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

           H.R. 5005, THE HOMELAND SECURITY ACT OF 2002, DAYS 1 AND 2

    =======================================================================

                                    HEARING

                                   before the

                              SELECT COMMITTEE ON
                               HOMELAND SECURITY
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                              JULY 15 AND 16, 2002

                                   __________

                                Serial No. 107-2

                                   __________

        Printed for the use of the Select Committee on Homeland Security

     Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                     house

                                   __________

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                                WASHINGTON : 2002
    ____________________________________________________________________________
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                     SELECT COMMITTEE ON HOMELAND SECURITY

                       RICHARD K. ARMEY, Texas, Chairman

    TOM DeLAY, Texas                     NANCY PELOSI, California
    J. C. WATTS, Jr., Oklahoma           MARTIN FROST, Texas
    DEBORAH PRYCE, Ohio                  ROBERT MENENDEZ, New Jersey
    ROB PORTMAN, Ohio                    ROSA L. DeLAURO, Connecticut

                                      (ii)

                                C O N T E N T S

                                   __________
                                                                       Page

    Testimony of:
        The Honorable Tom Ridge, Director, Office of Homeland
          Security...................................................     7
        The Honorable Ann Veneman, Secretary of Agriculture..........    91
        The Honorable Norman Y. Mineta, Secretary of Transportation..    94
        The Honorable Tommy G. Thompson, Secretary of Health and
          Human Services.............................................    98
        The Honorable Spencer Abraham, Secretary of Energy...........   103
        The Honorable Kay Cole James, Director, Office of Personnel
          Management.................................................   107
        The Honorable Mac Thornberry, M.C............................   142
        The Honorable Jane Harman, M.C...............................   145
        The Honorable Jim Gibbons, M.C...............................   149
        The Honorable Ellen O. Tauscher, M.C.........................   152
        The Honorable F. James Sensenbrenner, Jr., Chairman,
          Committee on the Judiciary.................................   183
    Material Submitted for the Record:
        Opening Statements of Select Committee Members (July 15).....     4
        Opening Statements of Select Committee Members (July 16).....    89
        Statement of Mr. Bobby L. Harnage, Sr., American Federation
          of Government Employees....................................    77
        Statement of Ms. Colleen M. Kelly, National Treasury
          Employees Union............................................    81
        Questions for the Record for Secretary Mineta................   197

                                     (iii)

              H.R. 5005, THE HOMELAND SECURITY ACT OF 2002, DAY 1

                                  ----------

                             MONDAY, JULY 15, 2002

                         U.S. House of Representatives,
                         Select Committee on Homeland Security,
                                                        Washington, DC.
        The committee met, pursuant to call, at 2:05 p.m., in Room
    345, Cannon House Office Building, Hon. Richard K. Armey
    [chairman of the committee] presiding.
        Present: Representatives Armey, Watts, Pryce, Portman,
    Frost, Menendez, and DeLauro.
        Chairman Armey. The Select Committee is meeting today to
    hear testimony on H.R. 5005, the Homeland Security Act of 2002.
    As announced at the last meeting, the Chair will recognize one
    member from both the majority and the minority for an opening
    statement so that we can hear from our witness and proceed to
    questions. Without objection, all members' opening statements
    will be made a part of the hearing record.
        The Chair now recognizes the gentleman from Oklahoma, Mr.
    Watts, for a brief opening statement.
        Mr. Watts. Thank you, Mr. Chairman, for the opportunity to
    address my colleagues on the committee and the distinguished
    guests before us here today. I commend you on your leadership
    of this Select Committee and thank you for your organization
    efforts to get us to this point.
        During my first year in the House of Representatives, the
    Oklahoma City bombing created a wake-up call on the need for a
    plan of action against domestic terrorism. During my last term
    here in Congress, the attacks on September 11, 2001, have
    forever changed the world and again demonstrated why the
    government must change the way we view threats to our homeland.
    We are about to hear from Governor Ridge, whom I met with in
    May of this year to discuss ways we can work together,
    executive branch and legislative branch, and better organize
    our infrastructure.
        I look forward to hearing Governor Ridge's perspective and
    have confidence at his leadership, in conjunction with the
    Cabinet secretaries and other members of the administration
    appearing before this panel, will take into consideration the
    ideas, concerns and goals voiced by members of the House
    working on this very important issue.
        I was pleased when President Bush called last month for the
    creation of a Department of Homeland Security, and I am
    thankful Speaker Hastert had the good judgment to create this
    committee. As my colleagues know, I have been involved in this
    issue since the 1995 Oklahoma City bombing and, in fact,
    introduced legislation 18 months ago to create a Committee on
    Homeland Security and to look at the way the executive branch
    is organized to prevent and respond to terrorism.
        We have received report after report from the National
    Commission on Terrorism to the Center for Strategic and
    International Studies, to the GAO study that I commissioned in
    2000 that clearly stated the need for this reorganization. The
    Select Committee has offered a fair, open and bipartisan
    process for members to express their views as we discuss the
    proposal put forth by the President.
        George Mason, the Virginian and who made the case for the
    Bill of Rights to our Constitution, wrote, ``government is, or
    ought to be instituted for the common benefit, protection and
    security of the people, Nation or community.''
        Mr. Chairman, we need to secure our borders as we secure
    our liberty. We must protect our rights as Americans and as our
    government protects our freedom. But while we think outside the
    box in order to promote these values each of us holds dear, we
    must never think outside the parameters of the United States
    Constitution.
        I think the emulation of a past system will serve the
    Nation well again. To divide responsibilities, such as when our
    country had one department for war and one for defense, we will
    create a more logical organizational structure that meets the
    needs of the 21st Century. Yes, history does repeat itself.
        One overlooked reality regarding the creation of this new
    department is that as America becomes better secured against
    terrorism, we also become better secured against other mass
    casualty events as well. A community that is better prepared to
    address terrorism is also better prepared to address floods,
    earthquakes, fires or naturally occurring disease outbreaks.
        Let me implore the members of this committee, Mr. Chairman,
    to continue fostering a beneficial dialogue with our
    colleagues. The creation of the Department of Homeland Security
    should not be about partisan politics, nor should the debate be
    anything less than mindful of the fact that we are at war
    abroad while facing threats here at home. Congress needs to
    take more--take no more time than is necessary to do the job
    right.
        Finally, I want all members to again reflect on our reason
    for being here today. The terrorist attacks of September 11 and
    earlier attacks like the Oklahoma City bombing give us possibly
    the most vital responsibility of our tenure in this great
    House. The new department will be charged with safeguarding the
    lives of our children and grandchildren. We must all work
    together to assure it is done right. This is not the time or
    the place for politics to guide our policy making because, if
    it does, we know who will suffer when our enemies come calling
    again.
        With that, I thank you, Mr. Chairman, and look forward to
    hearing from my colleague, Mr. Frost, and Governor Ridge, as we
    continue this open exchange of ideas and thoughts this
    afternoon.
        Chairman Armey. Thank you, Mr. Watts. The Chair will now
    hear the gentleman from Texas, Mr. Frost, for his opening
    statement.
        Mr. Frost. Thank you, Mr. Chairman. Good afternoon,
    Governor Ridge, our former colleague. It is a pleasure to have
    you back. Homeland security is a bipartisan priority for this
    Congress. Democrats have been pushing hard to make it a Cabinet
    level priority since soon after September 11, and now that the
    administration has come on board, I have confidence that we can
    get it done quickly, assuming we continue the open, bipartisan
    and collaborative process we have followed so far.
        The standing committees of the House have gotten us off to
    a very good start. Working on an extraordinary accelerated
    schedule and with real substantive bipartisanship, they have
    reported out a series of recommendations that should accomplish
    our goal of protecting the American people. It is true that the
    committees have recommended several important changes to the
    President's original proposal, changes that we will discuss
    with Governor Ridge today.
        I hope the administration will take these recommendations
    for what they are, good faith, bipartisan attempts to improve
    the President's proposal and to create a leaner and more
    efficient Department of Homeland Security.
        As this Select Committee considers all of these issues, I
    urge that we give added weight to the bipartisan work of the
    standing committees. They have years and years of experience in
    these matters and their members are some of the world's experts
    in their fields. If the Select Committee does not include their
    recommendations, it is important that the bill be considered
    under an open, bipartisan process on the floor, that allows the
    standing committees to have their amendments fairly considered
    by the full House.
        From the beginning, all eight us have assumed that the
    Chairman and ranking members would have the opportunity to
    defend their proposals on the House floor. I believe that this
    is the most significant piece of this process and it is
    absolutely crucial to the ultimate success of the new Federal
    Department. After all, our goal is not to establish a big new
    Federal bureaucracy; it is to ensure that this new structure
    works in the real world to increase the security of the
    American people and it will only succeed if all of us work
    together.
        That includes Democrats and Republicans, Congress and the
    administration, and perhaps more importantly, the 170,000
    Federal workers who will actually do the work of setting up the
    new department and carrying out its functions. To make this
    work, we must build a bipartisan coalition that is deep and
    broad. We must ask hard questions and provide honest answers.
    We must operate in good faith and give each other the benefit
    of the doubt.
        Most importantly, we must resist the temptation to use the
    urgency of this situation to advance other goals. No matter how
    sincere they may be. This is not an opportunity to claim new,
    bureaucratic territory. It is not a chance to dismantle civil
    service laws, gut whistleblower protections, or rewrite the
    Freedom of Information Act. This is nothing less than a war on
    terrorism, and any other partisan, parochial and ideological
    agenda, poses an obstacle to creating a more effective homeland
    security structure.
        Make no mistake, there are plenty of legitimate substantive
    questions we need to answer and we will explore these today.
    Some of the general questions, how large can this new Federal
    bureaucracy be without hindering its effectiveness? How much
    will it really cost taxpayers and where will we get the money?
    And there are more specific ones, should the new department
    include FEMA, and does that threaten FEMA's effectiveness in
    responding to natural disasters like hurricanes and floods. How
    will it affect our efforts to reform to the Immigration and
    Naturalization Service? Do we want security officials at the
    Department of Homeland Security directing medical research, or
    should that important responsibility remain with the scientific
    officials at the Department of Health and Human Services?
        We look forward to working with the administration to
    answer these and other important questions. Together we can
    provide a smarter, leaner and more effective means of
    protecting the public. So Governor Ridge, I again welcome you
    and look forward to hearing your views today.
        Thank you.
        Chairman Armey. Thank you, Mr. Frost.
        [Additional statements submitted for the record follow.]

                 PREPARED STATEMENT OF THE HONORABLE DICK ARMEY

        Thank you, Governor Ridge, for appearing before us today.
    It is always a pleasure to welcome you back to the Hill.
        As you know, we had the opportunity last week to hear from
    Secretaries Powell, O'Neill and Rumsfeld and Attorney General
    Ashcroft. As they shared their experience in the war we
    currently face, I couldn't help but be struck by their passion.
    Each conveyed an understanding of the importance of our work
    here and the gravity of the threat presented by the enemies of
    freedom. They laid the foundation for why we must act.
        They also demonstrated the high price of inaction.
        ``History teaches,'' President Ronald Reagan once said,
    ``that wars begin when governments believe the price of
    aggression is cheap.'' We've seen President Bush heed this
    warning on the international front. He brought swift and
    decisive action that defeated the warlords and liberated
    Afghanistan. Al Qaeda is on the run, and bin Laden is in
    hiding.
        Here at home, however, our ability to deal with foreign
    terrorist threats remains limited. Many of our security
    resources are scattered. Our technology is outdated and the
    missions of our agencies on the front lines of terrorism are
    unfocused. This makes us vulnerable. As long as we are
    vulnerable, our enemies will believe the price of aggression is
    one that they can afford.
        We cannot allow ourselves to forget just how real the
    threat has become. Although we may find ourselves safe while
    terrorist cells are confused and on the run, our short-term
    success shouldn't inspire complacency. In this battle, time is
    of the essence. We must not take any more time than is
    absolutely necessary to do the job right.
        Last month, President Bush offered his proposal to
    transform our government and make, in his words, the ``evil
    ones'' think twice before attempting to strike again. He
    inspired the House of Representatives to take swift and
    thorough action, showcasing our ability as a great deliberative
    body. All of the twelve standing committees of jurisdiction
    have met. They have considered the proposal line-by-line.
    They've each reported a set of recommendations based upon their
    individual expertise.
        It is this expertise that will be the key to creating a
    successful final product. That is why we will hear from them-
    the committee chairmen and ranking members-on Wednesday. They
    are invited to join us and discuss their views on the details
    of this legislative proposal. Before that, on Tuesday, a panel
    of cabinet secretaries will make the specific case for the
    President's plan.
        Clearly, it is going to be a heavy work week. The reward
    for our diligence, however, will be a bill reflecting an open
    and deliberative process. Our goal is to produce final
    legislation that presents a coherent vision of how our
    government must transform itself to focus its efforts and win
    the war.
        Meeting the threat this country faces will take all the
    American know-how and creativity that we can muster. We can't
    be afraid to upset the status quo in the process. We've shown
    that we're up to the task.
        Now it makes sense to kick off our week discussing the
    details of the President's plan with the President's lead
    spokesman and top adviser on Homeland Security matters. We
    welcome the thoughts of Governor Ridge on this topic.

              PREPARED STATEMENT OF THE HONORABLE J.C. WATTS, Jr.

        Thank you, Mister Chairman, for the opportunity to address
    my colleagues on the committee and the distinguished guest
    before us today. I commend you on your leadership of this
    select committee and thank you for your organizational effort
    to get us to this point.
        During my first year in the House of Representatives, the
    Oklahoma City bombing created a wake-up call on the need for a
    plan of action against domestic terrorism. During my last term
    here in Congress, the attacks on September 11, 2001 have
    forever changed the world and, again, demonstrated why the
    government must change the way we view threats to our homeland.
        We are about to hear from Governor Ridge, whom I met with
    in May of this year to discuss ways we can work together--
    executive branch and legislative branch--and better organize
    our infrastructure. I look forward to hearing Governor Ridge's
    perspective and have confidence that his leadership, in
    conjunction with the cabinet secretaries and other members of
    the administration appearing before this panel, will take into
    consideration the ideas, concerns and goals voiced by members
    of the House working on this important issue.
        I was pleased when President Bush called last month for the
    creation of a Department of Homeland Security, and am thankful
    Speaker Hastert had the good judgment to create this committee.
    As my colleagues know, I have been involved in this issue since
    the 1995 Oklahoma City bombing and, in fact, introduced
    legislation eighteen months ago to create a committee on
    homeland security and to look at the way the executive branch
    is organized to prevent and respond to terrorism. We have
    received report after report--from the National Commission on
    Terrorism to the Gilmore Commission to the GAO study that I
    commissioned in 2000--that clearly stated the need for this
    reorganization.
        This select committee has offered a fair, open and bi-
    partisan process for members to express their views as we
    discuss the proposal put forth by the president.
        George Mason, the Virginian who made the case for the Bill
    of Rights to our Constitution, wrote: ``Government is, or ought
    to be, instituted for the common benefit, protection and
    security of the people, nation or community.'' Mister Chairman,
    we need to secure our borders as we secure liberty. We must
    protect our rights as Americans as our government protects our
    freedom. But while we think outside the box in order to promote
    these values each one of us holds dear, we must never think
    outside the parameters of the United States Constitution.
        I think the emulation of a past system will serve the
    nation well again. To divide responsibilities, such as when our
    country had one department for war and one for defense, we will
    create a more logical organizational structure that meets the
    needs of the twenty-first century. Yes, history does repeat
    itself.
        One overlooked reality regarding the creation of this new
    department is that as America becomes better secured against
    terrorism we also become better secured against other mass
    casualty events. A community that is better prepared to address
    terrorism is also better prepared to address floods,
    earthquakes, fires or naturally occurring disease outbreaks.
        Let me implore the members of this committee, Mister
    Chairman, to continue fostering a beneficial dialogue with our
    colleagues in Congress. The creation of the Department of
    Homeland Security should not be about partisan politics, nor
    should the debate be anything less than mindful of the fact we
    are at war abroad while facing threats at home. Congress needs
    to take no more time than is necessary to do the job right.
        Finally, I want all Members of the committee to again
    reflect on our reason for being here today. The terrorist
    attacks of September 11th and earlier attacks, like the
    Oklahoma City bombing, give us possibly the most vital
    responsibility of our tenure in this great House. The new
    department will be charged with safeguarding the lives of our
    children and grandchildren--and we must all work together to
    ensure it is done right. This is not the time or the place for
    politics to guide our policy-making because if it does, we know
    who will suffer when our enemies come calling again.
        With that, I thank you, Mister Chairman, and look forward
    to hearing from Congressman Frost and Governor Ridge as we
    continue this open exchange of ideas and thoughts this
    afternoon.

               PREPARED STATEMENT OF THE HONORABLE DEBORAH PRYCE

        Thank you Mr. Chairman. I would like to begin by thanking
    our distinguished guest for taking the time to be with us today
    to share his expertise and insight on the process of creating
    the Department of Homeland Security. With the committees of
    jurisdiction in the House having completed their important work
    on the matter, this second hearing of the Select Committee on
    Homeland Security will give us an opportunity to begin delving
    into the President's proposal.
        Last week, we began to look at the nature of the threat our
    nation faces and the need for the new Department. Today, we
    continue to examine those issues while discussing specific
    ideas for creating the Department. The witness before us today
    has dedicated substantial time and effort in his role as
    Director of the Office of Homeland Security, and I look forward
    to learning from his experience.
        On September 20, 2001, just 9 days after the tragic events
    that have transformed our nation, President Bush came before a
    joint session of Congress and outlined the first steps of the
    United States' response. As part of this historic address, the
    President announced the creation of an Office of Homeland
    Security within the White House to coordinate a comprehensive
    national strategy to safeguard the nation against terrorism.
        Thus far, this office has proven to be a success, giving
    the President a close adviser who focuses exclusively on
    homeland security. Governor Ridge has made marked progress in
    improving Federal coordination with State and local governments
    and law enforcement, as well as strengthening coordination
    among Federal agencies. In the face of the unique and deadly
    terrorist enemy that we face, this nationwide coordination,
    information sharing, and cooperation seems to be at the heart
    of any successful effort to secure the homeland.
        At this time, it has become clear that we must build on the
    success of the Office of Homeland Security under Governor Ridge
    by undertaking a more widespread and fundamental reorganization
    of the government. The creation of the Department of Homeland
    Security would remake the current patchwork of government
    homeland security activities into a single department with the
    primary mission of protecting our homeland. The need for a
    single Department to organize the homeland security functions
    that are currently dispersed among more than one hundred
    different government organizations cannot be overstated.
        As we work to craft this new Department, we will rely
    heavily on the expertise of those, like Governor Ridge, who
    have been on the frontlines of the effort to secure the
    homeland. By tapping into their experience, we can maximize the
    effectiveness of the Department, sharply focus its mission, and
    offset any associated costs by eliminating unnecessary
    redundancies and increasing government efficiency.
        Today, the Select Committee begins in earnest the historic
    task of creating a new Federal Department to respond to the
    threats our nation faces in the 21st Century. I look forward to
    learning from our distinguished guest about the challenges he
    has encountered in his current role as Director of the Office
    of Homeland Security.

                PREPARED STATEMENT OF THE HONORABLE ROSA DeLAURO

        I want to thank Governor Ridge for testifying before the
    Committee today. As director of the White House Office of
    Homeland Security, he has done an excellent job under very
    difficult circumstances.
        We all agree that we need a Cabinet-level department to
    oversee our efforts to guarantee our nation's security. We know
    that the ongoing threat requires us to act swiftly, and we have
    made great strides toward that goal.
        Since last week's hearing, all twelve standing Committees
    with jurisdiction over this department have completed their
    work and given us their recommendations. These recommendations
    carry with them the expertise and in-depth knowledge of each of
    their Chairs and Ranking Members, who understand perhaps better
    than anyone how to ensure that we successfully marshal our
    efforts to protect the homeland, without harming non-security
    related duties responsibilities that are equally important. I
    believe the Select Committee must give the Committee's
    recommendations serious consideration as we officially begin to
    draft this legislation.
        September 11th changed our world in a way none of us could
    imagine. To protect the American people, we must change with
    it. We can't just change the location of these agencies. We
    must change the way they do business--the way they share
    intelligence, the way they interact with States and localities,
    the methods in which they address the very real threats we are
    facing.
        I believe it's possible to make those changes without
    changing our commitment to open government and to protecting
    the liberty of the American people. I look forward to working
    with my colleagues on both sides of the aisle in that effort.

        Chairman Armey. Well, Governor Ridge, let me just say, for
    me it is a special delight to welcome you back to the House
    where you served so well for so many years and where you still
    have so many good friends. I like to count myself among them.
        If you would like to proceed, let me say, without
    objection, we will put your written formal statement in the
    record and we would invite you to proceed with your statement
    as you would like to present it to us.

       STATEMENT OF THE HONORABLE TOM RIDGE, DIRECTOR, OFFICE OF
                           HOMELAND SECURITY

        Governor Ridge. Thank you, Mr. Chairman. It is good to be
    back in the people's House with friends with whom I have served
    over the years. I want to thank the Select Committee for giving
    the administration the opportunity to appear before you today.
        President Bush has asked me to convey his personal
    appreciation for the comprehensive, timely and, to your point,
    Congressman Frost, bipartisan manner in which the House of
    Representatives has considered his proposal to make America
    safer by creating a Cabinet level Department of Homeland
    Security.
        As you know, the President has signed an executive order
    creating a transition planning office for the new department,
    and it is housed within the Office of Management and Budget. I
    appear before you today to testify in my capacity as director
    of that office, and I look forward to working with you this
    afternoon and in the future.
        When President Bush established the Office of Homeland
    Security last October, the first mission he assigned was, and I
    quote, ``to develop and coordinate the implementation of a
    comprehensive national strategy to secure the United States
    from terrorist threats or attacks.''
        It was immediately clear that doing so would require
    careful study of how the Federal Government is organized for
    the mission of homeland security. Like many who have examined
    this question, and Congressman Menendez, you and I have had
    this discussion before, including many Members of Congress, we
    concluded that the Federal Government can and should be better
    organized, could be organized differently. Tomorrow the
    President will release the Nation's first ever national
    strategy for homeland security. It is a focused and forward-
    looking plan to secure the Nation from terrorism. Our execution
    of this strategy must be equally focused. That is why the
    President has proposed the Department of Homeland Security.
        On June 6, President Bush unveiled his proposal to unite
    the agencies essential to homeland security. On June 18, we
    delivered the draft Homeland Security Act of 2002 to Congress.
    The very next day, the House passed a resolution to create this
    special Select Committee to consider the bill, a sign that the
    members need to stay focused on the big picture, the need to
    reorganize our government to secure the homeland.
        More than 10 months have elapsed since September 11. To
    some, the threat of terrorism may have receded, but our Nation
    remains at grave risk of terrorist attacks now and for the
    foreseeable future.
        A couple things we have learned about the enemy: Terrorists
    are strategic actors. They choose their targets deliberately,
    and they choose them based on the weaknesses they observe in
    our defenses and in our preparations. They use speed and
    surprise to terrorize.
        Protecting ourselves, therefore, requires that we be
    flexible and nimble as well with the ability to quickly spot
    the gaps and move just as quickly to fill them. It requires
    improved coordination and communication between all levels of
    government and every sector of society. And it requires
    something else, a thorough knowledge of our enduring
    vulnerabilities. Our population is large and diverse and
    mobile. It allows for sleeper cells to hide within our midst.
    Our factories, power plants, transportation and other critical
    infrastructure provide numerous potential targets. Our 21st
    century global economy and the 21st century technologies on
    which it relies are vulnerable to new threats of cyber
    terrorism.
        The very freedoms we cherish give terrorists a window on to
    these vulnerabilities. The more we know about our enemy, the
    easier it is to defeat him. The more we know about our
    vulnerabilities, the better we can protect ourselves. The
    fundamental mission of the Department of Homeland Security
    would be threefold: To prevent terrorist attacks within the
    United States, to measure and reduce our vulnerability to
    terrorism, and to minimize the loss of life and damage and
    speed recovery from any future attack.
        Currently, no Federal Government agency calls homeland
    security its primary mission. In fact, as many of you have
    talked and discussed about it publicly, homeland security
    functions are divided around 100 different departments and
    agencies. We must align these efforts to ensure that homeland
    security is the top priority of one department and the top
    priority of everyone who works in that department.
        The current homeland security apparatus grew up around us
    in a very ad hoc fashion. It grew up over the course of many
    decades. The President's reorganization with well-planned and
    well thought out, based on input from every level of
    government, the private sector, the academic community, and, of
    course, the Congress of the United States. The President
    proposed that certain existing agencies be moved to the new
    department based on their core competencies in homeland
    security. The President faced a great many choices, and I
    believe he made the right ones.
        Of course, members from both sides of the aisle, as has
    been noted in opening comments, have offered their support and
    valuable expertise. Some have offered amendments in a sincere
    attempt to improve the bill, and at the same time enhance our
    security. And the administration's views, many of these
    amendments would strengthen the new department's ability to
    secure the homeland. Others, in our opinion, would not be
    helpful to achieving our full potential. But all members
    deserve a clear explanation of why we believe the President's
    proposal is best suited to carry out this mission.
        For most of our history, America has relied upon two vast
    oceans and two friendly neighbors to protect us from threats
    abroad. The mobility of modern terrorism, however, demands that
    we do much more. The Department of Homeland Security would have
    sole responsibility for managing the entry of people and goods
    into the United States and protecting our entire transportation
    infrastructure. It would also be responsible for maintaining
    the careful balance between security and global commerce. The
    President has proposed that this division include the principal
    border and transportation security agencies, including the
    United States Customs Service, the United States Coast Guard,
    the Transportation Security Administration, the Immigration and
    Naturalization Service, and the border security functions of
    the Animal and Plant Health Inspection Service.
        I would like to just share with you a couple of
    observations about each one of these departments or agencies.
        The United States Customs Service duties range from the
    seizure of contraband to the collection of revenue, to the
    enforcement of consumer protection, and even food safety laws.
    Many are highly relevant to homeland security. The
    administration is grateful for the careful consideration given
    to this issue by Chairman Thomas and the Committee on Ways and
    Means. The administration does, however, have concerns that
    their amendment, as currently drafted, would limit the latitude
    and accountability of the Secretary of Homeland Security and
    looks forward to further discussion with Chairman Thomas and
    his committee on this matter.
        The United States Coast Guard is our primary defense
    against terrorists who seek targets at our ports or exploit the
    international shipping industry to enter the United States. The
    President understands and the President values the many other
    non-homeland security-related functions performed by the Coast
    Guard. These will continue under the reorganization.
        Like many, including the blue ribbon Hart-Rudman
    Commission, the President recognizes the importance of placing
    the Coast Guard in the new department. Last week, Admiral Tom
    Collins, commandant of the Coast Guard, and five prior
    commandants, came to the White House to support this plan. They
    wrote the following, and I quote: ``we believe this major
    organizational change, if properly done, will enhance the
    maritime security of the United States and improve the ability
    of the Coast Guard to do all its missions.'' one of the
    commandants remarked to me it is not often they get together
    and have something it agree on. They certainly agreed on this
    point.
        The Immigration and Naturalization Service is responsible
    for enforcing our immigration laws and administering
    immigration services. Consistent with the President's long-
    standing position, the administration's proposal would
    reorganize the INS into separate service and enforcement
    bureaus with both bureaus answering to the Secretary of
    Homeland Security, a proposal consistent with H.R. 3231
    introduced on November 6 by Judiciary Chairman Sensenbrenner,
    and, I might add, overwhelmingly in concept supported by the
    House of Representatives by full vote on floor.
        Of course, border security does not start at the water's
    edge, in many instances, it begins where visas are issued, at
    our overseas consular and diplomatic offices. Representatives
    Hyde and Lantos, with the administration's full support, have
    offered an amendment giving the Secretary of Homeland Security
    the full legal authority needed to oversee issuance of visas
    and authorizing the assignment of Homeland Security employees
    to diplomatic and consular posts. The amendment was approved,
    with the House International Relations Committee, the House
    Judiciary Committee, and, with minor adjustments, by the
    Government Reform and Oversight Committee.
        Congress deserves a great deal of credit for acting
    immediately after September 11 to strengthen airport and
    aviation security. The newly created Transportation Security
    Administration is a natural fit in the new department. Its
    budget, personnel and even statutory responsibility are all
    directly related to the Department's core mission of protecting
    our air, land and sea borders and ports from terrorism.
        I share the confidence shown by Secretary Mineta and
    Administrator Magaw that moving TSA will not slow down or
    interfere with the agency's ability to meet its
    Congressionally-mandated deadlines. In fact, the administration
    believes the opposite is true. Matching the TSA's mandate with
    the Department of Homeland Security's mission will only enhance
    its ability to accomplish that task.
        While focusing on the importation of goods and weapons, we
    cannot overlook the potential for agri-terrorism, the
    importation of an animal or plant disease can wreak devastation
    on an industry on which 1/6th of our gross domestic product
    depends.
        The administration supports the House Agriculture's
    Committee recommendation to move the specialized border
    inspection and enforcement functions of the animal and plant
    health inspection service as well as the Plum Island Animal
    Disease Center to the new Department.
        Even our best efforts to prevent terrorism cannot guarantee
    that terrorists will not strike again. Therefore, we must
    improve our response capability as well. In a crisis, the
    Federal Government augments the primary State and local
    response roles. There is an artificial decision between
    consequence management and crisis management hinders and, we
    believe, dilutes our efforts.
        The new Department will consolidate myriad Federal
    emergency response plans into one genuine all hazard plan
    covering all potential acts of terrorism, including chemical,
    biological, radiological or nuclear events. It will coordinate
    with the Federal Government's disaster response efforts. It
    will help equip and train our first responders. It will
    consolidate grant programs for first responders and citizen
    volunteers now scattered across several agencies, and it will
    manage critical elements of the Federal Government's emergency
    response assets such as the national pharmaceutical stockpile.
        To accomplish this, we must, as the Hart-Rudman Commission
    suggested, make the Federal Emergency Management Agency an
    essential building block for the new Department. FEMA is the
    lead disaster mitigation providing command and control and
    funding support. The President's proposal would build on FEMA's
    all-hazard capabilities and very strong intergovernmental
    relationships to improve our response to terrorist events. It
    is absolutely critical that the Federal Emergency Management
    Agency be housed within the new Department.
        Chemical, biological, radiological and nuclear
    countermeasures are basically our science and technology
    component within the new Department. The Department will lead
    the Federal Government's efforts to prepare for and respond to
    incidents involving weapons of mass destruction. It will do so
    by harnessing the creative genius of the Nation's research and
    development community, particularly the private sector. The
    President's proposal envisions a national network of
    laboratories modeled on the National Nuclear Security
    Administration Laboratories that helped us win the Cold War.
        Last week, the House Committee on Science amended the
    President's proposal to create an under secretary of Homeland
    Security for science and technology. As with many of the ideas
    generated by Congress since June 6th, this was a valuable
    contribution. The administration would support reframing this
    particular unit, reframing this directive, to reflect this
    emphasis, as long as the primary focus remains on harnessing
    science and technology to meet the important homeland security
    challenges of the 21st century.
        We all know that bioterrorism is a real and present danger.
    Terrorists and terrorist organizations are actively trying to
    get their hands on biological agents and weapons. Our
    experience with the anthrax attacks demonstrates how far we
    have to go to improve our ability to detect the threat and
    preventing it from being spread to others. The President has
    proposed a 300 percent increase in spending on biodefense. With
    the help of Congress earlier this year, we began distributing
    over $1 billion to States and localities to help their public
    health systems meet the threat. Last month, the President
    signed legislation to provide another $4.3 billion to cities
    and States for training, vaccines, emergency preparedness and
    food and water security. It is critical that the new Secretary
    of Homeland Security be able to set goals and priorities for
    research and development efforts related to bioterrorism.
        Under the President's proposal, the new Department will
    help develop and test new vaccines, diagnostics, antidotes,
    therapeutics and other measures to counter the threat and
    reduce the danger these horrific weapons pose to human life.
    Currently, most of our efforts in this field are conducted by
    the Department of Health and Human Services where they are
    stovepiped away from the research to counter other weapons of
    mass destruction being conducted with other organizations
    within other departments. The President's plan will consolidate
    funding and oversight for these programs with other scientific
    initiatives in order to ensure that the highest priorities and
    protection receive the most resources.
        One of the other units within the Department is assigned to
    analyze information and infrastructure protection within this
    country and preventing future attacks requires timely
    information, a thorough knowledge of our vulnerabilities, and
    the ability to take action. The new Department will provide all
    three.
        First, it will fuse and integrate intelligence and other
    information about terrorist threats to the homeland from the
    FBI, the CIA, and other agencies that collect that kind of
    information. It will comprehensively assess the vulnerabilities
    of our Nation's critical infrastructure, physical and cyber. We
    all know they are really intertwined.
        Then the Department will do something unprecedented. It
    will match or integrate that threat information against our
    vulnerabilities to determine the appropriate protective actions
    to take. Some 85 percent of our Nation's critical
    infrastructure is owned by the private sector. The Department
    will work with businesses to learn of our vulnerabilities so we
    can take steps to reduce them.
        Businesses understandably want assurances that they would
    not be unwittingly drawing a road map for those who would do us
    harm. The administration believes it would be in the public
    interest to pass for homeland security purposes another
    statutory exemption to the Freedom of Information Act. The
    exemption would also give State and local officials seeking the
    latest threat information to protect their citizens.
        Congressman Davis has been focused on this issue for some
    time. The administration strongly supports his amendment, since
    approved by Government Reform and Oversight Committee, to
    provide an exemption to the Freedom of Information Act while
    ensuring that the Federal Government's regulatory and
    enforcement efforts are in no way compromised. When a specific
    and credible threat arises, the Department will provide one
    clear voice of warning to our Homeland Security advisory
    system. Beyond simply countering each individual threat, this
    capability will build a protective system to provide true long-
    term nationwide deterrence.
        Let me say a few words about another critical security
    agency, and that is, the United States Secret Service. No one
    can deny the crucial role in homeland security, both in
    protecting our national leaders from harm and increasingly in
    managing security at designated national security special
    events, such as the Super Bowl and the Winter Olympics. The
    agency will continue to investigate counterfeiters and other
    financial crimes, its core protective function is a perfect
    match for the new Department.
        That covers the what and the why. Now let me just say a few
    words before we get into questions about the how. Creating a
    new Department of Homeland Security is not the end of our
    reform efforts, it is the beginning. The new Secretary must
    have freedom to manage, to attract and retain the very best
    people from other agencies and the private sector and to reward
    their best efforts accordingly; to protect the homeland, it is
    critical that we, as the President has said, get the right
    people in the right place at the right time with the right pay.
        Federal workers should be assured, I am going to say this
    again, Federal workers should be assured that the Department of
    Homeland Security will be run according to the principles of
    the merit system. Fair treatment without regard to political
    affiliation, equal opportunity, equal pay for equal work, and
    protection for whistleblowers.
        Union members collective bargaining rights will remain with
    them in the new Department. President Bush is committed to a
    Federal workplace that is free of discrimination and
    retaliation. The new Secretary of Homeland Security must also
    have freedom to move resources in order to fill gaps in our
    defenses and counter the latest threat. The President has
    proposed for the new Department a budget of over $37 billion,
    nearly double what the government spent on homeland security in
    the previous fiscal year 2002, double the figures that were in
    that fiscal 2002 budget. Obviously Congress with bipartisan
    support added substantially to those numbers in the fall.
        The President's proposal gives the Secretary latitude to
    reallocate up to 5 percent of the funds in a given fiscal year,
    as well as the authority to reorganize the Department to
    respond to the changing nature of the terrorist threat.
        Clearly, as a former colleague, someone who actually
    aspirated to get on the Appropriations Committee, I am
    sensitive to the need for congressional oversight. The
    Appropriations Committee would have 15-day notice before funds
    could be moved to ensure that the power is not abused. But also
    as a former member, I well recognize with the budget process,
    the authorizing committees as well as the appropriations
    process and the Appropriation Committee, there would be
    substantial, vigorous oversight of the Secretary's capacity to
    transfer up to 5 percent.
        Change, of course, is never easy, especially this largest
    change in government in 55 years. So the President and I are
    thankful and most appreciative of the many good ideas that came
    out of the various committee markups last week. We also
    understand that Members may be reluctant to support a proposal
    that affects the institutions they oversee, because they do
    have expertise and knowledge and an affiliation with these
    institutions. We understand why they may be so cautious about
    change. We believe, nevertheless, that creating a Department of
    Homeland Security is the right course to take.
        It is a vision of our shared future that is greater than
    the sum of our current parts. This debate has echoes in the
    past. When President Harry S. Truman suggested uniting the
    Nation's military under a single Department of Defense, he was
    not greeted with unanimous support. In fact, there was
    opposition among his own advisers. One of them favored improved
    coordination and cooperation, but not unification. Truman
    disagreed. He believed unification was the key to improved
    coordination and cooperation, and President Bush agrees.
        Again, I thank the members of the Select Committee, as well
    as your colleagues in the House, for the serious and
    expeditious action you have taken on this proposal to
    strengthen our national effort to secure our homeland.
        Thank you, Mr. Chairman.
        Chairman Armey. Thank you, Governor.
        [The statement of Mr. Ridge follows:]

        PREPARED STATEMENT OF THE HONORABLE TOM RIDGE, ASSISTANT TO THE
                        PRESIDENT FOR HOMELAND SECURITY

                                I. Introduction

        Chairman Armey, Representative Pelosi, distinguished members of the
    Select Committee on Homeland Security. President Bush asked me to
    convey his appreciation for the comprehensive, expeditious, and most
    importantly, bipartisan manner in which the House of Representatives is
    considering his proposal to make America safer by creating a Cabinet-
    level Department of Homeland Security to unite essential agencies that
    must work more closely together.
        In the weeks since the President submitted a detailed legislative
    proposal to Congress, numerous House committees have conducted hearings
    to consider different aspects of the draft Homeland Security Act of
    2002. In the Administration's view, many of the amendments to the
    Administration's legislative proposal submitted for the Select
    Committee's consideration would strengthen the ability of the new
    Department to provide a unified homeland security structure that will
    improve protection against today's threats and be flexible enough to
    help meet the unknown threats of the future. Some amendments, however,
    would impair the Department's ability to secure our homeland. I will
    summarize the Administration's views of these issues in this statement.
        Through all of this legislative activity, it is important to stay
    focused on our goal and the basic reason why this Select Committee on
    Homeland Security was created. The United States is a nation at risk of
    terrorist attacks and it will remain so for the foreseeable future. We
    need to strengthen our efforts to protect America, and the current
    governmental structure limits our ability to do so. Change is needed
    now. It is our job--Executive Branch and Legislative Branch working
    together--to implement this change.

          II. The Need for Homeland Security: Threat and Vulnerability

        We are today a Nation at risk to terrorist attacks and will remain
    so for the foreseeable future. The terrorist threat to America takes
    many forms, has many places to hide, and is often invisible. Yet the
    need for improved homeland security is not tied solely to today's
    terrorist threat. It is tied to our enduring vulnerability.
        All assessments of the terrorist threat must start with a clear
    understanding that terrorists are strategic actors. They choose their
    targets deliberately based on the weaknesses they observe in our
    defenses and our preparations. They can balance the difficulty in
    successfully executing a particular attack against the magnitude of
    loss it might cause. They can monitor our media and listen to our
    policymakers as our Nation discusses how to protect itself--and adjust
    their plans accordingly. Where we insulate ourselves from one form of
    attack, they can shift and focus on another exposed vulnerability.
        The United States faces a profound danger of terrorism. We were
    dealt a grave blow on September 11 and we face today the real
    possibility of additional attacks of similar or even greater magnitude.
    Our enemies are working to obtain chemical, biological, radiological,
    and nuclear weapons for the stated purpose of killing vast numbers of
    Americans. Terrorists continue to employ conventional means of attack,
    such as bombs and guns. At the same time, they are gaining expertise in
    less traditional means, such as cyber attacks. And, as we saw on
    September 11, our terrorist enemies will use new tactics and exploit
    surprise to carry out their attacks and magnify their deadly effects.
        Our population and way of life are the source of our Nation's great
    strength, but also a source of inherent vulnerability. Our population
    is large, diverse, and highly mobile, allowing terrorists to hide
    within our midst. Americans assemble at schools, sporting arenas,
    malls, concert halls, office buildings, high-rise residences, and
    places of worship, presenting targets with the potential for many
    casualties. Much of America lives in densely populated urban areas,
    making our major cities conspicuous potential targets. Our factories,
    power plants, and parts of our transportation system could be attacked
    to cause systemic disruption. Americans subsist on the produce of farms
    in rural areas nationwide, making our heartland a potential target for
    agriterrorism.
        The U.S. government has no higher purpose than to ensure the
    security of our people and preserve our democratic way of life.
    Terrorism directly threatens the foundations of our Nation--our people,
    our way of life, and our economic prosperity. In the war on terrorism,
    as in all wars, the more we know about our enemy, the easier it is to
    defeat him. Similarly, the more we know about our vulnerabilities, the
    better we can protect them.
        When President Bush established the Office of Homeland Security in
    October 2001, the first mission he assigned the Office was ``to develop
    and coordinate the implementation of a comprehensive national strategy
    to secure the United States from terrorist threats or attacks.'' The
    President recognized that the United States has never had a shared
    national vision of what must be done to secure the homeland against the
    full range of terrorist threats we face today and might face in the
    future.
        The National Strategy for Homeland Security will help to prepare
    our Nation for the work ahead in several ways. It is a comprehensive
    statement of what needs to be done to secure the homeland to which all
    Americans can refer. It provides direction to the Federal government
    departments and agencies that have a role in homeland security. It
    suggests steps that State and local governments, private companies and
    organizations, and individual Americans can take to improve our
    security and offers incentives for them to do so. It recommends certain
    actions to the Congress. In this way, the Strategy provides a framework
    for the contributions that we all can make to secure our homeland. The
    President will release the Strategy tomorrow.

