing Coast Guard's Mission and Budget Requirement.......    41
        Budget Request for FY 2003...............................    41
        Major Acquisition Projects...............................    42
        Search and Rescue Program................................    42
    Deciding the Future Structure and Funding of Inter-City 
      Passenger Rail (Amtrak)....................................    33
        Operating Losses Are a Small Part of the Problem--Focus 
          Should Be on Capital Requirements......................    34
        Performance Trends.......................................    34
    Improving Motor Carrier and Vehicle Safety...................    37
        Ensuring Motor Carrier Safety at the U.S.-Mexico Border..    37
        Implementing TREAD Act Provisions to Improve Detection of 
          Motor Vehicle Safety Defects...........................    38
        Tightening Controls Over the CDL Program and Preventing 
          Fraudulent Issuance of CDLs............................    37
    Responding to September 11, 2001.............................     7
        Establishing TSA to increase Aviation Safety.............     7
            Hiring and Training the TSA Workforce................     8
            Interim Approach May Be Needed.......................    10
            Screening Checked Baggage through Explosives 
              Detection Equipment................................     9
        Funding the Transportation Security Administration.......    11
        Implementing Computer Security...........................    12
        Measuring TSA's Success in Improving Aviation Security...    10
    Stewardship and Accountability over Federal Funds............    44
        Enhancing Stewardship of Transportation Infrastructure 
          Projects...............................................    45
        Improving Contract Oversight.............................    44
    Supporting the Nation's Aviation System......................    14
        Being Positioned for When the Demand for Air Travel 
          Rebounds...............................................    14
            Keeping Capacity Enhancing Initiatives on Track......    18
            Managing FAA Acquisitions and Making Sound Business 
              Decisions..........................................    20
            Overarching Factors That Will Affect FAA's 
              Performance........................................    23
        Ensuring that Aviation Safety Remains a Top Priority.....    27
            Reducing the Number of Runway Incursions and 
              Operational Errors.................................    27
            Strengthening FAA's Safety Inspection Programs.......    30
        The Impact of Falling Aviation Trust Fund Revenues.......    10
            Increased Funding Requirements from the General Fund.    25
            Reductions in the Trust Fund's Uncommitted Balance...    24
House Testimony..................................................    63
    Aviation Security............................................    70
        Mr. Sweeney and Inspector General Mead Questions and 
          Answers................................................    70
    Commercial Drivers License Fraud.............................    75
        Mr. Rogers, Chairman and Inspector General Mead Questions 
          and Answers............................................    76
    Container Security...........................................    75
        Mr. Rogers, Chairman and Inspector General Mead Questions 
          and Answers............................................    75
    Departmental Priorities......................................    69
        Mr. Sweeney and Inspector General Mead Questions and 
          Answers................................................    69
    FY03 Funding Challenges......................................    66
        Mr. Sabo and Inspector General Mead Questions and Answers    66
    Hardened Containers..........................................    69
        Mr. Sabo, Mr. Mead, Inspector General and Ms. Stefani, 
          Principal Assistant Inspector General for Auditing and 
          Evaluations Questions and Answers......................    69
    Non-Aviation Security........................................    75
        Mr. Rogers, Chairman and Inspector General Mead Questions 
          and Answers............................................    75
    Passenger Profiling..........................................    73
        Mr. Rogers, Chairman, Mr. Mead, Inspector General and Ms. 
          Stefani, Principal Assistant Inspector General for 
          Auditing and Evaluations Questions and Answers.........    73
    Revenue-Aligned Budget Authority.............................    76
        Mr. Rogers, Chairman and Inspector General Mead Questions 
          and Answers............................................    76
    Transportation Security......................................    63
        Mr. Rogers, Chairman, Mr. Mead, Inspector General and Ms. 
          Stefani, Principal Assistant Inspector General for 
          Auditing and Evaluations Questions and Answers.........    65
        Mr. Sabo and Inspector General Mead Questions and Answers    66
    Whistleblower Protections of TSA.............................    71
        Mr. Olver and Inspector General Mead Questions and 
          Answers................................................    71
Inspector General's Opening Remarks..............................     2
    Amtrak.......................................................     3
    Aviation Matters.............................................     3
        Controllers-in-charge issue..............................     3
        Runway Incursions........................................     3
    Coast Guard..................................................     4
        National Distress System.................................     4
    Computer Security............................................     3
    FAA Free Flight Phase 1......................................     3
    Motor Carrier and Vehicle Safety.............................     4
        Commercial drivers license program.......................     4
        Tread Act................................................     4
    Revenue aligned budget authority.............................     5
    Stewardship and accountability over federal funds............     4
    Transportation Security......................................     2
Mr. Rogers Opening Remarks.......................................     1
Questions and Answers for the Record from Chairman Rogers to the 
  Office of Inspector General....................................    92
    Accountability at FAA........................................   128
    Amtrak's Capital Needs.......................................   106
    Amtrak-General Questions.....................................   103
    Budget Justifications........................................   137
        Attrition Rate...........................................   143
        Average Time between Draft and Final Report Issuance by 
          Operating Administration, FY 2001......................   157
            Why Coast Guard Longer Response Time.................   158
        Average Time to Complete OIG Program Audits--FY2001......   156
            Why Longer Timeframe to Complete Audits..............   156
        Budget Request to Office of the Secretary and Office of 
          Management and Budget..................................   143
        Calculating Target and Actual Returns for each Budget 
          Dollar Invested in the OIG.............................   170
        Comparison of OIG President's Budget Requested by Agency.   149
        Contracting out Financial Work to Private Firms..........   164
        Conviction Rate..........................................   171
        Costs to Audit Financial Statements......................   150
        DOT OIG Listing of 20 Most Staff-Intensive Audits 
          Completed in FY 2001...................................   159
        DOT OIG Listing of 20 Most Staff-Intensive Audits 
          Completed in FY 2002...................................   160
        FAIR Act Implementation..................................   168
        Inspector General Immediate Office Staff Listing.........   138
        General Services Administration Rental Cost..............   147
        New Direct-Funded FTPs...................................   163
        OIG Annual Budgetary Increases by Fiscal Year 1993-2003..   148
        OIG Audits Completed.....................................   169
        OIG Authorized FTE by Fiscal Year 1996-2002..............   138
        OIG Field Office Staff for FY 2002 and FY 2003...........   139
        OIG Operating Costs......................................   145
        OIG Reimbursable Agreements..............................   140
        OIG's TASC Budget Line Increase..........................   168
        Ongoing and Planned Audit Assignments....................   151
        Reason Recommendation Response Time has Slowed...........   169
        Reimbursable Agreements Funding Request, FY 2002-2003....   162
            Is Independence Undermined with Reimbursable 
              Agreements.........................................   162
            Reimbursable Agreement Planned Audits................   162
        SES Bonuses and Awards...................................   144
        SES Travel Expenditures..................................   161
        Staff Performing Internal Audits.........................   137
    Coast Guard FY 2003 Budget...................................   119
    Coast Guard: Small Boat Station Readiness....................   108
    Commercial Drivers License Fraud and Its Relationship to 
      Security...................................................    96
    Cost Accounting and Performance Management at FAA............   124
    FAA: Controller in Charge Program............................   122
    Major Highway Project Oversight..............................    98
    New Coast Guard Warehouse....................................   120
    Office of the Secretary: Integrated Technology Omnibus 
      Procurement................................................   136
    Operating Cost Control.......................................   127
    Operational Errors...........................................   127
    Runway Incursions............................................   126
    TSA Start-Up Issues..........................................    92
Questions and Answers for the Record from Mr. Tiahrt to the 
  Office of Inspector General on Airline Security................    89
Questions for the Record from Chairman Rogers to the Office of 
  Inspector General..............................................    78

  Deputy Secretary, U.S. Department of Transportation, Office of the 
                               Secretary

Accessibility Funding--Office of the General Counsel.............   313
Additional Personnel Costs.......................................   201
Additional Security Costs........................................   201
Airline Cockpit Doors............................................   186
Airline Compensation.............................................   501
Airline Complaints--Office of the General Counsel................   309
Airport and Airway Trust Fund....................................   196
Airport and Aviation Trust Fund..................................   217
Airport Screener Contracts.......................................   210
Airport Security at Small Airports...............................   208
Alaska Bypass Mail System........................................   353
Amtrak...............................................173, 191, 193, 210
Amtrak Long-Term Proposal........................................   184
Assistant Secretary for Administration...........................   316
Automated DOT Rulemaking System..................................   360
Average Grades in Salaries and Expenses Account..................   478
Aviation and Surface Transportation Safety.....................176, 180
Budget Office Travel.............................................   315
Budget Shortfall in 2002.........................................   195
Chairman Rogers Opening Statement/Remarks......................173, 233
Change in Workload Since September 11............................   305
Coast Guard Jurisdiction in Mobile...............................   208
Coast Guard Small Boat Station Readiness.........................   229
Correspondence Control and Tracking System.......................   268
DELPHI...........................................................   332
Department of Transportation Board of Contract Appeals...........   481
Department of Transportation Full-Time Permanent Positions FY 
  2001-2003......................................................   408
Departmental Office of Civil Rights..............................   337
Deputy Secretary Jackson Opening Statement/Remarks.............175, 178
Detection Deployment.............................................   202
Digital Glue Technology..........................................   192
Docket Management System.........................................   358
DOT Advisory Committees..........................................   490
DOT Attorneys....................................................   304
DOT Political Appointees.........................................   449
Employee Performance Awards......................................   445
Employee Training and Development................................   330
Essential Air Service.....................................211, 213, 233
    Overflight Fees..............................................   235
    Salaries and Other Administrative Costs......................   252
    Subsidized EAS Communities...................................   239
FED Docket Online Rulemaking System..............................   361
Federal Security Liability Issues................................   187
FY 2000 Non-DOT Clients..........................................   370
FY 2001 Non-DOT Clients..........................................   373
FY 2002 Non-DOT Clients..........................................   377
FY 2002 and FY 2003 Planned Space Increases......................   385
FY 2002 and FY 2003 Planned Space Reductions.....................   384
FY 2002 Supplemental Appropriation...............................   190
FY 2003 New Programs and Program Terminations....................   499
FY 2002 Proposed OST Staffing:
    Staffing in the Immediate Office of the Secretary............   263
    Staffing in the Office of Intermodalism......................   279
    Staffing in the Office of Public Affairs.....................   416
    Staffing in the Office of the Assistant Secretary for 
      Administration.............................................   326
    Staffing in the Office of the Assistant Secretary for 
      Aviation and International Affairs.........................   273
    Staffing in the Office of the Assistant Secretary for 
      Governmental Affairs.......................................   415
    Staffing in the Office of the Assistant Secretary for 
      Transportation Policy......................................   276
    Staffing in the Office of the Chief Information Officer......   282
    Staffing in the Office of the Deputy Secretary...............   265
    Staffing in the Office of the General Counsel................   299
FY 2003 Proposed OST Staffing Changes............................   411
GSA Rental Payments..............................................   382
GSA Space Requirement for the Department.........................   383
High Speed Rail..................................................   194
Highway and Aviation Trust Fund Shortfalls.......................   215
Highway Funding..................................................   191
Highways.......................................................176, 180
Homeland Security..............................................176, 178
Human Resources Information System (HRIS)........................   318
Immediate Office of the Secretary and Deputy Secretary...........   262
Immediate Office of the Secretary Staffing History...............   254
Information Technology Omnibus Procurement (ITOP)................   365
Information Technology Procurement Contracts Managed by TASC.....   227
Mass Transit in Northern Virginia................................   207
National Distress and Response System Modernization..............   230
New Headquarters Building........................................   222
New Headquarters Building........................................   343