         III. Overview of the proposed Department of Homeland Security

        When President Bush directed his Administration to develop the
    National Strategy for Homeland Security, it was immediately clear that
    doing so would require careful study of how the Federal government is
    organized for the mission of homeland security. Like many who have
    examined this question, we quickly concluded that the Federal
    government can be much better organized than it presently is. Homeland
    security is, in many respects, a new mission, so it should come as no
    surprise that our strategic review concluded that the structure of the
    Federal government must be adapted to meet the challenges before us.
        The President proposed the establishment of the Department of
    Homeland Security on June 6, roughly five weeks prior to the
    publication of the Strategy. The proposal to create the Department
    preceded the Strategy because we finished our work on the
    organizational issue first and because of our wish to deliver the
    proposal to create the new Department to the Congress in time for
    action during the current legislative session. As the President said in
    his June 6 address to the Nation, ``we face an urgent need, and we must
    move quickly, this year, before the end of the congressional session.''
        Creating the Department of Homeland Security proposed by President
    Bush would result in the most significant transformation of the U.S.
    government in over a half-century. It would transform and largely
    realign the government's confusing patchwork of homeland security
    activities into a single department whose primary mission is to protect
    our homeland.
        Currently, no Federal government department has homeland security
    as its primary mission. In fact, responsibilities for homeland security
    are dispersed among more than 100 different government organizations.
    Creating a unified homeland security structure will align the efforts
    of many of these organizations and ensure that this crucial mission--
    protecting our homeland--is the top priority and responsibility of one
    department and one Cabinet secretary. The fundamental mission of the
    Department would be to:
         Prevent terrorist attacks within the United States;
         Reduce America's vulnerability to terrorism; and
         Minimize the damage and recover from attacks that do
    occur.
        The Department of Homeland Security would mobilize and focus the
    resources of the Federal government, State and local governments, the
    private sector, and the American people to accomplish its mission. It
    would have a clear, efficient organizational structure with four
    primary divisions.
        Establishing a new department to meet current and future homeland
    security challenges is both a vital enterprise and an extraordinarily
    difficult and complex one. The success of a new department in
    protecting our country will depend upon two principal factors: (1)
    ensuring that the new Department has the right building blocks moved
    into it, and (2) ensuring that the leadership of the new Department is
    given the right set of tools to work with and manage those blocks to
    ensure that the benefits of consolidation, in terms of both security
    and efficiency, can be achieved. There are a variety of issues in both
    categories, and we have strong views about many of them. Some of what
    has been done in the markups has been helpful, but some of it would, in
    our view, be distinctly damaging to the new Department's ability to
    carry out its mission successfully. I will first discuss the issues
    relating to the proper building blocks of the new Department, and then
    I will address the managerial flexibility and authority needed to
    fashion them into an effective force for protecting the American
    homeland.

                       border and transportation security

        America has historically relied heavily on two vast oceans and two
    friendly neighbors for border security, and on the private sector for
    most forms of domestic transportation security. The increasing mobility
    and destructive potential of modern terrorism requires that we
    fundamentally rethink and renovate our systems for border and
    transportation security. We must now conceive of border security and
    transportation security as fully integrated requirements, because our
    domestic transportation systems are inextricably intertwined with the
    global transport infrastructure. Virtually every community in America
    is connected to the global transportation network by the seaports,
    airports, highways, pipelines, railroads, and waterways that move
    people and goods into, within, and out of the Nation. We must therefore
    promote the efficient and reliable flow of people, goods, and services
    across borders, while preventing terrorists from using transportation
    conveyances or systems to deliver implements of destruction.
        In the President's proposal, the principal border and
    transportation security agencies--the U.S. Customs Service, the U.S.
    Coast Guard, the Immigration and Naturalization Service (INS), the
    Animal and Plant Health Inspection Service, and the Transportation
    Security Administration--would be unified within a single, powerful
    division of the new Department of Homeland Security. The new Department
    also would control the issuance of visas to foreigners through the
    Department of State and would coordinate the border-control activities
    of all Federal agencies that are not incorporated within the new
    Department. As a result, the Department would have sole responsibility
    for managing entry of people and goods into the United States and
    protecting our transportation infrastructure.
    U.S. Customs Service.
        One of the missions of the new Department will be to improve border
    security while at the same time facilitating legitimate trade--a
    delicate balance that the Customs Service has successfully maintained
    throughout its history. Transferring an intact Customs Service to the
    new Department will ensure that this balance will continue.
        The Customs Service's mission is entirely border-related. The
    Customs Service is critical to ensuring that goods and persons entering
    and exiting the United States do so in compliance with U.S. laws and
    regulations. It is not only responsible for keeping the implements of
    terrorism, narcotics, and other forms of contraband out of the United
    States, but also for collecting and safeguarding revenue, enforcing
    consumer protection and food safety laws, and enforcing U.S. trade and
    intellectual property laws in connection with all commercial goods
    entering the United States.
        The Customs Service plays very important roles in administering
    U.S. trade law and in collecting revenue from import duties. These
    functions of the Customs Service are operationally intertwined with its
    border security mission but are themselves not directly related to
    homeland security. It is important that provisions regarding
    administration of these functions do not limit the Secretary of
    Homeland Security from building the most effective and efficient border
    system possible.
    U.S. Coast Guard.
        Inclusion of the Coast Guard in the new Department is crucial to
    the President's plan for improving our border and transportation
    security. To maximize the Coast Guard's effectiveness in the new
    Department, it is essential that the Coast Guard remain intact, retain
    essential attributes as a military, multi-mission, and maritime
    service, and continue to execute the full range of Coast Guard
    missions.
        A large portion of the Coast Guard's current operating budget is
    directly related to the core missions of the proposed Department. The
    remainder of its missions contribute indirectly to the overall security
    and economic viability of the Nation. The Coast Guard is the lead
    Federal agency for maritime homeland security. The Coast Guard's multi-
    mission assets, military role as an Armed Force, and maritime presence
    and authorities bridge security, safety, and response capabilities
    between Federal, State, local and private organizations as well as
    other military services.
        The President's budget proposal for Fiscal Year 2003--a budget
    written with homeland security as a primary priority--is a clear
    indication of the support that the Coast Guard can expect within the
    new Department. The FY 2003 budget proposed to provide the Coast Guard
    with $7.1 billion, representing both the largest increase and the
    highest level of funding in Coast Guard history. I believe that moving
    the Coast Guard to the Department of Homeland Security will only
    increase future support for its missions--ensuring that the Coast Guard
    remains a top priority for this and future Presidents as they continue
    to prosecute the war on terrorism and safeguard the homeland.
        The President understands and values the many Coast Guard functions
    that are not directly tied to homeland security. He understands the
    importance of ensuring full support for such Coast Guard functions as
    search and rescue, fisheries, environmental law enforcement, and marine
    safety. The President and I are convinced that these functions will
    continue to receive the attention they require in the new Department. I
    should point out that even though it is currently in the Department of
    Transportation, the Coast Guard's non-transportation functions have
    flourished in recent years--totaling more than 75 percent of its
    current budget according to Coast Guard estimates. The non-homeland
    security functions are likely to fare even better within the new
    Department of Homeland Security than they do today within the
    Department of Transportation due to security-related budget support.
    Because the Coast Guard uses the same ships and people to save a
    capsized sailor as it does to protect our ports, this budget support
    will improve the Coast Guard's ability to fulfill its non-homeland
    security functions as well as its homeland security duties.
        Many experts have recognized the importance of including the Coast
    Guard in the Department of Homeland Security. Several of the blue-
    ribbon commissions and think tank reports related to terrorism--
    including the seminal Hart-Rudman Commission--have suggested such a
    move. So too have most of the bills suggested by members of Congress,
    including bills introduced by Representatives Harman, Tauscher,
    Thornberry, and Tancredo. Most importantly, the former and current
    leadership of the Coast Guard itself supports the move. Last week,
    Admiral Tom Collins, Commandant of the Coast Guard, and five former
    commandants came to the White House to share with the President their
    support for this initiative. These are individuals with more than 200
    years of Coast Guard experience among them and they all agree that this
    move would be good for the country and good for the Coast Guard. In a
    letter to the leadership of the Congress, the Commandants wrote: ``We
    believe this major organizational change, if properly done, will
    enhance the maritime security of the United States and improve the
    ability of the Coast Guard to do all its missions.'' One of the
    Commandants remarked to me that it is not often that they all agree on
    something.
    Immigration and Naturalization Service.
        The Immigration and Naturalization Service (INS) is responsible for
    enforcing the laws regulating the admission of foreign-born persons
    (i.e., aliens) to the United States and for administering various
    immigration benefits, including the naturalization of qualified
    applicants for U.S. citizenship. It is important to put the INS mission
    and its challenges into context to understand the full meaning and
    potential benefit of the proposal to include the INS in the same
    Cabinet department as the Nation's other border-management agencies.
        The INS is critical to ensuring the security of our Nation's land
    borders. Its inspectors stand shoulder to shoulder with Customs
    inspectors at all our ports of entry, conducting more than 500 million
    inspections a year. A subordinate agency of the INS, the U.S. Border
    Patrol, maintains control of U.S. borders between ports of entry. The
    INS also works to identify and remove people who have no lawful
    immigration status in the United States.
        Consistent with the President's long-standing position, the
    Administration's proposal would reorganize the INS by separating units
    for services from enforcement. The Department would build an
    immigration services organization that would administer our immigration
    law in an efficient, fair, and humane manner. The Department would make
    certain that America continues to welcome visitors and those who seek
    opportunity within our shores while excluding terrorists and their
    supporters.
        The Administration's proposal to separate the administration of
    citizenship and immigration services from the enforcement of migration
    laws within a single department is broadly similar to H.R. 3231,
    introduced on November 6 by House Judiciary Chairman Sensenbrenner. The
    Administration supported this bill, and it was passed by the House on
    April 25 by a vote 405-9. The Administration continues discussions with
    the Committee on the Judiciary to address members' concerns over
    several aspects of the President's proposal to create the Department of
    Homeland Security. That being said, let me underscore that the twin
    missions of the INS are complementary. Splitting them between two
    departments would make policy coordination, organization, reform, and
    systems integration more difficult. The Administration is prepared to
    jointly consider with Congress an alternate organization for the
    Department of Homeland Security in which immigration services is pulled
    out of the Border and Transportation Security division and made into
    its own bureau reporting directly to the Secretary of Homeland
    Security.
    Transportation Security Administration.
        On September 11, jet passenger aircraft on routine flights became
    the weapons of the deadliest terrorist attack in history. These events
    revealed the high priority that must be given to protecting the
    transportation sector. It is only natural, therefore, for the newly
    created Transportation Security Administration (TSA) to become a part
    of the Department of Homeland Security.
        The entirety of TSA's budget, personnel, and focus is directly
    related to the core missions of the proposed Department--protecting the
    security of our air, land, and sea borders and the security of our
    interconnected transportation systems. TSA has the statutory
    responsibility for security of all modes of transportation and it
    directly employs transportation security personnel. The organization
    uses various tools to execute its assigned missions including
    intelligence, regulations, enforcement, inspection, screening and
    education of carriers, passengers, and shippers.
        At the Department of Homeland Security, TSA will have ready access
    to the department's intelligence architecture to support our efforts to
    prevent terrorists from using the transportation system as a target.
    Combining TSA with established organizations will enable the fledgling
    agency to benefit from their relevant experience. Also, by merging TSA
    with fully staffed agencies, the new Department will allow the
    leveraging of staff, research capabilities, resources and facilities to
    address critical vulnerabilities.
        Moreover, the continuity of security from our borders throughout
    our transportation system is extremely important. The protection of
    this system and the passengers, cargo, and conveyances traveling
    through it is a responsibility that must be shared by TSA, INS, Customs
    and other Department of Homeland Security elements. Clearly, these
    agencies' ability to coordinate will be enhanced if they are part of
    the same organization and has access to shared systems.
        I share Secretary of Transportation Norm Mineta's and TSA
    Administrator John Magaw's confidence that moving TSA will not slow or
    interfere with the agency's ability to meet its statutory deadlines. In
    fact, the Administration strongly believes that moving the TSA into a
    new department whose sole focus is the protection of the homeland can
    only enhance its ability to accomplish its crucial mission.
    Animal and Plant Health Inspection Service.
        One-sixth of the U.S. gross domestic product and one-eighth of all
    jobs are connected to agriculture, either directly or indirectly. A
    terrorist attack on crops and/or livestock would have a direct
    financial impact on growers or breeders, but it would also hurt
    shippers, stockyards, slaughterhouses, distributors, and so on. Attacks
    against the Nation's agricultural sector could also impact consumers,
    threatening not only their pocketbooks, but their confidence in the
    safety of the food supply as well.
        Many biological agents are readily obtainable in countries where
    animal diseases are endemic, and could be introduced within the United
    States. Animal diseases like foot-and-mouth, viruses like the West Nile
    virus, pests like the Mediterranean fruit fly, and plant diseases like
    Dutch Elm are very difficult to contain once they are established,
        This is why the President proposed including the U.S. Department of
    Agriculture's Animal and Plant Health Inspection Service--the agency
    that prevents and manages outbreaks of diseases and pests--and the Plum
    Island Disease Facility in the new Department. In the past few weeks,
    Administration staff from the White House and the Department of
    Agriculture have worked with the House Agriculture committee to refine
    the President's proposal. The result of that work appears in the
    Committee's amendment which moves the specialized border inspection and
    enforcement functions of the U.S. Department of Agriculture, as well as
    the Plum Island Disease Facility, to the new Department. The
    Administration supports the amendment. We look forward to working with
    Congress so that the final bill provides the Secretary of Homeland
    Security the coordinating authorities required to ensure integrated
    plans to address the threat of agriterrorism.
    Visa Issuance Authority.
        Border security does not actually start at the borders. Rather, in
    many instances it begins at the consular and diplomatic offices
    overseas where visas are issued. Thus, the President proposed to
    provide the Secretary of Homeland Security with full legal authority
    for controlling visa issuance. Congressman Hyde and Lantos have built
    on this proposal and, with the Administration's support, offered an
    amendment giving the Secretary of Homeland Security the full legal
    authority needed over visa issuance while at the same time authorizing
    the assignment of Homeland Security employees to diplomatic and
    consular posts. The Amendment was approved not only by the House
    International Relations Committee, but also by the House Judiciary
    Committee and with minor adjustment by the Government Reform and
    Oversight Committee. The Administration supports the Hyde/Lantos
    amendment as it provides the Secretary of Homeland with the control
    over visa issuance necessary for effective border security.

                      emergency preparedness and response.

        The United States will do everything in its power to prevent future
    terrorist attacks, but we must not become complacent and assume that
    all future terrorist plots against us will be prevented. Therefore, we
    must prepare to minimize the damage and recover from all manner of
    terrorist attacks as a fundamental part of our Nation's homeland
    security strategy. Past experience has shown that preparedness is
    essential to an effective response to major terrorist incidents and
    natural disasters. America needs a comprehensive national system for
    bringing together and commanding all necessary response assets quickly
    and effectively. We must plan, equip, train, and exercise many
    different response units to mobilize without warning to any emergency.
    Under the President's proposal, the Department of Homeland Security,
    building on the strong foundation already laid by the Federal Emergency
    Management Agency (FEMA), would lead our national efforts to create and
    employ a system that will improve our response to all disasters, both
    manmade and natural.
        Under the President's proposal, the Department of Homeland Security
    would consolidate existing Federal government emergency response plans
    into one genuinely all-hazard plan--the Federal Incident Management
    Plan--and thereby eliminating the ``crisis management'' and
    ``consequence management'' distinction. This plan would cover all
    incidents of national significance, including acts of bioterrorism and
    agriterrorism, and would clarify roles and expected contributions of
    various emergency response bodies at different levels of government in
    the wake of a terrorist attack.
        In the event of an attack, the Department of Homeland Security
    would provide a line of authority from the President through the
    Secretary of Homeland Security to one on-site Federal coordinator. The
    single Federal coordinator would be responsible to the President for
    coordinating the entire Federal response to incidents of national
    significance. Lead agencies will maintain operational control over
    their functions (for example, the FBI will remain the lead agency for
    Federal law enforcement) under the overall coordination of the single
    Federal official.
        The President's proposal assigns the new Department the missions of
    ensuring the preparedness of our Nation's emergency response
    professionals, providing the Federal government's emergency response to
    terrorist attacks and natural disasters, and aiding recovery efforts.
    In addition to FEMA, proposed components of this division include the
    Office for Domestic Preparedness of the Office of Justice Programs, the
    National Domestic Preparedness Office of the FBI, the Domestic
    Emergency Support Teams of the Department of Justice, the Office of the
    Assistant Secretary for Public Health Emergency Preparedness (including
    the Office of Emergency Preparedness, the National Disaster Medical
    System, and the Metropolitan Medical Response System) of the Department
    of Health and Human Services (HHS), and the Strategic National
    Stockpile of HHS.
    Federal Emergency Management Agency.
        Under the President's proposal, FEMA will be a central component of
    the Department of Homeland Security for several reasons. It would
    provide the new Department with the experience and leadership needed to
    build the new national emergency response system envisioned in the
    National Strategy for Homeland Security. The new Department would build
    on FEMA to consolidate the Federal government's emergency response
    assets to better prepare all those pieces for all emergencies--both
    natural and man-made.
        FEMA would also play a crucial role in the Department of Homeland
    Security's efforts to streamline and improve the provision of Federal
    grants to State and local governments for emergency response purposes.
    On May 8, 2001, President Bush announced the creation of the Office of
    National Preparedness within FEMA to ``coordinate all Federal programs
    dealing with weapons of mass destruction consequence management within
    [Executive Branch Agencies]* * *'' The Office of National Preparedness
    has been working closely with State and local governments to ensure
    their planning, training, and equipment needs are addressed. The
    President's FY 2003 budget proposal requested $3.5 billion for FEMA to
    provide support to State and local first responders. Under the
    President's proposal, the new Department would build on this grant
    consolidation effort by incorporating similar homeland security
    programs located elsewhere in the Executive Branch. FEMA would play an
    important role in making this consolidated effort work at the new
    Department.
        FEMA also is the principal Federal agency that works with State and
    local entities to reduce the vulnerability of their communities to
    disasters. In 2001, FEMA provided $2.7 billion in direct assistance to
    States, local governments, and individuals stricken by natural
    disasters and incidents of terrorism, furnished over $589 billion in
    flood insurance coverage to over 4 million policy-holders, and awarded
    $177 million in grants to support emergency management preparedness and
    mitigation capabilities. Building on these past efforts, the new
    Department would make mitigation efforts against terrorism and natural
    disasters one of its priorities.
        Finally, FEMA's strong relationships with State and local
    governments would provide the new Department with an extremely
    important resource for coordinating our Nation's homeland security
    efforts. As I have learned during my eight months in this job, homeland
    security is a national mission that requires a national effort. FEMA's
    strong ties to the State and local entities that secure our hometowns--
    ties built and maintained through FEMA's ten regional offices and its
    excellent performance during incidents across the country--would help
    the new Department provide the best support possible to those entities
    in the future. As I often say, when every hometown is secure, the
    homeland will be secure. I would note that a principal recommendation
    of the Hart-Rudman Commission was that FEMA should be a core building
    block for an agency that is focused on homeland security.
    The National Pharmaceutical Stockpile
        CDC currently manages 12 ``push packages'' of pharmaceutical and
    medical supplies and equipment strategically located around the United
    States; additional lots of pharmaceuticals and caches of medical
    materiel are maintained by manufacturers under special contractual
    arrangements with CDC. One of the push packages was dispatched to New
    York City on September 11 and elements of the stockpile were used to
    respond to the anthrax attacks.
        The President's proposal integrates the stockpile with other
    national emergency preparedness and response assets at the new
    Department. The Secretary of Homeland Security will assume
    responsibility for continued development, maintenance, and deployment
    of the stockpile--making it an integral part of the larger suite of
    Federal response assets managed by FEMA and other future DHS
    components--while the Secretary of Health and Human Services will
    continue to determine its contents. The arrangement will ensure
    effective blending of the public health expertise of HHS with the
    logistical and emergency management expertise of DHS.

        CHEMICAL, BIOLOGICAL, RADIOLOGICAL, AND NUCLEAR COUNTERMEASURES

        The expertise, technology, and material needed to build the most
    deadly weapons known to mankind--including chemical, biological,
    radiological, and nuclear weapons--are spreading inexorably. If our
    enemies acquire these weapons, they are likely to try to use them.
    Currently, chemical, biological, radiological, and nuclear detection
    capabilities are modest and response capabilities are dispersed
    throughout the country at every level of government. The threat of
    terrorist attacks using chemical, biological, radiological, and nuclear
    weapons requires new approaches, a focused strategy, and new
    organization.
        Accordingly, the President's proposed legislation would establish
    an entire division in the Department of Homeland Security devoted to
    leading the Federal government's efforts in preparing for and
    responding to the full range of terrorist threats involving weapons of
    mass destruction. It proposes the transfer of the select agent
    registration enforcement programs and activities of HHS, the new
    National Bio-Weapons Defense Analysis Center of the Department of
    Defense, the Plum Island Animal Disease Center of the Department of
    Agriculture, and various programs and activities of the Department of
    Energy related to the prevention of nuclear smuggling and non-
    proliferation of CBRN technologies and material.
        The Department of Homeland Security will harness the creative
    genius of the entire research and development community, especially the
    private sector. Under the President's proposal, the Department of
    Homeland Security will establish a network of laboratories, modeled on
    the National Nuclear Security Administration laboratories that provided
    expertise in nuclear weapon design throughout the Cold War. These
    laboratories would provide a multidisciplinary environment for
    developing and demonstrating new technologies for homeland security and
    would maintain a critical mass of scientific and engineering talent.
    The Department would establish a central management and research
    facility with satellite centers of excellence located at various
    national laboratories.
        Last week, the House Committee on Science amended the President's
    proposal to create an Under Secretary of Homeland Security for Science
    and Technology. As with many of the ideas generated by Congress and
    others since the President addressed the Nation on June 6, this
    proposal is a valuable contribution to the structure of new Department.
    The intent of the President's proposal is to ensure that the new
    Department can harness science and technology to confront the full
    range of terrorist threats to the homeland. We look forward to working
    with the Congress to develop the best possible bill and to take
    advantage of the refinements provided by the House Committees.
    Department of Energy Research Programs.
        A number of programs already exist at our National Laboratories
    that will benefit homeland security. These programs, most of which grew
    as part of various national security activities, would be transferred
    (in terms of budget and FTEs) to the control and sponsorship of the new
    Department of Homeland Security.
        Research and Development to Counter the Chemical, Biological,
    Nuclear, and Radiological Threat. This Department of Energy-wide
    program provides research and development for a Department of Homeland
    Security core mission: detecting and tracking the presence of weapons
    of mass destruction. This activity includes the development of new
    technologies and systems for detecting fissile material at border
    crossings and technologies and systems that monitor the environment for
    the release of biological or chemical agents. The transfers to the new
    Department in this area would include $69 million in the Chemical and
    Biological National Security research and development program. In
    addition, the new Department would oversee $10 million in the Combating
    Nuclear Smuggling activity, which develops applied radiation detection
    systems for emergency response and law enforcement agencies. This
    activity provides system modeling, testing, and concept evaluation to
    monitor and track fissile and weapons grade nuclear materials, and
    supports training of inspection personnel. Finally, Supporting
    Activities ($3.5M) is a relatively small account and is responsible for
    strategic initiatives such as technology road mapping and out-year
    planning in support of the Chemical and Biological National Security
    Program and the Nuclear Smuggling Program. The Department of Homeland
    Security would assume the budget and FTEs associated with all these
    activities.
        Environmental Measurements Laboratory. The Department of Homeland
    Security would assume control of the Environmental Measurements
    Laboratory (EML) located in New York City. EML provides program
    management, technical assistance, and data quality assurance for
    measurements of radiation and radioactivity relating to environmental
    restoration, global nuclear non-proliferation, and other priority
    issues. EML would provide a nucleus for the new Department to conduct
    research and development activities associated with environmental
    sampling, facility protection, and standardization protocols for crisis
    response technologies.
        Intelligence Program. The Department of Energy's National
    Laboratories maintain in-house intelligence capabilities for assessing
    nuclear weapons and other WMD technologies throughout the world. These
    capabilities make use of the scientific expertise resident at the
    laboratories, and are augmented with funding from the intelligence
    community for their support for national assessments and analyses. One
    piece of these efforts includes analyses of third world chemical,
    biological, and nuclear programs, and thus would be invaluable to the
    Department of Homeland Security for guiding research and development
    activities to counter the use of these weapons against the homeland.
    Under the President's proposal, this activity will continue to provide
    uninterrupted and seamless support to the National intelligence
    community in this area while providing in-house threat expertise to the
    Department of Homeland Security.
        Advanced Scientific Computing Research. The Advanced Scientific
    Computing Research program supports researchers in applied mathematics
    and computer science to achieve optimal efficiencies from large scale
    computing systems. This activity would provide a nucleus around which
    to grow Department of Homeland Security programs in, for example,
    advanced simulation, computer science, and scientific modeling to
    support such activities as complex nonlinear systems analysis, traffic
    flow modeling, and information extraction and analysis.
        Life Sciences. The Department of Homeland Security would begin to
    oversee a portion, amounting to $20 million, of the Department of
    Energy program in the life and environmental sciences. This activity is
    expected to provide a core around which to grow DHS programs in, for
    example, identifying and understanding the microbial components that
    define a pathogen's life cycle, transmission, virulence, and
    invasiveness; sequencing the genomes of select organisms and strains as
    well as developing central bioinformatic resources or tools for rapid
    use of genomic information; and dealing with the threat of engineered
    pathogens.
    Bioterrorism Research Program.
        There are few threats that could endanger our national survival.
    The threat posed by the Soviet Union's vast nuclear arsenal was one
    such threat. The threat of bioterrorism is another. If properly
    employed, certain biological agents could cause tens or hundreds of
    thousands of casualties and wreak huge economic damage. Given the vast
    quantities of biological weapons that already exist around the world,
    the risk of terrorists and their supporters obtaining and using these
    weapons is sufficient to warrant a massive effort to prevent such
    attacks.
        Under the President's proposal, the Department of Homeland Security
    would unify much of the Federal government's efforts to develop and
    implement scientific and technological countermeasures against human,
    animal, and plant diseases that could be used as terrorist weapons. The
    Department would sponsor and establish national priorities for
    research, development, and testing to invent new vaccines, antidotes,
    diagnostics, therapies, and other technologies against bioterrorism; to
    recognize, identify, and confirm the occurrence of an attack; and to
    minimize the morbidity and mortality caused by such an attack. In
    addition, the Federal government will set standards and guidelines for
    State and local biological preparedness and response efforts.
        The President recognizes that all these efforts against
    bioterrorism must be part of a broader research and development
    program. Therefore, the President's proposal would charge the new
    Department with leading the Federal government's whole range of
    homeland security science and technology efforts. Currently, the bulk
    of our scientific efforts against biological terrorism are conducted by
    the Department of Health and Human Services and are separate from
    research against other weapons of mass destruction. The President's
    proposal would consolidate the funding and oversight for these programs
    with other scientific initiatives in order to ensure that priority
    threats receive an appropriate percentage of our national research and
    development investment. This effort would avoid stove-piped approaches
    to research and development by pursuing priority programs in
    multipurpose research institutions such as the National Institute of
    Health. Working within the context of the national priorities
    established by the Department of Homeland Security, the NIH and others
    would continue to make decisions on the disbursement of research
    funding dollars consistent with sound science and expertise.
    Select Agent Program.
        The recently enacted Public Health Security and Bioterrorism
    Preparedness and Response Act of 2002 authorized the Department of
    Human Services (HHS) and the Department of Agriculture (USDA) to
    promulgate and enforce regulations concerning the possession and use of
    Select Agents--certain hazardous biological organisms and toxins widely
    used in over 300 research laboratories across America. Examples include
    the bacterium that causes anthrax, the bacterium that causes Plague,
    and the virus that causes Ebola, a lethal hemorrhagic fever. Select
    Agents are prime candidates for use by would-be bioterrorists and thus,
    when used in research, must be kept constantly under safe and secure
    conditions.
        The Administration believes that the new Department, with its
    strong multi-purpose security infrastructure, will be best suited to
    prevent nefarious or other irresponsible uses of Select Agents. The
    Administration proposes that the Secretary of Homeland Security would
    administer the select agents program in consultation with the
    Secretaries of HHS and USDA with these agencies continuing to make key
    medical and scientific decisions, such as which biological agents
    should be included in the select agents list.

               INFORMATION ANALYSIS AND INFRASTRUCTURE PROTECTION

        Currently, the U.S. government has no single entity dedicated to
    translating assessments about evolving terrorist targeting strategies,
    training, and doctrine into a system of protection for the
    infrastructure of the United States. We have a foreign intelligence
    community and law enforcement agencies, but we have not had a cohesive
    body responsible for homeland security. The President's proposal closes
    that gap. The new Department will merge under one roof the capability
    to assess threats to the homeland, map those threats against our
    vulnerabilities, and take action to protect America's key assets and
    critical infrastructure. To ensure that the new Department has access
    to all the intelligence and information it requires to assess terrorist
    threats, the draft legislation contains powerful assurances that the
    Secretary of Homeland Security will be provided such information by the
    intelligence community and Federal law enforcement agencies.
        In addition to ensuring that domestic agencies respond in an
    integrated manner to tactical situations, the Department will also have
    a much more strategic mission that will require a different kind of
    analysis--one that has access to both public and private sector data to
    ensure that the Nation's infrastructure is protected. It will review
    intelligence provided by the intelligence and law enforcement
    communities and develop an action plan to counter the threat. More than
    just countering each identified threat, the Department will design and
    implement a long-term comprehensive and nation-wide plan for protecting
    America's critical infrastructure and key assets. A key mission of the
    Information Analysis and Infrastructure Protection division will be to
    understand and reduce the Nation's domestic vulnerability.
        The President's proposal would transfer to the new Department the
    National Infrastructure Protection Center of the FBI, the National
    Communications System of the Department of Defense, the Critical
    Infrastructure Assurance Office of the Department of Commerce, the
    Computer Security Division of the National Institute of Standards and
    Technology, the National Infrastructure Simulation and Analysis Center
    of the Department of Energy, and the Federal Computer Incident Response
    Center of the General Services Administration.
        Consistent with longstanding principles, the Department would not
    engage in the domestic collection of intelligence on United States
    citizens. The President's proposal creates within the Department the
    new capabilities that our Nation needs to fight the war on terrorism
    and also holds true to the belief that government intrusion into the
    daily lives of our citizens should be strictly limited.
        The Department as proposed by the Administration maintains the
    President's role as the ultimate authority over the control of
    sensitive intelligence information. The President, as Commander-in-
    Chief, must have the ability to make decisions about how the Nation's
    most sensitive intelligence information is handled in order to carry
    out his sworn duties. The President will be able to exercise his
    authority in regard to intelligence distribution through such tools as
    Presidential Decision Directives and Executive Orders.
        The President's proposal does not provide the Department with
    ``tasking'' authority over other executive branch agencies for numerous
    reasons. First, it is important that members of our intelligence and
    law enforcement communities know who they work for. It would be
    destructive to alter the clear chain of command that currently exists
    in the executive branch agencies. Second, the Federal intelligence and
    law enforcement communities have developed tremendous operational
    expertise, and should be able to apply that expertise without
    interference. Through the authorities provided under the
    Administration's proposal, and through its ``seat at the table'' in
    interagency processes, the Department of Homeland Security will be able
    to obtain and direct all the information it needs. Department officials
    would take part in daily meetings with officials from the White House
    and members of the intelligence community, and would be able to make
    whatever requests necessary to carry out the Department's missions.

              OTHER ASPECTS OF THE DEPARTMENT OF HOMELAND SECURITY

    U.S. Secret Service.
        The core mission of the Secret Service aligns with the core
    competences of the new Department. The Secret Service has two distinct
    and significant missions: protection and criminal investigations. It is
    responsible for: the protection of the President, the Vice President,
    and their families, heads of State, and other designated individuals;
    the investigation of threats against these protectees; protection of
    the White House, Vice President's Residence, and other buildings within
    Washington, D.C.; and security design, planning, and implementation at
    designated National Special Security Events. The Secret Service is also
    responsible for the enforcement of laws relating to counterfeiting of
    obligations and securities of the United States, investigation of
    financial crimes including, but not limited to access device fraud,
    financial institution fraud, identity theft, computer fraud,
    telecommunications fraud, and computer-based attacks on our Nation's
    financial, banking, and telecommunications infrastructure.
        These missions obviously have a critical nexus to the fundamental
    mission of the new Department: protecting our Nation, its leadership,
    and its critical infrastructure from terrorist attack. Equally
    important, however, is the synergy between the institutional culture
    and mindset of the Secret Service and the institutional culture and
    mindset we hope to create in the new Department. Alone among major
    agencies of the Federal government, the Secret Service is, and has been
    for decades, in the business of assessing vulnerabilities and designing
    ways to reduce them in advance of an attack. That is to say, it is
    primarily in the business of prevention, rather than enforcement or
    response. This is a critical outlook and a critical expertise that the
    Service has to share with the new Department, and it is our hope and
    expectation that having the Secret Service in the new Department will
    greatly assist in creating an overall culture of anticipation,
    vulnerability assessment, and threat reduction.
        The President's proposal transfers the Secret Service intact to the
    new Department and would have its director report directly to the
    Secretary of Homeland Security. The Secret Service strongly supports
    the proposed shift to the new department and believes it has a great
    deal to contribute to the creation of an effective Homeland Security
    Department.
    State, Local, and Private-Sector Coordination.
        Homeland security must be and is a shared responsibility. One of
    the major reasons for proposing the Department of Homeland Security was
    to simplify coordination between Federal, State, and local governments
    as well as the private sector. State and local governments and the
    private sector have critical roles to play in homeland security.
        In our system of government, State governments share power with
    Federal institutions. Our structure of overlapping Federal, State, and
    local governance with more than 87,000 different jurisdictions creates
    unique opportunities and challenges. All of the State and local
    agencies and private sector organizations have their own expertise in
    and commitment to protecting America. This expertise needs to be
    focused in the national effort through complementary systems that avoid
    duplication and ensure essential requirements are met. To meet the
    terrorist threat, we must increase collaboration and coordination--in
    law enforcement and prevention, emergency response and recovery, policy
    development and implementation--so that public and private resources
    are better aligned to secure the homeland.
        Our proposal seeks to provide governors and mayors a single entry
    point to address the majority of their homeland security concerns.
    Thus, we were very pleased last week to receive the support of 46 of
    the Nation's governors for the proposed Department of Homeland Security
    as well as statements of support from the U.S. Conference of Mayors,
    the National Sheriffs' Association, the International Association of
    Emergency Managers, the Lieutenant Governors Association, the
    International Association of Chiefs of Police, the Fraternal Order of
    Police, the American Legislative Exchange Council, and the National
    Association of Counties.
    Freedom to Manage.
        The Secretary of the new Department of Homeland Security faces a
    monumental challenge. Terrorists are determined, opportunistic, and
    agile, and the Secretary must build a department that can continually
    adapt to meet this rapidly changing threat. Moreover, even if our
    adversary were not so devious and nimble, the sheer organizational and
    management challenge confronting the new Secretary of Homeland Security
    is enormous. The creation of this new Department is larger and more
    complex than most corporate mega-mergers. History shows that a
    governmental reorganization of this magnitude is never easy. Providing
    the Secretary with the freedom to manage the Department is, therefore,
    profoundly important to achieving our goal of securing the homeland.
    Without this authority, an already challenging task will be far more
    difficult. If the new Department is to be greater than the sum of its
    parts--if it were not, it would obviously not be worth creating--its
    leadership must have the flexibility to organize it in the optimal way,
    create a new institutional culture, motivate and reward an outstanding
    workforce, and respond quickly to changing circumstances, emerging
    threats, and emergency situations.
        I address many specific components of the Administration's
    management proposals in the remainder of my testimony. I simply want to
    emphasize here that the freedom to manage will prove critical to
    accomplishing the Department's primary mission of homeland security. As
    this agency assumes a responsibility unique to the 21st century, the
    Administration believes that the Department must include 21st century
    approaches to management.
    Budgetary Flexibility.
        Over the past few weeks, I have often been questioned on the need
    for the budgetary flexibility proposed in the Administration's
    legislation. I strongly believe this authority is necessary to get the
    Department up and running and keep it moving against emerging threats.
    We must move forward quickly--and responsibly. I believe the requested
    budgetary flexibility does both.
        Let me first make clear what the Administration's proposal
    requests. The President's proposal provides the Secretary authority to
    reallocate funds to meet emerging needs, as well as the authority to
    reorganize the Department to respond to the changing nature of the
    terrorist threat. Specifically, the legislation allows up to five
    percent of any appropriation available to the Department in any fiscal
    year to be transferred between accounts. This provision is subject to a
    fifteen-day notification requirement to the Appropriations Committees.
        The need for this significant authority is in line with the
    magnitude of the homeland security mission. The new Department will
    become the focal point of a national effort to ensure that the country
    is capable of continually adapting to the changing nature of the
    terrorist threat. To re-emphasize, the threat is continually changing.
    Thus, the Department will have to respond quickly, and decisively, to
    adjust to the evolving threats. This will require budgetary
    flexibility. For example, if intelligence and vulnerability assessments
    indicate the immediate need to enhance security at a potential target,
    the Department of Homeland Security must be able to surge and respond
    quickly. If these targets need to be protected immediately, the new
    Department requires the resources to enhance protective measures.
    Congressional oversight--over budget and statutory authority--will
    ensure that this flexibility is properly used.
        Moreover, the complexity of weaving together a multitude of Federal
    agencies into a cohesive, streamlined department requires some
    flexibility with respect to operational structures. The new Secretary
    will need to integrate the Department's now-fragmented functions and
    identify opportunities to link and streamline the Department's
    operations. As the operating components are moved into the Department,
    they must be integrated into a comprehensive, strategic framework--one
    that ensures that the Department's personnel, systems, and assets begin
    to work together.
        It is difficult for any one of us sitting here today to predict
    exactly how and where challenges will arise during the transition, but
    I am certain that we can agree that there will be some logistical
    hurdles. I submit that providing reorganization flexibility to the new
    Secretary is an efficient and practical means of getting over these
    hurdles. Congress has seen the wisdom of granting to a new agency the
    authority to reorganize based on future demands. For instance, the
    Department of Energy currently has broad authority to reorganize
    elements of the Department in order to maximize its efficiency and
    effectiveness. Again, Congressional oversight will ensure that the
    authority is properly used.
    Personnel Flexibility.
        As President Bush said last week when he addressed Federal homeland
    security workers, ``the new department must be able to get the right
    people in the right place at the right time with the right pay. We need
    to be able to reward excellence and ensure accountability for
    individual performance. A lot will be expected of us* * *.'' That's why
    the Administration's proposed legislation provides the new Secretary
    the flexibility to draw from the best practices of the public and
    private sectors.
        Before I talk about the future, let me talk about the present.
    Presently, the government's human resource system is a complicated
    thicket of reward, redress, and grievance procedures. The base of that
    system--the GS 1-15 classification and pay levels- dates back to 1949.
    The idea that one size fits all--the underlying premise of the GS
    model--is belied by the fact that Congress has often deviated from this
    system, for example, with the Federal Aviation Administration, the
    Internal Revenue Service, the Central Intelligence Agency, and most
    Federal banking agencies. In asking for a non-traditional personnel
    system, the Administration is not making an unprecedented request.
    Rather, the Administration is trying to craft an H.R. system that is at
    once capable of facilitating the high-level of performance necessary to
    navigate the largely unchartered territory of this new Department while
    remaining accountable to the public, to Congress, and to the new
    Department's employees.
        We believe it can be done. We believe we can, and must, empower the
    workers of this new department. We have every incentive to do so,
    because an engaged, loyal workforce will prove better able to meet the
    difficult missions that this Department will undertake. Thus, Federal
    workers transferring to the Department would bring their same pay and
    benefits with them. Instead of an H.R. system that would simply be
    imposed upon workers--whether by legislation or by regulation--the
    President proposes an H.R. system which will be developed with public
    notice and comment. The system will be developed in the context of and
    given the experience of daily operations--not before the agency's
    creation.
        Moreover, the flexibility requested will benefit the workers.
    Incentives, accountability, pay harmonization--these important issues
    are better addressed through a flexible H.R. system, able to respond
    and meet the workers concerns as the issues arise. We have already
    started a dialogue with the unions to address their concerns; this
    dialogue will continue into the future.
        Congress has recognized the need for flexibility before; the
    Administration submits that creation of this Department requires
    similar consideration. Congress and the Administration are trying to
    create something new--a Federal agency tasked with securing our
    homeland. If present personnel and pay systems remain in place until
    some further legislative action, the agency, under the President's
    proposal, would be forced to operate with at least seven different
    personnel and pay systems, each with its own level of complexity and
    conflict with the others. This would saddle the new agency with a
    significant management burden at a time when additional burdens are
    least needed.
        Finally, let me make clear that the Administration developed its
    proposal only after in-depth conversation with long-serving career
    personnel management officials. The observation that inflexible and
    complex personnel structures can hinder agency performance is not
    unique. I ask Congress to work with us to establish a system that
    redounds to the benefit not only of the Department but also, and
    critically, to its future employees.
        Prohibited employment practices. The intent of the personnel
    provisions in the Homeland Security Act of 2002 is to give the
    Department tools it needs to fulfill its mission with a flexible,
    contemporary human resources management (HRM) system that meets its
    specific needs. The bill also contains two kinds of safeguards to guard
    against the theoretical creation of an abusive HRM system. First, the
    bill requires that the regulations establishing the details of the HRM
    system must be ``grounded in the public employment principles of merit
    and fitness.'' The nine principles now found in section 2301(b) of
    title 5, United States Code will govern the creation of the Department-
    specific personnel rules. One of the principles is that employees must
    be protected against reprisal for lawful disclosure of information
    evidencing illegal or wasteful activities.
        Secondly, the regulations establishing a new HRM system must by law
    be published for public comment before they become final rules. The
    process of prescribing regulations ensures that the point of view of
    the Department is counterbalanced by the broader, government-wide
    viewpoints of the Office of Personnel Management and the Office of
    Management and Budget. Even before an HRM system is established, indeed
    before any element of a new HRM system can be published for public
    comment, it must be agreed to by each of the agencies.
        Application of the Whistleblower Protection Act within the new
    Department. There has been much concern in the past few weeks that the
    proposed personnel system for the new Department would deny employees
    whistleblower protections. That is just not so. Let me be very clear on
    this point. Department of Homeland Security employees will have
    whistleblower rights and protections. In fact, Department of Homeland
    Security will have all the protections guaranteed by the merit system
    principles. The Administration has committed itself to a workplace free
    of discrimination and retaliatory behavior. These are fundamental and
    decent values that will serve as the foundation for employment at the
    Department.
        Unionization and Collective Bargaining. Under the President's
    proposal, the Title 5, U.S. Code laws governing Federal personnel
    management that now apply to employees who will be transferred to the
    new Department will continue to apply as they have to date, including
    union representation. The proposed legislation does not impair
    employees' collective bargaining rights in any way or change existing
    authorities. Specifically the legislation proposed by the
    Administration provides that when the Department is established,
    employees represented by unions will continue to be represented because
    their bargaining units will move with them. The Administration would
    support specific statutory affirmation of the existing rights of
    Department of Homeland Security employees to union representation,
    subject to National Security authority.
        Veterans' preferences laws. For more than 50 years, veterans'
    preference has helped hundreds-of-thousands of veterans gain Federal
    employment, while at the same time assisting the government fill
    positions that have needed the special skills, training and ``can-do''
    attitude of veterans. The Administration is fully committed to applying
    veterans' preference laws to the human resources management system of
    the new Department. We would also support explicit statutory
    affirmation of veterans' preference laws in the Homeland Security Act
    of 2002.
        Presidential National Security Authorities. Over twenty years ago,
    Congress gave the President authority to exclude an agency from the
    coverage of the Federal Labor Management Relations Statute if he
    determined that an agency's primary function included intelligence,
    counterintelligence, investigative, or national security work. Every
    President beginning with Jimmy Carter has used this authority to issue
    executive orders exempting an agency or agency component from coverage.
        The Government Reform and Oversight Committee passed an amendment
    which would severely limit the President's ability to use this
    authority. The amendment results in the anomalous situation that a
    President has the authority, if he deems it appropriate, to exempt
    agency components in, for instance, the Library of Congress or the
    Department of State, but he has limited authority to do so in the
    Department of Homeland Security, a department with a clear mandate to
    engage in national security work. The Administration strongly opposes
    this amendment.
        Whatever the final composition of the Department of Homeland
    Security, it is clear that the new agency will have the responsibility
    to safeguard our country, to secure its people and borders. This new
    agency's mission, by necessity, will include, in some part,
    intelligence, counterintelligence, investigative and national security
    work--the very work that Congress deemed appropriate for an exemption.
    Restricting the President's powers to safeguard the national security
    in a new Department dedicated to strengthening our security would be an
    unfortunate irony.
        We--the Congress and the Administration--are working diligently to
    establish a Department that will respond to the terrorist threat. We
    are engaged in an effort to better protect Americans from the horrors
    of terrorism. I submit to you that this effort will be significantly
    undermined if this Amendment is allowed to stand. The Administration is
    committed to using the existing statutory authority to exempt units of
    government from the FLMRA with great care and restraint; however, if it
    is needed, it must be available. Cutting back on the President's
    ability to protect the Nation's security and engrafting special
    statutory protections for public employee unions into this bill is
    clearly the wrong thing to do.
    Acquisition and Contracting Flexibility.
        The Secretary of Homeland Security requires an acquisition system
    and contracting authority which can rapidly adjust to changing threats.
    Accordingly, the Administration's proposal calls for the new Department
    to have some of the same acquisition and contracting authorities that
    have proven beneficial in other Departments, including: non-
    impairment--the ability to waive acquisition regulations that impair
    the mission; other transactions authority--the ability to develop
    prototypes and field them rapidly; and personal services contracts--the
    ability to quickly hire consultants/contractors for immediate projects.
    Freedom of Information.
        In order to build a system capable of protecting the Nation's
    critical infrastructure, the Federal government must be able to gather
    information related to operational capacities and vulnerabilities and
    share resulting assessments or analysis with not only the private
    sector but also State and local officials. This problem is not new.
    Congressman Davis, along with many of his peers, has been focused on
    this issue for some time. Last week the Government Reform and Oversight
    Committee approved an amendment that the Congressman submitted
    providing a limited exemption for information voluntarily submitted to
    the government related to critical infrastructure. This amendment
    recognizes the need for an exemption while ensuring that the Federal
    government's regulatory and enforcement efforts are in no way
    undermined. The Administration supports the intent and purpose of this
    amendment.
    Other Important Responsibilities of the new Department.
        Many departments perform numerous missions not related to their
    core mission and do so in an outstanding manner. The Department of
    Transportation, through the Coast Guard Commandant coordinates all the
    Federal government's drug interdiction activities. The Department of
    Defense administers the largest Federal educational program for school-
    aged children--the Department of Defense Dependents Schools system. The
    Department of the Treasury manages a large fleet of aircraft--the
    Customs Service's Air Wing.
        The President's proposal was carefully crafted to include in the
    Department of Homeland Security only those agencies whose principal
    missions align with the new Department's mission of protecting the
    homeland. The Administration looks forward to working with Congress to
    ensure that the Homeland Security Act of 2002 ensures full
    accountability by the Department's leadership for all its missions,
    homeland security related or not. I would emphasize, that by creating
    this Department, the Congress would ensure that a single official--the
    cabinet-level Secretary of Homeland Security--would be accountable for
    all statutory responsibilities.

                                 IV. Conclusion

        Over the past nine months, the Administration has conducted a
    thorough review of existing government institutions and systems for
    providing homeland security, such as law enforcement, public safety,
    public health, and emergency management. We concluded that the current
    arrangement was not the best way to organize for homeland security
    because responsibility is scattered across the government, information
    is not fully shared, authority is shared by multiple agencies, and
    numerous redundancies cause inefficiency.
        The fragmentation of border security responsibilities is a case in
    point. In his testimony before this Committee last week, Treasury
    Secretary Paul O'Neill cited a recent example of overlapping
    responsibilities. The Customs Service--part of the Department of
    Treasury--stopped a suspicious boat and searched it for illegal drugs
    and other contraband. However, the Customs agents found illegal aliens.
    Customs transferred the aliens to the Coast Guard--currently part of
    the Department of Transportation. The Coast Guard, upon reaching land,
    then turned over the aliens to the Immigration and Naturalization
    Service--currently part of the Department of Justice. In such a
    fragmented system, a terrorist can easily slip through the bureaucratic
    maze undetected. Under the President's reorganization proposal, a
    single department would be responsible for border security.
        The Homeland Security Act of 2002 includes twenty-two of the more
    than one hundred Executive Branch organizations or entities that have
    significant homeland security responsibilities. The President's
    proposal includes those agencies whose primary focus is in the areas of
    preventing terrorist attacks, reducing our Nation's vulnerability to
    terrorism, and building our recovery capabilities. It includes those
    agencies whose ability to contribute to homeland security would be
    improved by being in a Department whose core competency and single
    mission was homeland security.
        In the weeks since President Bush submitted a concise draft bill to
    the Congress, the Administration has worked closely with House
    committees as they have considered our proposal. Our intent is to
    ensure that the final bill establishes clear and workable lines of
    authority and accountability, leverages the strengths of the agencies
    that will compose the Department of Homeland Security, and provides the
    new Secretary the authorities and management flexibility he or she will
    need to effect enormous change so that the new Department can adapt to
    the changing threat of terrorism. The Administration's proposal does
    not seek to usurp the prerogatives of the Congress or any Committee. We
    are simply trying to ensure that, on a practical basis, the Department
    of Homeland Security can get organized and operational--and do the best
    possible job of protecting Americans.
        Again, I thank the members of the Select Committee and the U.S.
    House of Representatives for the serious and expeditious action you are
    taking on this proposal to strengthen the Nation's collective effort to
    secure America.