New Political Positions..........................................   469
Office of Intermodalism..........................................   278
Office of the Assistant Secretary for Administration--Security...   324
Office of the Chief Information Officer..........................   281
Office of Drug and Alcohol Policy and Compliance.................   264
Office of the General Counsel....................................   299
    Accessibility Funding........................................   313
    Airline Complaints...........................................   309
    Change in Workload Since September 11........................   305
    DOT Attorneys................................................   304
    Position Descriptions........................................   296
    Position Descriptions--Aviation Matters......................   305
Opening Statements/Remarks:
    Chairman Rogers............................................173, 233
        Amtrak...................................................   173
        Security.................................................   174
    Deputy Secretary Jackson...................................175, 178
        Aviation and Surface Transportation Safety.............176, 180
        Conclusion...............................................   182
        Highways...............................................176, 180
        Homeland Security........................................   176
        Homeland Security--TSA and the Coast Guard...............   178
        Other Programs...........................................   182
        Overview.................................................   178
        Public Transportation and Rail.........................177, 181
OST Clerical/Professional Table..................................   476
OST Headquarters Space...........................................   479
OST Political Appointees On-Board................................   446
OST Reimbursable Positions.......................................   260
OST Staffing.....................................................   406
OST Training.....................................................   314
Other Programs...................................................   182
Other Security Technologies......................................   206
Overseas Travel of OST...........................................   395
Passenger Baggage Screening......................................   205
Pay and Non-Pay COLAs............................................   495
Pennsylvania Station Tunnel......................................   206
Political Appointees.............................................   256
    DOT Political Appointees.....................................   449
    OST Political Appointees.....................................   446
    Vacant DOT Political Positions...............................   465
Political/Career Employee Ratios.................................   471
Position Descriptions--Aviation Matters..........................   305
Position Descriptions--Office of the General Counsel.............   296
Programs Requiring Authorizing Legislation.......................   497
Public Transportation and Rail.................................177, 181
Questions for the Record:
    Chairman Rogers..............................................   233
Reception and Representation...................................261, 480
Rental of Airport Space for Security.............................   189
Reorganization...................................................   218
Salaries and Expenses--Positions and FTE.........................   413
Salaries and Expenses Reimbursables..............................   484
Salaries and Expenses Travel Expenses............................   391
Seaport Security Supplemental....................................   186
Security Technologies............................................   207
Security.........................................................   174
Senior Executive Bonus Recipients................................   417
Staffing in the Immediate Office of the Secretary................   263
Staffing in the Office of Governmental Affairs...................   415
Staffing in the Office of Public Affairs.........................   416
Staffing in the Office of the Assistant Secretary for 
  Administration.................................................   326
Staffing in the Office of the Assistant Secretary for Aviation 
  and International Affairs......................................   273
Staffing in the Office of the Assistant Secretary for 
  Transportation Policy..........................................   276
Staffing in the Office of the Deputy Secretary...................   265
Staffing in the Office of Intermodalism..........................   279
Staffing in the Office of the Chief Information Officer..........   282
Staffing in the Office of the General Counsel....................   299
Stand-up Costs...................................................   202
Statewide Transportation Planning................................   188
Subsidized EAS Communities.......................................   239
Table of Normal Cost Percentages.................................   494
TEA-21 Reauthorization...........................................   216
Trace or Backscatter X-Ray Systems...............................   198
Transportation Administrative Service Center...................226, 363
    Obligations by Business Practice.............................   368
    TASC FTE Staffing............................................   281
Transportation Planning, Research and Development................   348
Transportation Security Administration Budget Request............   198
Transportation Security Administration User Fees.................   199
Transportation Security Administration...........................   308
Travel Expenses..................................................   392
Foreign Travel Report:
    Immediate Office of the Secretary............................   395
    Office of Intelligence and Security..........................   398
    Office of the Assistant Secretary for Aviation and 
      International Affairs......................................   402
    Office of the Assistant Secretary for Transportation Policy..   401
    Office of the Assistant to the Secretary and Director of 
      Public Affairs.............................................   405
    Office of the Associate Deputy Secretary and Director of 
      Intermodalism..............................................   397
    Office of the Deputy Secretary...............................   396
    Office of the General Counsel................................   399
Travel Within the Immediate Office of the Secretary and the 
  Office of the Deputy Secretary.................................   266
Tren Urbano Project..............................................   194
Truck Safety.....................................................   207
U.S. Department of Transportation Space Utilization..............   479
Under Secretary for Transportation Policy........................   270
Under Secretary for Transportation Policy........................   217
User Fees........................................................   362
Vacant Political Appointee Positions.............................   465
Workers Compensation Payment.....................................   314
Workforce Diversity Training.....................................   331
Acquisition, Construction, & Improvement:
    $1 Million Unobligated.......................................   707
    Personnel Resources--Appropriation...........................   735
    Personnel Resources--Resources...............................   738
    Unobligated Balance..........................................   703
Aids to Navigation: Short Range Aids.............................   726
Airborne Use of Force............................................   607
Alteration of Bridges:
    Program......................................................   744
    Status of Sidney Lanier Bridge Project.......................   747
    Cost Estimate/Sharing Agreement for Chelsa Street Bridge.....   747
    Buy American Provision.......................................   524
Asset Retirement: FY2002.........................................   692
Asset Sales Collections..........................................   702
Ballast Water Management (BWM) Program:
    Activities for FY2002 and FY2003.............................   628
    Program Budgeted Costs.......................................   625
Battery Recovery Program:
    Funding Requested............................................   759
    FY2002 Estimates.............................................   760
Boat Crew:
    Boat Crew Mission Hour Limits................................   645
    Boat Crew Personal Protective Equipment (PPE) Levels.........   651
    Station Turnover Rate........................................   637
    Station Staffing Requirements................................   638
    Station Staffing Request In FY2003...........................   639
    Station Staffing Status......................................   640
    Stations: Overworked, Under Trained, and Fatigued............   530
    Stations: Statistics Of Vessel Incidents.....................   631
Boating Safety:
    Boating Safety State Matching Data...........................   748
    Boating Safety Grant Spending History........................   753
    Commandant's Boat Safety Board...............................   632
    Federal and State Spending on Boating Safety Duplicate.......   751
    Standard Boat Readiness Rates................................   647
    Standard Boat Inspections Standards..........................   647
    Unobligated Boating Safety Grant Funds.......................   754
Bonuses and Awards:
    Amount of Bonuses Awarded....................................   584
    Bonuses and Awards...........................................   581
    Enlistment Bonuses...........................................   583
    Senior Executive Services (SES) Bonuses: FY2001-2002.........   580
Budget:
    Adequacy of USCG Cost Accounting.............................   542
    Annualization of the FY2003 General Pay Raise................   563
    Annualization of FY2002 National Defense Authorization Act 
      Entitlements...............................................   564
    Ballast Water Management (BWM) Program Budgeted Costs........   625
    Budget by Mission Category...................................   537
    Budget Costs for Pay Raise...................................   576
    Budget Growth by Mission.....................................   594
    Coast Guard Research & Development (R&D) Center Operating 
      Costs......................................................   763
    Cutter Operational Costs.....................................   599
    Drug Interdiction Budget.....................................   604
    Firearms and Ammunition Budget...............................   665
    Funding for New WLBS.........................................   599
    FY2001 ``Other Services'' Obligations........................   602
    FY2002 and 2003 ``Other Miscellaneous Agencies''.............   545
    General Detail for FY2003....................................   585
    General Detail Percentage Increase...........................   584
    High Interest Vessel Control.................................   658
    Homeland Security Budget.....................................   519
    Increasing Operating Fees....................................   549
    Maintenance Funding Budget...................................   532
    Other Miscellaneous Services.................................   603
    ``Other Services'' Operating Expenses Obligations............   601
    Sea Marshal Budget...........................................   660
    Supplemental.................................................   523
    TRICARE Budget...............................................   533
C-130J Acquisition:
    C-130J Project Status........................................   715
    C-130J Outyear Estimates.....................................   716
C-37A Aircraft:
    C-37A Potential Cost Officer.................................   715
    C-37A Project Status.........................................   714
Coastal Patrol Boat (CPB) Homeports..............................   600
Container Security: Technology...................................   525
CONUS COLA:
    Addition/Deletion of Conus Cola Locations....................   579
    Addition/Deletion of Conus Cola Locations in FY2003..........   579
    Comparison of DOD Conus Cola: FY2003.........................   580
    Fiscal Year 2003 CONUS COLA..................................   577
    Localities Eligible for CONUS COLA...........................   577
Coxswain Test Score:
    Coxswain Test Score Results..................................   646
    Coxswain Test Score Standards................................   646
DEEPWATER:
    Certification Letter.........................................   733
    Engineering Change Proposals.................................   732
    Funding in Capital Investment Plan (CIP).....................   731
    Reevaluation due to September 11.............................   531
Drug Interdiction:
    Budget.......................................................   604
    Cuba's Antidrug Cooperation..................................   529
    Efforts......................................................   522
    Drug Table Seizures..........................................   606
    Drug Vessels Disabled by HITRON..............................   607
    Seizures.....................................................   527
    Technology to Detect Narcotics and Explosives................   609
    Trace Detection Equipment....................................   608
Environmental Compliance & Restoration (EC&R):
    Breakdown of Requested EC&R Funds............................   758
    Cost Effective Alternative Detection System..................   609
    Definition of Minor & Major EC&C Remediation Projects........   757
    FY2003 Environmental Compliance & Restoration (EC&R) Sites...   755
Excessed Properties:
    Excessed Properties..........................................   701
    Properties Retained in Coast Guard Inventory.................   702
Exchange:
    Coast Guard Retail Exchanges.................................   589
    Profits from the Retail Exchange.............................   591
FAA Franchise Fund: FY 2002 and FY 2003..........................   536
Firearms and Ammunition:
    Firearms and Ammunition Budget...............................   665
    Green Ammo Executive Order...................................   666
    Green Ammo Funding...........................................   682
    Surveillance of Weapons......................................   518
Fisheries:
    Alaskan Fisheries Enforcement Resource Hours.................   610
    Living Marine Resources Performance Measure..................   611
    Running Gear Entanglement System (RGES)......................   764
Fuel and Energy:
    Fuel and Energy Cost Assumptions.............................   588
    Home Heating and Electric Bill Costs.........................   589
Funding for Projects:
    Alex Haley Conversion Phase II...............................   714
    Application of Ambient Temperature-Cured Glass...............   716
    Chemical, Biological, and Radiological (CBR) Funding.........   664
    Five Year Funding Projection--FY2003--FY2007.................   698
    Self Contained Breathing Apparatus...........................   690
    Comparison Table of FY2003 Columns...........................   699
    Vessel Traffic Information System Corpus Christi Enhancement 
      Funding....................................................   691
General Service Administration (GSA) Rental Costs................   623
Great Lakes Icebreaker (GLIB):
    Project Schedule.............................................   709
    Cost Profile.................................................   709
    Outyear Estimate.............................................   710
Hawaii Rainbow Communications System.............................   718
Homeland Security:
    Budget.......................................................   519
    Homeland Security Strategies.................................   541
    Impact upon Coast Guard Performance Goals....................   541
    New Normalcy.................................................   519
    Presence and Response Capabilities Follow-On.................   653
Housing Projects:
    Estimated Dates for Current Coast Guard Housing Projects.....   727
    Housing Projects Assumed in the 2002 & 2003 Capital 