        Chairman Armey. Let me say the Chair will now begin to
    recognize members under the 5-minute rule for questions. Might
    I recommend to my colleagues on the committee, indeed Governor,
    to yourself, we have this cute little red light down here. We
    ought to keep our eye on that. We can probably help to pace
    ourself. The Chair doesn't want to appear heavy-handed with any
    of our members, but we want to move along so everybody has a
    fair time for questioning.
        Under its 5-minute rule, the Chair recognizes the gentleman
    from Oklahoma, Mr. Watts.
        Mr. Watts. Mr. Chairman, thank you. I will jump right into
    questioning. Governor, everyone in this room agrees that it is
    vital for Congress and the administration to work together to
    this new Homeland Security Department. However, I don't think
    we have done enough to highlight or to detail the non-Homeland
    Security dual-use benefits of this new department that I
    mentioned and that we talked about, I guess last May.
        For example, first responders, better prepared for
    terrorism, are also better prepared for floods, forest fires,
    hurricanes and other natural disasters. Also more secure
    borders have already resulted in more drug seizures.
        I was wondering if you could help us relate to some of the
    dual-use benefits that you have seen and how the new Department
    will better secure America from terrorism while growing every-
    day security?
        Governor Ridge. One of the very specific directions that
    the President gave the Office of Homeland Security was to, as
    we looked at the entire country through the lens of security,
    was to be looking for those kinds of strategic investments that
    not only enhanced security, but added value in another way. I
    would just like to illustrate that by pointing out three or
    four components of the Department of Homeland Security and how
    it not only enhances security but also makes us a better and
    stronger and healthier country along the way.
        The FEMA initiative is a good one. Obviously, this is the
    team, the entity, that went through some difficult periods in
    the 1980s. I am very familiar with the Stafford Act that was
    written in the late 1980s because I was the primary author over
    on the House side. We all know there were some difficulties
    with that, but understood James LeWitt and Joe Alba, there is a
    feeling in the Congress and around the country that this is a
    good agency now. They respond quickly, have the programs to
    help people and communities, and they basically have an all-
    hazard capacity.
        What we are basically saying in the President's proposal,
    is you have this agency that has core competencies that deals
    on a day-to-day basis with the States, with the local
    governments, deals with first responders across the States and
    the territories, and why not make this the centerpiece of our
    emergency response capacity so that as we train and equip and
    exercise our first responders, whether they train and equip or
    exercise in response to a terrorist attack or a natural
    disaster or another man-made disaster, not necessarily a
    terrorist incident, they will be better equipped and better
    prepared. To that end, you have double value for that
    investment.
        The $3.5 billion, even if we just spend that in the
    President's 2003 budget in inter-operative communications, the
    police, fire, EMTs, everybody that needs to better respond
    needs inter-operable communications. So there is a good
    investment with multiple value.
        The public health investment that we would make, clearly
    whether it is working with the Health and Human Services to
    find antidotes to a potential bioterrorist incident, that kind
    of research will pay added dividends at medical breakthroughs
    in the public health community generally.
        The borders, the kind of investment we would make at the
    border, the border consolidation, we can enhance security at
    the border, but given NAFTA and the economic interdependence of
    States, communities, people and jobs on the free flow of
    commerce back and forth across those borders, sure, we do
    monitor, we must monitor who comes in under what circumstances
    into this country and what they bring with them. But if we do
    it right, and we believe we can, with the consolidation of the
    border and transportation facilities, we not only enhance our
    security at the border, but we facilitate the economic energy
    around the three countries as a result of NAFTA.
        Mr. Watts. Mr. Chairman, I see the yellow light is on, so I
    will yield back the balance of my time.
        Chairman Armey. Thank you.
        Governor Ridge. I didn't mean to give you a monologue on
    that. It was a great question.
        Chairman Armey. The Chair now recognizes the gentleman from
    Texas, Mr. Frost.
        Mr. Frost. Thank you. Governor, I have two rather specific
    questions. One is we have all, of course, heard about what has
    happened with creative accounting used in private industry
    recently with Enron and WorldCom and various other examples. I
    am concerned about what kind of accounting we are going to use
    here with the new agency. It is my understanding that the
    administration does not expect to send us a budget estimate
    until after this legislation has been passed by the Congress
    and sent to the Senate. Yet we know certain things thus far.
        The Congressional Budget Office said last week in their
    estimate to cost another $3 billion to create this department,
    over and above the cost of the current programs. The GAO,
    General Accounting Office, on June 25 in testimony before the
    Subcommittee on Technology, Terrorism and Government
    Information, a committee of the Judiciary in the U.S. Senate,
    said realistically, however, in the short-term, the magnitude
    of the challenges that the new Department faces will clearly
    require substantial time and effort and take additional
    resources to make it fully effective. When Secretary O'Neill
    appeared before our committee last week, I asked him about
    this, and he said basically, well, we will make it work and it
    will not cost any more money.
        The question is, who is right? You have got CBO saying it
    is going to cost $3 billion more, the GAO saying it is going to
    cost more money. What is going to happen here? We do have to
    account for the Federal budget. This is a time of serious
    concern about budget spending. Can you devise a scheme where
    the Department will not cost any more money than it currently
    does, or inevitably are you going to have some additional cost?
        Governor Ridge. Congressman, I agree. Had the House and
    Senate Appropriation Committees had a select committee audit
    the books of WorldCom a couple years ago, they probably would
    not have been in the mess they are in now given their attention
    to detail.
        I understand the attention that the appropriators and the
    Congress would have, since you have the constitutional
    responsibility, to make sure that every dollar is spent
    appropriately.
        I will tell you that the $37 billion that we envision to
    support the first year of this agency is reflected in the
    President's request for financial support of these departments
    and agencies in his 2003 budget. The notion that we could
    achieve the kind of efficiencies that I believe and the
    President believes we could achieve if we have the requisite
    transfer authority and personnel flexibility and the like, I
    think there is a consensus that within that $37 billion, there
    are ample resources to stand up this new department.
        The 2003 budget request is in excess of $13 billion more
    than its 2002 budget request, if you aggregate the request for
    all of the departments we include in here, and it is our belief
    with the management tools we would request, there would be more
    than enough money to absorb the transition cost.
        You also asked a question about transition, and we also
    admit given the substantial nature of both the number of
    personnel in the agencies, it is going to take some time to set
    up, the enabling legislation we asked you to consider gives us
    a year's transition from the effective date. So we think the
    dollars are sufficient within the budget, particularly if we
    get the management freedoms we hope to have.
        Mr. Frost. Let me ask you to turn to one other matter, if I
    may. This has to do with the rights of Federal employees.
        On page 21 of your statement, you said that the
    administration would support specific statutory affirmance of
    the existing rights of Department of Homeland Security
    employees to union representation, subject to national security
    authority.
        Are you saying that you support the Morella amendment as
    was adopted in the Government Operations Committee last week?
        Governor Ridge. No, we are not saying that at all, Mr.
    Chairman. That amendment-- let me tell you what we are saying,
    first of all. We are saying that the nine principles as
    enunciated in the Civil Service System based on merit and
    fairness are very much a part of this proposal. But we are
    saying that as it relates to this agency that has intelligence,
    counterintelligence, investigative and national security
    authority, to exempt this agency, which meets all the criteria
    of the law that has existed for 20 years, it at least gives the
    President the option, depending on the circumstances, to exempt
    that Department and Agency, or a sub piece of that agency from
    that authority that has been in existence for, in excess of 20
    years would be a move in the right direction, a step in the
    right direction.
        Mr. Frost. So you oppose the Morella amendment?
        Governor Ridge. That is correct. Absolutely.
        Chairman Armey. Thank you, Mr. Frost. The Chair recognizes
    the gentlewoman from Ohio.
        Ms. Pryce. Thank you, Mr. Chairman. Governor, it is great
    to have you with us here today back among us. We are very proud
    of the work you have done so far and your statement this
    morning has been very enlightening. To follow up a little bit
    on some of what Mr. Frost had to ask you about, last Thursday
    Treasury Secretary O'Neill was here and he took issue with the
    CBO estimates as a cost of transferring agencies into the new
    Department.
        I have some concerns with that CBO report myself, because
    it certainly seemed to fail to take into account any of the
    cost savings that could obviously result from the streamlining
    and the efficiencies that we all know will happen.
        Now, specifically, Secretary O'Neill questioned the need
    for the physical transfer of offices. He cited the example of
    the Customs Service. He indicated that he would be happy to
    continue to be the Customs Service landlord if the Customs
    Service's physical facilities and personnel were to stay at the
    current location in the Treasury Department.
        My question for you is how important do you believe it is
    to consolidate these physical facilities, or don't you believe
    it is important? And do we need a single location, a single
    headquarters? By not relocating everything under the same roof,
    do you see any problems with communication and information
    sharing? Just take me in that direction a little bit, your
    thoughts.
        Governor Ridge. First of all, I would like to revisit
    briefly the Secretary O'Neill's belief that the $3 billion
    estimate was inflated. We obviously share that belief. Just a
    cursory look at some of the potential savings we would get
    through a consolidation of information technology suggests that
    in a very short period of time, we could save several hundred
    million dollars.
        If we have the reprogramming authority, then that savings
    can be reallocated or redistributed to other places within the
    Department. So we feel comfortable with the right kind of
    flexibility. We will not need $3 billion to set up the
    Department. We will not need anything if we get the right kind
    of authority to planning it.
        Most of the men and women who work for Customs are located
    outside of Washington, D.C. As a matter of fact, the potential
    170,000 men and women who would be involved in the Department,
    we estimate no more than about 10 percent would remain in
    different offices around Washington, D.C. So by and large,
    Customs is at the border where we want them to be. The
    logistics of the integration of some of these departments and
    agencies, I doubt very seriously will ever end up being
    consolidated in one building. We are going to obviously try to
    bring as much administrative and fiscal efficiency as we can to
    their operation. The fact of the matter is about 90 percent of
    them are outside of Washington, D.C. and that is where they
    will remain.
        Ms. Pryce. On a completely different note, numerous aspects
    of the administration's proposal, we have heard concerns that
    transferring a given agency may result in a withering of its
    non-homeland security-related functions. I would like you to
    focus for a moment on one particular aspect of the bill that
    raises particular concerns for me, and that is title III, which
    talks about the public health related activities.
        Clearly, protecting against bioterrorism attack is a key
    element in all of this, absolutely hands down, no question. But
    do you believe that refocusing research priorities or shifting
    responsibilities out of HHS or CDC could result in the neglect
    of research on so-called everyday diseases, cancer, heart
    disease, all the things we have gone down the road spending so
    much money, and we are so close in many respects? Give us your
    thoughts, please, Governor.
        Governor Ridge. I believe it is well-recognized that the
    CDC and the NIH are really the primary focal point of much of
    this Nation's public research into a wide range of public
    health issues, not just relating to terrorist events. What the
    President has suggested, however, is that piece of the research
    that deals with terrorism be part of an overall strategic
    research effort that would be overseen by the new Secretary of
    the Department of Homeland Security, in this instance, in
    consultation with the Secretary of Health and Human Services.
    It is also the President's intention and desire that we not set
    up or even necessarily build new laboratory facilities and
    capacity within the Department of Homeland Security.
        The way it is presently configured, I think the President
    envisions the time, the notion that with consultation with
    Secretary Thompson on whoever else it might be, that those
    dollars flowing through for bioterrorism research, will
    probably end up being some of them being assigned to the
    Centers for Disease Control, National Institutes of Health and
    other great research institutions we have in the academic
    community around this country.
        So I think the President's purpose is to consolidate all
    those research dollars that deal with homeland security, to set
    priorities based upon threat and vulnerability to make sure on
    an annual basis where we have got a sense of the threat or
    vulnerability, the greatest threat, the greatest vulnerability
    ultimately receives the largest share of those research
    dollars. NIH and CDC will continue to enjoy, I think, the very
    robust funding they have historically enjoyed, and the very
    strong vigorous bipartisan support they have always had in this
    Congress.
        Ms. Pryce. Thank you, sir.
        Chairman Armey. Thank you, Ms. Pryce. The Chair now
    recognizes the gentleman from New Jersey, Mr. Menendez.
        Mr. Menendez. Thank you, Mr. Chairman. Great pronunciation,
    too.
        Chairman Armey. I practiced all weekend.
        Mr. Menendez. Governor, thank you for your testimony and
    your insights and your service to the country. I think what we
    all agree on is the goal, which is ensuring the safety of the
    American people. The question is how do we best achieve that?
        And it is in that context that, you know, my questions are
    directed. You know, one of the images that has not left my mind
    is when the FBI whistleblower Colleen Rowley was detailing how
    the FBI had failed in some cases, in the case specifically with
    Zacharias Moussaoui, and she was in the midst of what I thought
    was very significant information for the Congress to consider
    in this issue. And then suddenly all of the cameras left the
    hearing room to go to the announcement of the creation of the
    Department on Homeland Security.
        And I think they missed in essence the critical issue that
    the simple creation of a department will not necessarily
    ensure, and that is that at the core of the events and
    consequences that took place leading to September 11 is the
    glaring and unacceptable failure of intelligence and law
    enforcement information sharing that should have taken place.
    And in that regard, I certainly heard from the Cabinet
    secretaries here the other day the buzz words of coordination,
    cooperation, and collaboration. But what I am concerned about
    is that the President's bill, as proposed, does not ensure, it
    does not have a mechanism that ensures coordination,
    cooperation, and collaboration and information sharing.
        So my question is, would you favor adding mechanisms to the
    bill that would ensure--guarantee that such information
    sharing, coordination, and cooperation would actually occur?
        And I even look at the Brookings' analysis of the
    President's bill, and they describe that effective prevention
    efforts require the integration of all relevant data--
    Intelligence Community, the law enforcement community, the
    border, and Transportation Security Agency--and that the
    administration's proposal, according to them, for a new
    information unit is inadequate to the task because it will not
    have regular or routine access to the raw intelligence and law
    enforcement information necessary. They suggest, for example,
    that the new analytical unit within the FBI that is being set
    up should be transferred to the Department of Homeland
    Security. You could focus on those issues.
        Do you think that a mechanism within this legislation would
    be something that the administration would look favorably upon?
    What do you think about transferring that analytical unit that
    is being proposed by the FBI into this new proposed Department
    to ensure information sharing?
        Governor Ridge. Congressman, obviously we would welcome the
    opportunity to sit down with you to review the language that
    you may have in mind. But I believe the President's notion that
    the analytical capacity that this Department has and its
    ultimate use and the guarantees of the affirmative obligation
    on the CIA and the FBI to share information meets the
    President's objectives.
        And to that point, if I might, the intelligence agency that
    would be gathering information that can be applied either to an
    effort to reduce the threat, identify the bad guys, identify
    the terrorists, prevent the act, intervene, and the
    intelligence gathering communities, give us information that
    would help us reduce the vulnerability. And I think the
    President feels very strongly that the CIA, the FBI, Department
    of Defense, we have got some agencies that are working in
    closer collaboration and coordination than ever before.
        That is not to say that you may have to somewhere down the
    road sometime enhance and mandate even further consolidation
    and collaboration. But the equipment we have--the agencies and
    the people we have to reduce the threat are separate and apart
    from what the President wants this--sees as the strategic
    mission of this directorate within the Department of Homeland
    Security: Let the CIA identify the terrorists and the FBI go
    after them domestically, work with the Department of Defense
    overseas. But here the purpose of securing that information
    isn't to go after, in an aggressive way, the people who will do
    us harm, but to take that information as it relates to domestic
    threats, match it against vulnerabilities, and then take the
    action to reduce the vulnerability not to reduce the threat.
        So I think there are two very important--they are critical
    functions within the Federal Government--reducing the threat
    and reducing the vulnerability. But I think the President
    believes the mission of this analytical unit is to get that
    information from the intelligence gathering community, but to
    use it not to go after the actors but to prevent against
    potential action.
        Chairman Armey. Thank you, Mr. Menendez. The Chair now
    recognizes the gentleman from Ohio, Mr. Portman.
        Mr. Portman. Thank you, Mr. Chairman. And, Governor, thank
    you for your good testimony this afternoon and for your
    willingness to step up and serve when the President called on
    you last October. You continue to do a great job in helping not
    just put this Department together but to protect our citizens.
    We appreciate it.
        I have become a believer in this idea partly because of the
    work you all have done; but even before that, from the Hart-
    Rudman work from Senator Lieberman's work, from the work here
    in the House done by Mac Thornberry, Jane Harman, Ellen
    Tauscher, Jim Gibbons and others. The right hand often doesn't
    know what the left hand is doing, does it? And we have, as you
    know, well over 100 different agencies and departments, none of
    which has as their primary responsibility protection of the
    homeland. So the question is how we do it. It won't make us
    immune, but it will make us safer and it is the right thing to
    do.
        I serve on the Ways and Means Committee, as you know, and
    one of the issues there was--and this issue was revisited in
    just about every authorizing committee--how can we be sure that
    the traditional functions of the agencies that do have a nexus
    to homeland security but also have other responsibilities will
    be maintained when brought into the new Department?
        I wonder if you could address that with specificity as to
    the Coast Guard and as to the Immigration Service, particularly
    their processing function, but in general tell us about how
    those responsibilities can be maintained within this Homeland
    Security structure.
        Governor Ridge. I think the fact that the President has in
    his proposal designated that the entire Coast Guard, all of the
    Coast Guard be transferred into this Department, first of all
    recognizes that they are a multitasked organization. And for
    all of us who have had the opportunity, actually the privilege
    to get to know how well the Coast Guard functions and maybe
    even conclude how underappreciated they are in terms of not
    only the defense of this country but the variety of different
    services they provide this country, would well understand why
    the President wants to keep the unit intact; because the same
    people, and by and large much of the same equipment they would
    use for fisheries oversight, for search and rescue, would be
    the same people and the same equipment you may very well use in
    the port security.
        I think the President has recognized, however, that because
    of the added requirement within the Coast Guard to an enhanced
    homeland security mission, that the government has to build up
    the capacity of the Coast Guard. They are going to need more
    people. They are going to need more boats. They are going to
    need more equipment.
        And so in the 2003 budget, in recognition of this
    organization being multitasked, the President has given them I
    think the largest single increase they have ever received, and
    I think it is a precursor as we go about making sure that this
    Department, transferred in full, continues to provide the
    multitude of services at the highest level, as required by
    statute, including an enhanced homeland security requirement.
    But there again, it is added value.
        I don't know how many people have had the opportunity to
    work or spend some time with the Coast Guard, but I was in New
    Orleans a couple of months ago and we boarded a ship that was
    registered in Singapore, had an Indian crew, and was taking
    American grain over to Japan. But these same men and women on
    this new platform, if they weren't boarding that, may have been
    involved in a search-and-rescue mission outside in the Gulf if
    reassignment might have been involved in a fisheries protection
    mission somewhere else in the Gulf Coast.
        So I think you might--one could argue, I think, that as you
    build up personnel and equipment for the homeland security
    mission, depending on the circumstances, there will be more
    people and equipment to deal with some of these other
    responsibilities as well.
        Mr. Portman. Immigration Service, particularly the
    processing function.
        Governor Ridge. The what function?
        Mr. Portman. The Immigration Service. Would those
    traditional functions of the Immigration Service, the
    processing particularly, be safe within the Department of
    Homeland Security?
        Governor Ridge. I think it is pretty clear that the
    President has said all along that we do need to force a
    division between the immigration services. The President has
    been a strong proponent of open and fair and humane immigration
    and believes strongly that we need to really repair, do some
    work with the Immigration Service side.
        But there is also an enforcement side that is more
    appropriately involved at the border, and both the President
    and the House of Representatives have spoken about the need to,
    while dividing those two pieces of the Immigration and
    Naturalization Service, put them in one department, so you have
    one controlling legal authority determining the policy to
    letting them in and overseeing the enforcement in case they
    violate any of the rules of their admission.
        Mr. Portman. Governor, with regard to managerial
    flexibility, you touched on it in your testimony. I know that
    you are concerned about whistleblower rights. Can you touch on
    how whistleblower rights can be protected within the
    flexibility you have proposed?
        Governor Ridge. I think whether it is the budget
    flexibility, the transfer authority, we are at war. One war,
    two fronts. Now, we are not going to see people moving
    divisions, but we may determine that they are--the actors are
    moving toward a different threat, creating a different threat
    or a different kind of vulnerability. And I think it is
    critical that under the rigorous oversight--and you have that
    with the Congress of the United States, the budgetary process,
    authorization process, the appropriation process--that the new
    Secretary have some transfer authority. For example, what if
    the threat was a potential biological bioterrorist incident and
    that the--based on the intelligence, based on consultation with
    the Secretary of Health and Human Services and the medical
    people, the scientific people we bring in, we decided we don't
    have the antidote, we don't have the vaccines, we don't have
    the diagnostics. Absent that flexibility, if every single dime
    is accounted for, I think it is going to be very difficult for
    that Secretary to respond quickly on behalf of this country, to
    go to NIH or CDC and say, ``This is a threat, you need to come
    up with the following.''
        Another example: We see a lot of things going on in the
    private sector that I think are really rather remarkable,
    sensor equipment, protection equipment, detection equipment.
    What if suddenly we see a scientific breakthrough that we
    decide as a matter of national security/homeland security
    interest, we want to deploy that technology not a year from now
    as we go through the budget process, we need to deploy it now
    because that is where the threat is. Again, I believe that if
    you--if Congress agrees that we are at war, that the enemy, if
    you agree they are agile, that they will move and change
    targets and that we ought to be able to give the Secretary some
    flexibility to target some of these resources based on the
    threat, based on the vulnerability, then 5 percent, not only
    during the transition phase, but in perpetuity is the way to
    go.
        One war, two fronts. This is not a traditional war. Their
    strategy and tactics are different. Again, in response to your
    question, we have got this information to protect ourselves
    against the actions. If we see we are not adequately protected
    against potential actions, then I think we would want to give
    that Secretary the ability to go out and either purchase the
    equipment, push the envelope on R&D. And to wait a year through
    the budget cycle, I think, might--well, clearly, may not be in
    the best interest of the country.
        And I would say this: My colleagues will make sure that
    when that department Secretary comes to the Hill, if he or she
    transfers 1, 2, 3, 4, or up to 5 percent, I don't think there
    is any doubt in anybody's mind that the Congress of the United
    States will make sure that that Secretary accounts for every
    single penny. I would trust the Secretary to move some of these
    resources.
        Chairman Armey. Thank you. The Chair now recognizes the
    gentlewoman from Connecticut, Ms. DeLauro.
        Ms. DeLauro. Thank you very much, Mr. Chairman. And welcome
    and thank you for your public service, Governor. It really is
    outstanding.
        Let me ask, first, if I can, Mr. Chairman, there are a lot
    of details out there for us to work through in a short period
    of time. As everyone knows, our colleagues Henry Waxman and
    David Obey sent a letter to you, Governor, outlining their 10
    main areas of concern with the proposal. Mr. Chairman, with
    your permission I would like to enter the letter into the
    record.
        Chairman Armey. Without objection.
        [The information follows:]
                              House of Representatives,
                                Committee on Government Reform,
                                          Washington, DC, July 9, 2002.
    Hon. Tom Ridge
    Director, Office of Homeland Security, The White House, Washington,
            D.C.
        Dear Governor Ridge: Congress is considering the President's
    proposal to create a new Department of Homeland Security on an
    accelerated schedule. But now that Congress has received the
    legislative language that would implement the President's plan, many
    issues have arisen about the details of the proposal. We are writing in
    the hope that you will be able to provide expeditious responses to
    these concerns.
        The issues fall into ten main areas. First, the new Department will
    inherit a vast array of responsibilities that have nothing to do with
    homeland security. These include administering the National Flood
    Insurance Program, cleaning up oil spills at sea, and eradicating pests
    like the boll weevil. Giving the new Department dozens of
    responsibilities unrelated to homeland security risks bloating the size
    of the bureaucracy and diluting the new Department's counterterrorism
    mission.
        Second, the legislation lacks an effective mechanism to coordinate
    the activities of the many Federal agencies that have major homeland
    security functions. The President's submission to Congress listed 153
    different agencies, departments, and offices involved with homeland
    security.\1\ After the creation of the proposed new Department, this
    number actually will increase to 160 agencies, departments, or offices
    with security roles. But the draft bill does not include a mechanism
    for developing and implementing a unified homeland security strategy
    across the entire government.
    ---------------------------------------------------------------------------
        \1\ President George W. Bush, The Department of Homeland Security
    (June 2002) (hereinafter ``White House Briefing Document'') (on line at
    http://www.whitehouse.gov/deptofhomeland/).
    ---------------------------------------------------------------------------
        Third, there are inefficiencies and coordination problems that will
    arise when parts of agencies are removed from their existing
    departments and moved to the new Department. The goal of the
    legislation is to make government more efficient, but some of the
    proposed changes could have exactly the opposite effect. For example,
    GAO has testified that programs transferred from the Department of
    Health and Human Services include ``essential public health functions
    that, while important for Homeland Security, are critical to basic
    public health core capacities.''\2\
    ---------------------------------------------------------------------------
        \2\ U.S. General Accounting Office, Homeland Security: New
    Department Could Improve Coordination but May Complicate Public Health
    Priority Setting, 6 (June 25, 2002) (GAO-02-883T).
    ---------------------------------------------------------------------------
        Fourth, despite prior assurances that the Administration supported
    reforms of the Immigration and Naturalization Service (INS) that were
    passed by the House, the President's proposal would import the INS into
    the new Department of Homeland Security wholly intact and without these
    needed internal reforms.
        Fifth, the legislation includes broad exemptions from our nation's
    most basic ``good government'' laws. The legislative language would
    allow the new Secretary, in conjunction with the Office of Personnel
    Management, to waive all provisions of our civil service laws. These
    laws have evolved over many decades to ensure that our government has a
    professional civil service hired on the basis of merit rather than
    political favoritism. Yet the proposed legislation would allow the new
    Department to waive all of these protections, including those that
    prohibit patronage, protect whistle-blowers, provide for collective
    bargaining rights, and ensure health and retirement benefits.
        A similar approach has been taken with procurement and the
    management of real property. Under the proposal, the Secretary does not
    have to comply with cornerstone procurement principles, such as open
    and competitive bidding. Moreover, basic government in sunshine laws,
    such as the Freedom of Information Act and the Federal Advisory
    Committee Act, have been limited in their application to the new
    Department.
        Sixth, the President's proposal would give the new Department
    extraordinary powers to avoid meaningful congressional oversight. Not
    only would the new Department be able to exempt itself from civil
    service, procurement, and property laws, it would also be able to
    rearrange functions, eliminate offices, and transfer large amounts of
    appropriated funds without having to seek prior congressional approval.
        Seventh, the proposal does not address the potential for disruption
    in the nation's war against terrorism. According to David Walker, the
    Comptroller General of GAO:
            [R]eorganizations of government agencies frequently encounter
            start up problems and unanticipated consequences that result
            from the consolidations, are unlikely to fully overcome
            obstacles and challenges, and may require additional
            modifications in the future to effectively achieve our
            collective goals for defending the country against
            terrorism.\3\
    ---------------------------------------------------------------------------
        \3\ U.S. General Accounting Office, Homeland Security: Proposal for
    Cabinet Agency Has Merit, But Implementation Will Be Pivotal to
    Success, 5 (June 25, 2002) (GAO-02-886T).
    ---------------------------------------------------------------------------
    Although Administration officials have compared this restructuring to
    the formation of the Department of Defense in the 1940s, that
    reorganization was not attempted until after the war was over, and even
    then it caused confusion and inefficiencies for decades.
        Eighth, there is no comprehensive national strategy for combating
    terrorism to guide the new Department. Logically, a major bureaucratic
    reorganization like this should be proposed as part of a comprehensive
    national strategy for providing homeland security. But in this case,
    the reorganization is occurring in a vacuum. There is no national
    strategy that identifies the major threats the nation faces and
    explains how the new Department will meet them. Nor is there a
    comprehensive threat and risk assessment that identifies and
    prioritizes threats in a coherent manner.
        Ninth, the costs of this proposal have not been identified.
    Although the Administration has stated that the creation of this new
    Department ``would not 'grow' government,''\4\ this is not credible.
    According to the nonpartisan Congressional Budget Office, even the less
    ambitious reorganization proposed by Senator Lieberman will cost
    taxpayers over $1 billion over the next five years.\5\ Costs for the
    Administration's plan inevitably will be higher.
    ---------------------------------------------------------------------------
        \4\ White House Briefing Document, supra note 1, at 17.
        \5\ Congressional Budget Office, Cost Estimate: S.2452, National
    Homeland Security and Combating Terrorism Act of 2002, 1 (June 17,
    2002).
    ---------------------------------------------------------------------------
        Finally, the Administration's proposal was developed in secret by a
    small group of White House advisers, without substantive input from the
    agencies that handle homeland security. It is being rushed through
    Congress on an accelerated schedule. This is not normally an approach
    that produces sound policy. The potential for making grave mistakes as
    a result of this truncated process should be a serious concern for all
    Americans.
        We need to work together to address the concerns raised in this
    letter and to make improvements in the legislation. Your response to
    the issues and questions raised in the body of this letter will be an
    important step in this process. For this reason--and given the short
    time frame Congress has for consideration of the legislation--we urge
    you to respond by July 15, 2002.

           I. TRANSFER OF FUNCTIONS NOT RELATED TO HOMELAND SECURITY

        According to the White House briefing document issued on June 7,
    2002, the Department of Homeland Security ``must be an agile, fast-
    paced, and responsive organization.''\6\ Transferring functions that do
    not involve homeland security to the new Department, however,
    interferes with this goal. Giving the new Department unnecessary
    responsibilities inevitably will expand the size of its bureaucracy and
    dilute its counterterrorism mission.
    ---------------------------------------------------------------------------
        \6\ White House Briefing Document, supra note 1, at 16.
    ---------------------------------------------------------------------------
        At the same time, giving vital but unrelated government
    responsibilities to the Department creates the risk that these
    responsibilities will be neglected and performed poorly. As GAO has
    concluded, many of the unrelated functions being given to the new
    Department ``represent extremely important functions executed by the
    Federal government that, absent sufficient attention, could have
    serious implications for their effective delivery and consequences for
    sectors of our economy, health and safety, research programs and other
    significant government functions.''\7\
    ---------------------------------------------------------------------------
        \7\ GAO-02-886T, supra note 3, at 19.
    ---------------------------------------------------------------------------
        Despite these risks, many important government functions that are
    not related to homeland security are being transferred to the new
    Department. In fact, the new Department will have to carry out over
    three dozen completely unrelated missions under the President's
    proposal.
        Section 402(3) of the President's proposal would transfer the
    Animal Plant Health Inspection Service (APHIS), which is now currently
    part of the Department of Agriculture, into the new Department. APHIS
    has nearly 8,000 full-time employees (FTEs), but few have
    responsibility for inspecting plants and animal products at the border.
    The other APHIS employees perform functions that are critical to
    various sectors of the economy, but are not related to homeland
    security. For example, APHIS is responsible for:
         Eradicating pests, such as the boll weevil, the citrus
    canker, the gypsy moth, and various noxious weeds through detection and
    control strategies throughout the United States;
         Approving animal drugs that are made from biological
    materials, such as animal vaccines;
         Approving field trials of genetically modified crops; and
         Maintaining the missing pet network at www.missingpet.net.
        Section 502(1) of the President's proposal would transfer the
    Federal Emergency Management Agency (FEMA) into the new Department. To
    date, however, FEMA has had a limited role in counterterrorism.
    According to former FEMA director James Lee Witt, ``[o]ver the last
    decade FEMA has responded to more than 500 emergency and major disaster
    events. Two of those were related to terrorism (Oklahoma City and New
    York City).''\8\ In Mr. Witt's view, ``[f]olding FEMA into a homeland
    or national security agency will seriously compromise the nation's
    previously effective response to natural hazards.''\9\ Major FEMA
    responsibilities that are unrelated to homeland security include:
    ---------------------------------------------------------------------------
        \8\ James Lee Witt and Associates, Department of Homeland Security
    and FEMA (white paper) (June 19, 2002).
        \9\ Id.
    ---------------------------------------------------------------------------
         Providing flood insurance and mitigation services
    (including pre-disaster mitigation, the Hazard Mitigation Grant
    Program, and flood mapping);
         Conducting various programs to mitigate the effects of
    natural disasters, such as programs to assist States in preparing for
    hurricanes and the National Earthquake Hazards Reduction Program;
         Providing temporary housing and food for homeless people;
    and
         Operating the National Fire Data Center and the National
    Fire Incident Reporting System to reduce the loss of life from fire-
    related incidents.
        Section 402(4) of the President's proposal would transfer the
    United States Coast Guard out of the Department of Transportation and
    into the new Department. The Coast Guard describes itself as a ``multi-
    mission, military, maritime'' agency. Although it performs some
    security-related functions, it also conducts many others unrelated to
    homeland security. For example, Coast Guard responsibilities include:
         Providing navigational tools to ensure that vessels can
    navigate the nation's waterways;
         Promulgating and enforcing boating regulations to ensure
    that oceangoing vessels are safe;
         Protecting the nation's fishery resources, as well as its
    endangered species, by enforcing prohibitions against illegal and
    excess fishing;
         Protecting the maritime environment by preventing oil
    spills in the nation's waters and ensuring that spills are cleaned up
    expeditiously if they happen; and
         Maintaining a fleet of ships that is capable of breaking
    ice in order to maintain maritime mobility and monitors the movement of
    glaciers.
        These Coast Guard functions are essential, but they could be
    jeopardized by the transfer to a new Department focused on homeland
    security. Indeed, the effects of the shift in the Administration's
    priorities are already being felt. According to the Administration's
    homeland security budget justification for fiscal year 2003, ``[a]fter
    September 11, the Coast Guard's port security mission grew from
    approximately 1-2 percent of daily operations to between 50-60 percent
    today.''\10\ Without a sustained commitment to its core marine and
    fishery functions, the Coast Guard's ability to protect boaters and the
    marine environment will be jeopardized.
    ---------------------------------------------------------------------------
        \10\ President George W. Bush, Securing the Homeland; Strengthening
    the Nation, 18 (undated) (hereinafter ``FY03 Budget Justification'')
    (on line at http://www.whitehouse.gov/ homeland/homeland--security--
    book.html).
    ---------------------------------------------------------------------------
        There are many other examples of unrelated functions being
    transferred to the new Department. The transfer of the Environmental
    Measurements Laboratory from the Department of Energy (DOE), for
    example, will make the new Department responsible for maintaining the
    Human Subjects Research Database, which contains descriptions of all
    projects involving human subjects that are funded by the DOE, as well
    as the program that assesses the quality of 149 private laboratories
    that measure radiation levels. Radiation measurement quality control
    undoubtedly will seem like a small item to the new Department of
    Homeland Security, but assuring that the laboratories make accurate
    measurements is important, as mistakes potentially could affect public
    health and cause large unnecessary public expenditures at DOE
    facilities.
        Appendix A contains a list of 40 unrelated functions that would be
    transferred to the new Department by the President's proposal. While it
    may be impossible to create a new Department without transferring some
    unrelated functions, there would seem to be serious dangers inherent in
    the wholesale transfer of unrelated functions as contemplated in the
    Administration's proposal.

                  II.LACK OF EFFECTIVE COORDINATING MECHANISMS

        At the same time that the Administration's proposal transfers
    numerous unrelated functions to the new Department, the proposal also
    fails to include provisions that would ensure the coordination of the
    more than 100 Federal entities that will continue to have significant
    homeland security functions.
        According to the Administration, ``responsibilities for homeland
    security are dispersed among more than 100 different government
    organizations.''\11\ Indeed, an organizational chart provided by the
    White House listed 153 different agencies, departments, and offices
    with a role in homeland security (see Figure 1). The White House argues
    that the President's proposal would solve this problem by
    ``transforming and realigning the current confusing patchwork of
    government activities into a single department.''\12\
    ---------------------------------------------------------------------------
        \11\ White House Briefing Document, supra note 1, at 1 (emphasis in
    original).
        \12\ Id.
    ---------------------------------------------------------------------------

                                    Figure 1

        In fact, however, the President's proposal will not simplify this
    patchwork and may even make it worse. Even after all of the changes
    proposed in the President's legislative language, the Federal
    government would continue to have well over 100 agencies, departments,
    and offices involved in homeland security. According to an analysis by
    the minority staff of the Appropriations Committee, the total number of
    departments, agencies, and offices with a role in homeland security
    actually will grow under the President's proposal, from 153 to 160 (see
    Figure 2).\13\
    ---------------------------------------------------------------------------
        \13\ A post-transfer organizational chart provided by the White
    House Office of Management and Budget shows the number of Federal
    agencies, departments, and offices dropping to 134. The White House
    chart, however, lists the new Department of Homeland Security as having
    only six offices involved in homeland security. The White House chart
    omits major components of the new Department that will have homeland
    security functions, including the Coast Guard, the Office of Threat
    Analysis, and the office responsible for State, local, and private
    sector coordination.
    ---------------------------------------------------------------------------

                                    Figure 2

        One example of the continued need for coordination across agencies
    involves providing emergency response. According to the Administration:
    Currently, if a chemical or biological attack were to occur, Americans
    could receive warnings and health care information from a long list of
    government organizations, including HHS, FEMA, EPA, GSA, DOJ, OSHA,
    OPM, USPS, DOD, USAMRIID, and the Surgeon General--not to mention a
    cacophony of local agencies.\14\
    ---------------------------------------------------------------------------
        \14\ White House Briefing Document, supra note 1, at 5.
    ---------------------------------------------------------------------------
        But under the President's proposal, all but one of these 11 Federal
    agencies (FEMA) would continue to exist, and this one agency would be
    replaced by the new Department. The potential for confusion--and the
    need for effective coordination--remains as great after the creation of
    the new Department as before.
        In fact, in some cases, the reorganization will actually create
    confusion. Currently, three separate Federal agencies are in charge of
    protecting the food supply: the Food and Drug Administration (FDA),
    which prevents adulteration of fruits, vegetables, processed foods, and
    seafood; the Environmental Protection Agency (EPA), which regulates
    environmental contaminants, such as pesticides; and the Department of
    Agriculture, which regulates the safety of meat and poultry for human
    consumption, as well as the spread of plant and animal pests through
    food products. Leading experts, such as the National Academy of
    Sciences, have called for consolidating these diffuse authorities into
    a single agency.\15\
    ---------------------------------------------------------------------------
        \15\ National Research Council, Ensuring Safe Food from Production
    to Consumption, National Academy Press (1998) (recommending a major
    overhaul of food safety laws and appointment of a single Federal
    official to oversee food safety). See also U.S. General Accounting
    Office, Food Safety and Security: Fundamental Changes Needed to Ensure
    Safe Food (Oct. 10, 2001) (GAO-02-47T) (recommending a single food
    safety agency).
    ---------------------------------------------------------------------------
        The Administration's proposal, however, would further fragment
    regulation of the food supply by transferring some of Agriculture's
    responsibilities to the new Department, creating a fourth food safety
    agency. APHIS, which is charged with inspecting imports to ensure that
    pests and bugs that could harm crops or livestock do not enter the
    United States, would become part of the new Department. But the Food
    Safety Inspection Service of the Department of Agriculture, which
    inspects domestic and imported meat and poultry for threats to human
    health, would remain at Agriculture. The nonsensical result, as GAO has
    observed, is that ``the focus appears to be on enhancing protection of
    livestock and crops from terrorist acts, rather than on protecting the
    food supply as a whole.''\16\
    ---------------------------------------------------------------------------
        \16\ GAO-02-886T, supra note 3, at 18.
    ---------------------------------------------------------------------------
        One area in which coordination is urgently needed is among law
    enforcement and intelligence agencies, in particular the Federal Bureau
    of Investigation (FBI) and the Central Intelligence Agency (CIA). How
    the new Department would relate to these agencies is not clear,
    however. One of the primary missions of the new Department is to
    ``[p]revent terrorist attacks within the United States.''\17\ The
    Administration says that a new department with this mission is needed
    because ``[t]oday no one single government agency has homeland security
    as its primary mission.''\18\ But the FBI has also just undergone a
    major reorganization. Now, its primary mission is also ``[p]rotecting
    the United States from terrorist attack''\19\--identical to that of the
    new Department of Homeland Security. As a result, rather than having no
    single Federal agency with homeland security as its mission, the
    Administration seems to be proposing two.
    ---------------------------------------------------------------------------
        \17\ White House Briefing Document, supra note 1, at 8.
        \18\ Id. at 1.
        \19\ Statement of Robert S. Mueller, III, before the Senate
    Committee on the Judiciary (June 6, 2002) (on line at http://
    judiciary.senate.gov/testimony.cfm?id=279&wit--id=608).
    ---------------------------------------------------------------------------
        Under the Administration's proposal for a new Department of
    Homeland Security, there will be a new office for intelligence and
    threat analysis. This office will assist in ``pulling together
    information and intelligence from a variety of sources.''\20\
    Similarly, under FBI Director Mueller's reorganization proposal, there
    will be a new office in the FBI called the Office of Intelligence that
    will also assist in ``pulling together bits and pieces of information
    that often come from separate sources.''\21\ The Department of Homeland
    Security's intelligence office would ``have the ability to view the
    dangers facing the homeland comprehensively, ensure that the President
    is briefed on relevant information, and take necessary protective
    action.''\22\ Similarly, the FBI's intelligence office will be charged
    with ``providing analytic products to policy makers and investigators
    that will allow us to prevent terrorist acts.''\23\ This does not
    appear to be a recipe for a unified approach.
    ---------------------------------------------------------------------------
        \20\ White House Briefing Document, supra note 1, at 14.
        \21\ Mueller Statement, supra note 19.
        \22\ White House Briefing Document, supra note 1, at 14.
        \23\ Mueller Statement, supra note 19.
    ---------------------------------------------------------------------------
        The investigation of the September 11 attacks has already revealed
    serious lapses in the analysis and sharing of intelligence information.
    In July 2001, an FBI special agent in Phoenix reported to his
    supervisors that followers of Osama bin Laden might be training at U.S.
    aviation schools and suggested a nationwide canvass of the schools.\24\
    But this warning was apparently ignored. As early as January 2001, the
    CIA obtained information that two of the September 11 assailants--Nawaz
    al-Hazmi and Khalid al-Midhar--met with al-Qaeda agents in Malaysia.
    But this information was not provided to the INS until August 2001, by
    which time al-Hamzi and al-Midhar had already entered the United
    States.\25\
    ---------------------------------------------------------------------------
        \24\ FBI Whistle-Blower Assails Bloated Bureaucracy, Washington
    Post (June 7, 2002).
        \25\ Terrorism ``Watch List'' Was No Match for Hijackers,
    Washington Post (Sept. 23, 2001); Can We Stop the Next Attack?,
    Time.com (March 3, 2002). The CIA has claimed that it provided
    information on al-Midhar as early as January 2001, but the FBI has
    asserted that the information provided contained little detail.
    Sources: CIA Warned FBI About Hijacker, CNN.com (June 4, 2001); FBI and
    CIA Fight It Out Over Who Was to Blame for September 11 Blunders, The
    Guardian (June 5, 2002).
    ---------------------------------------------------------------------------
        The Administration's proposed bill, however, does not adequately
    address these problems. Although the bill gives the Secretary of
    Homeland Security rights of access to reports, assessments, and
    analytical information from other agencies that relate to threats and
    vulnerabilities, the Department remains primarily a ``consumer'' of
    intelligence information collected by agencies outside its control
    after that information is already processed by those agencies. This
    passive role will not ensure that the new Department obtains access to
    information that the collecting agencies deem insignificant, such as
    the warning from the FBI agent about flight schools. Although the
    Administration's bill allows for the transmittal of ``raw''
    intelligence from outside agencies to the Department of Homeland
    Security, the Department is not given the resources to cope with the
    volume and complexity of this information.\26\ Moreover, the new
    Department has no ``tasking'' authority to direct what intelligence is
    collected, making it difficult for the new Department to ensure that
    possible threats it identifies are properly pursued.
    ---------------------------------------------------------------------------
        \26\ Of the 1,000 people slated to staff the new Information
    Analysis and Infrastructure Protection Division, 800 reportedly will
    come from the FBI's National Infrastructure Protection Center (NIPC).
    These individuals, however, are already fully occupied with their
    current responsibilities, which involve protecting critical
    infrastructure, particularly with respect to computer and information
    technology. If given the new role of processing all raw intelligence
    information from the FBI, CIA, and other intelligence agencies, the
    existing NIPC staff would be both overwhelmed and diverted from its
    current tasks.
    ---------------------------------------------------------------------------
        Another concern is the potential for confusion and interference in
    the actual response to bioterrorist incidents. The FBI will bring a law
    enforcement focus to the scene of a bioterrorist event, while the new
    Department will be concerned with the emergency response. Under the
    President's proposal, it is unclear which will prevail. Under
    Presidential Decision Directive 62, which was signed during the
    previous Administration, the FBI was designated as the lead agency for
    ``crisis management,'' which included efforts to anticipate, prevent,
    and resolve terrorist attacks. FEMA was designated the lead agency for
    ``consequence management,'' which included broader measures to protect
    public health and safety. The President's proposal seeks to ``clarify''
    these responsibilities by ``eliminating the artificial distinction
    between `crisis management' and `consequence management.'''\27\ But it
    does not describe how the new Department and the FBI will handle the
    scene of a bioterrorist attack if they both arrive at the same time
    with fundamentally conflicting interests and goals.
    ---------------------------------------------------------------------------
        \27\ White House Briefing Document, supra note 1, at 12.
    ---------------------------------------------------------------------------
        There are many other instances of coordination problems that the
    President's proposal does not address. It is unclear in the President's
    proposal, for instance, how the Department of Homeland Security would
    organize and coordinate the various different police forces that exist
    among Federal agencies. The Administration's proposal would transfer
    some of those forces (the Federal Protective Service, which protects
    buildings belonging to the General Services Administration (GSA)), but
    not others (the security forces protecting Department of Energy,
    Veterans, and judicial buildings). Moreover, removing the Federal
    Protective Service from GSA creates its own problems because, as GAO
    has observed, ``security needs to be integrated into the decisions
    about location, design and operation of Federal facilities.''\28\
    ---------------------------------------------------------------------------
        \28\ GAO-02-886T, supra note 3, at 18.
    ---------------------------------------------------------------------------
        What is urgently needed is an effective entity at the White House
    level that can unify the disparate Federal agencies with homeland
    security functions behind a comprehensive national strategy. This is
    supposed to be the mission of the White House Office of Homeland
    Security, which President Bush created in October 2001, and which you
    head. But the proposal does nothing to give the head of the office the
    kinds of authority needed to succeed.