      Investment Plans (CIP).....................................   729
    Why Shouldn't HLS Liaisons not be Reimbursable Billets?......   550
Icebreaking:
    Polar Icebreaking Reimbursement Data.........................   551
    Polar Icebreaking Support Fees...............................   551
    Details of Iceberg B-15......................................   553
Law Enforcement: Coast Guard Intel Efforts with Other Agencies...   768
Maintenance Funding:
    Budget.......................................................   532
    EAGLE Maintenance and Improvements...........................   690
    Increased Aircraft Maintenance Funding.......................   595
    Increased Electronics Maintenance Funding....................   596
Marine Information for Safety & Law Enforcement (MISLE):
    2001 GAO Report..............................................   723
    Project Status...............................................   722
Maritime Domain Awareness (MDA):
    Funding Request Details......................................   656
    Information Management.......................................   720
    Major Contracts..............................................   722
Maritime Safety & Security Teams (MSST):
    Funding History..............................................   662
    Current Laydown..............................................   662
    Future Laydown...............................................   663
    Equipment Details............................................   663
Midway island: Impact of Discontinued Services...................   623
Morro Bay:
    Age and Homeport.............................................   659
    Homeland Security Mission....................................   659
Medical (See TRICARE):
Morale, Well-Being, and Recreation (MWR):
    Increases in MWR.............................................   590
    Total or MWR Support.........................................   590
Motor Lifeboat (MLB):
    Claim Fault Determination....................................   711
    Contractor Claim Settlement..................................   710
National Distress & Response Systems Modernization Project 
  (NDRSMP):
    Funding......................................................   652
    DOT Inspector General (IG) Report............................   719
    Historical Funding...........................................   719
National Transportation Safety Board (NTSB):
    Coast Guard ``Bright Line Test'' Proposal....................   611
    Status Of Coast Guard/NTSB MOU...............................   612
Oil Spill Liability Trust Fund (OSLTF):
    OSLTF Emergency Fund Obligations.............................   762
    Payment of Claims from OSLTF.................................   761
Opening Remarks by Adm. James M. Loy, Commandant, U.S. Coast 
  Guard..........................................................   514
Opening Remarks by Chairman Rogers...............................   513
Performance Goals:
    Coast Guard Performance Goals................................   540
    Changes to FY2004 Performance Plan...........................   540
    Homeland Security Performance Goals..........................   540
    Performance Goals: Targets Met or Exceeded...................   538
    Performance Goals: Targets not Met...........................   539
Personnel & Allowances:
    Accessions and Workforce Strength............................   567
    Additional National Strike Force Personnel...................   655
    Average Total Earned Compensation............................   574
    Aviation Career Continuation Pay.............................   582
    Breakdown of Variety of Personnel Entitlements in FY2003.....   564
    Career Sea Pay (CSP) Improvement Examples....................   697
    Change of Military and Civilian Mix in FY03..................   556
    Coast Guard Incident Command System Requirement..............   687
    Coast Guard Personnel Challenges.............................   557
    Coast Guard Public Affairs Staffing..........................   688
    Coast Guard Strategic Port Cities Public Affairs Staffing....   688
    Command Center Staffing And Training Levels..................   651
    Commandant and Vice Commandant Staff.........................   619
    Comparison of Military/Civilian Mix to DOD...................   557
    Contracting Out of Response Planning.........................   656
    Determination of FTE Staff Year for Particular Positions.....   562
    District Offices--Authorized Billet levels...................   600
    Funding Breakdown of Headquarters Managed Units for FY2001-
      FY2003.....................................................   628
    Funding for Liaison Billets Per Staff-Year...................   550
    Headquarters Administration: Total Assigned Billets..........   613
    How was the Number of 43 People Derived......................   550
    Increases in Sea Pay.........................................   695
    Increase in Unemployment Compensation Payments...............   566
    January 2002 Pay Rates.......................................   572
    Law Specialist/Attorney Requirements.........................   686
    Major Acquisition Pro & Contractor Personnel.................   744
    Marine Safety Office (MSO) Personnel to Conduct Security 
      Patrols....................................................   652
    Military/Civilian Mix........................................   556
    New Response Plans and Planning Billets......................   656
    Non-Supervisory Positions Required by Statute................   694
    OE-Funded Full time Equivalent Staff Years...................   562
    Officer-To-Enlisted Ratio....................................   693
    Pay Raise Break Down.........................................   563
    Performance Goals and Measures for Human Capital Practices...   559
    Personnel Assignments........................................   582
    Public Affairs Field Staff...................................   622
    Public Affairs Headquarters Staff............................   621
    Recruiting from Reserve Force................................   561
    Regular Military Compensation................................   568
    Retaining Coast Guard Experience.............................   561
    Status of Future Force 21....................................   560
    Status of Workforce Surveys..................................   645
    Worker's Compensation........................................   565
Port Security....................................................   517
Readiness:
    Executive Management use of Readiness Management System (RMS)   545
    Measuring/Monitoring Operational and Maintenance Readiness...   543
    New Security Readiness and Planning Positions and Locations..   683
    Readiness Management System (RMS) Development................   544
    Security Readiness and Planning Funding Breakdown............   683
Recreational Boating Safety Program:
    Status of Boat Factory Visit Program.........................   752
    Status of Recreational Boating Survey........................   753
Reserves:
    Decrease in Prior Experience of Coast Guard Reserves.........   764
    Raising the Selected Reserve Force...........................   766
    Reserves Role in Homeland Security (HLS) Missions............   765
    Reserve Utilization..........................................   767
Response Boat--Medium (RB-M):
    Fleet Scope..................................................   712
    FY2002-2003 Spend Plan.......................................   713
    Request for Proposal (RFP) Release Estimate..................   713
    Schedule Acceleration........................................   712
Retail Exchanges (See Exchange):
    Retired Pay: Accrual Funding.................................   760
Rigid Hull Inflatable (RHI):
    Boat End of Service Life Data................................   649
    Boat Fleet Status............................................   649
    Boat Mishap Reductions.......................................   648
    Status of Training for Operations............................   650
Sea Marshals:
    Budget.......................................................   660
    Concept of Operations........................................   661
    Personnel....................................................   660