                 III. PROBLEMS WITH EXTRACTING CERTAIN AGENCIES

        The sections above have raised concerns with transferring functions
    unrelated to homeland security and the lack of coordinating mechanisms
    regardless of whether agencies are inside or outside the structure of
    the new Department. Also of concern are the potential effects of
    removing certain functions from their home agencies.
        This is a particular problem for the functions being transferred
    from the Department of Health and Human Services (HHS). Section 502(5)
    of the President's proposal would move the Office of the Assistant
    Secretary for Public Health Emergency Preparedness and ``the functions
    of the Secretary of Health and Human Services related thereto'' to the
    new Department of Homeland Security. This provision makes little sense.
    In the Public Health Security and Bioterrorism Preparedness and
    Response Act of 2002, Congress created the Office of the Assistant
    Secretary for Public Health Emergency Preparedness in recognition of
    the need to have a central office in HHS to coordinate how the various
    agencies within the Department respond to public health
    emergencies.\29\ Moving this office to another department will not
    eliminate the need for a coordinating office within HHS. It will simply
    recreate the same problems within HHS that Congress was attempting to
    fix.
    ---------------------------------------------------------------------------
        \29\ According to the Public Health Security and Bioterrorism
    Preparedness and Response Act of 2002 (Pub. Law 107-588), the Assistant
    Secretary coordinates all agency interfaces on emergency preparedness
    between HHS and ``other departments, agencies and offices of the United
    States.'' This person also ``[i]nterfaces between the Department and
    State and local entities with responsibility for emergency
    preparedness.'' As part of this person's duties, he or she also
    ``coordinate[s] the efforts of the Department to bolster State and
    local emergency preparedness for a bioterrorist attack or other public
    health emergency.''
    ---------------------------------------------------------------------------
        Richard Falkenrath, director of policy at the White House Office of
    Homeland Security, was asked about this problem during a briefing for
    staff on July 1, 2002. He answered that the challenge of coordinating
    emergency preparedness and response activities within HHS could be
    handled by ``a couple of people'' in the Secretary's office. Obviously,
    this cavalier attitude is seriously misinformed.
        Section 505 is also problematic. It transfers control over HHS
    programs to provide assistance for State and local preparedness from
    HHS to the new Department. These funds, which total over $1 billion,
    allow States and localities to enhance their surveillance,
    communication, and laboratory abilities, all of which are essential for
    responding to numerous public health threats, including threats that
    are not related to terrorism. As GAO has stated, these programs
    ``include essential public health functions that, while important for
    homeland security, are critical to basic public health core
    capacities.''\30\ As a result, GAO made the following conclusions:
    ---------------------------------------------------------------------------
        \30\ GAO-02-883T, supra note 2, at 6.
    ---------------------------------------------------------------------------
              We are concerned that this approach may disrupt the synergy
            that exists in these dual-purpose programs. We are also
            concerned that the separation of control over the programs from
            their operations could lead to difficulty in balancing
            priorities. Although the HHS programs are important for
            homeland security, they are just as important to the day-to-day
            needs of public health agencies and hospitals, such as
            reporting on disease outbreaks and providing alerts to the
            medical community. The current proposal does not clearly
            provide a structure that ensures that both the goals of
            homeland security and public health will be met.\31\
    ---------------------------------------------------------------------------
        \31\ Id. at 8.
    ---------------------------------------------------------------------------
        Section 403 also creates uncertainties by transferring to the new
    Department vague authorities over visa processing. Currently, approving
    and denying visas is an important activity of the State Department,
    which processes about 400,000 immigrant visas and over six million non-
    immigrant visas annually. To perform this function, the State
    Department employs thousands of foreign service officers skilled in
    hundreds of languages. Section 403(1) transfers to the Secretary of
    Homeland Security ``exclusive authority'' over this function, but this
    authority would be exercised ``through'' the Secretary of State. As a
    result, it is unclear whether the State Department must concur in
    policy decisions, or whether this is merely an administrative function.
    Additional statements by the Administration have not clarified this
    provision. The Administration has stated that consular officers will
    remain employed by the State Department, but that the new Secretary of
    Homeland Security will delegate back to the Secretary of State some
    visa functions unrelated to security.
        Similar problems affect the provisions transferring portions of the
    Department of Energy. The provisions in the bill are ambiguous and
    potentially very broad. For example, section 302(2)(G) of the
    President's proposal would transfer ``the advanced scientific computing
    research program and activities'' at Lawrence Livermore Laboratory to
    the new Department. Although the exact scope of this provision is
    unclear, it appears to encompass parts of the Lawrence Livermore
    Laboratory's Computation Directorate, which supports other programs at
    the laboratory by providing computing capacity and capability, as well
    as research, advanced development, and operations and support related
    to computing, computer science, and information technologies. Such a
    transfer could harm the laboratory's ability to support its key
    mission--safeguarding the stockpile of nuclear weapons--as well as
    other core laboratory activities.
        Section 302(2)(E) gives the President authority to transfer from
    DOE to the new Department any life science activity within the
    biological and environmental research program that is related to
    microbial pathogens. The result would be that ongoing DNA sequencing of
    harmful microbes could be transferred to the new Department, while
    virtually identical work on microbes with beneficial uses (such as
    microbes that break down pollution) would stay at DOE. Splitting this
    highly specialized work risks weakening the effectiveness of both.

           IV.LACK OF RECOGNITION OF DISPARATE IMMIGRATION FUNCTIONS

        In April, the House passed legislation (H.R. 3231) recognizing the
    two distinct functions of the INS: an immigration services function and
    an enforcement function. As part of this reform effort, the bill would
    split the INS into a Bureau of Citizenship and Immigration Services and
    a Bureau of Immigration Enforcement, both under the supervision of an
    Associate Attorney General for Immigration Affairs within the
    Department of Justice. The legislation aimed to correct longstanding
    and widely-recognized systemic problems within the INS by separating
    out its distinct and often conflicting service and enforcement
    functions.
        When the House immigration bill was being considered, the
    Administration expressed its support. In addition, when the White House
    issued its briefing document regarding the new Department of Homeland
    Security, that support was reiterated. The briefing document stated the
    following:
              The new Department of Homeland Security would include the INS
            and would, consistent with the President's long-standing
            position, separate immigration services from immigration law
            enforcement.\32\
    ---------------------------------------------------------------------------
        \32\ White House Briefing Document, supra note 1, at 10.
    ---------------------------------------------------------------------------
        Despite these assurances, however, the legislative language
    proposed by the President would import the INS into the new Department
    of Homeland Security intact and unreformed. There are no details
    whatsoever regarding the structure of the INS after it is transferred
    to the new Department. As a result, the Administration's proposal fails
    to address internal structural and coordination problems that hamper
    the effectiveness of the INS.

                   V.EXEMPTIONS FROM ``GOOD GOVERNMENT'' LAWS

        The Administration's proposal would create broad exemptions to the
    nation's ``good government'' laws. It would make the civil service,
    procurement, and property acquisition and disposal laws essentially
    optional for the new Department. In addition, the President's proposal
    would weaken valuable sunshine laws, such as the Freedom of Information
    Act and the Federal Advisory Committee Act. The bill would also create
    a weak management and oversight structure by not fully applying the
    Chief Financial Officers Act, the law governing Chief Information
    Officers, and the Inspector General Act.

                  A. Exemption from Civil Service Protections

        The nation's civil service laws have evolved over many decades to
    ensure that the government has a professional civil service hired on
    the basis of merit rather than political favoritism. Section 730 of the
    President's proposal, however, would give the Secretary the authority
    to create an alternative personnel system. The only limitation in the
    statute is that the system should be ``flexible, contemporary, and
    grounded in the public employment principles of merit and fitness.''
        Under the President's proposal, employees of the new Department
    could be exempted from essential provisions of title 5 of the United
    States Code. No rationale has been offered to explain why affording
    these basic protections for Federal workers and their families would
    undermine the mission of the new Department. The civil service
    provisions that become optional include the following:
         The prohibition on discrimination against employees on the
    basis of political affiliation and on coercing political activity
    (anti-patronage protection);
         The prohibition on hiring or promoting a relative (anti-
    nepotism protection);
         The prohibition on reprisal against employees for the
    lawful disclosure of information about illegal and wasteful government
    activity (whistleblower protection);
         The preferences for veterans in hiring and in reductions-
    in-force;
         The protection from arbitrary dismissal or demotion
    through due process appeal rights to the Merit Systems Protection
    Board;
        The right to organize, join unions, and bargain
    collectively with management over working conditions;
         Sick and annual leave for Federal employees and family and
    medical leave;
         Retirement benefits, such as the Civil Service Retirement
    System and the Federal Employees' Retirement System; and
         Health insurance through the Federal Employees' Health
    Benefits Program.
        Moreover, important programs for ensuring diversity in the Federal
    workforce, such as the requirement to recruit minorities, would also
    become optional under the proposed legislation.
        Another potential threat to the civil service laws is section
    732(b), which allows the Secretary to hire an unlimited number of
    employees through ``personal service'' contracts rather than through
    the civil service system. Although the rationale for this provision
    seems to be to allow the new Department to obtain certain specialized
    services in an emergency, there do not appear to be any limits on its
    use. For example, current law requires these types of contracts to be
    temporary (no longer than one year) and subject to salary caps (no
    higher than the GS-15 level). The President's proposal would allow
    these contracts to go on indefinitely and at any rate. In effect, the
    section provides an alternative vehicle for bypassing the protections
    and requirements of the civil service system.

                      B. Exemption from Procurement Rules

        Under section 732(c) of the President's proposal, the new Secretary
    could waive any and all procurement statutes and regulations, and the
    Secretary would not be required to comply with the cornerstone
    procurement principles of open and competitive bidding. In a section-
    by-section analysis provided by the White House, the Administration
    asserts that ``normal procurement operations would be subject to
    current government-wide procurement statutes and regulations.''\33\ To
    the contrary, however, the legislative language would add the new
    Department to the list of entities listed in 40 U.S.C. Sec.  474, such
    as the Postal Service, which would exempt entirely the Department from
    the Federal government's normal acquisition laws.
    ---------------------------------------------------------------------------
        \33\ The White House, Analysis for the Homeland Security Act of
    2002, 11 (undated).
    ---------------------------------------------------------------------------
        As a result, there is no guarantee that the new Department would be
    getting the lowest prices, the best quality, or the best deals.
    Fundamental principles of Federal procurement such as the following
    would not apply:
         The requirement that acquisitions be publicly advertised;
         The requirement that sufficient notice be given to allow
    companies to respond;
         The requirement that all responsible bidders be given the
    chance to compete for a given acquisition; and
         The requirement that all contractors be rated on the same
    criteria when competing for a given contract.
        These bedrock principles have helped to maintain competition in
    Federal contracting, which history has proven to be the best way to
    ensure the best quality at the lowest prices while maintaining a system
    free of favoritism or abuse. In addition, long-standing preferences for
    small- and minority-owned businesses designed to encourage their
    development and access to Federal contracts would no longer be
    guaranteed.
        Section 732(a) of the President's proposal would explicitly grant
    the new Department so-called ``other transactions authority'' for
    research and development contracts. This authority was given to the
    Defense Department to eliminate the open and competitive bidding
    process in order to attract nontraditional contractors. In fact,
    however, it has been used mainly by traditional contractors to
    negotiate contracts that waive the Federal government's rights to
    review financial management and cost information, as well as its rights
    to use new inventions discovered through research funded by the Federal
    taxpayer.\34\ In reviewing the use of this authority by the Defense
    Department, the Inspector General found that these that types of
    contracts ``do not provide the government a number of significant
    protections, ensure the prudent expenditure of taxpayer dollars, or
    prevent fraud.''\35\
    ---------------------------------------------------------------------------
        \34\ In general, for intellectual property developed with Federal
    funding, the government normally retains a nonexclusive,
    nontransferable, irrevocable, and paid-up (royalty-free) license to use
    the intellectual property.
        \35\ Inspector General, Department of Defense, Comments on the
    Service Acquisition Reform Act (H.R. 3832), 11 (Mar. 12, 2002)
    (concluding that ``other transactions have not attracted a significant
    number of nontraditional Defense contractors'' and that ``traditional
    protections for the public trust do not exist, for the most part, for
    other transactions'').
    ---------------------------------------------------------------------------
    C. Exemption from Property Rules
        The new Department will acquire a considerable inventory of Federal
    property, particularly through the Coast Guard, which owns valuable
    real estate across the country. Sections 732(d) and (f) of the
    President's proposal, however, would give the new Department broad
    authority to acquire and dispose of both real and personal property.
    Specifically, the Department could acquire replacement real property
    through exchange or transfer with other agencies or through the sale or
    long-term lease to the private sector. In addition, the Department
    would be authorized to retain the proceeds of such transactions.
        Currently, under the 1949 Property Act, Federal agencies must
    determine whether they own ``excess'' property they no longer need. GSA
    then screens this excess property for other Federal uses. If there are
    no Federal uses for the property, GSA declares the property ``surplus''
    and screens it for ``homeless'' or ``public benefit'' uses, such as for
    schools, correctional institutions, airports, and other entities. If no
    beneficial public use is found for the property, GSA may sell the
    property through negotiated sales at fair market value without
    restrictions on use. The property may also be sold to the public
    through a bidding process if a negotiated sale does not occur. Under
    the Administration's proposal, however, none of these procedures will
    apply.
        The Government Reform Committee reported a comprehensive reform of
    Federal property laws earlier this year (H.R. 3947). This reform gave
    agencies more flexibility to manage their property, but it also
    included safeguards to ensure that agencies respond to community input,
    consider local zoning laws, and receive fair market value. None of
    these safeguards are incorporated into the Administration's proposal.

                  D. Exemption from Freedom of Information Act

        Section 204 of the President's proposal would exempt the new
    Department from complying fully with the Freedom of Information Act
    (FOIA). If nonfederal entities or individuals provide information
    voluntarily to the new Department that relates to infrastructure
    vulnerabilities or other vulnerabilities to terrorism, that information
    would not be subject to FOIA. This exemption would apply to information
    that ``is or has been in the possession of the Department.''
        FOIA was designed to preserve openness and accountability in
    government. In order to protect sensitive information, FOIA already
    contains sufficient exemptions from disclosure. These exemptions cover
    critical infrastructure information. FOIA does not require the
    disclosure of national security information (exemption 1), sensitive
    law enforcement information (exemption 7), or confidential business
    information (exemption 4). Therefore, new exemptions to its provisions
    do not appear necessary.
        The danger in creating new exemptions to FOIA is that important
    information about health and safety issues could be withheld from the
    public. In fact, the provision is drafted so broadly that it could be
    used to ``launder'' embarrassing information through the new Department
    and thereby prevent public disclosure.
        One particular target of the new FOIA exemption appears to be the
    ``Risk Management Plans'' that chemical plants are required to file
    under the Clean Air Act. These plans inform communities about the
    dangers they would face in the event of an explosion or chemical
    accident in a nearby plant. Chemical industry officials argued that
    Congress should restrict public access to this information because the
    information could be used by terrorists to target facilities.
        Congress addressed this issue by carefully balancing the goal of
    informing emergency responders and the public about potential risks of
    chemical accidents with the goal of keeping sensitive information away
    from terrorists. In the Chemical Safety Information Site Security Act
    of 1999, Congress concluded that information about potential ``worst
    case'' scenarios should remain available to the public, but with
    certain restrictions to prevent a searchable database from being
    readily posted on the internet. Congress ensured public access to basic
    information about the risk management plans, preserving the right of
    Americans to know about chemical accidents that could impact their
    families and communities. Under the President's proposal, however,
    chemical companies could now prevent the disclosure of all Risk
    Management Plans under FOIA simply by sending them to the new
    Department.

                E. Exemption from Federal Advisory Committee Act

        Section 731 of the President's proposal would exempt advisory
    committees established by the Secretary of the new Department from the
    Federal Advisory Committee Act (FACA). FACA requires that any committee
    formed to provide advice to the Federal government, and which consists
    of members who are not Federal employees, must follow certain rules in
    order to promote good-government values such as openness,
    accountability, and a balance of viewpoints. Generally, FACA requires
    that such committees announce their meetings, hold their meetings in
    public, take minutes of the meetings, and provide the opportunity for
    divergent viewpoints to be represented.
        To protect sensitive information, FACA includes exemptions for
    information that relates to national security issues or information
    that is classified. As a result, many agencies with homeland security
    missions, such as the Department of Justice, the Federal Bureau of
    Investigation, and the Department of Defense, currently operate under
    FACA without difficulty. The President's proposal contains no
    explanation why the new Department could not also comply with FACA. In
    fact, the only two agencies that are exempt from FACA are the Central
    Intelligence Agency and the Federal Reserve.
        At least 27 advisory committees that currently exist would be
    transferred to the new Department under the President's proposal. These
    existing advisory committees, which are currently subject to FACA,
    include the Navigational Safety Advisory Committee at the Coast Guard,
    the Advisory Committee of the National Urban Search and Rescue System
    at FEMA, the Advisory Committee on International Child Labor
    Enforcement at the Customs Service, and the Advisory Committee on
    Foreign Animal and Poultry Diseases at APHIS. When rechartered under
    the Homeland Security Department, none of these advisory committees
    will be subject to the FACA requirement on balance and openness.
        In addition, the President's proposal waives important conflict of
    interest laws that apply to individuals serving on advisory committees.
    Under section 731, if an individual serves on an advisory committee,
    the individual will be exempt from the provisions of sections 203, 205,
    or 207 of Title 18, United States Code. These sections contain
    important protections. Section 207, for example, provides that a person
    who serves on a committee that is advising an agency on a specific
    matter cannot lobby the agency about the same matter after leaving the
    advisory committee. No rationale is provided for exempting members of
    advisory committees from these protections against conflicts of
    interest.

                 F. Exemption from Chief Financial Officer Act

        Section 103(d)(4) of the President's proposal would authorize the
    President to appoint the Department's Chief Financial Officer (CFO)
    without Senate confirmation. Current law requires that a CFO of a
    cabinet department either be: (1) appointed by the President with
    Senate confirmation; or (2) designated by the President from among
    agency officials who are Senate-confirmed.\36\ In either case, current
    law requires that CFOs be Senate-confirmed.
    ---------------------------------------------------------------------------
        \36\ 31 U.S.C. Sec.  901(a)(1).
    ---------------------------------------------------------------------------
        In addition, the President's proposal contains no language making
    the CFO Act applicable to the new Department. The CFO Act contains core
    financial management, accountability, and reporting requirements that
    are at least as important for the new Department as they are for other
    covered agencies, which include all existing cabinet departments.
    Moreover, section 602 of the President's proposal provides that the CFO
    shall report to the Secretary or to another official of the Department
    as the Secretary may direct. This section is inconsistent with the CFO
    Act, which requires that the CFO report directly to the agency head
    regarding financial management matters.\37\
    ---------------------------------------------------------------------------
        \37\ 31 U.S.C. Sec. 902(a)(1).
    ---------------------------------------------------------------------------
        These exemptions from financial management requirements make little
    sense. According to GAO, ``[i]t is important to re-emphasize that the
    department should be brought under the Chief Financial Officers (CFO)
    Act and related financial management statutes.''\38\
    ---------------------------------------------------------------------------
        \38\ GAO-02-886T, supra note 3, at 33.
    ---------------------------------------------------------------------------

            G. Exemption from Chief Information Officer Legislation

        The proposal does not appear to give the Chief Information Officer
    (CIO) of the new Department the same status and responsibilities as
    CIOs at other agencies. Section 603 of the President's proposal
    provides that the CIO shall report to the Secretary or to another
    official of the Department as the Secretary may direct. The Clinger-
    Cohen Act, however, requires that the CIO report directly to the agency
    head.\39\
    ---------------------------------------------------------------------------
        \39\ 44 U.S.C. Sec.  3506(a)(2)(A).
    ---------------------------------------------------------------------------
        In addition, the Clinger-Cohen Act specifies numerous
    responsibilities for CIOs. These include developing an accounting,
    financial, and asset management system that is reliable, consistent,
    and timely; developing and maintaining information systems; and
    assessing and reporting on progress made in developing information
    technology systems. The President's legislative language, however, does
    not specify any responsibilities for the CIO. In fact, the bill would
    assign responsibility for information technology systems to an Under
    Secretary for Management at the new Department, a responsibility
    assigned to the CIO under the Clinger-Cohen Act.

            H. Limits on Access to Information by Inspector General

        Section 710 of the President's proposal would subject the Inspector
    General (IG) of the new Department to the Secretary's control and would
    authorize the Secretary to prevent the IG from doing work in areas
    involving certain information. These areas are quite broad and extend
    to information concerning any ``matters the disclosure of which would,
    in the Secretary's judgment, constitute a serious threat to national
    security.'' Under the President's proposal, the Secretary could
    prohibit the IG from doing work ``if the Secretary determines that such
    prohibition is necessary * * * to preserve the national security or to
    prevent a significant impairment to the interests of the United
    States.''
        IGs at certain other agencies (such as the Defense Department and
    the Justice Department) have similar limitations on access. But in
    those cases, the IGs are directed to report to Congress if the relevant
    Secretary impedes their access to necessary information. In the case of
    the IG for the new Department, this important check on Secretarial
    interference has been eliminated. Instead, the proposal would give the
    responsibility of reporting interference with an IG investigation to
    the Secretary, who would have an obvious conflict of interest in full
    reporting.

                   VI. EXEMPTION FROM CONGRESSIONAL OVERSIGHT

        In addition to creating exemptions to many of the nation's good
    government laws, the President's proposal would substantially undercut
    Congress' ability to conduct oversight of the new Department. Through
    several broad and sweeping provisions in the President's proposal, the
    Secretary of the new Department would have new powers to rewrite
    enacted legislation and override budgetary decisions made by Congress.
        The President's proposal would give the Secretary of the new
    Department the equivalent of a lump-sum appropriation of more than $30
    billion. In transferring the various existing agencies to the new
    Department, several provisions of the President's proposal allow the
    Secretary to transfer agency balances to the new Department. Section
    803(e) of the President's proposal allows the new Secretary to allocate
    those funds as the Secretary sees fit, and it expressly overrides the
    provision of permanent law that requires funds transferred to be used
    only for the purposes for which they were originally appropriated.
    Taken together, these provisions allow the new Secretary to rewrite
    appropriations relating to both homeland security and all other
    functions conducted by the new Department.
        Section 733(b) creates for the new Secretary a permanent blanket
    grant of authority to transfer between appropriations accounts up to 5
    percent of the appropriations made each year for agencies within the
    new Department, so long as the Appropriations Committees are given 15
    days notice. This provision could allow the Secretary to transfer $2
    billion or more per year rather than addressing potential funding
    misallocations through the annual congressional appropriations process.
        In addition, section 733(a) allows the Secretary to ``establish,
    consolidate, alter, or discontinue'' any organizational unit in the new
    Department, including those established by statute, upon 90 days notice
    to Congress. Although the Coast Guard and the Secret Service are exempt
    from this provision, all other agencies transferred to the new
    Department could be abolished entirely with no input from Congress.

           VII. POTENTIAL FOR SERIOUS DISRUPTION IN THE WAR ON TERROR

        The Administration asserts that the ``current components of our
    homeland security structure will continue to function as normal and
    there will be no gaps in protection as planning for the new Department
    moves forward.''\40\ Unfortunately, this is a difficult goal to
    achieve, and the proposal submitted to Congress contains no
    implementation plan that shows how disruptions will be avoided.
    ---------------------------------------------------------------------------
        \40\ White House Briefing Document, supra note 1, at 4.
    ---------------------------------------------------------------------------
        In fact, the history of corporate and government reorganizations is
    not encouraging. As a management professor from Columbia University
    recently remarked, ``[t]o think that a structural solution can bring
    about a major improvement in performance is a major mistake.''\41\ In
    the corporate world, more mergers fail than succeed.\42\ According to
    one expert, ``[p]rivate-sector data show that productivity usually
    drops by 50 percent in the first four to eight months following the
    initial announcement of a merger, largely because employees are
    preoccupied with their now uncertain future.''\43\
    ---------------------------------------------------------------------------
        \41\ The Experiment Begins, National Journal (June 15, 2002).
        \42\ See, e.g., Breaking Up Is Hard, Merging Is Harder, New York
    Times Week in Review (June 23, 2002) (``Indeed, business history is
    littered with failed attempts to unite far-flung enterprises that would
    prosper through sheer scale''); and Stressed Out: Can Workplace Stress
    Get Worse?, Wall Street Journal (Jan. 16, 2001) (``75 percent of those
    deals, by several experts' estimates, will fail to achieve expected
    results'').
        \43\ Max Stier, Homeland Security: Mega Merger, Washington Post
    (June 25, 2002).
    ---------------------------------------------------------------------------
        The model most often cited by the Administration is the creation of
    the Department of Defense in 1947. But that reorganization was not
    undertaken until after World War II was over. Moreover, the newly
    created Defense Department was riven with strife for decades after its
    creation. As recently as 1983, when President Reagan ordered the
    invasion of Grenada, the Army and the Marines had to split the island
    in half because they could not figure out how to cooperate.\44\ The
    original 1947 reorganization required four different amendments, the
    last being the Goldwater-Nichols Act of 1986, before the problems
    created by the 1947 reorganization were finally addressed.
    ---------------------------------------------------------------------------
        \44\ Repeating the Past, National Journal (June 15, 2002).
    ---------------------------------------------------------------------------
        GAO has closely tracked the history of government reorganizations.
    According to David Walker, the Comptroller General of GAO:
            Often it has taken years for the consolidated functions in new
            departments to effectively build on their combined strengths,
            and it is not uncommon for these structures to remain as
            management challenges for decades * * * . [R]eorganizations of
            government agencies frequently encounter start up problems and
            unanticipated consequences that result from the consolidations,
            are unlikely to fully overcome obstacles and challenges, and
            may require additional modifications in the future to
            effectively achieve our collective goals for defending the
            country against terrorism.\45\
    ---------------------------------------------------------------------------
        \45\ GAO-02-886T, supra note 3, at 5.
    ---------------------------------------------------------------------------
        Given this history, the burden should be on the Administration to
    show how this bureaucratic reorganization can be accomplished
    successfully. But virtually no detail has been provided to Congress
    that addresses these serious implementation issues.

                        VIII. LACK OF NATIONAL STRATEGY

        Most experts recommend three concrete steps for developing an
    approach to homeland security: First, evaluate the threats posed to the
    country; second, develop a plan for dealing with those threats; and
    third, implement that plan through whatever reorganization and
    realignment of resources is necessary. It appears, however, that the
    Administration has taken exactly the opposite approach: White House
    officials proposed the reorganization first; they will come out with a
    strategy second; and they may eventually do a comprehensive assessment
    of the threats facing the country.
        Experts have consistently criticized the United States for failing
    to have a comprehensive national strategy for fighting terrorism. GAO
    has made this finding repeatedly.\46\ The U.S. Commission on National
    Security, the bipartisan group headed by former Senators Warren Rudman
    and Gary Hart, found that ``no overarching strategic framework guides
    U.S. national security policymaking or resource allocations.''\47\
    Likewise, the independent panel headed by Governor James Gilmore
    concluded that ``the United States has no coherent, functional national
    strategy for combating terrorism.''\48\
    ---------------------------------------------------------------------------
        \46\ See U.S. General Accounting Office, Combating Terrorism:
    Selected Challenges and Related Recommendations (September 2001) (GAO-
    01-822); U.S. General Accounting Office, Combating Terrorism: Need for
    Comprehensive Threat and Risk Assessments of Chemical and Biological
    Attacks (September 1999) (GAO/NSIAD-99-163); and U.S. General
    Accounting Office, Combating Terrorism: Threat and Risk Assessments Can
    Help Prioritize and Target Program Investments (April 1998) (GAO/NSIAD-
    98-74).
        \47\ The United States Commission for National Security/21st
    Century, Road Map for National Security: Imperative for Change (Mar.
    15, 2001).
        \48\ Advisory Panel to Assess Domestic Response Capabilities for
    Terrorism Involving Weapons of Mass Destruction, Toward a National
    Strategy for Combating Terrorism (Second Annual Report) (Dec. 15,
    2000).
    ---------------------------------------------------------------------------
        Nine months ago, in October 2001, the White House agreed with this
    assessment. In the executive order creating the White House Office of
    Homeland Security, President Bush recognized that developing a national
    strategy was essential in the fight against terrorism. The executive
    order establishing the Office provided that:
            The mission of the Office shall be to develop and implement the
            coordination of a comprehensive national strategy to secure the
            United States from terrorist threats or attacks.\49\
    ---------------------------------------------------------------------------
        \49\ Executive Order 13228.
    ---------------------------------------------------------------------------
        When you assumed your position, you also recognized that developing
    this strategy was your top assignment, calling it your ``main
    mission''\50\ and your ``very first mission.''\51\ In a speech in
    April, you said, ``I take every word of that executive order
    seriously,'' and you promised that the strategy would be ``guided by an
    overarching philosophy: risk management--focusing our resources where
    they will do the most good, and achieve the maximum protection of lives
    and property.''\52\
    ---------------------------------------------------------------------------
        \50\ Ridge Says Focus is on Expanding Homeland Security Resources,
    Speech at Homeland Security Conference, U.S. Department of State
    (Washington, DC) (on line at http://usinfo.state.gov).
        \51\ Tom Ridge Speaks to the Associated Press Annual Luncheon,
    Office of the White House Press Secretary (Apr. 29, 2002) (on line at
    http://www.whitehouse.gov/news/releases/ 2002/04/20020429-3.html).
        \52\ Id.
    ---------------------------------------------------------------------------
        Since that time, the national strategy has been promised
    repeatedly. In the budget justification for fiscal year 2003, the
    Administration made this statement:
            The United States has never had a national blueprint for
            securing itself from the threat of terrorism. This year, with
            the publication of the National Strategy for Homeland Security,
            it will.\53\
    ---------------------------------------------------------------------------
        \53\ FY03 Budget Justification, supra note 10, at 6. The
    Administration continued: ``The Budget for 2003 is a down payment on a
    larger set of homeland security initiatives that will be described in
    the national strategy and reflected in the 2004 and later budgets.''
    Id. at 7.
    ---------------------------------------------------------------------------
        Unfortunately, this strategy has not been developed.\54\ As a
    result, Congress still does not have a list of priorities set forth in
    a clear way and cannot gauge whether your reorganization proposal best
    serves the nation's security goals. Moreover, the new Department will
    have no clear strategy to implement after it is created. As John R.
    Brinkerhoff, civil defense director at FEMA under President Reagan, has
    stated: ``The Bush Administration is doing the wrong thing for the
    wrong reasons * * * . What worries me the most is that we've put the
    cart before the horse: We're organizing, and then we're going to figure
    out what to do.''\55\
    ---------------------------------------------------------------------------
        \54\ In testimony before the Government Reform Committee on June
    20, 2002, you stated that the principles of the national strategy have
    been evident ``ever since the President sent up his 2003 budget
    initiative.'' House Committee on Government Reform, Hearing on The
    Department of Homeland Security: An Overview of the President's
    Proposal (June 20, 2002) (stenographic record). This statement is
    misleading at best. The budget justification for fiscal year 2003
    included absolutely no information about the newly proposed Department
    of Homeland Security, which the Administration now says is the
    cornerstone of the national strategy. Moreover, the Administration's
    budget justification for fiscal year 2003 makes clear that no national
    strategy existed when the budget justification was submitted to
    Congress. FY03 Budget Justification, supra note 10, at 6.
        \55\ Bush's Homeland Gambit, National Journal (June 15, 2002).
    ---------------------------------------------------------------------------

                                    IX. COST

        The Administration has stated that the creation of this new
    Department ``would not 'grow' government.''\56\ According to the
    Administration: ``The cost of the new elements (such as the threat
    analysis unit and the State, local, and private sector coordination
    functions), as well as the department-wide management and
    administration units, can be funded from savings achieved by
    eliminating redundancies inherent in the current structure.''\57\
    ---------------------------------------------------------------------------
        \56\ White House Briefing Document, supra note 1, at 17.
        \57\ Id.
    ---------------------------------------------------------------------------
        This is not a credible statement. CBO has examined the costs of the
    reorganization proposal put forth by Senator Lieberman (S. 2452).
    According to CBO, the Lieberman bill ``would cost about $1.1 billion
    over the 2003-2007 period.''\58\ CBO writes: ``[A] new cabinet-level
    department would require additional resources to perform certain
    administrative functions, including new positions to staff the offices
    of the Inspector General, general counsel, budget, and Congressional
    affairs for the new department.''\59\ In addition, CBO states that the
    new Department would require additional funding for ``centralized
    leadership, coordination, and support services,'' and that ``new
    departmental staff would be hired over the first two years following
    enactment of the legislation.''\60\
    ---------------------------------------------------------------------------
        \58\ CBO Cost Estimate, supra note 5 (specifically excluding the
    costs of obtaining a new or leased building and centralizing staff and
    resources there).
        \59\ Id.
        \60\ Id.
    ---------------------------------------------------------------------------
        The Administration's proposal is significantly more ambitious and
    costly than Senator Lieberman's. It includes more agencies, such as the
    Transportation Security Administration with over 40,000 employees.
    Moreover, it requires the new Department to take on a host of new
    functions, including:
         A new office for ``Intelligence and Threat Analysis'' to
    ``fuse and analyze intelligence and other information pertaining to
    threats to the homeland from multiple sources,''\61\ including a new
    ``system for conveying actionable intelligence and other
    information''\62\ and a new system to ``consolidate the Federal
    government's lines of communication with State and local public safety
    agencies and with the private sector'';\63\
    ---------------------------------------------------------------------------
        \61\ White House Briefing Document, supra note 1, at 3.
        \62\ Id. at 14-15.
        \63\ Id. at 14.
    ---------------------------------------------------------------------------
         A new ``state-of-the-art visa system, one in which
    visitors are identified by biometric information'';\64\
    ---------------------------------------------------------------------------
        \64\ Id. at 10.
    ---------------------------------------------------------------------------
         A new ``automated entry-exit system that would verify
    compliance with entry conditions, student status such as work
    limitations and duration of stay, for all categories of visas'';\65\
    ---------------------------------------------------------------------------
        \65\ Id.
    ---------------------------------------------------------------------------
         New ``interoperable communications,'' including
    ``equipment and systems'' for the ``hundreds of offices from across the
    government and the country'' that make up the ``emergency response
    community'' (this would be a ``top priority'' of the new
    Department);\66\ and
    ---------------------------------------------------------------------------
        \66\ Id. at 12.
    ---------------------------------------------------------------------------
         A new ``national system for detecting the use of
    biological agents within the United States,'' including a new
    ``national public health data surveillance system,'' and a new ``sensor
    network to detect and report the release of bioterrorist pathogens in
    densely populated areas.''\67\
    ---------------------------------------------------------------------------
        \67\ Id. at 13.
    ---------------------------------------------------------------------------
        In addition to these new functions, the President's proposal would
    establish an entirely new bureaucracy, complete with a management
    hierarchy and accompanying staff. According to the President's
    legislative language, the new Department would have up to 22 Deputy,
    Under, and Assistant Secretaries. This is more than the number of
    Deputy, Under, and Assistant Secretaries at the Department of Health
    and Human Services, which administers a budget about ten times the
    proposed budget of the new Department of Homeland Security.
        Like CBO, GAO has also concluded that the new Department will
    impose costs on the taxpayer. According to GAO, ``[n]umerous
    complicated issues will need to be resolved in the short term,
    including a harmonization of information technology systems, human
    capital systems, the physical location of people and other assets, and
    many other factors.''\68\ As a result, GAO concludes that the
    President's reorganization proposal ``will take additional resources to
    make it fully effective.''\69\
    ---------------------------------------------------------------------------
        \68\ GAO-02-886T, supra note 3, at 2.
        \69\ Id.
    ---------------------------------------------------------------------------
        Mark Everson, Controller at the Office of Federal Financial
    Management within the White House Office of Management and Budget, was
    asked about these costs at a staff briefing on July 1, 2002. He said
    that the Administration had no estimate of the transition costs of
    creating the new Department and no estimate of the level of savings to
    be achieved by combining agencies. The only thing he said he knew was
    that these unknown costs would exactly equal these unknown savings.
        Obviously, Congress needs more concrete information about budget
    costs before it can legislate intelligently.

                                   X. PROCESS

        When the President made his nationally televised address on June 6,
    2002, announcing his proposal for a new Department of Homeland
    Security, it came as a surprise not only to Congress and the American
    people, but also to the agencies, departments, and offices affected by
    the proposal. The plan was put together with so much secrecy that
    ``[n]o Cabinet secretary was directly consulted about a plan that would
    strip 170,000 employees and $37 billion in funding from existing
    departments.''\70\ In fact, there was so little communication between
    the White House and the agencies that at least one major agency had to
    call the minority staff of the Committee on Government Reform to learn
    whether it was affected by the reorganization plan.
    ---------------------------------------------------------------------------
        \70\ Bush Plan's Underground Architects; In Silence and Stealth,
    Group Drafted Huge Security Overhaul, Washington Post (June 9, 2002).
    ---------------------------------------------------------------------------
        This closed process utilized by the Administration is ill-suited to
    ensuring that all potential problems are identified and addressed
    beforehand. Moreover, the risk of making policy mistakes is compounded
    by the rushed process being used in Congress to consider the
    legislation. It is not clear how in this process the time and
    opportunity will be found to make sure the legislation is done
    correctly.

                                 XI. CONCLUSION

        The issues raised in this letter exemplify the serious questions
    that should be resolved before Congress completes work on this
    legislation. For this reason, we urge you to respond in detail and in
    writing to the concerns raised in this letter by July 15, before the
    House select committee starts its consideration of this bill.
            Sincerely,
                                       Henry A. Waxman,
        Ranking Minority Member, Committee on Government Reform
                                         David R. Obey,
          Ranking Minority Member, Committee on Appropriations.

                                   APPENDIX A

             Transferred Functions Not Related to Homeland Security

    Animal Plant Health Inspection Service
        Animal Welfare Act: APHIS enforces the Animal Welfare Act, the act
    that regulates the exhibition of animals in zoos and circuses and the
    transportation of animals on commercial airlines.
        Biotechnology Regulatory Policy: APHIS regulates the movement,
    importation, and field testing of genetically engineered plants and
    microorganisms.
        Canadian Geese: APHIS works with State wildlife agencies and local
    governments to address problems with non-migratory, resident Canadian
    geese.
        Disease and Pest Detection and Eradication: APHIS is responsible
    for the detection and eradication of pests and diseases that affect
    crops and livestock. For example, on September 20, 2001, APHIS
    implemented the accelerated National Scrapie Eradication Program. A few
    of the other pests and diseases APHIS monitors for and eradicates
    include: the boll weevil; the fruit fly; rabies; the Asian Longhorned
    Beetle; the citrus canker program; and the plum pox virus.
        Horse Protection Act: APHIS enforces the Horse Protection Act, the
    act which prohibits horses subjected to a process called soring from
    participating in exhibitions, sales, shows, or auctions.
        Missing Pets: APHIS maintains the missing pets network at
    www.missingpet.net.
        National Poultry Improvement Plan: This is an industry/State/
    Federal program that establishes standards for evaluating poultry
    breeding stock and hatchery products to ensure they are free from
    hatchery-disseminated and egg-transmitted diseases.
        Noxious weeds: APHIS cooperates with Federal, State, and private
    organizations to detect and respond to infestations of invasive plants,
    such as branched broomrape and small broomrape.
        Screwworm: APHIS is working to ensure that screwworm is not
    reintroduced into the United States. This eradication program is close
    to its goal of establishing a permanent sterile screwworm barrier in
    the eastern third of Panama.
        Trade Issue Resolution and Management: APHIS monitors emerging
    foreign pest and disease threats at their origin before they have an
    opportunity to reach U.S. ports. APHIS also participates in trade
    agreements.
        Veterinary Biologics: APHIS regulates veterinary biologics
    including vaccines and diagnostic kits.
    Coast Guard
        International Ice Patrol: The Coast Guard has a fleet of ships
    designed to break ice in cold regions to ensure that boats are able to
    navigate the waterways.
        Marine Safety: The Coast Guard enforces regulations to ensure that
    boats and other marine equipment meet safety standards.
        Maritime Drug Interdiction: The Coast Guard interdicts drugs
    illegally brought into this country on the waterways.
        Maritime Law Enforcement: The Coast Guard enforces the laws of the
    waterways.
        Maritime Mobility Missions: The Coast Guard provides aids to
    navigation and bridge administration to ensure that vessels are able to
    navigate our waterways.
        Oil Spill Cleanup: The Coast Guard helps to prevent oil spills in
    the nation's waters and assists in their cleanup when they occur.
        Protection of Natural Resources: The Coast Guard protects our
    domestic fishery resources and marine environment.
        Search and Rescue: The Coast Guard, as one of its primary missions,
    rescues troubled vessels and people on the nation's waterways.
    Customs
        Border Drug Interdiction: The Customs Service fights against drug
    smuggling at the United States border.
        Copyright Protection: The Customs Service helps to enforce the
    Copyright Acts.
        Enforcement of Health and Safety Laws: The Customs Service checks
    imports to ensure that they comply with health and safety laws.
        Fostering of Trade: The Customs Service works with the trade
    community and identifies and confronts trade issues facing the country.
        Child Pornography Prevention: The Customs Service enforces laws
    protecting against child pornography.
        Fair Trade Protection: The Customs Service enforces a variety of
    fair trade laws such as the Lanham Trade-Mark Act and the Trade Act of
    1974.
        Protection of Species at Risk: The Customs Service enforces laws
    protecting threatened species such as the Bald Eagle Protection Act and
    the African Elephant Conservation Act as well as the Endangered Species
    Act of 1973.
        Revenue Collection: The Customs Service provides the nation with
    its second largest source of revenue.
        Stolen Antiquities and Art: The Art Recovery Team works to recover
    stolen pieces of art and antiquities.
        Tariff Enforcement: The Customs Service ensures that U.S. tariff
    laws are enforced.
    Department of Energy
        Energy Emergency Support: The DOE Office of Energy Assurance
    assesses the potential effects of natural disasters such as
    earthquakes, hurricanes, tornados, and floods on energy infrastructure
    and provides energy emergency support in the case of such disasters.
        Human Subjects Research Database: The DOE Environmental
    Measurements Laboratory (EML) maintains the Human Subjects Research
    Database, which contains descriptions of all projects involving human
    subjects that are funded by the DOE, performed by DOE staff, or
    conducted at DOE facilities. EML also provides direct assistance to the
    manager of the DOE Protecting Human Subjects Program, such as assisting
    with production of educational and guidance materials.
        Quality Assessment Program for Contractor Labs: EML also runs a
    quality assessment program for DOE contractor laboratories that measure
    radiation. The program tests the quality of 149 private laboratories'
    environmental radiological measurements.
    Federal Emergency Management Agency
        Emergency Food and Shelter: FEMA gives grants to providers of
    emergency food and shelter for hungry and homeless people.
        Hazards Mitigation Program: FEMA provides grants to States and
    local governments to implement hazard mitigation measures to reduce the
    loss of life and property resulting from major natural disasters, such
    as hurricanes.
        National Earthquake Hazards Reduction Program: FEMA is the lead
    agency on programs to improve the understanding, characterization and
    predictions of earthquake hazards; to improve model building codes and
    land use practices; to reduce risk through post-earthquake
    investigations and education; to develop and improve design and
    construction techniques; to improve mitigation capacity; and to
    accelerate the application of research results.
        National Flood Insurance Program: FEMA administers the National
    Flood Insurance Program, which provides insurance coverage for events
    that are not covered by traditional homeowners' policies.
        Reduce Loss from Fire: FEMA runs a number of programs to reduce the
    loss of life from fire-related incidents, including the National Fire
    Data Center and the National Fire Incident Reporting Systems.
    Secret Service
        Prevention of Counterfeiting: The Counterfeit Division of the
    Secret Service has exclusive jurisdiction to investigate counterfeiting
    of United States securities and obligations including items such as
    food stamps and postage stamps.
        Safe School Initiative: The Secret Service has partnered with the
    Department of Education to help prevent violence in schools.
        Telecommunications Fraud: The Secret Service has become a
    recognized expert in helping to prevent telecommunications fraud such
    as the cloning of cellular telephones.

        Ms. DeLauro. Thank you. Let me move to an area to follow up
    on some of the things that my colleague Ms. Pryce talked about:
    the issue of public health and the new Agency. Many of CDC's
    agencies have both the public health and homeland security
    functions. And some sense that separating those functions could
    harm the public health system, hinder our response to disaster,
    whether they are natural or terrorist in nature. The Commerce
    Committee has recommended that the functions stay with CDC. GAO
    has testified that ``these dual-purpose programs have important
    synergies that we believe should be maintained,'' end quote,
    and that they, quote ``do not believe the President's proposal
    is sufficiently clear on how both the homeland security and the
    public health objectives would be accomplished.''.
        Brookings, in their recent publication, and I quote from
    their review of the public health issues: ``the administration
    has not made a strong case for why a substantial amount of
    biological research should be taken away from the Department of
    Health and Human Services, which already does good work related
    to homeland security in places such as Centers for Disease
    Control and Prevention and National Institutes of Health.''
        Would it not make more sense--I have two or three questions
    here--for the new Secretary to work with the experts at CDC to
    convey threat assessments rather than to try to take over their
    work? Let me just--on NIH. NIH has already have begun efforts
    in biodefense research: NIAID's strategic plan for biodefense
    research, NIAID's biodefense agenda for CDC category A agents.
    I mean, this work is being done by agencies that have the
    resources, they have the technological and scientific expertise
    to carry these efforts out.
        I am concerned about these areas. I just think that we have
    probably the finest capacity in the world today to deal with
    these issues, and I would not like to see them have to try to
    regroup in some ways.
        Let me just say, in addition, if you gave the new Secretary
    the power to set priorities, that could theoretically take
    funding from the NIH. If you have a new department that is
    budget-neutral, where is the money going to come from if the
    Department of Homeland Security Secretary determines that
    smallpox is a greater threat than something else? Who is going
    to decide that greater priority with the limited dollars that
    are available?
        I sit on the Labor/HHS Subcommittee, and it has been a
    trademark of that committee in a very bipartisan way to, if you
    will, let the scientists work their way, without individuals
    such as myself, who are not experts in these fields--we do not
    earmark specific dollar amounts because we think research
    should take its course and go in the direction that it needs.
    It is working extremely well. And it would just seem that how
    are we going to ensure that research in development of the
    technologies for biodefense is synergistic, that it is not
    duplicative, that we do not wind up trying to recreate
    something that we have that is the envy, I might add, of the
    entire world in this effort?
        Governor Ridge. I agree with your conclusion that the work
    of the CDC and the NIH has really put us at the forefront of
    not just public health issues, but general health issues across
    the board. And to the extent that you and I both realize that
    they have got the resources, the infrastructure, we also agree
    on that. I think the President's point is that to avoid--to
    make best use of the dollars that the administration and
    Congress would devote to research and development as it relates
    to homeland security, it would be best provided--that strategic
    focus would be provided through the Department of Homeland
    Security in consultation with the Secretary of Health and Human
    Services, as well as in consultation with some of the other
    departments. But some of those, most of those programs, are
    going to be moved into the Department of Homeland Security, the
    notion being that based on the threat assessment--and I say
    this respectfully--not so much the threat assessment raised by
    the scientific community, but the threat assessment raised by
    the intelligence community, in matching that threat assessment
    with the knowledge and information we have from the scientific
    community, we might differ as to where the next level of
    funding should go for the next R&D project for the CDC or the
    NIH.
        Clearly, it is a matter of trying to set priorities with a
    strategic focus on enhancing our protection of this country. It
    is not to replace these facilities, they are going to end up
    getting most of these resources, but to determine where the
    research--the kind of research that they are going to do. The
    President believes the intelligence community provide the
    information, work with the Secretary of Health and Human
    Services, and then give strategic focus when it comes to
    bioterrorism-related research.
        Chairman Armey. Thank the gentlewoman. The Chair now calls
    upon himself for a generous allocation of time under the 5-
    minute rule.
        Mr. Governor, I have three things I would like to cover.
    Let's start with the question on whistleblowers. There are
    folks that are apprehensive about the vision of Homeland
    Security as it relates to protection of whistleblowers. Would
    you like to speak to that issue?
        Governor Ridge. Thank you, Mr. Chairman. Better than my
    speaking to it, I would just remind everyone that when the
    President announced in his evening speech one night he was
    creating a Department of Homeland Security, he announced that
    there would be whistleblower protection. He has reiterated
    that. We believe that in order to empower this work force, they
    need to understand that their mission is critical to the
    defense of their country, to their homeland. If they see
    something wrong, if they have a better way ahead, they should
    proceed with all the protections that presently exist in the
    law, and under the Department of Homeland Security that is
    exactly what they are going to have.
        Chairman Armey. Okay, thank you.
        There is a big question in the minds of some of our Members
    about the Secret Service. Should the Secret Service or should
    it not be in the Department of Homeland Security? And if it
    should, is it possible to leave a function, such as
    counterfeiting, with another agency, perhaps the FBI? Do you
    have any thoughts on that?
        Governor Ridge. Well, again, we--the President's proposal
    would be to take the Secret Service intact and move it into the
    new Department. We did not see a comfortable division of labor
    there, because as I understand, so many of these men and women
    as part of their training also go through that division. I mean
    there is a cyber component and a crimes component. And,
    obviously, as we know, that these terrorist organizations are
    funded through illicit means. Some of the training they might
    have working with financial institutions, cyber crime, and the
    other related aspects of the Secret Service would only enhance
    their value to the Department of Homeland Security.
        Again, if a Member or two felt that there was a way that
    you could divide some of those responsibilities, we didn't see
    it; but we are certainly prepared to look at it.
        Chairman Armey. Thank you.
        Now, on the question of flexibility and reprogramming, I
    understand the President would like to have 5 percent in
    perpetuity. You have acknowledged your familiarity with the
    mood and attitudes of the appropriators, and you must be aware
    that it is not likely that that is going to happen. But
    shouldn't there be--if you take a look at the transition
    period, you asked for about a year's transition period. From my
    point of view, I can see a need for that kind of magnitude of
    reprogramming just in the business, as it were, of setting up
    shop, trying to determine.
        Is it possible you could work out some kind of a
    formulation to the confidence of the administration that all
    that it must needs do in the next few years, by way of
    beginning with a 5 percent reauthorization and working that
    down as you go into the outyears? Have you given that any
    thought at all?
        Governor Ridge. Well, we have. And the President has said
    that it is his desire to get a department with--that continues
    to enjoy the bipartisan support of both Chambers and both
    parties. And to that end, we recognize that Members of the
    House and the Senate who have responsibility for these dollars
    are not comfortable with that whole approach.
        But, clearly, during a transition period of a year or two,
    it seems to me to make enormous sense, particularly if
    everybody is worried about the cost of transition, the initial
    start-up cost. If you have that transfer authority, I truly
    believe, the President believes--first of all, we think the $3
    billion estimate is absolutely inflated--if you have that
    transfer authority, you can get it done.
        I would still argue as aggressively as I could for the next
    Secretary that a 1 or 2 percent or 2\1/2\ percent--I think the
    Department of Agriculture has 3 percent, and I appreciate that.
    I think that the Secretary of Homeland Security, if he is not
    going to get 5 long term, should at least have as much as the
    Secretary of Agriculture in one form or another, and I am not
    saying that in any pejorative way. It is just that flexibility
    to deal with a nimble, agile enemy gives us the chance to move
    resources, and potentially people and technology, where we need
    it.
        The other thing I want to underscore is reprogramming. We
    would like to have that as a permanent part of the --.
        Chairman Armey. Let me ask you this. If you had the
    reprogramming authority and the transfer authority, I think I
    am hearing you say that you could subsume whatever is the
    transition cost estimated to be as high. Could you subsume that
    within the 37, if you have that flexibility?
        Governor Ridge. Right.
        Chairman Armey. Thank you, appreciate that.
        The Chair will now recognize Members as they seek
    recognition for additional time, and I see Mr. Frost and Mr.
    Menendez, Ms. Pryce--all three of us here? Okay, that being the
    case, let us go ahead and start with Mr. Frost.
        Mr. Frost. Thank you.
        Governor--and of course, as we mentioned at the outset, you
    are a former Member of the House, so you are very familiar with
    the procedures in the House. Mrs. Pryce and I are members of
    the Rules Committee, in addition to being members of this
    select committee. And I wanted to ask you about floor
    consideration of this legislation. We all want this to be done
    in a bipartisan way. There is true bipartisan support for the
    creation of this new Department.
        My question is--there are some committees that feel very
    strongly about their particular views. The Appropriations
    Committee, as you know, on the 5 percent issue, the
    Infrastructure Committee on the Coast Guard and some other
    matters, the Judiciary Committee on the question of how the
    Immigration and Naturalization Service is going to be treated,
    the Government Reform Committee on employees's rights.
        Governor, what is your position as to whether those
    committees should have the right to have individual votes on
    those issues, assuming that any of those issues are not
    resolved satisfactorily to their satisfaction by this select
    committee?
        Governor Ridge. Congressman, I would tell you when I was a
    Member of the House, I definitely had opinions, particularly
    when I was a Member of the House. But as a member of the
    executive branch, the procedures that you choose to follow to
    determine to resolve your differences and determine the level
    of debate, I am going to leave that and defer that to the Rules
    Committee, underscoring that to date, we are gratified that
    there has been, by and large--not completely, but I think by
    and large--evidence of bipartisan support, and hopefully the
    rule can be worked out in a similar fashion. But I will leave
    that up to the Rules Committee.
        The executive branch will offer no suggestions as to how
    you resolve those potential conflicts.
        Mr. Frost. Governor, early in my career, 1979, 1980, the
    House considered the creation of the new Department of
    Education, and we considered that under an open procedure in
    which Members were able to offer amendments on the floor on
    individual issues that they felt strongly about. And in fact,
    we were here quite late several nights, as I recall, during the
    consideration of that bill. But that ultimately permitted the
    House to work its will and then to pass the bill on final
    passage, because everyone felt like they had been treated
    fairly.
        And as one member of the House, I think it is very
    important that all of our colleagues feel they have been
    treated fairly at the end of this process; that they have the
    opportunity to be heard; that the House work its will. And then
    I think we can come together and create the Department in a
    truly bipartisan fashion.
        So I would urge not only you but other members of the
    administration to take the position that this should be
    considered in an open process so that the committees--and this
    is a bipartisan issue in a number of these committees-- the
    committees, the chairman and the ranking member of those
    committees, will feel at the end of the process that they have
    been treated fairly, that they have had their day in court on
    the floor of the House of Representatives. And should that not
    occur, I think you will have real concern when a matter reaches
    the floor and you--the administration might have some
    difficulties that it otherwise could avoid if Members feel like
    they have been shut out and denied the opportunity to be heard.
        Governor Ridge. Thank you, Congressman.
        Mr. Frost. I would follow up on just the question I was
    asking you when we ran out of time, because I am not sure--and
    I would ask if you could refer to your statement, page 21,
    because I am not sure that I understood your answer. This is at
    the top of the page that I have, on page 21 of the matter
    before us, where you say, ``The administration would support
    specific statutory affirmation of the existing rights of
    Department of Homeland Security employees to union
    representation subject to national security authority.''
        Now, what type of statutory affirmations are you talking
    about? It is unclear to me, because either we make a clear
    statement of this or we don't. Either we give you a--we create
    an exception and permit the Secretary to waive all these
    provisions, or we say that they apply. I don't understand the
    qualifier in your statement ``subject to national security
    authority.'' you can't on the one hand say we want to put this
    in statutory law, and on the other hand say we are going to
    take it away.
        Governor Ridge. Well, I believe the President has said, and
    I reiterate, that the men and women who presently have
    collective bargaining rights would move into the new Department
    with their rights intact and would retain those rights to
    organization and to collectively bargain.
        There is, however, a statute that goes back to President
    Carter, as I understand it, that says to this President and to
    future Presidents that under certain circumstances where there
    is a national security interest involved, you may, given the
    exigencies of the time, assert your prerogative and withdraw
    that approval for whatever time period from the process.
        And I think, again, the President has basically stated that
    men and women are moving in with collective bargaining rights,
    they have got the benefits ascribed to them as a result of the
    collective bargaining, they continue to retain that ability to
    bargain collectively as members of this--I think this President
    feels very appropriately that this is a prerogative, a
    discretion, some flexibility, depends on exigent circumstances
    that his predecessors have had and that his successors should
    have as well. I don't believe it is in any way contradictory.
    But I mean, there were a couple of observations made during the
    introductory remarks that said let's not use the Department of
    Homeland Security to undo things or to try to--let's not use
    this time and the interest in the Department of Homeland
    Security to undo things that have been done in the past. Well,
    this was done 20 years ago and I think we ought leave it that
    way.
        Chairman Armey. Thank you. Mr. Watts.
        Mr. Watts. Mr. Chairman, thank you. Governor, the
    Transportation Security Administration has conducted tests of
    airport security at selected airports by sending undercover
    teams through screening areas to probe the effectiveness of
    current passenger screening and airport facility protection,
    and these tests allow TSA to measure the success or failure of
    its programs and of its airport security employees. Obviously,
    there are many areas in the proposed Department that allow for
    internal evaluations, where they can be conducted regularly,
    and improvements made based on results.
        One, do you see this as a part of the administration's
    proposal? And, two, what are the benchmarks that we will use to
    judge the new Department's success? Obviously, a lack of future
    terrorism attacks within the United States will be an
    indication. But how otherwise will we be able to measure the
    effectiveness of the new Department?
        Governor Ridge. You know--I think very appropriately asked,
    Congressman. First of all it is interesting to take a look at
    the TSA. They took a test. They made up the test. They had
    their employees take the test. Obviously the results were
    mixed, and then we publicized them. I think that speaks to the
    kind of country we are and how we operate and how we do
    business. I might argue, under a different set of
    circumstances, you may not want to advertise those kind of
    vulnerabilities. But since this is a new and fledgling agency
    that we want the Congress and the President to maximize their
    protection, those are--there are performance tests that I think
    depend on the nature of the mission of the individual agency.
        Having said that, I think that we will be able to come up
    with performance standards as we deal with first responders,
    the timeliness of the response, the level of cooperation as we
    go through training exercises and the like. I think if we take
    a look at measuring performance at the borders, how quickly--
    and here is one--I think how quickly we are able to integrate
    our information sharing capacity within this country is
    certainly measurable. We ought to set up a realistic time frame
    and get it done within time limits and hold ourselves to those
    limits.
        So I think you can measure time, you can measure quality of
    performance. You can actually have on-the-scene performance
    evaluations during these training exercises. But the President
    feels very strongly as we go about organizing this Department,
    whether it is the borders or first responders, we have to
    build, with the input presumably of the Congress of the United
    States, performance measures so we can test ourselves against
    the optimum effort to achieve homeland security.
        Mr. Watts. You had mentioned just, oh, I guess, the
    administration's asking for a 1 year transition period. I think
    that is going to be tough. What are your thoughts? Obviously, I
    guess the administration thinks that is adequate if they asked
    for a 1-year period. But I think that a 1-year transition
    period is going to be tough. What are your thoughts on that?
        Governor Ridge. It is a very, very aggressive timetable. I
    believe everyone associated with the initiative believes it is.
    I believe that the integration of some of the physical and
    technological and even fiscal capacities of the Department will
    obviously take a little longer than a year. But getting--if the
    Congress approves a Department of Homeland Security and has the
    22 department agencies, or some variation on that, I think the
    President believes by the end of 1 full year they ought to be
    integrated under the Department. Obviously, I think it is going
    to take a little longer to make sure that we have created the
    kind of technology architecture, information sharing capacity,
    and some of the other things that just are going to take us
    more than a year in order to accomplish. So we distinguish
    between putting the organizations together from integrating
    some of the resources.
        Chairman Armey. Thank you, J.C. Mr. Menendez.
        Mr. Menendez. Thank you, Mr. Chairman.
        Governor, I want to pick up where I left off with you and
    your response to my question. I didn't get you to respond
    specifically to the proposition that the analytical unit that
    is being proposed for the FBI would transfer to Homeland
    Security. I guess if you can give me a yes or no, do you
    support that or do you not support that?
        Governor Ridge. Do not.
        Mr. Menendez. Do not support it.
        Governor Ridge. Based on the fact that--again, I thought I
    did, and I apologize for that. That, very appropriately, if it
    is to be considered, may go to our ability as a country to
    reduce the threat to go after the actors. But it doesn't fit
    appropriately in an agency whose responsibility is to reduce
    vulnerability to action.
        Mr. Menendez. And it is exactly what you just restated and
    finished stating to my first question that is one of my
    concerns. First of all, we are asked here to pass judgment on
    the Department before a strategy has been unveiled. And
    obviously, you know, in my thinking as a former mayor and
    whatnot, I always think about, well, what is my strategy? And
    then I evolve from that a plan of action.
        We are being asked here on this committee to go ahead and
    follow, first, a plan of action without knowing what the
    strategy is. And in that respect, I noticed on page 3 of your
    statement, you said ``The proposal to create the Department
    preceded the strategy, because we finished our work on the
    organizational issue first and we wanted to deliver this to
    Congress.''
        My concern is as I listen to this, to your description of
    the Department, it doesn't have an essential element to it
    which I think it needs, which is prevention. I hear you talk
    about protection, but I don't here you speaking in context of
    prevention.
        Now, that doesn't mean I expect the Homeland Security
    Department to have a military operation abroad. That is not
    what I am talking about. But certainly prevention by acquiring
    critical elements of weapons of mass destruction, certainly the
    context of preventing those from coming into a country in the
    first instance, certainly the information sharing that will be
    essential to preventing an attack against the United States,
    those are all critical elements, in my mind at least, of a
    Department of Homeland Security. And, again, it is not only in
    my mind, but again I look at the Brookings' comments on this,
    and they say that ``the mission falls short both of what is
    needed and what would constitute a coherent, integrated
    strategy. A sound homeland strategy should focus first and
    foremost on prevention.''
        So help me with this context of, you know, what I see as
    one of the key ingredients. I agree with all of your other
    ingredients, but I think in the first and foremost instance,
    just like in public health we want to prevent people from
    getting sick, well, we want to prevent ourselves from getting
    attacked. How does this Homeland Security Department engage in
    that regard when we don't know the strategy?
        I understand there is going to be--I think there is going
    to be strategy unveiled tomorrow, so maybe you can give us a
    prelude to give us a sense, since we won't have you here after
    this hearing, how does that strategy that will be unveiled
    tomorrow relate to this Department that we are being asked to
    pass judgment on, and where are the prevention aspects of that?
        Governor Ridge. First of all, Congressman, the work on the
    strategy has been an ongoing effort since the end of last year.
    And once it is rolled out tomorrow, you will note that emerging
    pieces of that strategy were included in the President's 2003
    budget request which was submitted earlier this year. You will
    also note that emerging pieces of that strategy are reflected
    in how the new Department of Homeland Security is organized. So
    I don't want to leave you with the impression that we came up
    with an organization and thought about a strategy. The
    operation at the Office of Homeland Security has to build and
    take a look at the existing infrastructure, take a look at the
    kind of partnerships that we need to create with the other
    levels of government in the private sector, see if the existing
    infrastructure within the Federal Government is adequate; and,
    around what we viewed as priorities, develop both a strategy,
    and, as an agent to execute the strategy, come up with a
    Department.
        So it has been a process that has been, I think, consistent
    with the President's directive of October 8. Prevention is very
    much at the heart of the President's homeland security
    strategy. The CIA is engaged in preventive work. The Department
    of Defense is engaged in preventive work. The Federal Bureau of
    Investigation is engaged in preventive work. But it would also,
    if you take a look at the need to consolidate--.
        Mr. Menendez. Could I just interrupt you on that point,
    because I just want you to follow through. Yes, they are all
    involved in prevention, but this is going to be the Department
    that has the coordination efforts towards, I hope, prevention.
    How is that going to take place?
        Governor Ridge. Well, perhaps again we have to revisit,
    one, the, I think, very appropriate division of labor within
    the Federal Government as to who has primary responsibility to
    go after the actors and who has primary responsibility to deal
    with the potential of action. The very fact that you harden a
    target and you offer protective measures to a particular sector
    or at a particular target is a preventive action.
        Terrorists are strategic actors. If you have hardened this
    target, you have prevented, conceivably--I mean, there are no
    guarantees, but they may look to another target.
        Prevention involves sharing information at the borders. We
    want to prevent terrorists from coming in. We want to prevent
    materials or weapons that could be used against us from coming
    in. So there is preventive action at the border. There is
    preventive action inherent in the strategic focus given to some
    of the research and development that this new Department would
    be charged with as it relates to homeland security. What are
    the--do we have some diagnostic capability that enables us to
    identify a potential terrorist incident? There is a preventive
    notion within the analytical unit of the Department of Homeland
    Security. You have got the CIA and the FBI looking at this
    information, but you also have the Department of Homeland
    Security. It is not its primary function, but you have another
    set of eyes and sets of experience that are looking at the same
    kind of information.
        So I think one could argue that, as the President has said,
    there are three goals and three reasons for this organization
    to exist: prevent a terrorist attack--sometimes it does it
    independently, sometimes it does it in collaboration with other
    agencies of the Federal Government; reduce our vulnerabilities,
    that is the second goal; and the third, to prepare ourselves to
    respond as quickly as we possibly can, to minimize life and
    loss of damage in the event an incident occurs. Prevention is
    at the top of the list within this Agency.
        Chairman Armey. Thank you, Governor. Ms. Pryce.
        Ms. Pryce. Thank you, Mr. Chairman. Actually, my question
    has been asked and answered. But if I may just take a moment to
    add to what Congressman Frost has been advocating as to an open
    rule process here. Now, I have no preconceived notion of what
    this rule should look like. I sit here today with no clue how
    we should proceed on that level. But to have the Department of
    Education used as an example of how we should model our
    activity surrounding this bill, I am not sure that that, just
    because everybody went away happy in Congress because they got
    to add their particular fingerprints to the Department of
    Education, I think is not necessarily a good thing. I mean, I
    think the Department of Education happens to be one of the most
    burdensome, top-heavy, inefficient organizations that has ever
    been created in the history of this country, and I certainly
    hope we are not going to use that as a model. And I think that
    this committee can do better, and that this Congress can do
    much better.
        And with that said, if you would like to comment, Governor,
    you may. But I just couldn't resist making that comment.
        Governor Ridge. This sounds, very appropriately, like a
    point of view--differing points of view shared by the
    legislative branch, and I will let the legislative branch work
    them out.
        Ms. Pryce. Thank you.
        Chairman Armey. I want to compliment the Governor on his
    grasp of the notion that discretion is often times the better
    part of valor. Ms. DeLauro.
        Ms. DeLauro. Thank you very much, Mr. Chairman.
        And, Governor, let me just--I will be brief in my
    statements and I will just ask you to do the same in terms of
    response, so that we get everyone in to ask as many questions
    as they can, do you agree with the Commerce Department in
    leaving the CDC functions where they are and not transferring
    the--.
        Governor Ridge. Agree with the Commerce Department to do
    what, Congresswoman?
        Ms. DeLauro. The Commerce Committee has recommended that
    the functions of CDC stay where they are and not move.
        Governor Ridge. We would hope that that might be
    reconsidered, but we also understand in private discussions
    with the Commerce Committee and others, that there should be,
    might be, some flexibility on keeping the public health
    component within CDC, and we continue to entertain those
    discussions with the folks on the Commerce Committee; because
    whether they build it up from Commerce or whether they build it
    from up the Department of Homeland Security, an enhanced public
    health component is good.
        Ms. DeLauro. Thank you, Governor. When will we have a
    response to the Obey letter? The timetable is to mark this up
    on Friday. Will we have a response to this question? Can we
    expect that within the next day or so?
        Governor Ridge. The Obey letter is as long as the
    legislation we sent to the Hill, and it is a rather exhaustive
    piece of research, and I think they are going to find many of
    the answers to their questions in the strategy that will be
    released tomorrow. We will certainly acknowledge the receipt of
    that letter and try to answer as many questions in as timely a
    fashion as we can.
        Ms. DeLauro. A third question has to do with the way that
    the proposal, at least on the face of the wording limits, the
    access to information by the inspector general. And there
    again, I would just ask you to comment on this. As I understand
    it, it said we are subjecting the new Department to the
    Secretary's control and would authorize the Secretary to
    prevent the IG from doing work in areas involving certain
    information, areas quite broad and on a broad basis.
        Now, the IGs, again as I understand it, at certain other
    agencies like Defense and at Justice, have similar limitations
    on access. But in those cases, the IGs are directed to report
    to Congress if the relevant Secretary impedes their access to
    necessary information. This important check has been eliminated
    in this new Department. The proposal would give the
    responsibility of reporting interference with an IG
    investigation to the Secretary, who would have an obvious
    conflict of interest, if you will, reporting if there were
    something there.
        Can you talk to us about why the difference here than in
    Defense or Justice?
        Governor Ridge. The President strongly supports the notion
    of having an empowered and independent Inspector General taking
    a look at the activities of Homeland Security. It is my
    understanding that the language is very similar to that that
    relates to the Secretary of Defense as he executes his
    responsibilities, as well as the Attorney General, so there is
    nothing unique about the language. I mean, Congress has
    approved this kind of language as it relates to existing
    departments.
        Ms. DeLauro. But apparently it has a difference in existing
    departments, particularly as I mentioned in Defense and
    Justice. And maybe--if that is not the case, maybe you can
    clarify that for us, because in the way--the way it currently
    reads is, it makes it a different set of circumstances than
    Defense and Justice. So if that is a wrong interpretation, then
    I would appreciate if we could get some clarification.
        Governor Ridge. Then it would be my job to go back and
    clarify it for you. Clearly there are some--there is within
    this Department, conceivably, some very, very sensitive
    information. That is not to say you shouldn't have an Inspector
    General. It is just simply to say that, one, the President
    wants an independent, empowered Inspector General.
        We thought we covered both the needs for the Inspector
    General as well as whatever internal concerns anybody might
    have by using the same language that we have with the
    Department of Defense and the AG. And I will just get back with
    you and clarify the language.
        Ms. DeLauro. If you could clarify that language, that would
    be appreciated.
        Governor Ridge. Sure.
        [The Select Committee did not receive the information in
    time for the printing of this volume. When received, the
    information will be retained in the Committee's files.]
        Ms. DeLauro. Mr. Chairman, I have another question. And it
    just the--this is about Defense Department coordination. And
    let me just find out from you about the Department of Defense
    and Homeland Security. We have one Department, responsible for
    fighting terrorism abroad, working with a new Department,
    responsible for fighting terrorism in the home. What I am
    particularly interested in here is how are the two Departments
    going to handle competing demands for the services of the Coast
    Guard and National Guard? Has the issue been discussed? Is
    there a process in place for this kind of coordination? And has
    there been any thought to whether the two Guard services will
    have the necessary capabilities to meet both the Departments'
    demands?
        Governor Ridge. The new Department of Homeland Security's
    ability to respond to fulfill its mission is enhanced by the
    Unified Command Plan through which Secretary Rumsfeld creates a
    North American Command. Clearly now that there is someone, a
    North American Command, who--among other multiple
    responsibilities, there exists the homeland security function--
    gives the Secretaries working together, Secretary of Homeland
    Security with the Secretary of Defense, an opportunity to
    establish procedures and review these issues long before the
    need arises to deploy these resources.
        I would share with you that in my capacity as Assistant to
    the President for Homeland Security, that occasionally these
    issues about coordination came up prior to September 11, and we
    just sat down with the respective Secretaries and worked them
    out.
        Ms. DeLauro. But we have no method for coordination of the
    Coast Guard and National Guard right now, before going into the
    process.
        Governor Ridge. Well, it is the same mechanism that exists
    anytime you have an interagency challenge. The Secretaries sit
    down and work it out in the best interest of this country.
        Ms. DeLauro. Thank you. Thank you, Mr. Chair.
        Chairman Armey. Thank you, Ms. DeLauro. Now, Mr. Portman
    from Ohio.
        Mr. Portman. Thank you, Mr. Chairman.
        Governor, I have a few questions. I would like to get
    through all three of them, and the first is with regard to
    another clarification--I think you clarified the whistleblower
    protection issue, well, that that will be maintained in the
    President's proposal.
        With regard to freedom of information, there has been also
    some discussion whether the FOIA standards would apply. There
    is an exemption I see in section 204 in the legislative
    recommendations. Can you talk for a moment about how the
    Freedom of Information Act would work under your proposal?
        Governor Ridge. Yes. The limited exemption requested by the
    President in his initiative really significantly improves our
    ability to secure information voluntarily provided by the
    private sector about their own vulnerabilities of their
    operations. Clearly, there are critical pieces of
    infrastructure in this country, energy and telecommunications
    and financial institutions and the like, that we would all
    agree are pieces of critical infrastructure. This limited
    exemption gives them the ability to share that information with
    the Federal Government and ostensibly--depending on what kind
    of protective measures might be taken--with the State and local
    authorities under the right circumstances so that we could take
    protective measures to protect those sectors of the economy. It
    is a limited exemption, and we have heard it over and over
    again in our discussions with businesses and trade
    associations, it is proprietary. And, candidly, they don't
    want--they want to be forthcoming but they don't want to
    publicize it, necessarily, give a road map for the terrorists.
        Too, there may be some competitive implications that we
    can't appreciate unless we are involved in the sectors
    themselves, but I think this limited exemption fulfills the
    purpose of Homeland Security, but also continues to do justice
    to the Freedom of Information Act's original intent.
        Mr. Portman. I notice in your statement you had estimated
    that 80 percent of the infrastructure that could be vulnerable
    is in the private sector.
        Governor Ridge. We estimate about 85 percent of the
    critical infrastructure of this country is owned by the private
    sector.
        Mr. Portman. You assured us early this afternoon that the
    traditional non-homeland security functions of agencies like
    the Coast Guard, like the Immigration Service, would be not
    only maintained but could be strengthened, you indicated, in
    this new Agency.
        Can you touch on another important agency that doesn't have
    a traditional non-homeland security function but has a new
    function in the Transportation Department, and that is the
    Transportation Security Administration, TSA. Why is it
    important that TSA be part of the homeland security, or is it
    important?
        Governor Ridge. Well, it is very important because of the
    globalization of the economy, the globalization of
    transportation, that we have an agency who, Congress said, your
    primary mission, your exclusive mission, is to secure
    transportation. That means working in concert with other
    border-related organizations--the INS, Customs, Coast Guard,
    people coming into our airports, other seaports, and across our
    land ports--having the Transportation Security Administration,
    its budget, its personnel, and its mission very similar, its
    mandates very similar to the mission of the new Agency. We
    think it is a perfect fit.
        Mr. Portman. You talked earlier about managerial
    flexibility. I think you made a good case on your behalf that
    you need agility to be able to respond to a natural threat. You
    talked a little bit earlier about some of the personnel
    flexibilities.
        I would like to know if you can tell us how we can be sure
    that the workers who are on the lines now, on those front
    lines, will have their views, their concerns, their input, be
    made part of the managerial flexibility you would like to
    prepare for Congress.
        You talked earlier about the unions. I note that you said
    that union member collective bargaining rights would be
    maintained, and you reiterated that in response to a question
    from the other side. I also wonder about those nonunion
    members. As I look at it, about a third of the employees in
    this new Department would be union. Perhaps half of those are
    not dues-paying members. This leaves a significant number of
    employees who would not be represented by the union. I think it
    is very important that the union be brought into it, but how
    about those are who nonunion members? How would they be
    represented, in a sense, and how would they have their input
    included in your managerial flexibility?
        Governor Ridge. Well, first of all, I can't anticipate what
    the new Secretary would do, but I think that based on my
    experience as Governor, I suspect many of your own personal
    experiences, you are setting up a new entity, and as someone--a
    couple of you have said earlier, you can move lines around on
    the chart, but if you really want to maximize the protection of
    America, we have to engage the men and women within this
    Agency. There has to be a sense of mission, there has to be a
    sense of purpose, there has to be a sense of connection. They
    have to feel comfortable that if they come forward with ideas,
    some of which may be critical to how things have been done in
    the past, that needs to be embraced and not rejected.
        They have to be empowered not only with a sense of mission,
    they have got to be empowered with technology. One of the
    things that we know we haven't done a very good job as
    government generally is empowering these individual men and
    women with technology. And so I could only imagine that the new
    Secretaries working to empower these men and women, union or
    nonunion, involves a very aggressive outreach and continuing
    engagement of them across the board on all these issues. I
    don't believe you maximize the effectiveness of this Agency by
    ignoring the reality that all these men and women are united by
    a common goal and want to be part of securing America, and it
    just has to be, I suspect, a program of not only continuous
    improvement but continuous outreach.
        Mr. Portman. Mr. Chairman.
        Chairman Armey. Thank you. And I want to thank the panel. I
    want to--Governor, at the outset of today's proceedings, I
    mentioned that we in the House are very proud of you as being
    one of our own.
        In that regard, I was reflecting throughout today's debate,
    the President of the United States since September 11 of last
    year has been in a running gunfight with some of the most
    insidious forces of evil we have ever seen on this Earth. He
    has met every exigency that has come to him, every urgency,
    every possible proposal, with a sense of calm and resolve; and,
    indeed, on each and every occasion that he has proposed to the
    Congress of the United States he has done so with a calm and a
    sure respect for this institution, this legislative branch.
        It amazes me sometimes to see a man, who cares so much and
    must so deeply worry about how things will turn out, still be
    able to have the patience and the respect to watch this
    legislative process in all confidence that this democracy will
    work it out.
        I have no doubt that the President has sustained in his
    very difficult business of watching people legislate his
    proposal by the confidence that he must take from knowing that
    you yourself was a member of this body and an example of who we
    can be at our very best.
        So let me thank you, Governor, for what you have meant to
    this body, what you now mean to this Presidency, and, indeed,
    to this country and for your testimony today.
        Mr. Menendez. Mr. Chairman, if I may, I have an inquiry. I
    was under the understanding that Governor Ridge was going to be
    here until 4:00. Has that been altered?
        Chairman Armey. Does the gentleman have additional
    questions?
        Mr. Menendez. I do. Exactly because of all the great things
    you said, I want to take advantage of the Governor's being
    here, if I may.
        Chairman Armey. Mr. Governor, it is not the Chair's desire
    to cut anybody off from further questioning. Let me just say
    that at the conclusion of today's hearing I will pick up on
    where I am leaving off.
        I do want to make one final observation while I am still on
    my time. We need to remind ourselves that as the President
    proposed the Department of Homeland Security to us at a joint
    meeting of our bicameral leadership at the White House, he made
    the observation I have so many times heard him make: ``the
    President proposes, the Congress disposes.'' he has always
    respected that, and he is acutely aware of the fact that the
    rule under which this bill will be considered on the floor of
    the House of Representatives is not a decision for him to make,
    but, indeed, by virtue of the very agreement that created this
    committee, it is already determined that the rule under which
    we will consider this legislation on the floor will be that
    rule recommended to the Rules Committee by the Speaker and the
    minority leader. So that indeed we can rest with a confidence
    that the rights of the Members of this body to participate
    under that rule will be determined by the Speaker and the
    minority leader, with the President's appreciation,
    understanding and applause, I have no doubt. So that is
    something we need no longer concern ourselves with.
        To complete my thought on you for the moment, when and if
    you find yourself in a running gun fight, it is always nice to
    be able to call upon a deputy that is reliable and will watch
    your back; and you do that and you do that well. Again, it has
    been for me today quite a pleasure to watch you working on
    behalf of this country as a representative of this
    administration.
        With those comments, I will then recognize the gentleman
    from New Jersey.
        Mr. Menendez. I want to thank the Chairman. It is exactly
    because of the complimentary remarks you made about the
    Governor that I want to take advantage of picking his brain as
    we try to get through this.
        Governor, a couple of quick questions. On your response to
    Mr. Portman about FOIA, one of our concerns is an industry
    representative gives the Department, for example, what
    chemicals are at their plant. Under the right-to-know
    provisions for communities, now that would not be FOIAable.
        So our concern is, yes, we want you to get the critical
    infrastructure information from the private sector, but it can
    be used in a way in which other issues can be affected by the
    provisions of providing that information to you. So we need to
    make sure that we safeguard those. That is point number one.
        On TSA, the Transportation Committee voted not to not
    include TSA in the Department of Homeland Security but to delay
    it until that time in which it meets its mandate, because it
    feels the transfer at this time would in fact inhibit it
    meeting its mandate in an appropriate time. I would like you to
    respond to that.
        Thirdly, as I have traveled with my colleagues as the Chair
    of the Task Force on Homeland Security for House Democrats
    across the country and my own district and State back in New
    Jersey, which, of course, was right across from midtown
    Manhattan and we lost a lot of citizens on September 11, local
    responders are looking at this creation of this Department and
    saying, what does this mean to me?
        You have so often said, when the hometown is secure, the
    homeland is secure. Do you foresee this Department and its
    structure as presented to us by the administration does not
    speak to that? Do you do you see this being a resource beyond
    information to local, county and State officials? Do you see it
    being a funding source to some degree in that regard?
        Because, right now, I don't get the sense that local
    responders have bought in to the idea that this is going to
    necessarily be helpful in their obligations and our collective
    desire to have them there.
        Then, lastly, do you agree that the new legislation should
    not alter or diminish the regulatory authority of any other
    executive agency or establish regulatory authority at the
    Department of Homeland Security, except to the extent that the
    functions of another agency that includes such authority are
    specifically transferred to the new Secretary of Homeland
    Security?
        What I am concerned about here is, you know, questions of
    the Nuclear Regulatory Commission, the Environmental Protection
    Agency and other agencies with existing authorities that are
    not being transferred here but may have something to do with
    homeland security, should they not continue to exercise these
    authorities independently from the Department of Homeland
    Security?
        I know it is a lot, but I figured I would put it all out
    there. So, FOIA, how do we limit to ensure that you meet your
    goal but we don't prevent other existing laws from being
    circumvented; what is your view on the delay of the
    Transportation Committee's decision bipartisanly to not include
    TSA until their mandate has been met; how do you look at the
    question of local first responders; beyond providing
    information, do you see the Department being a vehicle for
    resources; and, lastly, on that issue of regulatory
    information?
        Governor Ridge. First of all, Congressman, I believe that
    the limited purpose for which the Freedom of Information Act
    exemption has been designed meets your concerns about the
    public's right to know. Frankly, all the information, we have
    had so much information out there in the public, I dare say
    this is probably more prospective rather than retroactive,
    because it is out there on a hard drive someplace, somebody has
    access to it. I think this is as much prospective.
        There may, however, be some vulnerabilities as it relates
    to the kind of chemicals that are there or the procedure itself
    that we need to know. So I will, if need be, visit with you
    personally about that language, because I understand your
    concern. Several Members on both sides of the aisle have raised
    it.
        I do believe it is critical that we have a limited
    exemption so they can be forthcoming to not only the Federal,
    but this also relates to your first responder question. These
    are the men and women that are going to show up if it is that
    petrochemical plant, if it is that utility, if it is that power
    facility or the like. If there is some vulnerability there,
    they may need to know it, and we have to be able to protect
    that information and how we get it to the first responders. We
    will continue to work with you.
        The TSA, the amendment, I am a little bit puzzled by it,
    because I think the congressional mandates, most of them were
    for the baggage check and to get the personnel up and running,
    conclude by the end of this year. Now, there may be some
    mandates, time frames, that take them into next year. But since
    we have a full year of transition, I cannot imagine any
    congressional mandate as it relates to TSA that will not be met
    under the existing time frame. I may have to familiarize myself
    a little bit more with the mandates, but we have been working
    with the TSA on ramping up the personnel, getting the screeners
    in place, getting the technology in place. So I think it can
    certainly be met within the confines of the existing enabling
    legislation.
        The first responders, frankly, one of the biggest
    challenges I think we have is figuring out a way to get them
    the information. That is going to be-- that is as high a
    priority as getting them the money.
        If you take a look the President's 2003 budget, there is a
    first responder initiative of about $3.5 billion that is for
    equipment, training and practice sessions. We have been working
    with the mayors and the League of Cities and a lot of the local
    government organizations, and we have been working with the
    national chiefs of police and the law enforcement community and
    the firefighters and the EMTs, so as that money is hopefully
    allocated at that level by the Congress in the budget, 75
    percent of that will go down directly to the first responders,
    down to the local levels. We think it is very critical.
        I say this with great respect as a former governor. It is
    great and I think it is appropriate that we give 20-25 percent
    to the governors, because they have disaster assistance centers
    they may have some flexibility to use to help counties. But we
    don't want the State legislators nor does anyone else want the
    State legislators reprogramming that 75 percent, because those
    dollars will be distributed based on a plan designed by the
    local government and first responders.
        So it is about resources, clearly, not only this year but
    future years. But, also, you raise a very good point. We need
    to make sure they have access to certain sensitive information
    as well and do a better job of sharing that information,
    particularly with the law enforcement community. So that
    continues to be a priority of this agency.
        Finally, the regulatory authority of the EPA and NRC, with
    very few exceptions, remains with those agencies, and should.
        Chairman Armey. Anybody else? Mr. Portman.
        Mr. Portman. Just quickly, Mr. Chairman.
        In response to the previous question, it is my sense the
    first responder community is supportive of what we are doing
    here and that the governors are supportive and that, in fact,
    the State and local organizations, so-called ``big seven'' out
    there, are supportive. Is that your sense?
        Governor Ridge. Thank you for that reminder, Congressman.
        One of the characteristics of the Office of Homeland
    Security within the White House is outreach to the non-Federal
    Government entities. We work with the governors, and we work
    with the mayors, and they are very supportive. But there is a
    caveat. They like the fact they are going to get the money.
    They just want to make sure it is distributed according to the
    plan that they helped design, not according to, frankly, the
    priorities that might be set by a State legislature rather than
    the mayors and the first responders. So they have been very
    supportive.
        They also like the notion of a one-stop shop, because you
    have the Department of Justice Office of Preparedness, and FEMA
    has one, and there are a couple other agencies. They like to
    see themselves as going to one agency that has control over all
    those resources for preparedness.
        Mr. Portman. Just one quick comment. I am finding when I am
    back home that is exactly what they are looking for. They want
    help with equipment, training, communications, certainly the
    funding that the President has proposed and that the Congress
    will appropriate, but also this notion that they can go one
    place in order to get the information they need, including the
    enhanced warning.
        Second, with regard to the private sector, those who have
    technology that they are willing to lend to this effort, my
    sense is they, too, are supportive of this. Can you comment on
    that?
        Governor Ridge. The genius of our enterprise-- it is not
    the genius of the enterprise system but the genius of Americans
    engaged in the freedom of enterprise I think offers us long-
    term, significant solutions to a variety of challenges that we
    have in this country.
        The Science and Technology Director, who I think is more
    appropriately named in the Weapons of Mass Destruction
    Countermeasures Unit, but I think this science and technology
    piece I think will give us an opportunity.
        If in addition to being able to target and assess existing
    technology to determine whether or not it meets our needs, that
    will do us a lot of good. But if there is a piece of technology
    out there that we need to deploy immediately or a vaccine that
    we may want to get out there but there is no market for it,
    there may be some pieces of technology, be it life science,
    information, whatever, for which there is no market but the
    country needs, that is one of the reasons that I would like to
    see the new Secretary have the flexibility to take some of the
    money, make those acquisitions and deploy them.
        So the President feels very strongly that the technology
    community will be a significant feature of how we secure
    ourselves in the 21st century.
        Mr. Portman. One of the criticisms of our current system is
    those who do have technology, science and so on to add to this
    effort don't feel there is a one-stop shop. In other words,
    there is a difficulty accessing the Federal bureaucracy.
        Governor Ridge. Very difficult. You and your colleagues are
    besieged by letters and visits, whether here or back home in
    the district, ``this is the technology innovation that I think
    can help solve this part of the homeland security problem.''.
        We need a central clearinghouse where not only Members of
    the House and Senate but the Office of Homeland Security, let's
    take advantage of the academic laboratories and the national
    laboratories. Let us have them assess these pieces of
    technology and then reach some conclusion as to, if there is an
    application, how we go about paying for the application.
        But they are all over now. We need a centerpiece, and this
    directorate within the homeland security will be that one-stop
    shop for evaluation and potential application.
        Mr. Portman. Thank you, Mr. Chairman.
        Chairman Armey. Ms. DeLauro.
        Ms. DeLauro. Thank you, Mr. Chairman.
        I would just like to follow up on the FOIA question and ask
    if there would be any willingness to revisit the exemption as
    it is currently established. Because the bill doesn't define
    infrastructure vulnerabilities and other vulnerabilities to
    terrorism. Clearly, no one wants to compromise our
    vulnerabilities, and we want to make sure that sensitive
    information is safeguarded, but there is kind of a sweeping
    nature of this exemption.
        Let me just ask you this, Governor. Do you not think that
    there is exemption for FOIA which already protects from
    disclosure certain confidential trade secret information that
    private entities supply to the government? Do you not think
    that is strong enough?
        Governor Ridge. In our consultation with the private
    sector, we concluded that it was not. I don't, without
    suggesting that the language is defective or insufficient in
    any way. I will be happy to have our lawyers come by and talk
    with you, but we think it is structured in such a way to give
    us the limited exemption.
        But, as the President has said, go up to the Hill, work
    with Members of the Congress. If they have got concerns, try to
    address them. That is not conceding the point. We think the
    language is good and appropriate, but we will be happy to send
    our lawyers over to talk to you about it.
        Ms. DeLauro. I asked the question because sometime earlier
    this year the Director of the FBI's National Infrastructure
    Protection Center was quoted as saying, ``We believe that there
    are sufficient provisions in FOIA now to protect information
    that is provided to us.''
        So the FBI believes that the current protections are
    adequate to what needs to get done in terms of a new entity. If
    there is a difference of opinion within the agencies or the
    administration and so forth, we would like to have that. I
    don't know if you concur with the FBI or if the administration
    does or what your response is to their view of the protections
    at the moment.
        Governor Ridge. We believe--my colleague just gave me the
    language--it is very strictly drawn. It, in fact, is one
    sentence, and I would like to read it, Section 204 of the
    President's initiative. ``information provided voluntarily by
    non-Federal entities or individuals that relates to
    infrastructure vulnerabilities or other vulnerabilities to
    terrorism and is or has been in the possession of the
    Department shall not be subject to FOIA.''
        We think that is limited. We think it is narrow. We think
    it is appropriately drawn.
        Ms. DeLauro. Do you disagree with the FBI?
        Governor Ridge. I can't speak to the FBI's interpretation.
    All I know is, in discussions with--again, it is a reflection,
    maybe in the society and in the world in which we live in,
    there are a lot of people in the private sector are afraid that
    this opens them to potential litigation.
        Ms. DeLauro. But there is a difference of opinion between
    the FBI and the private sector, is that correct?
        Governor Ridge. It is a difference in legal interpretation
    by a group of lawyers--.
        Ms. DeLauro. By the FBI and the private sector.
        Governor Ridge. --and based on our experience and
    discussion with several hundred companies and associations,
    this was of a particular concern. It is one sentence.
        Ms. DeLauro. So that the private sector--in terms of the
    drafting of this piece, the private sector has prevailed in
    their view of what this should be after internal discussions?
        Governor Ridge. Congresswoman, I don't know if anybody at
    the FBI was present during the very specific discussions we
    were having with certain sectors of the economy about the
    release of specific kinds of information. So before I conclude
    that we are even at odds, we have to make sure that we are even
    talking about the same kind of information disclosure.
        Ms. DeLauro. The FBI, the Director made that. That was a
    public statement.
        Governor Ridge. The terrific Director is a great lawyer,
    and he is doing a fabulous job. I am just saying I am not sure
    his conclusion is based on the kind of information around which
    we saw some reluctance.
        Ms. DeLauro. By the private sector.
        Governor Ridge. By their attorneys.
        Ms. DeLauro. Thank you very much, Governor.
        Chairman Armey. Mr. Frost.
        Mr. Frost. Mr. Chairman, if I may just make an observation,
    I think history is instructive. As I mentioned earlier, when
    the Department of Education was created in 1979, that was done
    under an open rule; and when the Department of Energy was
    created in 1977, that was also done under an open rule, where
    all amendments could be offered.
        I have no other comments.
        Chairman Armey. Mr. Portman.
        Mr. Portman. Mr. Chairman, just briefly.
        Thank you for indulging us, Governor. I think with regard
    to FOIA we have the same concern, and we want to come out in
    the same place.
        The language that the Governor read is very narrow. It has
    to do with infrastructure that is vulnerable to terrorism. The
    FBI exemption, as I understand it--and I am getting into issues
    that I am not expert on, and I may miss something--but there
    are specific exemptions in current law, as you know--I think
    there are 10 of them--for FOIA. One is law enforcement. So what
    the FBI is saying with regard to law enforcement information
    that they receive, they feel as though they currently have an
    FOIA exemption relating to law enforcement.
        Forget what the private sector wants. It is what we want.
    What we want is to have the infrastructure information so we
    can harden those vulnerabilities so that our citizens don't get
    hurt by terrorists. I think it is important to make the point.
    This is not the FBI versus the private sector or even the
    private sector at all. It is what we want.
        Ms. DeLauro. If the gentleman would yield, I would concur
    with the gentleman. I did not raise the issue of the private
    sector. I didn't know that that was the basis on which a
    determination was made. I was moving toward the agencies, what
    we want. FBI, CIA, State Department, as I understand it have
    adequate means today.
        I am coming from the same place that you are. It was a
    revelation to me that the private sector had a role in
    determining how we move toward trying to deal with this
    information.
        Thank you.
        Mr. Portman. Reclaiming my time, the important thing, I
    think we agree, is that we are sure that these infrastructures
    that all of our citizens depend on--and this includes high
    technology, it includes gas pipelines, it includes power plants
    and so on--.
        Ms. DeLauro. Absolutely. We are equally concerned about the
    safety and security of this Nation and its people.
        Mr. Portman. That is the key. That is what we ought to end
    up with in terms of the FOIA exemption.
        I thank the Chairman and yield back.
        Chairman Armey. The gentleman from New Jersey. I knew you
    were going to get me.
        Mr. Menendez. Two out of three isn't bad, Mr. Chairman.
        Governor, just let me follow up on your response to Mr.
    Portman about local responders, that the entities that might
    represent them, police, firefighters, emergency management
    personnel, municipalities and others are supportive, as you
    stated. I guess you mean the National League of Cities, U.S.
    Council of Mayors. They are all on record as supporting?
        Governor Ridge. Yes.
        Mr. Menendez. But they support because they believe in part
    that they are going to receive resources that will be dedicated
    at their level, is that not true?
        Governor Ridge. That is correct.
        Mr. Menendez. They are hoping, as you described before,
    that they will get it at their level.
        Governor Ridge. Correct.
        Mr. Menendez. And, thirdly, in this regard, how do you see
    within the Department that effort being undertaken? Is there a
    specific Under Secretary that you have this focused on? How do
    you see that taking place for police, firefighter, emergency
    management, municipalities, counties, States? How do you see
    that taking place? How is the functioning aspect of that within
    the proposed Department?
        Governor Ridge. Within the Department there is an Under
    Secretary for Emergency Preparedness and Response. The critical
    piece of that unit, if Congress allows for the transfer of FEMA
    from an independent agency basically to the new Department of
    Homeland Security, that becomes the critical mass within that
    particular unit.
        It is through that Under Secretary and through the
    apparatus of FEMA that the dollars would be distributed. This
    new Under Secretary and his team, ostensibly FEMA, would be the
    ones responsible for helping plan and prepare the exercises,
    working on distribution of these resources.
        It is through FEMA--and I am glad you raised this point--
    within the emergency supplemental--and one of these days you
    are going to work out all of your differences there. I am
    confident of that. But within the supplemental there is $175
    million that would go to FEMA.
        Part of the reason that the President requested that kind
    of money to FEMA now, even in anticipation of the 2003 budget,
    is the President would like to get FEMA to take that money and
    then work with the States and locals and first responders to
    develop State-wide plans for the resources that we hope
    Congress will approve in the 2003 budget. So there is a plan.
        The operation would say that, once the emergency
    supplemental is passed, the States with some of these resources
    are going to develop State-wide plans to build up capacity. If
    Congress supports the President's appropriation in 2003, and,
    again, during the appropriation process one of the commitments
    we have made with the local government and first responders is
    working with them on language to make sure they are not
    bypassed and money is distributed according to the plan they
    helped write, they would get the resources directly through
    FEMA.
        Mr. Menendez. Thank you for that response.
        Let me ask you one other question. Do you support--does the
    administration support a statutorily created, similar to the
    National Security Council, coordinating element within the
    White House? Because there will still be many agencies that
    will have some elements that are not being proposed to be
    transferred into the Department of Homeland Security. Do you
    support, you on behalf of the administration, support that?
        Governor Ridge. Categorically, I wouldn't say no, we don't
    support it, but I will tell you there is already an apparatus
    set up by executive order creating the non-statutory Office of
    Homeland Security, the position I have right now. There is a
    Homeland Security Council. It is comprised of several members
    of the President's Cabinet.
        The National Threat Advisory System was a product of
    consultation with members, principals, members of the Cabinet.
    Early on, the support for some kind of border consolidation, a
    modest form of consolidation that the administration proposed
    several months ago, was a product of that process where you had
    a Homeland Security Council comprised of members of the Cabinet
    working with the Office of Homeland Security.
        Mr. Menendez. Before my time runs out, you in essence say
    there is a need for a coordinating function; you just don't
    believe there is a statutory need?
        Governor Ridge. Correct.
        Mr. Menendez. Thank you, Governor, for your answers.
        Mr. Chairman, a procedural question to you. Today is Monday
    already. We are still, I assume, on a schedule that looks
    toward Friday for a markup. In order for us to mark up on
    Friday, members of this committee would have to know what we
    are marking from so that any proposed amendments to deal with
    some issues we are concerned with could be appropriately
    drafted.
        Could you give us some sense of that process, if you are
    ready to, today? But, if not, certainly by tomorrow so we could
    be prepared, looking forward to that Friday markup?
        Chairman Armey. Thank you, Mr. Menendez. I thank the
    gentleman from New Jersey. I have a mental block here. I don't
    know what it is.
        The way we plan on proceeding is to have, obviously, our
    Chairs and ranking members, perhaps the GAO in, before we can
    complete our hearings. Then we would try to prepare a
    chairman's mark to be distributed after we hear from our
    chairmen but in time for you to study it before that.
        Our staffs, all of our staffs, are working together in
    analyzing the work of the committees. So we ought to be able to
    catch up with the mark very quickly overnight and through the
    next day. But you should expect to have all day Thursday as a
    minimum to look at the mark that we would be addressing on
    Friday.
        Mr. Menendez. If the gentleman would allow me just to make
    sure I understand what he meant. Wednesday evening sometime
    there would be a mark that we would have available to us so
    that all day Thursday we could think about does this mark
    satisfy our concerns; or if it failed in some respect to
    satisfy our concerns, we would have all day Thursday to prepare
    amendments to the mark and offer them before this committee?
        Chairman Armey. Sometime before the sun rises on Thursday
    morning.
        Mr. Frost. If the Chairman would yield on that point, we
    have nine committees, I believe, that will be testifying before
    us on Wednesday, the Chair and the ranking members. So
    Wednesday could be a very lengthy day.
        Chairman Armey. Very long day. We will try to really stick
    to our guns on the 5-minute rule.
        Mr. Frost. But I think Mr. Menendez's observation is
    important, not only for members on our side but on your side,
    to have the time to be able to prepare any amendments that we
    deem are appropriate.
        Chairman Armey. I do appreciate that. That is why, Mr.
    Menendez, I am going to get this again. We think it is so
    important that we all continue to have, as our staffs work with
    the committee staffs to prepare for our testimony and then the
    subsequent mark, that we stay in touch with chapter and verse
    among ourselves at the staff level.
        Mr. Menendez. Mr. Chairman, if I may, one observation: Even
    though we will wait to hear from committee Chairs and ranking
    members on Wednesday, their decisions have been cast already,
    so therefore we know what their decisions are. To some extent,
    either those of us who serve on some of those committees or our
    staff has been present or has analyzed why they decided as they
    did. I would hope that would expedite the Chairman's mark, so
    we would have the appropriate--creating 170,000 jobs, $38 to
    $40 billion in budget, I want to make sure, as I said in the
    first hearing, that Winston Churchill is wrong, that we do the
    right thing, but not until after we exhaust all the other
    alternatives.
        Chairman Armey. You are absolutely right.
        I want to thank the witness again. I see no more
    recognitions sought for time.
        Governor Ridge, some members may have questions for you for
    the record; and, without objection, the hearing record will
    remain open for 30 days to permit members to submit questions
    in writing and have the response placed in the record.
        Without objection, the Select Committee stands in recess
    until 10 o'clock tomorrow morning.
        Governor Ridge. Thank you, Mr. Chairman. Thank you,
    members.
        [Additional material submitted for the record follows:]