    Program Services.............................................   769
    Role.........................................................   769
    Training.....................................................   770
Search & Rescue:
    Additional Staffing in FY2002................................   633
    Funding......................................................   689
    New Positions Added in FY2002-2003...........................   633
Senior Executive Services (SES):
    Comparison of SES for FY2002-2003............................   581
    Bonuses: FY2001-2002.........................................   580
Shackelton Expedition Details....................................   552
Small Boat Stations:
    Boat Crew Mission Hour Limits................................   645
    Boat Crew Personal Protective Equipment (PPE) Levels.........   651
    Station Turnover Rate........................................   637
    Station Staffing Requirements................................   638
    Station Staffing Request In FY2003...........................   639
    Station Staffing Status......................................   640
    Stations: Overworked, Under Trained, and Fatigued............   530
    Stations: Statistics Of Vessel Incidents.....................   631
Shore Facility:
    Breakdown of Funds for Shore Survey and Design...............   724
    Impact of Vital Improvements to Shore Facilities.............   725
    Operational Dates for Shore Facility Projects................   597
    Shore Facilities Requirements List...........................   726
    Station Manistee, Michigan Replacement.......................   729
    Status of Station Manistee Design............................   730
TASC: FY03 Breakdown of Services.................................   535
Travel by Appropriation..........................................   554
Transit Subsidy:
    Mass Transit Subsidy Benefit Program.........................   575
    Transit Subsidy Benefit Program Request......................   575
TRICARE:
    Budget.......................................................   533
    Military Health Care.........................................   587
    Projected Health Care Costs..................................   585
    Rise in Military Health Care Costs...........................   586
    TRICARE for Life Accrual Funding.............................   586
Questions for the Record (QFRs) from Chairman Rodgers:
    2001 GAO Report on MISLE.....................................   723
    Accessions and Workforce Strength............................   567
    Acquisition, Construction, & Improvements (AC&I) Unobligated 
      Balance....................................................   703
    Acquisition, Construction, & Improvements (AC&I): $1 Million 
      Unobligated................................................   707
    Addition/Deletion of Conus Cola Locations....................   579
    Addition/Deletion of Conus Cola Locations in FY2003..........   579
    Additional National Strike Force Personnel...................   655
    Additional Search and Rescue (SAR) Staffing in FY2002........   633
    Adequacy of USCG Cost Accounting.............................   542
    Airborne Use of Force........................................   607
    Alaskan Fisheries Enforcement Resource Hours.................   610
    Alex Haley Conversion Phase II...............................   714
    Alteration of Bridges Program................................   744
    Amount of Bonuses Awarded....................................   584
    Annualization of FY2002 National Defense Authorization Act 
      Entitlements...............................................   564
    Annualization of the FY2003 General Pay Raise................   563
    Application of Ambient Temperature-Cured Glass...............   716
    Asset Sale Collections.......................................   702
    Average Total Earned Compensation............................   574
    Aviation Career Continuation Pay.............................   582
    Ballast Water Management (BWM) Activities for FY2002 and 
      FY2003.....................................................   628
    Boat Crew Mission Hour Limits................................   645
    Boat Crew Personal Protective Equipment (PPE) Levels.........   651
    Boating Safety Grant Spending History........................   753
    Boating Safety State Matching Data...........................   748
    Bonuses and Awards...........................................   581
    Breakdown of Funds for Shore Survey and Design...............   724
    Breakdown of Requested EC&R Funds............................   758
    Breakdown of Variety of Personnel Entitlements in FY2003.....   564
    Budget by Mission Category...................................   537
    Budget Costs for Pay Raise...................................   576
    Budget Growth by Mission.....................................   594
    Budget Request for Fuel And Energy Costs.....................   587
    Budgeted Costs for Ballast Water Management (BWM) Program....   625
    C-130J Outyear Estimates.....................................   716
    C-130J Project Status........................................   715
    C-130A Potential Cost Offset.................................   715
    C-130A Project Status........................................   714
    Career Sea Pay (CSP) Improvement Examples....................   697
    Change of Military and Civilian Mix in FY03..................   556
    Changes to FY 2004 Performance Plan..........................   540
    Chemical, Biological, and Radiological (CBR) Funding.........   664
    Classes of Waterway Users and User Fees......................   631
    Coast Guard ``Bright Line Test'' Proposal....................   611
    Coast Guard Incident Command System Requirement..............   687
    Coast Guard Intel Efforts with Other Agencies................   768
    Coast Guard Performance Goals................................   540
    Coast Guard Personnel Challenges.............................   557
    Coast Guard Public Affairs Staffing..........................   688
    Coast Guard Research & Development (R&D Center Operating 
      Costs......................................................   763
    Coast Guard Reserves Role in Homeland Security (HLS) Missions   765
    Coast Guard Retail Exchanges.................................   589
    Coast Guard Strategic Port Cities Public Affairs Staffing....   688
    Command Center Staffing and Training Levels..................   651
    Commandant And Vice Commandant Staff.........................   619
    Commandant's Boat Safety Board...............................   632
    Comparison of DOD Conus Cola: FY2003.........................   580
    Comparison of Military/Civilian Mix to DOD...................   557
    Comparison of Senior Executive Services (SES) for FY2002-2003   581
    Comparison Table of FY2003 Columns...........................   699
    Contracting Out of Response Planning.........................   656
    Cost Effective Alternative Detection System..................   609
    Cost Estimate/Sharing Agreement for Chelsea Street Bridge....   747
    Coxswain Test Score Results..................................   646
    Coxswain Test Score Standards................................   646
    CPB Homeports................................................   600
    Current Maritime Safety & Security Teams (MSST) Laydown......   662
    Cutter Operational Costs.....................................   599
    Decrease in Prior Experience of Coast Guard Reserves.........   764
    Deepwater Certification Letter...............................   733
    Deepwater Engineering Change Proposals.......................   732
    Deepwater Funding in Capital Investment Plan (CIP)...........   731
    Definition of Minor & Major EC&R Remediation Projects........   757
    Details of Iceberg B-15......................................   553
    Determination of FTE Staff Year for Particular Positions.....   562
    District Offices--Authorized Billet Levels...................   600
    DOT Inspector General (IG) Report on NDRSMP..................   719
    Drug Interdiction Budget.....................................   604
    Drug Table Seizures..........................................   606
    Drug Vessels Disabled by HITRON..............................   607
    EAGLE Maintenance and Improvements...........................   690
    Enlistment Bonuses...........................................   583
    Estimated Dates for Current Coast Guard Housing Projects.....   727
    Executive Management use of Readiness Management System (RMS)   545
    Expected Excessed Properties.................................   701
    FAA Franchise Fund: FY 2002 and FY 2003......................   536
    Federal and State Spending on Boating Safety Duplicate.......   751
    Firearms and Ammunition Budget...............................   665
    Fiscal Year 2001 ``Other Services'' Obligations..............   602
    Fiscal Year 2003 CONUS COLA..................................   577
    Five Year Funding Projection--FY2003-FY2007..................   698
    Fuel and Energy Cost Assumptions.............................   588
    Funding Breakdown of Headquarters Managed Units for FY2001-
      FY2003.....................................................   628
    Funding For Liaison Billets Per Staff-Year...................   550
    Funding for New WLBS.........................................   599
    Funding Requested for Battery Recovery Program...............   759
    Future Maritime Safety & Security Teams (MSST) Laydown.......   663
    FY2002 and 2003 ``Other Miscellaneous Agencies''.............   545
    FY2002 Asset Retirements.....................................   692
    FY2002 Estimate for Battery Recovery.........................   760
    FY2003 Environmental Compliance & Restoration (EC&R) Sites...   755
    General Detail for FY2003....................................   585
    General Detail Percentage Increase...........................   584
    Great Lakes Icebreaker (GLIB) Cost Profile...................   709
    Great Lakes Icebreaker (GLIB) Outyear Estimate...............   710
    Great Lakes Icebreaker (GLIB) Project Schedule...............   709
    Green Ammo Executive Order...................................   666
    Green Ammo Funding...........................................   682
    GSA Rental Costs.............................................   623
    Hawaii Rainbow Communications System.........................   718
    Headquarters Administration: Total Assigned Billets..........   613
    High Interest Vessel Control.................................   658
    Home Heating and Electric Bill Costs.........................   589
    Homeland Security Performance Goals..........................   540
    Homeland Security Strategies.................................   541
    Housing Projects Assumed in the 2002 & 2003 CIP..............   729
    How was the Number of 43 People Derived......................   550
    Impact of Discontinued Services on Midway Island.............   623
    Impact of Homeland Security upon Coast Guard Performance 
      Goals......................................................   541
    Impact of Vital Improvements to Shore Facilities.............   725
    Increase in Unemployment Compensation Payments...............   566
    Increased Aircraft Maintenance Funding.......................   595
    Increased Electronics Maintenance Funding....................   596
    Increases in Morale, Well-Being, and Recreation (MWR)........   590
    Increases in Sea Pay.........................................   695
    Increasing Operating Fees....................................   549
    January 2002 Pay Rates.......................................   572
    Law Specialist/Attorney Requirements.........................   686
    Living Marine Resources Performance Measure..................   611
    Localities Eligible for CONUS COLA...........................   577
    Major Acquisition Pro & Contractor Personnel.................   744
    MISLE Project Status.........................................   722
    Marine Safety Office (MSO) Personnel to Conduct Security 
      Patrols....................................................   652
    Maritime Domain Awareness (MDA) Funding Request Details......   656
    Maritime Domain Awareness (MDA) Information Management.......   720
    Maritime Domain Awareness (MDA) Major Contracts..............   722
    Maritime Safety & Security Teams (MSST) Equipment Details....   663
    Maritime Safety & Security Teams (MSST) Funding History......   662
    Mass Transit Subsidy Benefit Program.........................   575
    Measuring/Monitoring Operational and Maintenance Readiness...   543
    Military Health Care.........................................   587
    Military/Civilian Mix........................................   556
    Morro Bay Age and Homeport...................................   659
    Morro Bay Homeland Security Mission..........................   659
    Motor Lifeboat (MLB) Claim Fault Determination...............   711
    Motor Lifeboat (MLB) Contractor Claim Settlement.............   710
    NDRSMP Funding...............................................   652
    Navigation User Fees.........................................   630
    Navigational User Fees for CG Operated VTS...................   594
    NDRSMP Historical Funding....................................   719
    Need For Recapitalization of Puget Sound VTS.................   717
    New Response Plans and Planning Billets......................   656
    New Search and Rescue (SAR) Positions Added in FY2002........   633
    New Security Readiness and Planning Positions and Locations..   683
    Non-Supervisory Positions Required by Statute................   694
    OE-Funded Full Time Equivalent Staff Years...................   562
    Officer-To-Enlisted Ratio....................................   693
    Oil Spill Liability Trust Fund (OSLTF) Emergency Fund 
      Obligations................................................   762
    Operational Dates for Shore Facility Projects................   597
    Other Miscellaneous Services.................................   603
    ``Other Services'' Operating Expenses Obligations............   601
    Pay Raise Break Down.........................................   563
    Payment of Claims from the Oil Spill Liability Trust Fund 
      (OSLTF)....................................................   761
    Performance Goals and Measures for Human Capital Practices...   559
    Performance Goals: Targets Met or Exceeded...................   538
    Performance Goals: Targets not...............................   539
    Personnel Assignments........................................   582
    Personnel Resources--AC&I Appropriation......................   735
    Personnel Resources--AC&I Resources..........................   738
    Polar Icebreaking Reimbursement Data.........................   551
    Polar Icebreaking Support Fees...............................   551
    Presence and Response Capabilities Follow-On.................   653
    Profits from the Retail Exchange.............................   591
    Projected Health Care Costs..................................   585
    Properties Retained in Coast Guard Inventory.................   702
    Public Affairs Field Staff...................................   622
    Public Affairs Headquarters Staff............................   621
    Raising the Selected Reserve Force...........................   766
    Readiness Management System (RMS) Development................   544
    Recapitalization of Puget Sound Vessel Traffic System (VTS)..   717
    Recruiting from Reserve Force................................   561
    Regular Military Compensation................................   568
    Reserve Utilization..........................................   767
    Response Boat--Medium (RB-M) Fleet Scope.....................   712
    Response Boat--Medium (RB-M) Fleet Scope.....................   713
    Response Boat--Medium (RB-M) FY2002-2003 Spend Plan..........   713
    Response Boat--Medium (RB-M) RFP Release Estimate............   713
    Response Boat--Medium (RB-M) Schedule Acceleration...........   712
    Retaining Coast Guard Experience.............................   561
    Retirement Accrual Funding...................................   760
    Rigid Hull Inflatable (RHI) Boat End of Service Life Data....   649
    Rigid Hull Inflatable (RHI) Boat Fleet Status................   649
    Rigid Hull Inflatable (RHI) Boat Mishap Reductions...........   648