      STATEMENT FOR THE RECORD OF BOBBY L. HARNAGE, SR., NATIONAL
    PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO

                                  introduction

        My name is Bobby L. Harnage, Sr. and I am the National
    President of the American Federation of Government Employees,
    AFL-CIO. On behalf of the 600,000 government workers
    represented by AFGE, who serve the American people across the
    nation and around the world, I thank you for this opportunity
    to offer our views about why we (1) oppose the Bush
    administration's Department of Homeland Security (DHS) proposal
    (H.R. 5005) and (2) support the Federal employee provisions
    recommended by the House Government Reform Committee when it
    marked up and adopted its version of H.R. 5005 on July 12,
    2002.
        President Bush's June 6, 2002, proposal to combine 22
    Federal agencies with just under 170,000 employees into one
    department with a budget of $37.5 billion has effectively ended
    the debate about whether there will be a DHS. But it has not
    ended the debate about what its size and scope should be.
        Given that the Bush administration is proposing to create
    what would be the third largest Federal department in personnel
    terms (after Defense and Veterans Affairs), Congress and the
    American public need to ask many questions. One question about
    which we at AFGE are particularly concerned is: ``How much
    flexibility should the Bush administration and the DHS be
    granted in setting the department's personnel policy?''
        It is particularly important that Congress addresses this
    question before enacting legislation because the Bush proposal
    received very limited scrutiny within the Executive branch
    before it was announced. According to the new Brookings
    Institution report Assessing the Administration's Proposal,
    ``most officials (and outsiders) with expertise in the subject
    were not consulted on the pros and cons of the choices the
    administration made.''

                   problems with bush administration proposal

        Tucked inside the Bush administration 35-page DHS bill is a
    68-word sentence that has raised serious concerns among Federal
    employees and their unions.
        It is Section 730 and it is on page 25.
        Section 730 says: ``Notwithstanding'' the civil service
    law, the Secretary of Homeland Security may propose Federal
    regulations to establish a personnel management system which
    ``shall'' be ``flexible,'' ``contemporary,'' and ``grounded in
    the public employment principles of merit and fitness.''
        We at AFGE believe this language grants unprecedented
    flexibility and latitude to the Bush administration in setting
    the DHS's personnel policy. This language grants authority to
    the Bush administration to exempt DHS employees from Title 5
    civil service protections and collective bargaining rights.
        We view the word ``flexible'' as an attempt to make it
    easier to arbitrarily demote or dismiss Federal employees.
        We view ``contemporary'' as a code word for a mind-set that
    would undermine civil service's pay, health insurance, and
    retirement systems, merit-based hiring, firing appeal rights,
    whistle-blower protection rights, and rights to organize and
    bargain collectively.
        Given the immense challenges President Bush and the DHS
    Secretary will face, I guess it is hardly surprising the Bush
    administration would ask for the fullest possible authority
    with regard to personnel policy. But Congress should NOT give
    it the unfettered power provided in Section 730, as written. It
    is too vague to ensure protection of Federal employees' rights.
    It undermines the merit system principles that define and
    insure the integrity of the Federal civil service. And it would
    appear to be part of a strategic effort by the Bush
    administration to restructure labor-management relations in the
    Federal government by (1) unilaterally expanding management
    rights and prerogatives and (2) diminishing the rights and
    involvement of Federal employees and their unions.
        In addition, Congress should not provide the Bush
    administration with such unprecedented personnel policy
    flexibility because this would conflict with the mission of the
    new DHS. The DHS secretary needs a workforce that ``hits the
    ground running,'' not one that spends its first days asking how
    the words ``flexible'' and ``contemporary'' might affect each
    worker's future.

             recommendations from house government reform commitee

        AFGE believes Congress could help the new DHS secretary
    succeed by adopting the Federal personnel provisions
    recommended by the House Government Reform Committee.
        1. House Government Reform Committee Bill & Title 5
    Compensation Packages.
        Section 730 of House Government Reform Committee bill
    deletes the Bush administration bill's Section 730 granting DHS
    the authority to exempt employees of the new department from
    Title 5. In its place, Section 730(c) directs the DHS secretary
    to submit to Congress a proposal for a demonstration project,
    ``the purpose of which shall be to help attain a human
    resources management system which [would] enable the Department
    best to carry out its mission.''
        Thus, the House Government Reform Committee bill basically
    preserves the existing Title 5 compensation package.
        Pay. Most Federal employees who will make up the workforce
    of the new DHS will be paid under one of the two main Federal
    government pay systems established under Title 5: the ``general
    schedule'' (GS) pay system, which sets specific salary levels
    for white collar workers, or the ``wage grade'' pay system,
    which sets rates for the government's craft and trade (blue
    collar) workers.
        AFGE believes there is no reason to treat employees in this
    department differently from their counterparts in other Federal
    agencies, particularly in that inferior compensation would be
    deleterious to workforce morale and send exactly the wrong
    signal about the importance of homeland security. In the event
    management believes it appropriate to increase pay for the new
    workforce, the existing pay system allows for significant
    flexibility to reward high performers.
        However, in an attempt to rationalize the 80 different pay
    and compensation systems mixed in and among the agencies that
    will be transferred into the DHS, Section 730(a) of the House
    Government Reform Committee bill gives the DHS secretary
    authority to propose Federal regulations that harmonize pay
    schedules ``as may be necessary to address inequitable pay
    disparities among employees within the Department performing
    similar work in similar circumstances.''
        Health Care. The Federal government provides health
    insurance to active and retired Federal employees and their
    dependents through the Federal Employees Health Benefits
    Program (FEHBP). The right to enroll in an FEHBP plan, as
    established in Title 5, would be a significant part of the
    overall compensation package of Federal employees who work in
    the new DHS.
        Retirement. About one-half of the Federal workforce is
    enrolled in the Civil Service Retirement System (CSRS), which
    is a defined benefit plan. The other half is covered by the
    Federal Employees Retirement System (FERS), which includes a
    small defined benefit, Social Security, and a thrift savings
    plan similar to a 401(k). CSRS and FERS are established under
    Title 5, and the new DHS would continue to provide both
    retirement systems.
        Workers Compensation. DHS employees who suffer a disability
    due to personal illness or injury sustained while in the
    performance of duty would be eligible for workers compensation
    benefits, pursuant to Title 5 provisions.
        2. House Government Reform Committee Bill & Existing Title
    5 Authority To Fire or Demote Federal Employees Who Are Poor
    Performers or Disciplinary Problems.
        The House Government Reform Committee bill preserves
    existing Title 5 authority to fire or demote Federal employees
    who are poor performers or disciplinary problems.
        The Bush administration argues that the DHS secretary needs
    significant flexibility in the hiring and firing process
    because existing Title 5 civil service merit principles, such
    as due process and appeal rights, make it impossible to fire or
    demote Federal employees who are poor performers or
    disciplinary problems. AFGE believes such flexibility is
    unnecessary because Federal managers already possess adequate
    authority under Title 5 to deal with such employees.
         During the one-year probationary period, a Federal
    employee may be fired for virtually any reason with no notice
    and no appeal rights.
         Following the one-year probationary period, a
    Federal employee can be fired or demoted, with 30 days notice.
    In accordance with basic notions of due process and in order to
    guard against any attempts to transform the Federal civil
    service system into a patronage system, that employee can
    appeal his/her case to the Merit Systems Protection Board
    (MSPB); if represented by a union, that employee has the option
    of taking his/her case to arbitration or appealing to the MSPB.
    However, the Office of Personnel Management reports that only a
    relatively small number of dismissals and demotions are
    reversed through such appeals.
        3. House Government Reform Committee Bill & Dismissing
    Federal Employees for National Security Reasons.
        Section 730(b) of the House Government Reform Committee
    bill provides that the DHS secretary shall establish procedures
    consistent with Title 5 to provide for the suspension and
    removal of DHS employees when necessary in the interests of
    national security.
        Title 5 provides that, in a situation involving national
    security, an employee may be suspended without notice and then
    removed after the Federal agency conducts an ``investigation
    and review'' and determines that such action ``is necessary or
    advisable in the interests of national security.'' In that
    context, the agency need not provide to the employee the
    rationale for a dismissal and the agency's decision to dismiss
    that employee is not subject to appeal.
        4. House Government Reform Committee Bill & Right of
    Federal Employees to Whistleblower Protections.
        Section 730(e) of the House Government Reform Committee
    bill strengthens existing Federal whistleblower protections by
    giving DHS employees, as well as employees throughout the
    Federal government, the right to sue for lost wages and
    benefits, compensatory damages, and ``equitable, injunctive, or
    any other relief that the court considers appropriate.''
        We at AFGE believe whistleblower protections are essential.
    Federal employees should be protected against managerial
    reprisals for lawfully disclosing information they believe
    demonstrates a violation of law or mismanagement of authority.
        That is why we are particularly pleased the House
    Government Reform Committee approved--by voice vote--the
    strengthening of whistleblower protections. Currently, the only
    effective, functional relief for Federal government employees
    under the Whistleblower Protection Act is through binding
    arbitration pursuant to collective bargaining agreements.
    Indeed, the Government Accountability Project (GAP), a highly
    respected government watchdog organization, now warns
    whistleblowers not to file cases for administrative hearings
    before the Merit Systems Protection Board. According to GAP,
    ``after spending thousands of dollars and years of litigation,
    whistleblowers are virtually guaranteed a formal endorsement of
    the harassment they are challenging. The Federal Circuit Court
    of Appeals, which has a monopoly on judicial review [of
    whistleblower cases] has twisted and gutted the law. Its track
    record in decisions on the merits is 1-74 against
    whistleblowers, since Congress in 1994 strengthened the
    whistleblower law.''
        We at AFGE also believe whistleblower protections are
    essential to the new DHS's success. Because if you limit
    whistleblower protections, you effectively deny yourselves as
    Members of Congress and the American public essential
    information on how the new department is functioning.
        Let me give you an example from one of AFGE's own councils.
        In the aftermath of the September 11 terrorist attacks, two
    union officers of the National Border Patrol Council--border
    patrol agents Mark Hall and Bob Lindemann--went on the NBS
    Today Show and testified before Congress to speak out against
    law security on the United States' northern border. They said
    that despite all the talk, no new agents had been placed on the
    northern border and that agents were not making criminal
    background checks on people caught entering the United States
    illegally. These statement prompted their Immigration and
    Naturalization Service (INS) supervisor to propose summarily
    firing the agents, stating in internal emails that ``[t]he
    President of the Local [union] deemed it necessary to
    independently question our readiness in a public forum,'' that
    ``managers must take a stance which bear no tolerance of
    dissent'' and that managers must ``view resistance from rank
    and file as insubordination.''
        This is what employees are often up against when they speak
    out against the ``company line'' even when the company line
    involves the security of the United States. Without the
    knowledge that the union would represent them and that an
    impartial whistleblower hearing process was in place to review
    subsequent INS actions against them, you can be sure they never
    would have said a word and Congress would never have heard the
    truth of what was really happening on the United States'
    northern border. The union responded to the agency's proposed
    firing of the employees and worked with them in filing a
    complaint with the Office of Special Council (OSC), which is
    charged with investigation of whistleblower complaints of
    reprisal. The OSC recommended a reversal of the agency's
    decision. Eventually, as a result of that process, the agency
    agreed to reinstate the employees with back pay.
        And, by the way, this was the fourth time in four years
    that the INS had attempted to muzzle legitimate criticism from
    employees for talking with investigators, the media, or Members
    of Congress. If you want to know what is really happening in
    the new DHS, you must provide employees with whisteblower
    protection and union representation. That is the bottom line.
        5. House Government Reform Committee Bill & Right of
    Federal Employees to Organize and Bargain Collectively.
        Under existing law, the President can strip a department's
    employees of collective bargaining rights if he determines that
    the primary function of an agency (or subdivision) is
    counterintelligence, investigative, or national security work.
    In fact, on January 7, 2002, President Bush issued Executive
    Order 13252 taking away the collective bargaining rights held
    by more than 500 Justice Department employees, many of whom
    were clerical and had enjoyed their rights for over 20 years.
    The Bush administration's stated reason for doing so? To
    prevent these employees from striking--a patently absurd
    argument since Title 5 clearly prevents Federal employees from
    striking. Based on the timing, as well as the fact that never
    before had any concern been raised about the union
    representation of U.S. Attorneys offices, AFGE would argue that
    the real reason the administration took away these employees'
    collective bargaining rights was to stop an organizing drive by
    workers in an unrepresented Miami field office.
        Section 731 of the House Government Reform Committee bill
    protects the collective bargaining rights of over 50,000
    current Federal employees slated to move into the new
    Department of Homeland Security. It provides that the President
    can not make such a national security-related determination
    regarding an agency (or subdivision) transferred into the new
    Department unless: (a) the mission and responsibilities of such
    agency (or subdivision) ``materially change'', and (b) a
    majority of employees within such agency (or subdivision) have
    as their ``primary duty'' intelligence, counterintelligence, or
    investigative work directly related to terrorism
    investigation.''
        AFGE supports Section 731 because the unionized Federal
    employees who will become part of the new DHS are among our
    nation's most patriotic, dedicated, and selfless public
    servants. In fact, many of these employees are law enforcement
    officers who have worked tirelessly since September 11 to
    protect our nation's borders.
        In addition, AFGE supports Section 731 because the right to
    organize and bargain collectively is critical to the success of
    the DHS's overall mission. Union representation allows Federal
    employees to speak out about problems they see on the job
    without fear of retribution from their superiors. Such freedom
    will give Congress and the American people important insight
    into the new department's effectiveness in making our nation
    more secure from terrorists.
        Union representation also is critical to stemming the tide
    of attrition that plagues many of the Federal agencies that
    will be transferred into the new DHS. For example, the
    Immigration and Naturalization Service is expected to lose 20
    percent of its border patrol agents and 15 percent of its
    immigration inspectors by year's end. Many thousands more are
    expected to leave the new department if faced with the prospect
    of losing their union representation.
        Congress has the prerogative as it legislates the creation
    of the new DHS whether to allow the employees to be represented
    by unions. Given the Bush administration's likelihood of taking
    away their collective bargaining rights, Congress has the
    right--and should exercise its right--to decide whether the
    President's discretion under current law to eliminate
    collective bargaining rights should apply in this instance.

                                   conclusion

        The idea of consolidating Federal agencies into one super
    department has been compared to a corporate merger--taking
    companies with different products, expertise and cultures and
    merging them into one entity. And it has been said of corporate
    mergers that they often sound good in theory, look good on
    paper, but utterly fail in practice. Given the rapid and wide
    consensus that there should be a DHS, we hope this pattern does
    not carry over.
        But if, as the old expression goes, the train has left the
    station, then it is AFGE's goal to make sure it doesn't run
    over tens of thousands of Federal employees along the way. No
    one is more interested in making their homeland secure than the
    dedicated men and women of the Federal government who put their
    lives on the line every day of the year. In order to keep these
    employees--and recruit and retain others like them--their Title
    5 civil service protections and collective bargaining rights
    need to be preserved in the new DHS.
        Thank you for the opportunity to present our views today.

        STATEMENT FOR THE RECORD OF COLLEEN M. KELLEY, NATIONAL
              PRESIDENT, NATIONAL TREASURY EMPLOYEES UNION

        Chairman Armey, Ranking Member Pelosi, distinguished
    members of the Committee, I would like to thank the Committee
    for the opportunity to comment on the creation of a proposed
    Department of Homeland Security and its impact on the Customs
    Service.
        As President of the National Treasury Employees Union
    (NTEU), I have the honor of leading a union which represents
    over 12,000 Customs employees who are stationed at 301 ports of
    entry across the United States. Customs inspectors, canine
    enforcement officers, and import specialists make up our
    nation's first line of defense in the wars on terrorism and
    drugs as well as the facilitation of lawful trade into the
    United States. In addition, Customs personnel are responsible
    for ensuring compliance with import laws and regulations for
    over 40 Federal agencies, as well as stemming the flow of
    illegal contraband such as child pornography, illegal arms,
    weapons of mass destruction and laundered money.
        With a FY2002 budget of approximately $3.1 billion, the
    U.S. Customs Service facilitates more trade, and interdicts
    more drugs than any other agency. The Customs Service collects
    over $20 billion in revenue on over 25 million entries
    involving over $1.3 trillion in international trade every year.
    The Customs Service provides the Federal government with its
    second largest source of revenue. Last year, the Customs
    Service deposited over $22.1 billion into the U.S. Treasury.
        The President's FY2003 budget requests a funding level of
    $3.18 billion for the United States Customs Service. This
    request represents a token increase from last year's
    appropriations. NTEU feels that this budget is simply
    inadequate to meet the needs of Customs personnel, especially
    in light of the incidents surrounding September 11th.
        In addition to appropriations, Customs also receives funds
    from the COBRA account. This user fee account funds all
    inspectors' and canine enforcement officers' overtime pay as
    well as approximately 1100 Customs positions across the
    country. This account is funded with user fees collected from
    air/sea passengers except from the Caribbean and Mexico,
    commercial vehicles, commercial vessels/barges and rail cars.
        The COBRA fund will expire on September 30, 2003, unless it
    is reauthorized by Congress before then. However, the
    President's FY2003 budget does not call for the reauthorization
    of COBRA. COBRA must be reauthorized or Congress must
    appropriate additional funds to make up for the loss of the
    user fees.
        In 2001, Customs Service employees seized over 1.7 million
    pounds of cocaine, heroin, marijuana and other illegal
    narcotics--including over 9.5 million tablets of Ecstasy,
    triple the amount seized in 1999. Customs also processed over
    500 million travelers last year, including 1 million cars and
    trucks. These numbers continue to grow annually. Over the last
    decade trade has increased by 137 percent.
        Yet, despite the increased threats of terrorism, the
    dramatic increases in trade resulting from NAFTA, and new drug
    smuggling challenges, the Customs Service has confronted its
    rapidly increasing trade workload and homeland security mission
    with relatively static staffing levels and resources. In the
    last ten years, there simply has not been adequate increases in
    staffing levels for inspectional personnel and import
    specialists, the employees who process legitimate trade, to
    successfully conduct their missions. Unfortunately, this
    situation is not likely to change under the President's
    Homeland Security proposal. The President has stated that his
    proposal will not include any additional funding that will
    enable the Customs Service and its personnel to successfully
    accomplish their missions of trade facilitation and border
    security.
        For example, traffic volume at U.S. land ports-of-entry has
    steadily increased as our shared borders with Mexico and Canada
    have become more open as a result of the NAFTA and other trade
    initiatives. The steady increase of commercial and non-
    commercial traffic has led to increased wait times at many land
    ports-of-entry, particularly those along the Southwest border.
    Wait times along the Southwest border often extend to 45
    minutes or more during peak hours. Such lengthy delays can be
    both irritating and costly to businesses and the traveling
    public. The lack of resources at ports-of-entry is also a
    problem along the Northern Border as well as seaports. The
    events of September 11 brought attention to the fact that the
    Northern border, the nations' seaports, and the Southwest
    border are still in urgent need of additional personnel and
    resources. In fact, Customs' recent internal review of
    staffing, known as the Resource Allocation Model or R.A.M.,
    shows that Customs needed over 14,776 new hires just to fulfill
    its basic mission and that was before September 11.
        For instance, with increased funding, modern technologies,
    such as Vehicle and Cargo Inspection Systems (VACIS), which
    send gamma rays through the aluminum walls of shipping
    containers and vehicles to enable Customs inspectors to check
    for illegal drugs or weapons of mass destruction, as well as
    decreasing the amount of time shipping containers are out of
    the supply chain, could be acquired. However, adequate and
    consistent funding to purchase, operate and maintain these
    technologies has not been forthcoming. Other technologies,
    coupled with proper personnel funding, such as portable
    contraband detectors (a.k.a. Busters), optical fiber scopes and
    laser range finders can be invaluable to Customs personnel
    protecting our borders from terrorists and illegal drugs.
        Included in the modern technology possibilities for Customs
    is the Automated Commercial Environment or (ACE). ACE could be
    an integral element for trade enforcement and in preventing
    cargo from becoming an instrument of terrorists. The current
    Automated Commercial System (ACS) is a 17 year old, outdated
    system that is subject to system crashes and freezes that wreak
    havoc on trade facilitation and employees' ability to do their
    jobs. Although a system upgrade is necessary for Customs to
    meet its modernization efforts, NTEU would oppose funding a new
    system that shifts funds away from critically important
    staffing needs.
        A number of these resource issues were addressed by the
    Ways and Means Committee in HR 3129, The Customs Border
    Security Act of 2002, which is part of the trade package before
    Congress. This legislation would authorize over $3 billion for
    a number of Customs priorities such as staffing, commercial and
    non-commercial operations, narcotics detection equipment, child
    pornography prevention, the ACE computer system and the air and
    marine interdiction units.
        As for the President's Department of Homeland Security
    proposal, HR 5005, it seeks to consolidate the Customs Service,
    INS, Border Patrol, the Animal and Plant Health Inspection
    Service (APHIS) the Transportation Security Agency (TSA) and
    the Coast Guard into one division titled, Border and
    Transportation Security under the jurisdiction of a newly
    created Department of Homeland Security. I find this proposal
    to be extremely troubling for a number of reasons, one of which
    is the fact that the Customs Service would not be maintained as
    a distinct entity within the proposed Department of Homeland
    Security. Each of these agencies' missions are unique and
    should remain as distinct entities in any new agency. Combining
    each agency's fields of expertise will lead to losing that
    expertise.
        The fact that Customs would not be a distinct entity within
    the Department of Homeland Security would deal severe blows to
    three distinct missions in which the Customs Service has world
    class expertise, trade facilitation, the collection of duty
    revenue, and drug interdiction at our nation's borders. Each
    year more than 16 million containers arrive in the United
    States by ship, truck and rail. In the last five years alone,
    Customs has witnessed a 60 percent increase in trade entries
    processed, and this rate is expected to grow an average of 8 to
    10 percent a year.
        To consolidate the Customs Service with five other
    agencies, only one of which remains a distinct entity, the
    Coast Guard, would be a long-term mistake for Customs. Customs'
    trade facilitation mission would clearly not be the highest
    priority for the Department of Homeland Security. Keeping
    Customs as a distinct entity within the Department proposed in
    both Representative Mac Thornberry's bill, HR 4660, and Senator
    Lieberman's Homeland Security bill, S 2452 would help retain
    the emphasis on the importance of Customs' trade related
    duties.
        Other trade issues such as textile transshipment
    enforcement, trade agreement circumvention, and the use of
    counterfeit visas to enter inadmissible goods would simply fall
    farther down the priority list in a newly created Department of
    Homeland Security. Many of these concerns have been voiced by a
    number of trade groups such as the National Foreign Trade
    Council and the Electric Industries Alliance.
        The importance of keeping Customs intact as a distinct
    entity within a new Department of Homeland Security is even
    more necessary when one looks at the full interaction of
    Customs employees involved in both the trade facilitation and
    law enforcement missions of the Customs Service. Trade
    enforcement functions are carried out by the same Customs
    personnel who ensure border security. Customs inspectors,
    import specialists, canine enforcement officers and agents work
    closely together to enforce trade and anti-smuggling laws. When
    an inspector makes a large illegal cash seizure at a border
    crossing, the case is given to an agent for a follow-up
    investigation to determine where the illegal funds came from
    and where they were going. The interaction between the law
    enforcement and trade facilitation missions of the Customs
    Service is also useful in the discovery of counterfeit goods
    and intellectual property piracy.
        Customs also relies on the expertise of its trade
    enforcement personnel to recognize anomalies in their review
    and processing of commercial transaction information associated
    with the admissibility and entry of imported goods. This
    process assists law enforcement in developing targeting
    criteria as well as targeting suspect shipments and starting
    investigations. The Customs Service has established
    partnerships with private industry that are unmatched, enabling
    them to work together to ensure the efficient flow of goods and
    services into the United States together with the mission of
    protecting our border from terrorism and other illegal
    activities. To separate these two vital missions of the Customs
    Service would compromise the current effectiveness of all
    Customs employees.
        Both the American public and the trade community expect the
    borders to be properly defended while at the same time being
    able to efficiently and safely facilitate trade across that
    border. The government must show the public that it is serious
    about protecting the borders and facilitating trade by fully
    funding agencies such as the Customs Service who are tasked
    with defending the borders and enforcing the trade laws of the
    United States. No organizational structure change will be
    successful, no matter how good it may look on paper, if the
    government does not provide proper funding for its border
    agencies.
        The Administration has indicated that it wants new
    ``flexibility'' in the legislation that will establish the
    Department of Homeland Security. While it is unclear exactly
    what is meant by that phrase, I urge Congress not to take away
    the rights and benefits that are currently available to the
    employees who may be merged into this new department. Before,
    during, and after September 11, front line employees have acted
    heroically to protect our freedom. They do not deserve to lose
    theirs.
        The House Government Reform Committee acted last week to
    protect the Title 5 rights of Federal employees who will be
    transferred into the new department under HR 5005 and I would
    strongly urge this committee and the Senate to do the same.
        Other legislative actions that would help to ensure the
    retention of Customs personnel would be to grant law
    enforcement status for Customs Inspectors and Canine
    Enforcement Officers. The U.S. Customs Service Inspectors and
    Canine Enforcement Officers continue to be the nation's first
    line of defense against terrorism and the smuggling of illegal
    drugs and contraband at our borders and in our ports. Customs
    Service Inspectors have the authority to apprehend and detain
    those engaged in terrorism, drug smuggling and violations of
    other civil and criminal laws. Canine Enforcement Officers and
    Inspectors carry weapons, and at least three times a year they
    must qualify and maintain proficiency on a firearm range. Yet,
    they do not have law enforcement officer status. They are being
    denied the benefits given to other Federal employees who they
    have been working beside to keep our country safe. Customs
    employees face real dangers on a daily basis, granting us law
    enforcement officer status would be an appropriate and long
    overdue step in recognizing and retaining the Customs personnel
    who continue to protect our borders from terrorism and drugs.
    There currently is a bill before the House, HR 1841, which
    would grant law enforcement status to Customs personnel.
    Representative Filner introduced this bill. This bill currently
    has 180 cosponsors. I would ask all members of this committee
    to cosponsor this very important legislation.
        Finally, I have attached to my statement an article from
    Newsday that features Customs Inspector and NTEU member Diana
    Dean, who apprehended Millenium Bomber, Ahmed Ressam in Port
    Angeles, Washington. It makes the case more eloquently than I
    could, that she is the kind of person we want in a new
    Department of Homeland Security. But I fear that the
    ``flexibilities'' proposed by the President will lead to many
    fewer such dedicated people willing to work for the new
    Department. That would be a shame and I hope Congress will not
    let that happen.
        Thank you for the opportunity to share NTEU's thoughts on
    these very important issues with this committee.
        [Whereupon, at 3:25 p.m., the committee recessed, to
    reconvene at 10:00 a.m. on Tuesday, July 16, 2002.]

              H.R. 5005, THE HOMELAND SECURITY ACT OF 2002, DAY 2

                                  ----------

                             TUESDAY, JULY 16, 2002

                         U.S. House of Representatives,
                         Select Committee on Homeland Security,
                                                        Washington, DC.
        The committee met, pursuant to call, at 10 a.m., in Room
    345, Cannon House Office Building, Hon. Richard K. Armey
    [chairman of the committee] presiding.
        Present: Representatives Armey, DeLay, Watts, Pryce,
    Portman, Pelosi, Frost, Menendez, and DeLauro.
        Chairman Armey. The select committee will come to order. We
    are meeting today to hear a second day of testimony on H.R.
    5005, the Homeland Security Act of 2002. Before we get started
    this morning, I would like to announce that it is my intention
    for members of the committee to proceed with testimony and
    questions for our first panel and then recess the select
    committee until 2:30 p.m. This afternoon when we will resume
    with our second panel.
        The Chair will also continue its practice of recognizing a
    member on each side of the aisle for opening statements and
    then asking the remaining members to put their opening
    statements in the record so we can get on with the hearing.
        The Chair now recognizes the gentlelady from Ohio, Ms.
    Pryce, for a brief opening statement.
        Ms. Pryce. Thank you very much, Mr. Chairman, members of
    the select committee, and our witnesses here this morning,
    thank you very, very much for being here for this important
    hearing. This is one of the most important things that this or
    any Congress has ever contemplated, and your input will be
    invaluable. So thank you very much.
        Mr. Chairman, I also would like to take an opportunity to
    thank you for your steady and bipartisan leadership of this
    committee. As we get started on our third day of hearings on
    the creation of the Department of Homeland Security, I would
    like to begin by thanking you once again. We have before us
    today three very impressive panels of individuals who have
    risen to their current post by virtue of their expertise and
    leadership in their respective fields. The diversity of our
    witnesses today demonstrates the collaborative and bipartisan
    nature of the process that we are undertaking. I look forward
    to your valuable input on the Department and look forward to
    your statements.
        Today, with the benefit of the recently unveiled National
    Strategy on Homeland Security, the committee continues its in-
    depth analysis of the administration's proposal. Last week we
    began our process by examining the nature of the threat facing
    our Nation. To be sure, what confronts America is in many ways
    the most unique and most deadly enemy that we have faced in our
    entire history, hiding in shadows, crossing our borders with
    ease, and preying on the open society in which we live. Our
    response must be smarter, more agile, and ever prepared, but
    always rooted in the principles that have made our Nation so
    strong.
        As Governor Ridge pointed out to us yesterday, we are
    fighting a war on two fronts. We fight this war not just abroad
    with our military, diplomatic, and economic weapons, but at
    home with every Federal, State and local government tool at our
    disposal.
        During this phase of the committee's work, we will examine
    specific ideas for consolidating our myriad and unique
    responses to the threat at home through a new Cabinet-level
    department. We will hear from a wide range of members from the
    administration whose departments undertake homeland security
    tasks and whose diverse functions demonstrate that under the
    current system, homeland security work of our government is
    dangerously spread out.
        We will hear from a bipartisan group of Members of Congress
    who have long been staunch advocates for the need of a
    Department of Homeland Security, and we will also hear first
    from the committee chairmen and ranking members who have begun
    the process of crafting the legislation to create this new
    Department. By tapping into all of their collective expertise,
    we can maximize the effectiveness of the Department, sharply
    focus its mission, and offset any associated costs by
    eliminating unnecessary redundancy and increasing government
    efficiencies.
        The creation of the Department of Homeland Security will
    unite the current patchwork of government homeland security
    activities into a single Department with the primary mission of
    protecting our homeland. The need for a single responsive and
    agile Department to organize the homeland security functions
    that are currently disbursed among more than 100 different
    government organizations cannot be overstated. As President
    Bush pointed out in his address to the American people
    announcing the creation of the Department of Homeland Security,
    we are a different Nation today, sadder and stronger, less
    innocent and more courageous, more appreciative of life.
        As we continue our work on this historic task to create a
    new Federal department to respond to the threats of our Nation
    through the 21st century, we must be ever mindful of the
    spirit, sacrifice, and resolve of the American people who
    rightfully require us to be persistent, yet judicious and
    balanced in our task, preserving the freedoms we all enjoy
    while ensuring the safety of our families, our communities, and
    our country.
        The witnesses before us reflect the strength and the spirit
    of the American people, and I look forward to hearing from all
    of you today. Thank you very much Mr. Chairman.
        Chairman Armey. Thank the gentlelady. The Chair is now
    happy to recognize the gentleman from New Jersey, Mr. Menendez.
        Mr. Menendez. Thank you Mr. Chairman. Mr. Chairman, members
    of the distinguished administration who are here, let me start
    off by saying what I hope is obvious to all of us in the work
    of securing our homeland: There are no Democrats, no
    Republicans, there are only patriots. And this work may very
    well be the most significant work that any of us will do in our
    public careers.
        I want to take this opportunity to outline the three
    priorities that I have that I believe this legislation must
    address if we are going to get this ambitious undertaking right
    in the first place. We recently learned that, in all-too-public
    spat between two of the most venerated agencies of the Federal
    Government, that the key problem with the events and
    circumstances leading to September 11 was a glaring and
    unacceptable lack of coordination and information sharing
    within and between intelligence and law enforcement agencies as
    well as State and local authorities.
        Ms. Colleen Rowley of the FBI in her Senate testimony,
    unlike and probably despite her superiors, informed us of much,
    in great detail, on the very same day the administration
    proposed to establish this new Department of Homeland Security.
        Since effective coordination and adequate information
    sharing is the main problem that the establishment of this new
    Department presumably would address, it is up to us in Congress
    to make sure that it is not only presumably addressed with
    verbal assurances, but that it is actually addressed with
    legislative language. So to make a twist on the words of Teddy
    Roosevelt: If it is broke, then fix it. And it is broke, so we
    need to fix it.
        Merely combining agencies of like missions into a larger
    institution setting in and of itself will not suffice. So I
    suggest to my colleagues that we must include mechanisms in
    this bill to guarantee that such coordination and information
    sharing indeed will occur.
        Secondly, we must get it right in terms of both focus and
    balance. As the House Democratic Homeland Security Task Force,
    which I chair, spelled out in two of our bills, the BioPAct Act
    and the USA Act, we must be in the business of prevention. We
    must prevent, not just prepare for and respond to future
    terrorist attacks. The key challenge to ensuring adequate
    prevention is to have all the databases that matter integrated
    and available in real-time to the new Secretary. The minute
    that this Department goes online, there should be no basis
    whatsoever for doubting whether the new Secretary will have all
    of the intelligence and law enforcement information on domestic
    threats that he or she would require.
        At this point, I am not persuaded that the bill will
    accomplish that. That is something I hope we can work towards.
        Mr. Chairman, I would like with your approval to submit for
    the record the principles adopted by the Democratic Caucus
    Homeland Security Task Force and by the Democratic Caucus.
    These principles state that the new Department should be
    created and operated in an open and fiscally responsible manner
    to an amended White House budget proposal; that Washington
    should promptly move resources to local first responders and
    continue the operation of local programs already proven to be
    effective, such as the COPS program, the FIRE Act, and
    assistance to our hospitals and community health care centers;
    that the proposed Department not jeopardize those functions and
    agencies that are not specifically related to security; and
    that as we protect and defend our country, we must also protect
    and defend the Constitution and our civil liberties, and that
    we protect the rights and benefits of civil service employees.
        Lastly, going back to local communities for a moment,
    Governor Ridge repeatedly has said if the hometown is secure,
    the homeland is secure. We have asked the administration
    whether there are plans, for example, to deal with some of the
    challenges our communities face; for example, for overtime
    costs that have gone up after 9/11 and are continuing, and we
    look forward to seeing that continue in a way that is
    responsive to these local concerns. Yes, there is burden
    sharing, but there must also be a sharing of resources in that
    context.
        Now the administration has finally produced a strategy, and
    I want to salute it. I just came from the White House with my
    members of the select committee, and that strategy is something
    I have been looking forward for quite some time, because I
    believe you need to set out a strategy and then you organize a
    department in response to a strategy. And I look forward to
    hearing from our Cabinet Secretaries as to what role they
    provided in the preparation of this strategy document.
        The improved coordination and data sharing this bill seeks
    must begin with a comprehensive threat assessment, followed by
    a strategy and plans to implement that strategy. That strategy
    should outline specific priorities, along with the budget that
    would allocate the resources necessary to implement it. These
    are not proposed embellishments. They are basic requirements.
    Although we must still review the strategy, its completion is
    clearly a significant step forward, and I salute the
    administration for producing it.
        Lastly, we have heard much about the talk about the need
    for flexibility for the new Secretary and this Department. And
    today, this morning, the President made that case again. And I
    understand the nature of some of what that flexibility needs to
    be, but I also hope that in the process of providing the
    flexibility necessary to guarantee the effective and efficient
    operation of the Nation's security, that we in the process of
    setting up this new Department--that homeland security should
    not mean insecurity for the employees for which we will have to
    call upon their greatest talents, their collective
    institutional wisdom, their knowledge of the challenges we
    face, and to unlock their abilities to be able to respond to
    those challenges in the new role which they are being
    transferred to.
        So life in America has forever changed after September 11.
    Main Street is now the front line of the new war. American
    values, however, have not changed and must not change. We
    continue to value liberty and freedom and justice and fairness.
    So what we pass here is part of our job, but we need to demand
    that the will of the people, the people's top priority, keeping
    their families and our Nation safe, is carried out effectively.
    Towards that end, we Democrats are continuing to work with you
    in a bipartisan process in order to ensure that what we produce
    is ultimately achieving that ultimate goal.
        Thank you Mr. Chairman.
        Chairman Armey. Thank the gentleman, and the gentleman is
    aware that the record is open for your submission and we
    appreciate that.
        [The information follows:]

        [Statements submitted for the record follow:]

                 PREPARED STATEMENT OF THE HONORABLE DICK ARMEY

        We are honored to have a very distinguished series of
    panels come before us today offering their views on the
    proposal to better prepare our country to defend itself from
    the enemies of freedom.
        I'd like to thank Secretaries Veneman, Thompson, Mineta and
    Abraham as well as Director James for taking the time to be
    with us. Each of these cabinet officials has responsibilities
    for and in-depth knowledge of the agencies involved in this
    government reorganization plan. In addition, I can think of no
    one in our government more able to address questions about the
    personnel issues we face than Director James.
        I'd also like to thank the House Members who first
    articulated the need for transforming our government for
    appearing before us today. We extend our welcome to Reps. Mac
    Thornberry, Jane Harman, Jim Gibbons and Ellen Tauscher, each
    of whom served as lead sponsors of legislation that preceded
    the President's own proposal.
        Finally, because there is a Judiciary Committee markup
    scheduled for tomorrow, we are happy to accommodate Chairman
    Sensenbrenner and Ranking Member Conyers today. We look forward
    to their perspective on the legislation at hand.
        Once again, the importance of our work in this Select
    Committee is demonstrated in the quality of our witnesses.
    Because their knowledge and expertise is unmatched, their input
    will be essential throughout our open and deliberative process.
        As we proceed with the heavy work load required for this
    historic government transformation, let us recall the words of
    our Founders. They remind us that government was established
    ``to provide for the common defense, promote the general
    welfare and secure the Blessings of Liberty to ourselves and
    our posterity.''
        No amount of work is too great to ensure that we live up to
    this goal. It is our duty to get this job done, taking no more
    time than is needed to do it right. I look forward to hearing
    from our distinguished series of witnesses who are here to
    assist us in that task.

              PREPARED STATEMENT OF THE HONORABLE ROSA L. DeLAURO

        Today marks the third day of hearings regarding
    consideration of the President's proposal to create the
    Department of Homeland Security. The standing committees
    completed their work expeditiously and in an impressively
    bipartisan fashion, and it now falls to the Select Committee on
    Homeland Security to finish this task both swiftly and
    thoughtfully.
        While I support the creation of the new Department to
    oversee our efforts to safeguard American citizens, I have a
    number of questions and concerns that I hope can be addressed.
    I continue to be concerned that transferring the public health
    functions of the Centers for Disease Control and biomedical
    research efforts underway at the National Institutes of Health
    would adversely affect our world-class research centers. From a
    public health standpoint, there is no difference between the
    response to a naturally occurring outbreak and one that is
    deliberately caused. And scientists at the National Institutes
    of Health have already implemented a strategic plan to guide
    their bioterrorism research. I see no reason for moving these
    responsibilities to the new department. I look forward to
    hearing from Secretary Thompson on these issues today.
        I also have concerns about how the transfer of the Coast
    Guard to the new department will affect their non-security
    duties--such as search and rescue, fisheries enforcement, and
    aids-to-navigation. These are critical responsibilities, and I
    look forward to hearing from Secretary Mineta on how they will
    continue to be carried out.
        Finally, I continue to have serious concerns regarding the
    new FOIA exemption proposed for this department, and what I
    believe to be an unnecessary check on the Inspector General to
    investigate and report to Congress on issues that might arise.
    I believe it is possible to safeguard information relating to
    our national security without unduly compromising America's
    tradition of open government.
        These are important questions that must be answered before
    we create the Department of Homeland Security, and many of them
    have been addressed by the standing committees. I have full
    confidence in our ability to take those recommendations under
    advisement and work together to find those answers, to address
    these valid concerns, and enact this historic legislation.

        Chairman Armey. Well, let me thank the panel for being here
    today. I do appreciate the effort. I want to especially thank
    Secretary Abraham for your late night plane ride that brought
    you here, Spencer. We do appreciate this extra effort on your
    part so you could be with us today. Without any objection by
    the members of the panel, we would put your written statement
    in the record and ask you to take a few minutes each in your
    turn to summarize your statement.
        Chairman Armey. And with that in mind, I would like to
    begin with Secretary Veneman to give your statement.