    Rise in Military Health Care Costs...........................   586
    Role of Coast Guard Sea Marshals.............................   769
    Running Gear Entanglement System (RGES)......................   764
    Schedule for User Fees Rulemaking............................   631
    Sea Marshal Budget...........................................   660
    Sea Marshal Concept of Operations............................   661
    Sea Marshal Personnel........................................   660
    Sea Marshal Program Services.................................   769
    Sea Marshal Training.........................................   770
    Search and Rescue (SAR) Funding..............................   689
    Security Readiness and Planning Funding Breakdown............   683
    Self Contained Breathing Apparatus...........................   690
    Senior Executive Services (SES) Bonuses: FY 2001-2002........   580
    Shackelton Expedition Details................................   552
    Shore Facilities Requirements List...........................   726
    Short Range Aids to Navigation...............................   726
    Small Boat Station Staffing Status...........................   640
    Standard Boat Inspections Standards..........................   647
    Standard Boat Readiness Rates................................   647
    Station Manistee, Michigan Replacement.......................   729
    Station Staffing Request in FY2003...........................   639
    Station Staffing Requirements................................   638
    Statistics of Vessel Incidents...............................   631
    Status of Boat Factory Visit Program.........................   752
    Status of Coast Guard/NTSB MOU...............................   612
    Status of Future Force 21....................................   560
    Status of Recreational Boating Survey........................   753
    Status of Sidney Lanier Bridge Project.......................   747
    Status of Station Manistee Design............................   730
    Status of Training for Rigid Hull Inflatable (RHI) Operations   650
    Status of Workforce Surveys..................................   645
    TASC: FY03 Breakdown of Services.............................   535
    Technology to Detect Narcotics and Explosives................   609
    Total of Morale, Well-Being, and Recreation (MWR) Support....   590
    Trace Detection Equipment....................................   608
    Transit Subsidy Benefit Program Request......................   575
    Travel by Appropriation......................................   554
    TRICARE for Life Accrual Funding.............................   586
    Turnover Rate for Coast Guard Smallboat Stations.............   637
    Unobligated Boating Safety Grant Funds.......................   754
    VTIS Corpus Christi Enhancement Funding......................   691
    Vessel Traffic Systems (VTS) Cost FY2000-2003................   591
    Why Shouldn't HLS Liaisons not be Reimbursable Billets?......   550
    Worker's Compensation........................................   565
User Fees:
    Classes of Waterway Users and User Fees......................   631
    Navigation User Fees.........................................   630
    Schedule for User Fees Rulemaking............................   631
Vessel Traffic Systems (VTS):
    Navigational User Fees for CG Operated VTS...................   594
    Need for Recapitalization of Puget Sound VTS.................   717
    Recapitalization of Puget Sound VTS..........................   717
    VTS Cost FY2000-2003.........................................   591

             Saint Lawrence Seaway Development Corporation

2001 Navigation Season Overview..................................   779
Advanced Navigation System Integration...........................   812
Binational Internet Web Site.....................................   778
Budget:
    Request for FY 2003..........................................   781
    FY 2003 Estimate.............................................   779
Budget Request for FY 2003.......................................   781
Critical Infrastructure and Navigation Security Measures.........   774
Economic Issues..................................................   792
Electronically-Based Governmental Service........................   795
Environmental Issues.............................................   798
Emergency Reserve Account........................................   800
FY 2003:
    Budget Estimate..............................................   779
    Budget Request...............................................   781
    Capital Plan Summary.........................................   787
    Capital Plan Project Descriptions............................   788
FY 2003 Budget Estimate..........................................   779
FY 2003 Capital Plan Summary.....................................   787
FY 2003 Capital Plan Project Descriptions........................   788
Foreign-Flag Vessel Enhanced Seaway Inspection Program...........   775
Great Lakes Navigation System Study..............................   777
Harbor Maintenance Trust Fund....................................   800
Personnel........................................................   813
Pilotage.........................................................   819
Reprogrammings...................................................   819
Revenues.........................................................   809
Seaway:
    AIS/GPS Project..............................................   777
    Lock Improvements............................................   775
    Statistics and Attributes....................................   817
Seaway AIS/GPS Project...........................................   777
Seaway Lock Improvements.........................................   775
Seaway Statistics and Attributes.................................   817
SLSDC:
    Authorized FTEs and On-Board Strength........................   814
    Availability Performance Measure.............................   811
    Balance Sheet................................................   810
    Eligible Employees for Retirement Over Next 10 Years.........   815
    Estimated Other Services.....................................   785
    Non-Federal Revenues.........................................   792
    Revenue Balance..............................................   801
    Revenue Sources..............................................   809
    Selected Performance Measurement Results.....................   818
SLSDC Authorized FTEs and On-Board Strength......................   814
SLSDC Availability Performance Measure...........................   811
SLSDC Balance Sheet..............................................   810
SLSDC Eligible Employees for Retirement Over Next 10 Years.......   815
SLSDC Estimated Other Services...................................   785
SLSDC Non-Federal Revenues.......................................   792
SLSDC Reserve Balance............................................   801
SLSDC Revenue Sources............................................   809
SLSDC Selected Performance Measurement Results...................   818
Statement by Administrator Albert S. Jacquez.....................   773
Tolls............................................................   802
Trade............................................................   803
Trade Development Initiatives....................................   776

       Architectural and Transportation Barriers Compliance Board

ABA Enforcement..................................................   830
Budget Request...................................................   831
Passenger Vessels................................................   826
Programs.........................................................   821
Research.........................................................   827
Rulemakings and Guidelines.......................................   822
    ADA and ABA Accessibility Guidelines.........................   824
    Public Rights-of-Way.........................................   825
    Recreation Facilities........................................   824
    Outdoor Developed Areas......................................   825
    Passenger Vessels............................................   825
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