        STATEMENT OF HON. ANN VENEMAN, SECRETARY, DEPARTMENT OF
                              AGRICULTURE

        Secretary Veneman. Thank you, Mr. Chairman and members of
    the committee. I appreciate the opportunity to be here today to
    discuss the President's proposal for a new Department of
    Homeland Security. As you discussed in this committee, the
    President has put forth a bold and historic plan that is aimed
    at better protecting our Nation from potential terrorist
    threats in the future.
        For the U.S. Department of Agriculture, the events of
    September 11 changed forever the context in which we do our
    work, as has been the case with so many of the other Federal
    agencies. In the past, the focus of most of our efforts has
    been to prevent and deter the unintentional introduction of
    pests and diseases from entering our country. Beginning in
    February of 2001, our systems were put to the test when we saw
    the devastating impacts of foot-and-mouth disease in the U.K.
    And other parts of Europe. At that time, USDA initiated an
    aggressive strategy to prevent foot-and-mouth disease from
    reaching our country by providing technical support to Great
    Britain. We increased staffing at our ports around the country
    by adding new inspectors, additional detector dog teams and
    port veterinarians. We worked closely with State agricultural
    departments to strengthen our coordination and our training as
    well as our contingency plans, and we launched a public
    information campaign to educate the public about their role in
    keeping foot-and-mouth disease out of the U.S.
        Through the President's 2003 budget proposal and
    supplemental appropriations by the Congress, we continue those
    efforts today. Our border protection and personnel levels will
    be at their highest ever, and investments in the area of
    research laboratory upgrades in security have enhanced our
    ability to prepare for the potential threats to American
    agriculture. These much-needed resources not only help protect
    against unintentional threats but they are helping as we deal
    directly with the potential acts of terrorism that we now face
    in the wake of September 11.
        But the potential of intentional threats to agriculture
    production and our food supply have required us to do even
    more. We have been working very closely with other Federal
    agencies, State agriculture departments, academia, the
    agriculture and food sector, on multiple fronts to secure and
    strengthen both our planning and preparedness. For example, we
    expedited work with the U.S. Customs Service to implement an
    automated inspection targeting system. We have collaborated
    with research universities and State ag departments to step up
    the development of rapid detection systems, expand our network
    of diagnostic laboratories, strengthen pest and disease
    surveillance, and better secure and strengthen our laboratories
    and improve emergency preparedness capabilities.
        While we have done a great deal of work, the job is far
    from over and we cannot let down our guard. When it comes to
    protecting U.S. Agriculture and our food supply, we must
    continuously improve and strengthen our protection
    capabilities.
        Governor Ridge and I enjoy a strong working relationship,
    and I can tell you that he clearly understands the importance
    of USDA's role in homeland security. In the months since he
    became the President's adviser on these issues, I have grown to
    appreciate his knowledge and understanding of the complex
    issues throughout the Federal Government. And that is why this
    proposal for a Department of Homeland Security is so critical.
        In putting forth the proposal, the President made clear the
    important role of agriculture in protecting the food supply by
    including parts of USDA in the plan, the Animal Plant Health
    Inspection Service, or, as we commonly refer to it, APHIS, and
    the Plum Island Animal Disease Center. This is a clear
    recognition of APHIS' vital mission as it relates to homeland
    security.
        There has been considerable discussion about the best way
    to protect America and the vital role that USDA's APHIS program
    serves in that regard. Many States and industries and
    stakeholders have provided input regarding the move of APHIS to
    the Department of Homeland Security and the ongoing programs
    with APHIS that are not directly associated with the protection
    of homeland security. These programs include protecting
    livestock from predators, eradicating boll weevil, fruit flies,
    Brucellosis, controlling rabies and wildlife, negotiating with
    foreign countries on technical requirements for U.S. Imports
    and exports, regulation of biotechnology, animal welfare, as
    well as other programs.
        In the past few weeks, the House Agriculture Committee has
    worked with the administration to refine the President's
    proposal. The result of that work appears in the committee's
    amendment which would move the specialized border inspection
    and enforcement functions of the U.S. Department of Agriculture
    as well as the Plum Island disease facility to the new
    Department of Homeland Security.
        The administration looks forward to working with Congress
    so that the final bill provides the Secretary of Homeland
    Security the coordinating authority required to ensure
    integrated plans to address the threat of agroterrorism. The
    House Agriculture Committee's amendment is consistent with the
    President's goal of unifying the border and transportation
    security functions of many Federal agencies. It affirms the
    critical role played by inspectors of our agriculture cargo
    conveyances and international passengers. It acknowledges the
    close partnerships USDA inspection personnel have developed
    with the U.S. Customs Service, the Immigration and
    Naturalization Service, and the U.S. Border Patrol. It also
    recognizes the importance of USDA's working with the new
    Department in training Homeland Security inspection personnel
    involved in examining cargo passengers and trade in food and
    agriculture products.
        Finally, the amendment recognizes that the transfer of the
    Plum Island Animal Disease Center is integral to the Department
    of Homeland Security. In short, the transfer of APHIS'
    agriculture quarantine inspection program and the Plum Island
    Animal Disease Center to the Department of Homeland Security is
    the right step to protect our Nation's security and
    agricultural health.
        Mr. Chairman, I thank you for this opportunity to appear
    today. We appreciate your leadership and that of this committee
    in addressing the important issues relating to homeland
    security, particularly as it relates to protection of
    agriculture and the food supply.
        Thank you very much and I look forward to answering your
    questions.
        Chairman Armey. Thank you Secretary Veneman.
        [The statement of Secretary Veneman follows:]

       PREPARED STATEMENT OF THE HONORABLE ANN M. VENEMAN, SECRETARY OF
                                  AGRICULTURE

        Mr. Chairman and Members of the Committee, thank you for
    the opportunity to be here today to discuss the President's
    proposal for a new Department of Homeland Security.
        The President has put forth a bold and historic plan aimed
    at better protecting our nation from potential terrorist
    threats in the future. The President's approach is to bring
    together agencies currently with missions related to the
    protection of our homeland and merge them into a single agency
    that will better protect, better prepare and better coordinate
    this critical responsibility.
        This requires extraordinary vision, new thinking and the
    ability to look at the much larger issue at hand--and that is
    again, the protection of our citizens against potential
    threats. And, I must say, we have appreciated the leadership
    role of this Committee and Members of both the House and the
    Senate for the strong role you have played in moving forward
    with this Legislation.
        For the U.S. Department of Agriculture, the events of
    September 11 changed forever the context in which we do our
    work, as has been the case in so many other Federal agencies.
        In the past, the focus of most of our efforts has been to
    prevent and deter the unintentional introduction of pests and
    diseases from entering our country.
        In February 2001, our systems were put to the test, when we
    saw the devastating impacts of foot-and-mouth disease (FMD) in
    the United Kingdom and other parts of Europe. At the time, USDA
    initiated an aggressive strategy to prevent FMD from reaching
    our country by providing technical support to Great Britain,
    increasing staffing at ports of entry around the country by
    adding new border officers, detector dog teams, and port
    veterinarians. We worked closely with State agriculture
    departments to strengthen our coordination, training, and
    contingency plans, as well as launching public information
    campaigns to educate the public about their role in helping
    keep FMD out of the U.S.
        Through the President's FY 2003 budget proposal and
    supplemental appropriations by the Congress, we continue those
    efforts today. Our border protection personnel levels will be
    at their highest levels ever, and investments in the areas of
    research, laboratory upgrades, security, have enhanced our
    ability to prepare and respond to potential threats to American
    agriculture.
        These much needed resources not only help protect against
    unintentional threats, but they are helping as we deal directly
    with the potential acts of terrorism that we now face in the
    wake of September 11th.
        But the potential of intentional threats to agricultural
    production and our food supply have required us to do much
    more. We have been working closely with other Federal agencies,
    State agriculture departments, academia and the agriculture
    sector, on many fronts to secure and strengthen planning and
    preparedness.
        For example, we have expedited work with U.S. Customs
    Service to implement an automated inspection targeting system.
    We have collaborated with research universities and State
    agriculture departments to step up the development of rapid
    detection systems, expand our network of diagnostic
    laboratories, strengthen pest and disease surveillance, better
    secure and strengthen laboratories, and improve emergency
    preparedness capabilities.
        While a great deal of work has been done in a very short
    amount of time, the job is far from over. We cannot let down
    our guard. When it comes to protecting U.S. agriculture and our
    food supply, we must continuously improve and strengthen our
    protection capabilities.
        Governor Ridge and I enjoy a strong working relationship
    and I can tell you he understands clearly the importance of
    USDA's role in homeland security. In the months since he became
    the President's advisor on these issues, I have grown to
    appreciate his knowledge and understanding of the complex
    issues throughout Federal government.
        This is why the President proposed including USDA's Animal
    and Plant Health Inspection Service (APHIS)--the agency that
    prevents and manages outbreaks of pests and diseases--and the
    Plum Island Disease Facility in the new Department. In the past
    few weeks, the House Agriculture Committee has worked with
    Administration to refine the President's proposal. The result
    of that work appears in the Committee's amendment that moves
    the specialized border inspection and enforcement functions of
    the U.S. Department of Agriculture, as well as the Plum Island
    Disease Facility, to the new Department. The Administration
    supports the amendment. We look forward to working with
    Congress so that the final bill provides the Secretary of
    Homeland Security the coordinating authorities required to
    ensure integrated plans to address the threat of agro-
    terrorism.
        The House Agriculture Committee's amendment is consistent
    with the President's goal of unifying the border and
    transportation security functions of many Federal agencies. It
    affirms the critical role played by inspections of agricultural
    cargo, conveyances, and international passengers. It
    acknowledges the close partnerships USDA inspection personnel
    have developed with the U.S. Customs Service, the Immigration
    and Naturalization Service, and the U.S. Border homeland
    security inspection personnel involved in examining cargo,
    passengers, and trade in food and agricultural products.
        Finally, the amendment recognizes that the transfer of the
    Plum Island Animal Disease Center is integral to the Department
    of Homeland Security. In short, the transfer of APHIS'
    agricultural quarantine inspection program and the Plum Island
    Animal Disease Center to the Department of Homeland Security is
    the right step to take to protect our Nation's security and
    agricultural health.
        Mr. Chairman, again, I thank you for this opportunity to
    appear before you today. I appreciate your leadership, and that
    of this Committee in addressing the important issues related to
    homeland security, particularly as it relates to the protection
    of agriculture and our food supply. I look forward to answering
    your questions today and a continued dialogue on these and
    other issues in the future.

        Chairman Armey. Secretary Mineta, we would love to hear
    from you now.

     STATEMENT OF HON. NORMAN Y. MINETA, SECRETARY, DEPARTMENT OF
                             TRANSPORTATION

        Secretary Mineta. Thank you very much, Mr. Chairman, and to
    Representative Pelosi and members of the select committee, it
    really is a pleasure for me to have this opportunity to appear
    before you today and to give you my views on the President's
    proposal to create the Department of Homeland Security.
        First I want to congratulate the leadership of both sides
    of the aisle for their responsiveness to this legislation and
    compliment you on the decision to establish this committee.
    This is an incredibly important issue that responds to the very
    real danger facing our great Nation. Having served in Congress
    with all of you, I know that all of you are answering the call.
        Now I would like to limit my comments to the impact this
    Department's creation will have on our Nation's transportation
    system and whether it is wise to proceed with this sizeable
    task while we are in the midst of fighting a war.
        First of all, the nature of the threats facing America
    requires a consolidated government structure to protect against
    invisible enemies that can strike with a wide variety of
    weapons, and the President's proposal underscores the
    importance of transportation security as a major part of
    America's overall homeland security.
        I believe that it is impossible to create a Department of
    Homeland Security and not have agencies like the United States
    Coast Guard and the Transportation Security Administration at
    the heart of it. Regardless of a threat, it is a given that our
    transportation system will be used by the enemy to arrive in
    our midst or deliver its weapons. That is why the Coast Guard
    and the Transportation Security Administration will be key
    components of the new Department of Homeland Security.
        The Coast Guard is our Nation's lead maritime security
    agency and the first line of security on our maritime borders.
    It has broad military and statutory authorities that are
    critical to securing our coastline, our economic exclusive
    zone, and seaports. And nearly 40 percent of the Coast Guard's
    current operating budget is directly related to the core
    missions of the new Department. To maximize the Coast Guard's
    effectiveness in this new Department, it is essential that the
    United States Coast Guard remain intact, retain its essential
    attributes as a military multimission and maritime service and
    be adequately funded to fulfill its missions.
        Admiral Collins, the Commandant of the United States Coast
    Guard, recently testified that the greatest danger to any Coast
    Guard mission would be to fracture the Coast Guard. Its
    multimission assets are critical to each of the five
    fundamental overlapping roles: maritime security, maritime
    safety, maritime mobility, protection of natural resources, and
    national defense--missions that will continue to flourish in
    the new Department. The Coast Guard's multimission assets are
    critical to each of its roles and are leveraged so that the
    same cutters, boats, aircraft, and personnel that maintain
    maritime mobility also provide maritime safety and security as
    well as protect our natural resources, and I am fully confident
    that the Coast Guard will be an outstanding part of the new
    Department of Homeland Security.
        Now, another key component of the new Department is the
    Transportation Security Administration, TSA, and it will be
    better able to secure the Nation's transportation
    infrastructure as part of a Department whose principal mission
    is protecting against terrorist attacks. The entirety of TSA's
    budget, personnel, and focus is directly related to the core
    missions of the proposed Department. TSA has the statutory
    responsibility for security of all modes of transportation and
    it directly employs transportation security personnel.
        At the Department of Homeland Security, TSA will have ready
    access to the Department's intelligence architecture to support
    its transportation security efforts. Combining TSA with
    established organizations will allow TSA to benefit from their
    relevant experience and will permit the efficient leveraging of
    security assets.
        The continuity of security from our borders throughout our
    transportation system will also improve as TSA, INS, Customs,
    and other elements of the DHS become part of the same
    organization with access to shared systems. I know some have
    expressed concerns that moving TSA will slow or interfere with
    the Agency's ability to meet its congressionally mandated
    deadlines. The concern, while understandable, is without merit.
    We are going to meet the deadlines that Congress gave us with
    respect to TSA. When the day comes for TSA to transfer to the
    new Department, TSA will be ready. And being ready means
    meeting every deadline asked of it before that day, period.
        In closing, let me say as a Member of Congress for over 20
    years, I know the challenge before all of you. And as a former
    Chair of a major committee, I am keenly aware of the
    jurisdictional questions and the issues that you face. And as a
    Cabinet member, I am familiar with the various pressures to
    protect the elements of a Cabinet member's department that add
    to one's prestige and budgetary authority.
        But having acknowledged all of those factors, I believe
    this legislation is necessary and a very good idea. It is
    needed and it is needed now. It is, indeed, timely. We are at
    war, a real war, and some have suggested that we wait until the
    current war is over, arguing that President Truman waited until
    after World War II was over before he reorganized the
    Department of Defense. I believe that historical comparison
    fails. Yes, this legislation is similar to President Truman's
    in boldness and in terms of scope, but it also has the vision
    and foresight character of the work of President Franklin
    Roosevelt when he was preparing the country to fight the rise
    of facism. It is forward-leaning and seeks to prepare us to
    succeed at goals of prevention and protection. And so I
    strongly urge support by this committee and its passage by
    Congress.
        Again, let me thank all of you for your leadership and your
    continued support of the mission that is envisioned by the
    President and I will look forward to answering your questions.
    Thank you.
        Chairman Armey. Thank you Secretary Mineta.
        [The statement of Secretary Mineta follows:]

      PREPARED STATEMENT OF THE HONORABLE NORMAN Y. MINETA, SECRETARY OF
                                 TRANSPORTATION

        Mr. Chairman, Representative Pelosi, and members of the
    Select Committee, it is a pleasure to appear before you today
    and give you my views on the President's proposal to create the
    Department of Homeland Security.
        First I want to congratulate the leadership of both sides
    of the aisle for their responsiveness to this legislation. I
    also compliment you on the decision to establish this Committee
    and the selection of its members. This is an incredibly
    important issue that responds to the very real danger faced by
    our nation. I have served in Congress with most of you, and I
    know you all of you will answer the call.This Committee has
    completed a great deal of work reviewing this issue, and it has
    listened to several members of the President's Cabinet
    recounting the general issues and the wisdom of establishing
    this important department.
        Therefore, I would like to limit my comments to what the
    impact of this Department's creation will be on our nation's
    transportation system, and whether it is wise to proceed with
    this sizable task while we are in the midst of fighting this
    war. I would like to frame my remarks within the context of my
    experience as a member of this House and service as both
    Secretary of Commerce and now Transportation. The nature of the
    threats facing America requires a consolidated government
    structure to protect against invisible enemies that can strike
    with a wide variety of weapons. The President's proposal-the
    most significant transformation of the U.S. government in over
    a half-century-underscores the importance of transportation
    security as a major part of America's overall homeland
    security. The President's proposal recognizes the critical
    importance of protecting airports, seaports, railroads,
    bridges, highways, and mass transportation facilities against
    the threat of terrorism. The importance of protecting our
    transportation and other national assets is echoed in the
    Office of Homeland Security's National Strategy for Homeland
    Security, which is being released today.
        It is impossible to create a Department of Homeland
    Security and not have agencies like the Coast Guard and the
    Transportation Security Administration at the heart of it. To
    cross our borders one is required to use our transportation.
    Regardless of the threat, our transportation system will be the
    means by which the enemy will arrive in our midst or used to
    deliver the weapons to be used against us. Therefore, in this
    increasingly global system, our transportation security is the
    key to the protection against and prevention of terrorist
    threats. That is why the Coast Guard and the Transportation
    Security Administration will function as key components of the
    Department of Homeland Security.

    the u.s. coast guard is an integral part of president's border security
                                    strategy

        The Coast Guard is our Nation's lead maritime security
    agency and functions as the first line of security on our
    maritime borders. It has broad military and statutory
    authorities that are critical to securing our 95,000 miles of
    coastline, 3.4 million square miles of Exclusive Economic Zone
    and 361 seaports. Nearly 40 percent of the Coast Guard's
    current operating budget is directly related to the core
    missions of the proposed Department and the remainder of its
    missions contribute indirectly to the overall security and
    economic viability of the Nation.
        To maximize the Coast Guard's effectiveness in the new
    department, it is essential that the Coast Guard (1) remain
    intact; (2) retain its essential attributes as a military,
    multi-mission, and maritime service; (3) retain the range of
    critical Coast Guard missions; and (4) be adequately funded to
    fulfill it missions. As Commandant Collins recently testified,
    the greatest danger to any Coast Guard mission would be to
    fracture the Coast Guard. Its multi-mission assets are critical
    to each of its five fundamental, overlapping roles: Maritime
    Security, Maritime Safety, Maritime Mobility, Protection of
    Natural Resources, and National Defense. The same cutters,
    boats, aircraft, and personnel that maintain Maritime Mobility
    also provide Maritime Safety and Security as well as protect
    our natural resources.
        The Coast Guard will bring critical capabilities to the new
    department. The Coast Guard possesses extensive regulatory and
    law enforcement authorities governing ships, boats, personnel,
    and associated activities in our ports, waterways, and offshore
    maritime regions. It is a military service with around-the-
    clock command, communication, and response capability. The
    Coast Guard maintains a network of coastal and seagoing
    vessels, aircraft, and expert personnel to prevent and respond
    to safety and security incidents. It has a geographic presence
    throughout the country, coasts, rivers, and lakes, both in
    large ports and small harbors. As a member of the National
    Intelligence Community, the Coast Guard offers intelligence
    fusion and dissemination capabilities.
        Although it will play a key role in homeland security, the
    Coast Guard's other missions will continue to flourish in the
    new department. As I already mentioned, the Coast Guard's
    multi-mission assets are critical to each of its roles,
    including drug and migrant interdiction, marine environmental
    protection, search and rescue, and ice operations. These assets
    are leveraged so that the same cutters, boats, aircraft, and
    personnel are used for each of its missions with the result
    that those missions create a beneficial synergy with its
    homeland security role.
        Being Secretary of the Coast Guard is one of the greatest
    honors and privileges I have had in my public service career.
    They are one of the best organizations I have encountered in
    the Federal Government. I am fully confident that the Coast
    Guard will be an outstanding part of the new Department of
    Homeland Security.

    the transportation security administration's role in the department of
                               homeland security

        The September 11th attacks, which used components of the
    transportation system as weapons, demonstrated the high
    priority that must be given to protecting the transportation
    sector. The Transportation Security Administration (TSA) will
    be better able to secure the nation's transportation
    infrastructure as part of a department whose principal mission
    is protecting Americans from terrorist attacks.
        The continuity of security from our borders throughout our
    transportation system is essential. The protection of this
    system and the passengers, cargo, and conveyances traveling
    through it is a responsibility that must be shared by TSA, INS,
    Customs and other DHS elements. Clearly, these agencies'
    ability to coordinate will be enhanced if they are part of the
    same organization and have access to shared systems.
        The entirety of TSA's budget, personnel, and focus is
    directly related to the core missions of the proposed
    Department--protecting the security of our air, land, and sea
    borders and the security of our inter-connected transportation
    systems. TSA has the statutory responsibility for security of
    all modes of transportation and it directly employs
    transportation security personnel. The organization uses
    various tools to execute its assigned missions including
    intelligence, regulations, enforcement, inspection, screening
    and education of carriers, passengers, and shippers.
        At the Department of Homeland Security, TSA will have ready
    access to the department's intelligence architecture to support
    our efforts to prevent terrorists from targeting the
    transportation system. Combining TSA with established
    organizations will enable the fledgling agency to benefit from
    their relevant experience, thereby helping TSA accomplish its
    goals. Also, by combining TSA with fully staffed agencies, the
    new department will allow the leveraging of staff, research
    capabilities, resources and facilities to address critical
    vulnerabilities.
        I know some have expressed concern that moving TSA will
    slow or interfere with the agency's ability to meet its
    Congressionally mandated deadlines. The concern while
    understandable is without merit. We are going to meet the
    deadlines--any deadlines--Congress gives us with respect to
    TSA. And by the very act of meeting those deadlines we
    accomplish the goal of preparing the agency for transition to
    the new Department. Transitioning this new agency to the new
    Department is defined as meeting the deadlines. The notion that
    which department's stationery TSA will use is going to distract
    TSA staff from the work they are doing now is a disservice to
    their commitment and professionalism to meet the demands
    Congress has put on them.
        Tom Ridge and I are working together on setting up the
    Transportation Security Administration. We were before the
    Department of Homeland Security was announced and we will be
    until the day it is transferred to this new department. And
    when that day comes, TSA will be ready. And being ready means
    meeting every deadline asked of it before that day. Period.
        Finally, let me say this. As a Member of Congress for
    twenty years I know the challenge before you. As a former chair
    of a major committee I am keenly aware of the jurisdictional
    questions and turf issues that you face. And as a Cabinet
    member I am familiar with the various pressures that come with
    protecting the elements of cabinet member's Department that add
    to one's prestige and budgetary authority.
        Having acknowledged all of those factors, I believe this
    legislation is necessary and a very good idea. It is needed.
    And it is needed now. We are in a war--a real war. And as
    horrible as the tragedies have been, our enemies desire to
    inflict greater catastrophes upon us.
        Some have suggested that we wait until this current war is
    over--arguing that Truman waited until World War II was over
    before he re-organized the Defense Department.
        I believe that historical comparison fails.
        Yes, this legislation is similar to President Truman's
    legislation in boldness and scope. But it also has the vision
    and foresight characteristic of the work of Franklin Roosevelt
    and others during the early rise of fascism. It is designed not
    to correct the mistakes of the past. It is submitted to meet
    the ever-growing threat that is before us. It is forward
    leaning and seeks to prepare us to succeed at goals of
    prevention and protection.
        I strongly urge its support by this Committee and its
    passage by Congress. Again, let me compliment the Committee and
    thank you for your continued support of our mission. I would be
    happy to answer any questions.

        Chairman Armey. Secretary Thompson, if you would like to
    make your opening statement, the panel would love to hear from
    you.

     STATEMENT OF HON. TOMMY G. THOMPSON, SECRETARY, DEPARTMENT OF
                       HEALTH AND HUMAN SERVICES

        Governor Thompson. Thank you very much, Mr. Chairman. Mr.
    Chairman, Congresswoman Pelosi, members of this bipartisan
    select committee, thank all of you for giving me this
    opportunity to appear before you today to discuss the proposed
    Department of Homeland Security.
        Mr. Chairman, our country is in your debt for your many
    years of visionary leadership in the House of Representatives,
    and I personally thank you.
        Ms. Pelosi, I deeply appreciate what you said in your
    opening statement at last week's hearing, that the issue of
    national security cuts across party lines. It was also echoed
    this morning by Congressman Menendez, and I thank him as well.
        And to all the members of this committee, let me say thank
    for your thoughtfulness in considering this serious matter. I
    join my colleagues in affirming unequivocally my support for
    the reorganization initiative that the President has announced.
    I have worked and will continue to work to implement his
    proposals with energy and enthusiasm.
        The President is absolutely right to create a Department of
    Homeland Security to make sure that our Nation is as safe and
    protected as possible. And if you are going to create an agency
    that focuses around the clock on protecting the homeland, there
    clearly needs to be a bioterrorism component in that operation.
    Since Governor Ridge began as Director of Homeland Security, he
    and I have worked very closely together on the programs and
    policies we need to keep America safe. We have coordinated our
    budget priorities and we have sustained a very close and
    friendly working relationship. And we at HHS continue to work
    closely with the White House, Governor Ridge, as well as
    Congress, to ensure that this new Department has the ability to
    protect America from a biological attack. HHS will provide DHS
    with whatever scientific expertise and other technical
    assistance it may seek to manage this program.
        In addition to the substantive changes, certain program-
    level details in administration choices are still being studied
    in order to ensure the most seamless transition and to give the
    greatest possible levels of efficiency and effectiveness to our
    fight against the threat of biologic and chemical warfare in
    order to protect the public health.
        As with the research and development program, the Secretary
    of Homeland Security, in consultation with the Secretary of
    Health and Human Services, will establish preparedness and
    response programs as well as the priorities. But at the same
    time, the implementation of the public health components of
    that program, such as the State and local preparedness grants,
    will be carried out largely through HHS.
        As to the regulation of certain dangerous pathogens known
    as ``select agents,'' this function would be transferred from
    the CDC to the new Department of Homeland Security. The newly
    created Office of Public Health Emergency Preparedness, with
    its emergency medical functions, would also be transferred, as
    would maintenance of the strategic national stockpile of
    medicines and emergency medical equipment.
        We have gone from eight ``push packages,'' totaling six
    tons of medical supplies to 12 push packages. Before September
    11, and especially since that day, our Department has worked
    fervently to build our capabilities to effectively respond to
    any bioterrorism attack. We have worked closely with State and
    local governments, with experts in the field, and with public
    health partners to make sure that we are going to be able to
    get stronger each and every day, and I am happy to report that
    we have been able to accomplish that goal. We were also able to
    disburse nearly all of the $1.1 billion in grants for
    bioterrorist and preparedness activities to the States and to
    major cities, and we have done so efficiently and with energy.
    We have taken our task seriously and we continue to do so. We
    are extremely proud of how much stronger we built America's
    preparedness in such a short time. I again thank this committee
    and Congress as a whole for supporting my Department in this
    endeavor.
        But there is much work to do before our level of public
    health readiness is where we want it to be. We are committed to
    getting the job done within HHS and by working with the new
    Department of Homeland Security. The President's proposal
    strikes the right balance. It plays to the strengths of HHS and
    recognizes this Agency's core mission, the protection of our
    Nation's public health, while at the same time capitalizing on
    the strategic and logistical strengths of the new Department of
    Homeland Security. By wisely marshaling and managing our
    expertise and our resources and by joining together with the
    same spirit of perseverance and determination of which the
    President has so elegantly spoken and that the needs of our
    time demand, we will build a more secure America and we will
    safeguard our families from the vicious threats of our enemies.
        That is our common task. It is one I know that we are all--
    Democrats, Republicans, Independents--committed to fulfill.
        Thank you, Mr. Chairman and members. I will be more than
    happy to answer your questions and those of all of the
    colleagues.
        Chairman Armey. Thank you Governor Thompson.
    fb deg.
        [The statement of Secretary Thompson follows:]

      PREPARED STATEMENT OF THE HONORABLE TOMMY G. THOMPSON, SECRETARY OF
                           HEALTH AND HUMAN SERVICES

        Thank you, Mr Chairman and members of the Committee for giving me
    the opportunity to appear before you today to discuss the proposed
    Department of Homeland Security. I strongly support the reorganization
    initiative that the President announced earlier this month.
        The threat of terrorism in its myriad forms has become an ever-
    present part of our daily lives. The new Department will enable us to
    make further significant advances in protecting the American people
    from those who are bent upon inflicting death, destruction, and social
    disorder to achieve their ideological ends. We are pleased that the
    Congress is giving the President's proposal prompt and thorough
    attention. I look forward to working with this Select Committee to
    ensure passage of the legislation for the new Department.
        The President's proposal deals with certain terrorism-related
    activities that currently are the responsibility of the Department of
    Health and Human Services (HHS). Some of these HHS activities would be
    transferred to the Department of Homeland Security (DHS). For other
    relevant public health and medical activities, DHS would assume
    responsibility for setting goals and providing strategic direction but
    would rely upon HHS to implement and operate the activities on a day-
    to-day basis.
        I will discuss examples from each group of activities in turn.

          Examples of Activities Proposed for Transfer from HHS to DHS

        HHS functions conveyed to the new Department in the President's
    proposal include:
         The Select Agent registration enforcement program;
         The Office of the Assistant Secretary for Public Health
    Emergency Preparedness; and
         The Strategic National Stockpile (formerly the National
    Pharmaceutical Stockpile).

                       select agent registration program

        Within HHS, the Centers for Disease Control and Prevention (CDC)
    currently regulates the transfer of certain dangerous pathogens and
    toxins--commonly referred to as ``Select Agents''--from one registered
    facility to another. These agents are used in research laboratories
    across America. Examples are the bacterium that causes anthrax, the
    bacterium that causes Plague, and the virus that causes Ebola, a lethal
    hemorrhagic fever. Select Agents are prime candidates for use by would-
    be bioterrorists and thus, when used in research, must be kept
    constantly under safe and secure conditions.
        The recently enacted Public Health Security and Bioterrorism
    Preparedness and Response Act of 2002 authorized HHS to promulgate and
    enforce regulations concerning the possession and use of Select Agents,
    as well as their transfer. While CDC has done its best to manage the
    Select Agent program, CDC is a public health agency and not a
    regulatory body. We believe that the new department, with its strong
    multi-purpose security and regulatory infrastructure, will be well-
    suited to prevent nefarious or other irresponsible uses of Select
    Agents. HHS will be prepared to provide DHS with whatever scientific
    expertise and other technical assistance it may seek to help it manage
    the program. Under the Administration bill, the Secretary of Homeland
    Security would administer the select agents program in consultation
    with HHS, and HHS would continue to make key medical and scientific
    decisions, such as which biological agents should be included in the
    select agents list.

         office of the assistant secretary for public health emergency
                                  preparedness

        The Public Health Security and Bioterrorism Preparedness and
    Response Act of 2002 created the HHS Office of the Assistant Secretary
    for Public Health Emergency Preparedness. The responsibilities of this
    new office include the supervision of the Office of Emergency
    Preparedness, the National Disaster Medical System, the Metropolitan
    Medical Response Systems, and related HHS emergency management
    functions. This cluster of activities is a logical and proper candidate
    for transfer to DHS--thereby enabling seamless integration of national
    public health and medical emergency management assets with the Nation's
    new preparedness and response infrastructure at DHS. The Public Health
    Service Officers and other HHS employees who have faithfully performed
    disaster relief work over the years have done a wonderful service for
    our Nation. They are a credit to HHS as they surely will be to the new
    Department.

                          strategic national stockpile

        CDC currently manages 12 ``push packages'' of pharmaceutical and
    medical supplies and equipment strategically located around the United
    States; additional lots of pharmaceuticals and caches of medical
    supplies are maintained by manufacturers under special contractual
    arrangements with CDC. You may recall that one of the push packages was
    dispatched to New York City on September 11th and that elements of the
    stockpile were used to respond to the anthrax attacks. I strongly
    believe that CDC has done an exemplary job managing the Strategic
    National Stockpile (formerly called the National Pharmaceutical
    Stockpile) and this fine work has set the stage for integration of the
    Stockpile with other national emergency preparedness and response
    assets at DHS.
        The President's proposal is designed to achieve this integration by
    tapping the strengths of DHS and HHS in a precisely coordinated way.
    Thus, the Secretary of Homeland Security will assume responsibility for
    continued development, maintenance, and deployment of the Stockpile--
    making it an integral part of the larger suite of Federal response
    assets managed by FEMA and other future DHS components--while the
    [[Secretary of Health and Human Services??]] will continue to determine
    its contents. The arrangement will ensure effective blending of the
    public health expertise of HHS with the logistical and emergency
    management expertise of DHS.

                  DHS Functions to be Carried Out through HHS

        The President's proposal clearly designates the following two
    activity areas that the Secretary of Homeland Security will carry out
    through the Department of Health and Human Services. However, certain
    specific program level details and administrative choices are still
    being studied in order to ensure the most seamless transition, and to
    give the greatest possible levels of efficiency and effectiveness to
    our fight against the threat of biological warfare and to protect the
    public health.

      civilian human health-related biological, biomedical and infectious
                    disease defense research and development

        The President's proposal provides that the new Department's
    civilian human health-related biological, biomedical, and infectious
    disease defense research and development work shall--unless the
    President otherwise directs--be carried out through HHS. The Department
    of Homeland Security will work through the HHS, especially the National
    Institutes of Health (NIH) to foster research and development that will
    enhance national capabilities for dealing with bioterrorism and other
    public health emergencies. As the agency responsible for assessing
    threats to the homeland, DHS will have the authority to define the
    policy framework and provide overall strategic direction regarding the
    Nation's biological and biomedical countermeasure research priorities
    in consultation with the Secretary of HHS. Working within this
    guidance, NIH will conduct and fund relevant research and development--
    striving constantly, as now, to ensure that the program is of the
    highest quality and engages the foremost scientists and engineers in
    all pertinent disciplines.
        The NIH program will continue to focus on four primary areas:
        (a) the creation and maintenance of centers of excellence in
    bioterrorism related microbiology;
        (b) microbial genomics, with a view to identifying targets for new
    or improved drugs, diagnostics, and vaccines, as well as elucidating
    the genetic bases for microbial virulence and antibiotic resistance;
        (c) initial development of drugs, diagnostics, and vaccines; and
        (d) advanced development and initial procurement of vaccines for
    the Strategic National Stockpile

                    certain public health-related activities

        The President's proposal provides that the new Department shall--
    unless otherwise directed by the President--carry out through HHS
    certain public health related activities (such as programs to enhance
    the bioterrorism preparedness of State and local governments and non-
    Federal public and private health care facilities and providers). The
    object of this provision is to continue the important role that HHS
    plays in assisting State and local governments and the hospital and
    public health community in preparing for and responding to large scale
    public health emergencies, while integrating these activities into the
    overall mission of DHS.
        An example of public health activities that will be integrated into
    DHS are the State and local bioterrorism preparedness grants that went
    out earlier this year. As you know, the bill that the President signed
    into law in January provided for $1.1 billion to 62 States, territories
    and three major cities (Chicago, Los Angeles, and New York City).
    Washington, D.C. was counted as a State in the funding formula. And, as
    of today, virtually all of this money has been distributed. The
    preparedness funds were divided into two parts. The CDC distributed a
    total of $918 million to State and local health departments to support
    bioterrorism, infectious diseases and public health emergency
    preparedness activities. The Health Resources and Services
    Administration is providing $125 million to the States to develop
    regional hospital plans and enhance the ability of hospitals to deal
    with large numbers of casualties. For both of these programs, we
    released 20 percent of the funds immediately to enable States to begin
    their planning without delay. Next, experts throughout my department
    reviewed each proposal for certain benchmark criteria before releasing
    the remaining 80 percent.
        I was quite impressed by the speed with which the States and
    municipalities developed their plans. It shows the seriousness with
    which they are taking the need for preparedness. Now that we have good
    plans, we will continue to work with the States and municipalities on
    implementation and strengthening areas of the plans which need more
    work.
        Under the President's proposal, the Secretary of Homeland Security,
    in consultation with the Secretary of Health and Human Services, will
    establish the Nation's anti-terrorism preparedness and response program
    and priorities, including the State and local preparedness grants.
    However, the implementation of the public health components of that
    program will be carried out largely through HHS. This structure will
    allow a seamless transition to ensure that Federal dollars are spent
    wisely to prepare our communities, throughout the nation, for any type
    of bioterrorist attack.

                                   Conclusion

        Mr. Chairman and members of the Committee, our Nation needs a
    Department of Homeland Security. I strongly support the President's
    proposal and look forward to doing whatever is necessary to effect a
    smooth and swift transition of responsibilities and operations. I
    believe that the President's proposal strikes the right balance: it
    plays to the strengths of HHS and recognizes this agency's core
    mission--the protection of our Nation's public health--while
    capitalizing on the strategic and logistical strengths of the new
    Department of Homeland Security. We will ensure that HHS fulfills its
    obligations to the new Department and provides it with whatever public
    health, medical, and scientific expertise it may require.
        At this time, I would be happy to answer your questions.

        Chairman Armey. Secretary Abraham, again I want to thank
    you for flying all night, and we would love to hear your
    comments.

      STATEMENT OF HON. SPENCER ABRAHAM, SECRETARY, DEPARTMENT OF
                                 ENERGY

        Secretary Abraham. Mr. Chairman, members of the committee,
    the President's proposal to create and organize a Department of
    Homeland Security is an important and necessary step to
    ensuring the security of all Americans, and I want to thank the
    members of this committee for your leadership and the hard work
    you are doing to make this vision a reality.
        From ensuring the security of our nuclear weapons complex
    to coming up with creative ideas on how to deal with a variety
    of threats, our Department, the Department of Energy, has many
    responsibilities which support the homeland security mission.
    And, of course, many of those responsibilities will remain
    after the creation of a Department of Homeland Security. But we
    feel it makes imminent sense to ensure that certain missions of
    the Department of Energy are combined in a way that enhances
    homeland security, and therefore we propose to move some
    programs and capabilities from the Department of Energy to the
    new Department of Homeland Security.
        Mr. Chairman, probably the most significant proposal
    affecting the Department of Energy involves how we support the
    new Department's need for world-class scientific and technical
    research and development capability. I have often described the
    national laboratories of our Department, which we manage, as
    the crown jewels of scientific and technical achievement in
    America. And in the aftermath of September 11, the ability of
    our scientists, engineers, and other employees to respond
    quickly and effectively to the challenges posed by terrorists
    was well demonstrated.
        The President's proposal offers a creative way to leverage
    these assets in support of the homeland security mission. We
    propose organizing the Department of Energy's national
    laboratories and sites in a manner to create a network
    laboratory system for the purpose of supporting the missions of
    the Department of Homeland Security. At various appropriate
    facilities, the DHS would assume responsibility for the
    management of domestic security research and development. The
    Department of Homeland Security would control the funding for
    those homeland security programs and allocate that funding as
    necessary to meet its goals.
        Mr. Chairman, we also propose to transfer certain other
    programs to the Department of Homeland Security that directly
    support its homeland security mission. These programs would be
    transferred entirely to the new DHS. Let me just describe a
    couple of them.
        First, research and development to counter the chemical,
    biological, nuclear, and radiological threat. This Department
    of Energy-wide program provides research and development for a
    DHS core mission: the detection and tracking of the presence of
    weapons of mass destruction. This activity includes the
    development of new technologies and approaches for detecting
    fissile materials at border crossings and technologies that
    monitor the environment for the release of biological or
    chemical agents.
        The transfers in this area would include a $69 million
    program in the chemical and biological security area of R&D and
    $10 million in combating of the nuclear smuggling programs as
    well. In addition, we propose that we transfer a portion
    amounting to about $20 million of the Department of Energy's
    program in the life and environmental sciences area. These
    activities consist of rapid DNA sequencing of pathogenic
    microbes and technological development. DNA sequencing would
    allow DHS to identify and build defenses against potential
    terrorist actions. And the technology development activities
    would allow DHS to use computational tools to compare the gene
    sequence from an organism against the database of existing gene
    sequencing; in other words, to be able to better identify
    possible threats and to neutralize those threats.
        I would like to mention another area which we propose to
    transfer, and that is our energy assurance activities. This
    program develops and maintains a capability for identifying
    potential threats to the national energy infrastructure,
    developing and maintaining a national strategy for energy
    assurance, and the development of a Federal response plan.
    Activities in this area also include funding for the National
    Infrastructure Simulation and Analysis Center, which is a key
    homeland security research and development activity. It is a
    computer modeling system that allows us to analyze what impact
    on the overall national energy infrastructure the breakdown or
    an attack on any one component of that infrastructure might
    produce.
        Finally, we propose to transfer to DHS the Environmental
    Measurements Laboratory which is located near New York City.
    This laboratory provides program management technical
    assistance and data quality assurance for the measurement of
    radiation and radioactivity relating to environmental
    restoration, nuclear nonproliferation, and other nonpriority
    areas.
        In addition to these, we also propose shifting specific
    programs in the area of advanced computer modeling in the area
    of nuclear and other weapons of mass destruction threat
    assessment, and certain intelligence functions, to give core
    capabilities to the new Department so it could ultimately
    expand in each of those areas and have the potential to
    coordinate better the work done there.
        Finally, Mr. Chairman, I would like to highlight one other
    critical proposal regarding my Department. As you know, the
    Department of Energy maintains the ability to respond
    immediately anywhere in the world to nuclear radiological
    incidents and emergencies. We propose that assets supporting
    this mission stay within the Department of Energy, but that the
    Department of Homeland Security have the ability to control
    their deployment as necessary.
        There are seven basic teams that make up this so-called
    NESP response capability which includes nuclear emergency
    support activities. These include aerial measurement teams,
    accident response teams, and a radiological assistance program
    that works closely with local and State agencies. Through these
    tailored and responsive teams, we are able to marshall highly-
    trained and unique scientific and technical expertise. There
    are more than 900 individuals on call to respond in the event
    of a nuclear incident or emergency, radiological incident or
    emergency. But only a handful of those 900 people, 70, are
    full-time. And it is our ability to call upon a broad range of
    professionals from across the Department's nuclear weapons
    complex that brings this program its depth and ability to
    respond to a wide range of crises or emergencies.
        Comparisons have been made to volunteer fire departments of
    the National Guard, because these teams are staffed with
    nuclear professionals who take this work as an additional duty.
    While it didn't make sense to propose transferring this
    capability in total to DHS, we do propose, however, that these
    teams, when requested by the Department of Homeland Security,
    be activated and deployed to help manage a crisis. In response
    to an incident, our teams would deploy under the authority and
    operational control of DHS.
        Mr. Chairman, I believe the President's proposal will
    ensure greater security for all Americans. Our ability to
    identify, deter and, if necessary, respond to threats to our
    security will be enhanced. Our homeland security missions will
    be executed more quickly and more efficiently. And the
    Department of Energy will stand ready to assist, as it does
    today, in any way that we can.
        Chairman Armey. Thank you Secretary Abraham.
        [The statement of Secretary Abraham follows:]

        Thank you, Mr. Chainnan for having me here today. The President's
    proposal to create and organize a new Department of Homeland Security
    is an ambitious and necessary step toward ensuring the security of all
    Americans, and I thank you for holding these hearings and moving
    forward on this important legislation.
        The President's proposal recognizes that the responsibilities and
    authorities to fight the war against terrorism and to ensure our
    nation's security are today spread among many agencies, including the
    Department of Energy.
        From ensuring the security of our nuclear weapons complex to coming
    up with creative ideas on how to deal with a variety of threats, our
    employees and our Department have many responsibilities that support
    the homeland security mission. And, of course, many of these
    responsibilities will remain after the creation of a Department of
    Homeland Security.
        But it makes eminent sense to ensure that certain missions are
    combined in a way that enhances homeland security. And therefore we
    propose to move some programs and capabilities from the Department of
    Energy to a new Department of Homeland Security.

                                  I. Structure

        Mr. Chairman, perhaps the most significant proposal affecting the
    Department of Energy involves how we structure the new Department's
    need for a world class scientific and technical research and
    development capability .
        I have often described the National Laboratories managed by the
    Department of Energy as the ``crown jewels'' of scientific and
    technical achievement in America. And, in the aftennath of September 11
    th, the ability of our scientists, engineers and other employees to
    respond quickly and effectively to the challenges posed by terrorism
    was well demonstrated. The President's proposal offers a creative way
    to leverage our lab assets in support of the homeland security mission.
        At each of these facilities a portion of the laboratory would be
    dedicated to DHS activities, and the DHS would assume responsibility
    for the management of domestic security R&D through joint sponsorship
    agreements to include direct tasking authority.
        Current contracting relationships between the operating
    organization and the workforce will not be disrupted. DHS would assume
    control of its funding for homeland security programs, and allocate it
    as necessary to meet homeland security goals. It is expected that the
    associated workforce will be dedicated to DHS activities, but that
    procedures will be available to allow the workforce from both DHS and
    DOE activities to easily support each other's efforts. Of course, a
    wide variety of functions undertaken at the DOE labs relate indirectly
    to the mission of Homeland Security. For that reason, the DOE programs
    would continue to carry out those activities that support the
    Department's core missions. And we expect that in carrying out those
    missions, the DOE programs will produce technologies that may be
    leveraged for homeland security.

                                  II. Programs

        Mr. Chairman, we also propose to transfer certain programs to DHS
    that directly support its homeland security mission. The programs
    identified for transfer from the DOE to DHS are as follows: First,
    Research and Development to Counter the Chemical, Biological, Nuclear,
    and Radiological Threat. This DOE-wide program provides R&D for a DHS
    core mission: detecting and tracking the presence of weapons of mass
    destruction. This activity includes the development of new technologies
    and approaches for detecting fissile material at border crossings and
    technologies that monitor the environment for the release of biological
    or chemical agents.
        The transfers in this area include $69 million in the Chemical and
    Biological National Security R&D program. This program develops and
    demonstrates chemical and biological detection, identification, and
    warning systems for use domestically; hand-portable chemical and
    biological detectors the size of palm pilots for real-time use by first
    responders in a crisis situation; modeling and simulation capabilities
    to predict the effects from chemical and biological attacks; and
    chemical and biological decontamination and restoration techniques for
    use in civilian settings.
        In addition, we propose to transfer the Combating Nuclear Smuggling
    activity, with a budget of about $10 million. This program develops
    applied radiation detection systems for emergency response and law
    enforcement agencies. This activity provides system modeling, testing,
    and concept evaluation to monitor and track fissile and weapons grade
    nuclear materialst and supports training of inspection personnel. In
    addition, other programs and activities directly related to homeland
    security within the proliferation detection program of the non
    proliferation R & D program may be designated by the President either
    for transfer to the new Department or jointly operated by the
    Departments of Energy and Homeland Security.
        Finally, Supporting Activities is a relatively small account--about
    $3.5 million--and is responsible for strategic initiatives such as
    technology road-mapping and out-year planning that will be important to
    carrying out the missions of the Chemical and Biological Naional
    Security Program and the Nuclear Smuggling Program.
        Second, we propose to transfer the Advanced Scientific Computing
    Research program, with a budget of about $3 million. This program
    supports researchers in applied mathematics and computer science to
    achieve optimal efficiencies from our supercomputers. This activity is
    expected to provide a nucleus around which DHS could conduct the kind
    of simulations, computer science, and modeling needed to better
    understand how large systems may react in different circumstances.
        Third, some DOE laboratories maintain an in-house intelligence
    capability for assessing nuclear weapons and other WMD technologies
    throughout the world, with a budget of $5.5 million. This capability
    makes use of the laboratory's scientific expertise resident at the
    laboratories, and is augmented with fwIding from the intelligence
    community for their support for National assessments and analyses. This
    capability includes analyses of third world chemical, biological and
    nuclear programs, and thus is expected to be invaluable to the DHS for
    guiding research and development activities to counter the use of these
    weapons against the homeland. Fourth, as a means of establishing within
    the new Department a critical core competence in several areas of
    science that will directly support its mission to protect homeland
    security, we propose to transfer a portion, amounting to $20 million,
    of the DOE program in the life and environmental sciences. The specific
    activities within our life and environmental sciences program we
    propose to transfer consist of:
        First, rapid DNA sequencing of pathogenic microbes. This capability
    will allow DHS to identify and build defenses against potential
    terrorist actions. Each pathogen has many close genetic relatives that
    do not cause disease but need to be characterized so that more accurate
    detection methodologies can be developed that avoid unnecessary and
    alamling false positives.
        Second, Technology Development. Today, we use computational tools
    to compare the gene sequence from an organism against the database of
    existing gene sequences. This can tell us which strains are more
    hannful than others and the source of the strain. Fifth, we propose to
    transfer the nuclear assessment program, which currently resides within
    the DOE's and NNSA's Materials Protection, Control, and Accountability
    Program.
        The Nuclear Assessment Program, with a budget of $6 million,
    leverages the scientific talents and system engineering skills of the
    laboratories in areas of central relevance to homeland security by
    tracking and assessment of nuclear smuggling events; assessment of
    communicated nuclear threats; and technical assistance and training
    support.
        Sixth, we propose to transfer energy assurance activities, with a
    budget of$23.4million. This program develops and maintains a capability
    for assessing vulnerabilities of the national energy infrastructure,
    and provides technical assistance to State and local governments and
    the private sector for emergency response planning. Activities include
    funding for the National Infrastructure Simulation and Analysis Center
    (NISAC), a key homeland security research and development activity.
        Transferring these functions will allow the new department to model
    the interdependency of the nation's various infrastructures--
    telecommunications, energy, and transportation, for example--so as to
    best identify vulnerabilities and establish priorities for
    infrastructure protection. Finally, we propose to transfer to DHS the
    Environmental Measurements Laboratory (EML) located in New York City,
    with a budget of $5 million. This laboratory provides program
    management, technical assistance and data quality assurance for
    measurements of radiation and radioactivity relating to environmental
    restoration, global nuclear non-proliferation, and other priority
    issues.
        EML is expected to provide a nucleus for a DHS capability in
    conducting research and development activities associated with
    environmental sampling, facility protection, and standardization
    protocols for crisis response technologies.
        Mr. Chairman, I would like to highlight one other critical part of
    the President's proposal regarding the Department of Energy. As you
    know, the Department of Energy maintains the ability to respond
    immediately, anywhere in the world, to discrete and specific nuclear-
    radiological incidences and emergencies. We propose that assets
    supporting this mission stay with the Department of Energy, but that
    the DHS have the ability to control their deployment as necessary.
        There are seven basic teams that make up this nuclear-radiological
    incident response capability. which includes nuclear emergency support
    activities. These include aerial measurement teams, accident response
    groups, and a radiological assistance program that works closely with
    State and local agencies. Through these tailored and responsive teams,
    we are able to marshal highly trained and unique scientific and
    technical expertise.
        There are more than 900 individuals on call to respond in the event
    of a nuclear-radiological incident or emergency. Only a handful of
    these--about 70--are full time. It is the ability to call upon a broad
    range of professionals from across the Department of Energy's nuclear
    weapons complex that brings this program its depth and ability to
    respond to a wide range of crises or emergencies.
        Comparisons to volunteer fire departments or National Guard units
    have been made because these teams are staffed with nuclear
    professionals who take this work on as additional duty. Day-to-day,
    they are the individuals who ensure the safety, the security, and the
    reliability of our nuclear weapons stockpile.
        Thus, it did not make sense to propose transferring this capability
    to DHS. However, we propose that these teams would, when requested by
    DHS, be activated and deployed to help manage a crisis. In response to
    an incident, our teams would deploy under the authority and operational
    control of the Department of Homeland Security.
        Mr. Chairman, I believe the President's proposal will ensure
    greater security for all Americans. OUf ability to identify, deter,
    and, if necessary, respond to threats to our security will be enhanced.
    Our homeland security missions will be executed more quickly and more
    efficiently. And the Department of Energy will stand ready to assist as
    it does today in any way we can.

        Chairman Armey. Director James, I am sure the entire
    committee would join me in saying it is a pleasure to hear from
    you today, on the day of your first anniversary on this job. We
    do appreciate your work and we look forward to your statement.

        STATEMENT OF HON. KAY COLES JAMES, DIRECTOR, OFFICE OF
                          PERSONNEL MANAGEMENT

        Ms. James. And thanks for the party.
        Mr. Chairman and Congresswoman Pelosi and other
    distinguished members of the committee, thank you for the
    opportunity to be here today, and thank you also for the
    opportunity to have worked with you and your staffs in the last
    few days on behalf of the American people.
        You have before you the weighty task of creating the
    legislation that will create a new Cabinet-level department to
    protect our Country and our people and keep us safe at home.
        We all know that the stakes are high. We saw the enemy for
    what they are on September 11: ruthless murderers, who relish
    rather than regret the death of innocents, and have made the
    institutions and people of our country the target for their
    hatred.
        It is against this backdrop that the President has asked
    the Congress to create the Department of Homeland Security so
    our Government will be properly organized and prepared to
    defend against this new kind of enemy and the changing threats
    posed to our people. The Department is a key component of the
    National Strategy for Homeland Security that the President
    unveiled today, the first-ever strategy for mobilizing the
    Nation's resources at every level to protect America from
    terrorist attack.
        Now is not the time for timid reforms and halfway measures.
    We are at war. The enemy has already shown his boldness in
    pursuing every possible avenue of attack, and we must be
    equally bold in pursuing every possible defense.
        My administration colleagues have addressed the issue of
    what agencies and responsibilities properly belong in the new
    Department. My role is to focus on the people we are counting
    on to secure and protect our homeland: our patriotic public
    servants. The Department of Homeland Security will bring
    together more than 170,000 Federal employees from agencies that
    not only have their own distinct cultures, they operate under
    seven different payroll systems and 22 personnel systems. Our
    responsibility to these dedicated public servants is to give
    them an organization that is as focused and committed to
    protecting our homeland as they are. The Department of Homeland
    Security must be world class, with the best possible equipment
    and the best possible personnel system, not a patchwork of
    antiquated systems and inflexible, outmoded practices.
        The bill that the President sent to Congress creates a
    broad framework to allow the new Department to retain the best
    aspects of the Government's existing personnel system and to
    build on them. Our objective is to ensure a smooth transition
    of people and functions to the new agency at the outset, and
    ultimately put in place a 21st century personnel system that
    meets 21st century needs. OPM will work with the new Department
    leadership to ensure that employees are not needlessly
    distracted by concerns about their pay and benefits but these
    public servants are able to concentrate solely on the
    Department's critical mission. Federal workers transferring to
    the Department will come with their current pay and benefits.
        The President's legislation allows the Secretary of
    Homeland Security, working in conjunction with the Director of
    OPM, to develop a new, agile personnel system. The new
    Department is being given great flexibility, but not carte
    blanche. The Department of Homeland Security will be subject to
    the principles of merit and fitness. These are operating
    principles that will serve as the foundation for employment in
    the Department.
        Employees can expect to be treated with respect and
    compensated appropriately. Whistleblowers will be protected
    when they disclose waste, fraud, and abuse. The veterans'
    preference law is a longstanding cornerstone of the civil
    service, and veterans will still receive employment preference
    in the Department of Homeland Security.
        In addition, Department employees will continue to be
    covered by generally applicable employment laws such as the
    Civil Rights Act, the Fair Labor Standards Act, the Social
    Security Act, government ethics standards, and Hatch Act
    restrictions on political activities.
        What tools might this flexibility hypothetically provide to
    support a culture of urgency in this new Department?
        The ability to bring in new talent quickly to fill
    vacancies in critical positions.
        The ability to shift gears in assignments rapidly as new
    threats or new enemies emerge, or when science or technology
    opens up new opportunities to protect the American homeland.
        The ability to reassign those who cannot adapt to the
    culture of emergency, for whom the Department of Homeland
    Security is not the right environment. And for these
    individuals, given the current needs of the Federal Government,
    other options will exist as long as they are not poor
    performers.
        With a mission this critical, we cannot afford a personnel
    system that rewards mediocrity and demoralizes high performers.
    I understand that change creates uncertainty and overcoming it
    can be no small challenge, and our focus in the midst of this
    environment is protecting America. Our commitment is that we
    will bring everybody to the table, and that includes employee
    unions and other stakeholders. We will ensure the development
    of this system will be fair and balanced and objective.
        The President of the United States himself afffirmed that
    when the Department is established, employees represented by
    unions will continue to be represented, their bargaining units
    will move with them.
        And, let me be as clear as I possibly can be on this issue:
    the creation of the Department of Homeland Security is not an
    effort at union busting. There are no hidden agendas here. The
    flexibility the President envisions for the new Department is
    aimed at one result and one result only: ensuring the security
    of our homeland.
        We must get our priorities right. More than 3,000 people
    were killed in the terrorist attacks on the World Trade Center
    and the Pentagon and in the plane that crashed into the woods
    in Pennsylvania on September 11. And as you move forward with
    your deliberations, you will be asked to consider many
    competing interests and I respectfully request that we keep
    foremost in our thoughts those victims and the lives of
    potential victims that may be saved by the actions that we take
    here.
        And, once again, I am grateful for the opportunity to
    discuss these matters with you and look forward to working with
    you to answer any questions that you may have.
        Chairman Armey. Thank you, Director James.
        [The statement of Ms. James follows:]

     PREPARED STATEMENT OF THE HONORABLE KAY COLES JAMES, DIRECTOR, OFFICE
                            OF PERSONNEL MANAGEMENT

        Mr. Chairman, distinguished Members of the Committee:
        Thank you for inviting me here today, and I hope that my
    testimony will help inform your deliberations.
        You have before you the weighty task of crafting the
    legislation that will create a new cabinet-level department to
    protect our country and keep our people safe at home.
        You know the stakes are high. We saw the enemy for what he
    is on September 11th--a ruthless murderer who relishes rather
    than regrets the death of innocents and who has made the
    institutions and people of our country the target for his
    fanatic hatred.
        It is against this backdrop that the President has asked
    the Congress to create the Department of Homeland Security so
    that our government will be properly organized and prepared to
    defend against this new kind of enemy and the changing threats
    posed to our people. The Department is a key component of the
    National Strategy for Homeland Security that the President
    unveiled today- the first-ever strategy for mobilizing the
    nation's resources at every level to protect America from
    terrorist attack.
        Now is not the time for timid reforms and halfway measures;
    we are at war. Wide and varied plots are the subject of our
    daily concerns--from shoe bombs to dirty bombs; threats
    involving scuba divers, threats to use petroleum tankers and
    private planes; threats to our power plants and refineries, to
    our water supply, and to the very air we breathe.
        The enemy has already shown his boldness in pursuing every
    possible avenue of attack. We must be equally bold in pursuing
    every possible defense. Nothing less than a unified homeland
    structure that takes in all the varied dimensions of protecting
    our borders, our infrastructure, and our citizens will suffice.
        My Administration colleagues have addressed the issue of
    what agencies and responsibilities properly belong in the new
    department. My role is to focus on the people we are counting
    on to protect and secure our homeland--our patriotic public
    servants.
        The Department of Homeland Security will bring together
    more than 170,000 Federal employees. The creation of the
    Department takes into account enormous challenges and important
    factors such as:
         The transfer of 22 Cabinet agency or small agency
    components--each with their own distinct culture and governed
    by varying personnel systems;
         Employee pay and benefits managed by seven
    different payroll systems--some with compatible components and
    some very different; and
         17 different unions represent employees being
    transferred to the Department, each with a multitude of
    different bargaining agreements and negotiated provisions.
        Our responsibility to these dedicated public servants--the
    men and women who secure our borders, protect our
    transportation systems, investigate terrorist organizations,
    respond to emergencies, and protect us against biological
    agents--is to give them an organization that is as focused and
    committed to protecting our homeland as they are.
        The Department of Homeland Security must be World Class,
    with the best possible equipment and the best possible
    personnel system--not a patchwork of antiquated systems and
    inflexible, outmoded, out-of-date practices.
        The bill that the President sent to Congress creates a
    broad framework to allow the new department to retain the best
    aspects of the government's existing personnel system--and to
    build on them. Our objective is to ensure a smooth transition
    of people and functions to the new agency at the outset--and
    ultimately put in place a 21st Century personnel system that
    meets 21st Century needs.
        OPM is prepared and will work with the new department
    leadership to ensure that employees are not needlessly
    distracted by concerns about their pay and benefits--that these
    public servants are able to concentrate solely on the
    department's critical mission of protecting our homeland.
        Federal workers transferring to the department will come
    with their current pay and benefits--the same health,
    retirement, and life insurance benefits, and the new Federal
    Long-Term Care Insurance Program that are available to them
    today.
        The new department is being given great flexibility, but
    not carte blanche. The Department of Homeland Security will be
    subject to the principles of merit and fitness.
        Civil service law sets out the nine merit system
    principles:
        (1) Recruit qualified individuals from all segments of
    society, and select and advance employees on the basis of merit
    after fair and open competition.
        (2) Treat employees and applicants fairly and equitably,
    without regard to political affiliation, race, color, religion,
    nation origin, sex, marital status, age, or handicapping
    condition.
        (3) Provide equal pay for equal work and reward excellent
    performance.
        (4) Maintain high standards of integrity, conduct, and
    concern for the public interest.
        (5) Manage employees efficiently and effectively.
        (6) Retain or separate employees on the basis of their
    performance.
        (7) Educate and train employees when it will result in
    better organizational or individual performance.
        (8) Protect employees from improper political influence
        (9) Protect employees against reprisal for lawful
    disclosure of information in ``Whistleblower'' situations
    (i.e., protect people who report things like illegal and/or
    wasteful activities).
        In addition, the law lists twelve categories of prohibited
    personnel practices under the merit principles, stating
    specifically that employees who have the authority to take,
    direct others to take, recommend, or approve personnel actions
    shall not:
        (1) Discriminate on the basis of race, color, religion,
    sex, national origin, age, handicapping condition, marital
    status, or political affiliation.
        (2) Solicit or consider employment recommendations based on
    factors other than personal knowledge or records of job-related
    abilities or characteristics.
        (3) Coerce an employee's political activity.
        (4) Deceive or willfully obstruct a person's right to
    compete for employment.
        (5) Influence any person to withdraw from competition for
    any position to improve or injure the employment prospects of
    any other person.
        (6) Give unauthorized preference or advantage to any person
    to improve or injure the employment prospects of any particular
    employee or applicant.
        (7) Engage in nepotism (hire or promote or advocate the
    hiring or promotion of relatives within the same agency
    component).
        (8) Retaliate against a whistle blower, whether an employee
    or an applicant.
        (9) Retaliate against employees or applicants who exercise
    their appeal rights, testify or cooperate with an Inspector
    General or the Special Counsel, or refuse to break a law.
        (10) Discriminate based on personal conduct which is not
    adverse to on-the job performance of the employee, applicant or
    others.
        (11) Violate any law, rule, or regulation which implements
    or directly concerns the merit principles.
        (12) Knowingly to take or fail to take a personnel action
    if that action or failure to act would violate a statutory or
    regulatory veterans' preference requirement
        These merit system principles and prohibited personnel
    practices apply both to regular Federal employees and to many
    others who are covered by alternative human resources systems
    (e.g., the Postal Service, CIA, FBI, FAA, and SEC), and are
    operating principles that will serve as the foundation for
    employment in the department. Employees can expect to be
    treated with respect and to be compensated appropriately.
    Whistleblowers will be protected when they disclose waste,
    fraud and abuse. And veterans will still receive employment
    preference in the Department of Homeland Security.
        In addition, department employees will continue to be
    covered by generally applicable employment laws such as the
    Civil Rights Act, the Fair Labor Standards Act, the Social
    Security Act, government ethics standards and Hatch Act
    restrictions on political activities. Keeping in mind the
    Department's overriding security mission, the President's
    legislation allows the Secretary of Homeland Security--working
    in conjunction with the Director of OPM--to develop a new,
    agile personnel system. Since those who threaten our country
    are relentless, the systems we develop must be flexible enough
    to permit us to anticipate and respond to threats one, two or
    five years down the line.
        What tools might this flexibility hypothetically provide to
    support a Culture of Urgency at the new department?
         The ability to bring in new talent quickly to fill
    vacancies in critical positions, whether created by retirements
    or changing missions.
         The ability to shift gears--and assignments--
    rapidly as new threats or new enemies emerge or when science
    and technology open up new opportunities to protect the
    American homeland.
         The ability to reassign those who cannot adapt to
    the Culture of Urgency, for whom Homeland Security is not the
    right environment. For these individuals, given the current
    needs of the Federal government, other options will exist so
    long as they are not poor performers.
        The Department of Homeland Security must have the ability
    to attract and retain good people, to offer incentives for
    exceptional contributions in order to get the right people to
    the right jobs in time to make a difference. The mission of the
    Department of Homeland Security demands the best of our public
    servants. With a mission this critical, we cannot afford a
    personnel system that rewards mediocrity and demoralizes high
    performers. I understand that change creates uncertainty, and
    overcoming it can be no small challenge. But our focus must be
    on protecting America.
        We will ensure the development of this system will be fair,
    balanced and objective. Our commitment is that we will bring
    everyone to the table, and that includes employee unions and
    other stakeholders. Indeed, I met with the leaders of some 40
    Federal unions and employee associations the day before the
    President announced his specific proposal for a Department of
    Homeland Security. We had a candid and very useful discussion
    about the human capital challenges of merging existing agencies
    into a single homeland security organization.
        I am convinced that the only way to effectively meet the
    serious tests ahead is through frank, straightforward, two-way
    communications where ideas and information are openly shared.
    As Director of OPM, I have made it a priority to encourage and
    foster open lines of communication and a good working
    relationship with the unions, and we have been meeting
    regularly.
        At the President's Management Council, I have encouraged
    the Chief Operating Officers of every agency to work with their
    unions and to involve them early on when important workplace
    decisions are made. To reaffirm that message across government,
    last month I sent a memorandum to all agency and department
    heads highlighting the importance of labor-management
    cooperation. It has never been more important for labor and
    management to work together; we need that cooperative spirit to
    bolster efforts to establish World Class human resources
    systems at the new Department of Homeland Security.The
    President of the United States himself has affirmed that, when
    the department is established, employees represented by unions
    will continue to be represented; their bargaining units will
    move with them. Let me be as clear as I can on this important
    issue: the creation of the Department of Homeland Security is
    not an effort at union busting. There are no hidden agendas.
    The flexibility the President envisions for the new department
    is aimed at one result and one result only: ensuring the
    security of our homeland.
        For employees transferred to the new Department of Homeland
    Security, the President has told them that there is tremendous
    honor--and tremendous responsibility--inherent in their
    assignments. They will have the personal and professional
    satisfaction of knowing that their primary mission is to keep
    America safe. I know that every Federal employee is committed
    to making the Department of Homeland Security as successful as
    possible, and they understand that their urgent and compelling
    mission may require personal sacrifices.
        We must get our priorities right. More than 3,000 people
    were killed in the terrorist attacks on the World Trade Center
    and the Pentagon and in the plane that crashed in the woods of
    Pennsylvania on September 11th. As you move forward with your
    deliberations, you will be asked to consider many competing
    interests. I respectfully request that you keep foremost in
    your thoughts these victims and the lives of potential victims
    that may be saved by the actions you take.
        Once again, I am grateful for the opportunity to discuss
    these matters with you, and would be happy to respond to any
    questions you may have.

        Chairman Armey. The Chair will now proceed under the 5-
    minute rule, and we may direct our questions to any member of
    the panel. The Chair recognizes the gentleman from Texas, Mr.
    Delay.
        Mr. DeLay. Thank you, Mr. Chairman, and appreciate your
    testimony. Since I have 5 minutes I have got a lot to talk
    about, and I want to quickly go to it.
        Mr. Mineta, it is great to see you here. And I might say
    that I served with you on the old Public Works and
    Transportation Committee, and have had a long relationship with
    you at that time, and now I serve on the Transportation
    Subcommittee of Appropriations, so I have dealt with the Coast
    Guard issue and the issue of the Transportation Security
    Administration, too.
        I don't know what your position is, but I have long
    understood that in any organization, it is vitally important to
    have an organization that allows people to do the best job that
    they can. And in that organization, the mission statement, or
    the goal, or whatever you want to call it, of that particular
    agency, department, or office pretty much lays out how people
    perceive the mission or the authority or the responsibility of
    that agency.
        I have always worried about Coast Guard being in the
    Department of Transportation. Every time we tried to
    appropriate money for the Coast Guard, people considered that a
    transportation agency instead of a law enforcement/military
    group. The number one priority to me for the Coast Guard is to
    protect and defend the borders of these United States. All
    other issues are important, but not as important as that main
    mission of the Coast Guard.
        The same with the TSA. TSA was put under the Department of
    Transportation for whatever reason. I had concerns about the
    Airport Security Act, as you know. It was put there, but it is
    not a transportation agency, it is a security agency. It is a
    security office. It is charged with providing for security of
    passengers that happen to be going on an airplane.
        Your testimony sort of alluded to that, but could you speak
    to the importance of bringing these two agencies under Homeland
    Security and, finally, focusing on their prime responsibility,
    and that is protecting and defending not only the citizens of
    the United States but protecting them through protecting our
    borders.
        Secretary Mineta. Well first of all, the mission of the
    Coast Guard fits very closely the new mission that is being
    charged to the Department of Homeland Security in terms of
    maritime or border protection, in terms of the maritime issues
    regarding port security; and so there are a number of missions
    and goals of the Coast Guard that fit very closely and well
    with the mission and the goals of the Department of Homeland
    Security.
        I think when you look at the history of the Coast Guard, it
    has always served the Nation well, regardless of what
    department it has been in. It has been in the Department of
    Treasury, it has been in the Department of the Navy, and since
    the formation of the Department of Transportation it has been
    there. But it is also part of the National Defense
    Authorization Act. So it is equally treated as an armed force.
    As with the Navy, the Army, the Air Force, the Commandant of
    the Coast Guard as a service chief has a role with the Joint
    Chiefs of Staff on matters involving the Coast Guard.
        So the Coast Guard has a military mission as well as a law
    enforcement mission in terms of interdiction of drugs on the
    high seas, interdicting illegal immigration and protecting, in
    that sense, the border. So I think that this mission and the
    values and the goals that are attached to the Department of
    Homeland Security fit well with the missions, values, and the
    of the United States Coast Guard.
        Then with the Transportation Security Administration,
    again, they are a security body. Yes, they have elements of law
    enforcement, but, again, they are basically a security
    administration and so, to that extent, since the primary
    responsibility of this new Department is going to be Homeland
    Security, I think, again, TSA ought to be moved into the new
    Department and it fits with the missions and goals and values
    of the new Department.
        Chairman Armey. Thank you.
        The Chair recognizes Ms. Pelosi.
        Ms. Pelosi. Thank you, Mr. Chairman. I would like to yield
    to the gentleman from Texas.
        Chairman Armey. Oh, the Chair recognizes the gentleman from
    Texas, Mr. Frost.
        Mr. Frost. Thank you, Mr. Chairman. I have a couple of
    questions for Director James, if I may.
        Director James, under the existing Labor, Management and
    Employee Relations Act, which was amended by Congress in the
    late 1970s, the President is the one who has the authority by
    executive order to waive that act. Under the legislation that
    is before us, that authority is given to you as the Director of
    OPM and the new Secretary of this agency, rather than having it
    exercised by the President by executive active order. Why
    should this authority be given to the new Secretary and to you
    when this does not apply to any other agency currently, or
    other department?
        Ms. James. Well, I think that there is a unique mission
    that this particular agency has, and there is the opportunity
    to use that particular authority in a very surgical way. I
    think that the intent is to make sure that employees who are
    represented by unions maintain the opportunity to do that. But,
    where it is necessary in the interest of national security to
    carve out for particular reasons, particular work groups, or it
    is very imperative for the Secretary in conjunction with OPM,
    going through a regulatory process where it would be open and
    for the public and not done in any way that would not be
    transparent in the interest of national security, to have the
    ability to do that.
        Mr. Frost. Well, if I may follow on that, as you know,
    there was an amendment adopted in committee last week authored
    by Congresswoman Morella from Maryland. That amendment narrowed
    the ability of the President to issue an executive order
    precluding the rights that are protected under the Civil
    Service Act. Of course, it didn't even address--it assumed
    that--the amendment assumed that you and the new Secretary
    would not have the authority but only the President would have
    that authority.
        I have that amendment in front of me, and it says it should
    be limited to those instances in which the mission and
    responsibilities of such unit, bargaining unit, materially
    change and that a majority of the employees within such unit
    have as their primary duty intelligence, counterintelligence or
    investigative work directly related to terrorism.
        So there are two elements here. One, that a majority of the
    employees would be directly related to the fight on terrorism
    and, second, that the mission and responsibilities of that
    particular function within the new departments will have
    materially changed.
        Now, I would ask you, what is wrong with the Morella
    amendment? That seems to be a very reasonable proposition, that
    a majority of the employees should be directly involved in
    fighting terrorism and that the mission should have changed,
    rather than just being a continuation of the existing
    amendment--mission. What is wrong with the amendment that was
    adopted by the committee?
        Ms. James. Several things. First, I believe that there is
    one component of the amendment which we can all agree on; and
    that is that when employees move into this agency they move
    there in their current bargaining units and with the full
    protection that they have. I think it diminishes the
    President's authority to protect the American people, however,
    by diminishing his ability to determine and use in a very
    sparing way the authority that every other President has had to
    determine that, for national security interests, some of those
    particular bargaining units may perhaps be better served by not
    falling under those particular protections.
        There have been specific examples throughout the history of
    our Country where every President, be they Republican or
    Democrat, has used that authority; and this particular
    amendment, the Morella amendment, really diminishes the ability
    of the President of the United States to use the authority that
    has been granted to him to protect the American people.
        Mr. Frost. Even if their mission and responsibilities have
    not materially changed?
        Ms. James. Well, you know, I think even if their mission
    and responsibilities have not materially changed, then perhaps
    the environment in which they operate has. We are in a new war,
    in a new day; and I think that the determination should be left
    to the President in conjunction with the Secretary to make
    those kinds of determinations.
        Mr. Frost. Of course, the legislation specifically
    delegates this to the Secretary and doesn't even have the
    President involved.
        Ms. James. Well, right now, we are talking about the
    Morella amendment which is far more sweeping and truly
    diminishes the authority of not just this President but of the
    Presidency.
        Mr. DeLay. [Presiding.] The gentleman's time has expired.
    Mr. Watts.
        Mr. Watts. Mr. Chairman, I want to direct my question to--
    first, I would like for Secretary Thompson and then Secretary
    Mineta to answer; and then if we still have time in the 5-
    minute segment we will go to Secretary Veneman and Mr. Abraham.
        But we all know that Homeland Security--when you talk about
    Homeland Security you are really talking about State and local
    defenses, State and local security. So, with that in mind, can
    you detail for the Select Committee how the entities to be
    transferred from your departments or agencies according to the
    President's proposal will work with State and local officials
    and agencies to better secure the homeland?
        Governor Thompson. Congressman Watts, first off, as far as
    the Department of health and Human Services, the Congress gave
    the Department of Health and Human Services $1.1 billion
    effective January 10 of this year. We had to set up a procedure
    through which we could get that money to each State, and we
    asked the States to come up with a comprehensive plan. They had
    until April 15 to do so.
        They came in with their plans. We critiqued those plans
    through CDC and through HRSA and through the Department and
    came up with a program. We sent them out templates on how to do
    their job better as far as securing the local responders, the
    emergency wards and the hospitals, the communications from CDC,
    through the State health departments, the local health
    departments, putting epidemiologists in there, securing the
    laboratories, improving the laboratories; and we got all that
    money sent out by June 1st of this year.
        Now the States are incorporating that plan. What is going
    to take place under the new procedure is that it is going to be
    in consultation with the Homeland Security--the money flows to
    the Department of Homeland Security, but the Department of
    Health and Human Services is actually going to do the work in
    consultation with the new Secretary for Homeland Security. Then
    they will contract back with the Department of Health and Human
    Services to continue this program; and this, of course, is to
    secure on a regional basis a better protection for all the
    people as relates to public health and also protect the
    citizens against any bioterrorism agent or any chemicals
    whatsoever.
        Mr. Watts. Secretary Mineta.
        Secretary Mineta. In terms of the mission of the Coast
    Guard and moving it over, the President's legislative proposal
    is that there are only two entities that would be kept intact,
    Secret Service and Coast Guard, in terms of moving to the
    Department of Homeland Security. I know that there have been--
    we had a lot of discussion in the Homeland Security Council for
    a long time as to whether or not there is a clear ``tear line''
    for splitting the Coast Guard into its functions, and there
    really is not.
        When you think about search and rescue or fisheries
    enforcement, drug interdiction, immigration interdiction, those
    assignments are interchangeable and that is why the Coast Guard
    ought to be kept as a distinct unit and it is why that is what
    we have recommended and why we support this legislation in this
    form.
        Mr. Watts. Secretary Veneman.
        Secretary Veneman. We at USDA have a very strong
    relationship with our State partners, particularly through
    State Departments of Agriculture, also through universities, in
    cooperating in many of the things that we do. As we look at the
    issues of Homeland Security, both on the prevention and
    preparedness parts of homeland security, our relationship with
    the States is very important; and we have been strengthening
    those relationships, as I talked about in my testimony, through
    the period of time we were under the threat of foot and mouth
    disease and also since September 11 when we are looking at
    threats of intentional terrorism as well.
        Under the House Ag Committee's proposal, the ag quarantine
    inspectors that are at our ports of entry would transfer to the
    Department of Homeland Security. There are some partnerships
    that we have with the States that enhance that inspection; and
    we would anticipate that, through contracting authorities, we
    would continue to have those partnerships both with APHIS and
    with the Department of Homeland Security. So I would anticipate
    we are going to continue to have a very strong relationship
    both on the preparedness side and the prevention side both
    within the Department of Agriculture and through the Department
    of Homeland Security.
        Chairman Armey. [Presiding.] Thank you. Thank you. The
    gentleman from New Jersey.
        Mr. Menendez. Thank you, Mr. Chairman.
        I want to thank all the Secretaries and the Director for
    their testimony.
        This is H.R. 5005, President's proposal. Could any one of
    the Cabinet Secretaries point to me the language that insures
    that nonsecurity missions of departments transferred in here
    are preserved? Can you point to me the language in the
    President's bill that will insure that nonsecurity missions of
    departments transferred from your respective departments, of
    agencies from your respective departments transferred into the
    new Department of Homeland Security, that those nonsecurity
    missions are preserved?
        Secretary Mineta. Well, I am convinced that, in terms of
    the Coast Guard being moved intact over to DHS, that there are
    a number of nonsecurity functions of the Coast Guard and that
    they will remain intact.
        Mr. Menendez. And, Mr. Secretary, could you tell me what--
    the language here that gives us that guarantee?
        Secretary Mineta. Well, in the case of the Coast Guard, I
    believe it is title 14 of the United States Code that moves
    under this new law. So I assume that as title 14 is moved under
    with H.R. 5005, that that would be the--.
        Mr. Menendez. Well, that will transfer the missions of what
    exists as the Coast Guard. But my point is that there is no
    guarantee in the legislation.
        For example, Secretary Thompson, the National Institute of
    Health and other similar agencies, that all of those
    nonsecurity missions that they so importantly carry out, there
    is no preservation of that in the Coast Guard. There is no
    preservation. As a matter of fact, before the Transportation
    Committee, the Commandant said that about 80 to 85 percent of
    the Coast Guard's functions are not security related. You
    described it Mr. Secretary as about 60 percent. So anywhere
    between 60 and 85 percent of the Coast Guard's missions and
    budget are not security related.
        How do we guarantee that when departments are being
    transferred, like the Coast Guard in its entirety, that
    nonsecurity missions are guaranteed which are equally important
    to the American people? I don't see any language that says
    that.
        Secretary Mineta. I think that is in title I. It doesn't
    lay out all of the specific functions. It doesn't list them.
    But I believe in title I the President's legislation does
    obligate the new Secretary to perform all of the duties of the
    agencies that are being transferred.
        Mr. Menendez. But, Mr. Secretary, those are very broad
    functions given to the Secretary of the Department for the
    purposes of operating that Department. The question is--and I
    think that, you know, my question obviously doesn't have an
    answer because it does not in the legislation, and that is my
    point here. We want to preserve nonsecurity missions such as
    the Coast Guard. Of which the Commandant said 85 percent is
    nonsecurity, you have described it in your own testimony as 60
    percent is nonsecurity. How do we insure that those nonsecurity
    missions are preserved in a Department whose focus is homeland
    security?
        So I would ask the Secretaries--and all of you have
    agencies that are being transferred that have multiple
    missions, and we want to preserve those other missions. We want
    to make sure we are continuing to pursue Alzheimer's and cancer
    and AIDS and all those other entities, that research and
    development is being done. Would you believe that language that
    would guarantee that the budgets of departments transferred to
    the new Homeland Security Department for whose missions are not
    security related that they be established with this fiscal year
    as a baseline and that prohibitions would be made against
    transferring money out of those nonsecurity missions for
    security purposes? Because, unless we do that, the answer to my
    question is there are no guarantees.
        If we say that 60 percent of the Coast Guard's missions are
    nonsecurity and somehow we don't insure the budget for that
    nonsecurity mission, then you can have Coast Guard's
    operational capacity go primarily for security and leave search
    and rescue and leave navigational issues and others potentially
    abandoned.
        As a matter of fact, isn't it true, Mr. Secretary, that the
    Coast Guard has already decreased operations up to 25 percent
    because of funding shortfalls? And that is before we get into
    its new focused function.
        Secretary Mineta. Well, first of all, there is no question,
    before September 11 security was probably, I don't know, 5
    percent. After September 11, security went up to probably 35
    percent. We did very little in terms of drug interdiction, very
    little in terms of immigration interdiction, fisheries
    enforcement.
        But, again, it seems to me that is also--from a former
    Member's perspective--the responsibility of the committees in
    terms of the oversight they are doing, in terms of the
    Appropriations Committees, of allocating the financial
    resources. So I think, like a lot of legislation, within the
    four corners of the legislation there is a lot of delegated
    authority to the executive branch. The exercise of those powers
    by the departments, I think, must be in accordance with some of
    the things that are in this legislation and the practices that
    Miss James talked about.
        The important part is that there be the kind of language
    that preserves the functions from the various departments or
    agencies that go to the new Department. But I also think that
    there is a responsibility on the part of the congressional
    committees to do their oversight to make sure that the
    functions and the missions of the agencies that are transferred
    over are kept, especially those that are moved over intact.
        Under this legislation, as I recall, it is only the Secret
    Service and the U.S. Coast Guard that are moved over in their
    entirety and to be kept as distinct entities in this
    legislation.
        Chairman Armey. The gentleman's time has expired. The
    gentlelady from Ohio.
        Ms. Pryce of Ohio. Thank you, Mr. Chairman.
        Secretary Thompson, would you talk to us a little bit about
    hospitals? I think that hospitals are just like first
    responders. They are on the front lines. They will bear a huge
    brunt of whatever this Nation suffers if we have any kind of
    bioterrorist attack. And it would just seem to me, off the
    cuff, that they are woefully unprepared for anything like that
    currently. What is happening now? What are you encouraging and
    what changes will we see as this new law is implemented in how
    our local hospitals are going to be prepared?
        Governor Thompson. Congresswoman Pryce, first off, this
    Congress in its wisdom appropriated $135 million last year and
    the bill was signed into law on January 10 by the President in
    order to have the hospitals develop a comprehensive plan as to
    how they would educate, how they would communicate with first
    responders, how they would handle the surge capacity, how they
    would handle problems if in fact there was an epidemic such as
    smallpox. We sent out that money through HRSA as of June 1st
    this year, after the hospitals and the State health departments
    developed a comprehensive plan.
        We have also got the hospitals and the local health
    departments hooked up through our Health Alert Network which is
    administered by CDC, and this was part of that $1.1 billion of
    which the hospitals got $135 million.
        Now in the upcoming budget for fiscal year 2003, there is
    an additional $518 million for hospitals to implement those
    plans that were being planned this year. So that is an
    additional $518 million to do several things: to strengthen the
    emergency wards, to have coordination between the first
    responders and the police and fire departments in a community,
    to have a regional capacity this year, to have a surge capacity
    of 500 beds to be upgraded to 1,000 beds next year, to have a
    place where if there was a smallpox epidemic that would need
    thousands of beds that they would have some place in a large
    city or a large area that people could communicate. And we are
    strengthening the laboratory capacity. We are strengthening the
    communication and all of that.
        Now, that is going to be--the money is going to be
    transferred over to the new Department of Homeland Security. It
    is going to be approximately $1.8 billion and--but they are
    going to contract back to do the work, which we are doing very
    effectively in the Department of Health and Human Services. But
    it will be in consultation with the new Secretary of Homeland
    Security and the Secretary of the Department of Health and
    Human Services in order to strengthen the hospitals, to
    strengthen our comprehensive plan that we have already set in
    motion.
        I am very proud of what we have been able to accomplish to
    date, and I think your question was--further alluded to that
    you didn't think we were prepared. I want to be able to report
    that I think we are very prepared. We are getting stronger
    every single day, and the Department has done an excellent job
    of getting this country prepared for any bioterrorism, any
    chemical agents whatsoever. We have got a long ways to go, but
    we have--.
        Ms. Pryce of Ohio. How about the bricks and mortar? Are we
    going to need --.
        Governor Thompson. Bricks and mortar is not part of this.
    We are putting the money--some of the money goes into bricks
    and mortar, especially for laboratories. Because what we need,
    if in fact there is a strange pathogen that comes in--if
    somebody is sick, comes into the emergency ward and is sick--we
    don't immediately know that pathogen. That part of that tissue
    has to be sent into a State laboratory immediately. We are
    expanding our States' laboratories. We are strengthening the
    security.
        Then if, in fact, there is a strange disease caused by a
    chemical or a biological pathogen they are in direct
    communication through the Health Alert Network and the
    laboratory network to CDC. We have airplanes on standby that we
    are leasing that we will send doctors immediately to that
    hospital to work in consultation with the local doctors for
    local health departments to determine what is wrong, find out
    what it is, decide what a cure is.
        Then, of course, we will then have all of the Push Packages
    which are distributed in 12 different locations around America,
    to send in medical supplies, any antidotes, any antibiotics or
    whatever is needed. We have to be able to move those within 7
    hours, and we have been able to do that.
        Ms. Pryce of Ohio. Thank you. That is a very complete
    answer and a very encouraging one.
        Very quickly, because I think our time is running out--my
    time is running out. Secretary Mineta, as you know, the House
    Transportation and Infrastructure Committee adopted an
    amendment to the administration's proposal that sets floors or
    minimum percentages on spending for the Coast Guard's Homeland
    Security missions. Do you believe those floors are necessary?
    Do you think that they are important? How do you feel about
    them?
        Secretary Mineta. First of all, they did put in their
    amendments to H.R. 5005 12 percent for search and rescue and 13
    percent for drug interdiction; and these are all minimum
    amounts. But I believe very, very strongly that these floors
    are really inappropriate because they really restrict the
    President's flexibility, the Secretary of Homeland Security and
    the Coast Guard in terms of being able to deal with surges in
    terms of any kind of activity that may occur. So even if these
    kinds of floor amendments were put on any bill, I think, that
    would affect any department, we would find them to be
    inappropriate.
        Ms. Pryce of Ohio. Thank you. Thank you, Mr. Chairman.
        Chairman Armey. The gentlelady from Connecticut.
        Ms. DeLauro. Thank you very much. Thank you very much, Mr.
    Chairman; and I want to welcome the Secretaries and thank you
    for your testimony and thank you for your continued efforts and
    good public service. You do an incredible job.
        Let me just follow up again on my colleague from Ohio, Ms.
    Pryce, but also, Secretary Thompson, something that you said.
    You do have an excellent process in place. I say to myself, why
    do we want to change it? But let me ask a specific set of
    questions.
        Last November, a 90-year-old woman in Oxford, Connecticut,
    contracted and quickly died from anthrax. Fortunately, local
    responders, hospitals, the State department of health, labs at
    our academic centers which I visited with whom CDC now works
    very, very closely, were well-trained people. They used the
    skills that they had honed from years of investigating
    naturally occurring outbreaks such as West Nile virus to
    investigate the incident. Wouldn't this plan that is being
    suggested, to separate public health activities related to
    bioterrorism from those related to naturally occurring events,
    threaten our ability to respond?
        In both cases we used the same labs, investigators, the
    scientific methods to investigate. Separating the
    responsibilities seems counterproductive, and how do you avoid
    a duplication without harming our public health system? Who is
    then responsible for investigating an outbreak when the source
    is unknown--meningitis, West Nile virus?
        Let me just--I have got a couple of other questions, but
    let me just address those to you right now.
        Governor Thompson. First off, I have to agree with you. I
    think the Department has done a hell of a good job. Far be it
    for me to say we haven't. We have done so under some very
    trying situations, and we continue to do so. But that doesn't
    mean that it cannot be strengthened and improved in the future.
        Homeland Security Director, Tom Ridge--Governor Ridge and I
    have worked very closely--in cooperation in developing the
    budget for bioterrorism and he was very much involved in
    developing that budget going up to $4.3 billion in fiscal year
    2003. The basic system is going to stay in place, but the
    dollars are going to be over in Homeland Security in regards to
    helping make sure that we take care of the security.
        But as far as the public health concerns--determining
    Ebola, West Nile virus, whatever the case may be--that is still
    a public health issue, and that will be administered and
    surveyed and researched by the Department of Health and Human
    Services through CDC and through the National Institutes of
    Health.
        So there is going to be a collaborative area between
    Homeland Security and Health and Human Services. I do not
    believe it is going to be repetitive or duplicative. I think it
    is going to strengthen Homeland Security and will not in any
    way harm our public health initiatives.
        Ms. DeLauro. Follow-up question. What is the likely impact
    going to be on research if you have got large amounts of money
    then that are going to be moved and priority setting--it is
    money and priority setting authority that is going to be
    transferred to another agency.
        Governor Thompson. That is right.
        Ms. DeLauro. Or shared with several agencies, for that
    matter. If you are going to take that authority away, if you
    are going to take the funding away, then how do you then deal
    with the research that we are doing which is ongoing, which is
    equally vital in terms of efforts? How is this going to be--.
        Governor Thompson. It is going to be approximately $4.7
    billion transferred over to Homeland Security, with the written
    language that it will have to contract back to CDC and contract
    with NIH in consultation with the two Secretaries that are
    developing the plan for Homeland Security. And that is dealing
    with bioterrorism, it is dealing with the agents, it is dealing
    with chemical and so on. So that is where the difference is. It
    is more of a consultation, but the money actually flows to the
    Homeland Security but the work still being done by the
    Department of Health and Human Services.
        Ms. DeLauro. Tell me then how are we going to integrate the
    work and the research that is already under way at the NIH with
    the new Department?
        Governor Thompson. Well, the work at NIH, you know, the
    vast majority of it--.
        Ms. DeLauro. They are working on bioterrorism.
        Governor Thompson. They are working very hard on
    bioterrorism. The NIH budget dealing with bioterrorism is $1.8
    billion. That leaves approximately $25 billion for all the
    other institutes. It is only that $1.8 billion that is going to
    be transferred from NIH to the Homeland Security with the
    understanding and with the written affirmation that that will
    be contracted back to NIH for the continuation of the research
    in consultation, as I mentioned, with the two Secretaries.
        Ms. DeLauro. Thank you very much, Mr. Secretary.
        Chairman Armey. The gentleman from Ohio.
        Mr. Portman. Thank you, Mr. Chairman; and I want to thank
    the Secretaries and the Director for their thoughtful testimony
    today and for what they are doing every day and what their
    people are doing to protect all of us from the terrorist
    threat.
        I thought the testimony was very compelling in terms of the
    need to consolidate functions. Secretary Mineta, perhaps you
    could follow up a little bit on the Coast Guard issue. You
    talked in your testimony about the seamless nature of the work
    of the Coast Guard. Could I ask you to approach it from a
    little different perspective, not so much the benefits of
    consolidation, but what if we don't? What if the Coast Guard
    were not made part of this new agency and what if TSA,
    Transportation Security Agency, were not made part of this new
    agency. How would that affect the security of our homeland?
        Secretary Mineta. Well, first of all, it seems to me that
    the critical mission of the Department of Homeland Security is
    to provide for the security of the American people. And if you
    have two major elements of that Homeland Security not part of
    that Department, the United States Coast Guard and
    Transportation Security Administration, then it seems to me
    that the DHS will be lacking in its ability to fulfill its
    missions, whether airport security or the port security or what
    we call ``maritime domain awareness'' within the United States
    Coast Guard. Those are all elements that would fit in and do
    fit in very nicely with the mission of the Department of
    Homeland Security.
        Mr. Portman. I thought Mr. Menendez made a good point, that
    we need to make sure that the existing responsibilities that
    are not security functions continue to be maintained, but we
    also need to be sure that we are getting the benefits of
    consolidation, including the synergies which would be involved
    in having all those organizations working together and, of
    course, the efficiencies in terms of our government being
    better able to protect our shores.
        There are lots of questions I have for the other
    Secretaries. I wish I had more time. Maybe we will have a
    second round. But, Ms. James, if I could ask you a couple of
    questions. You have a great background both in academia and the
    private sector of Federal, State and local government; and we
    appreciate what you bring to the table today.
        I want to get back to the flexibility issue. There has been
    discussion of this agency needing to be lean and mean, and I
    couldn't agree more. I think one way you insure that is by
    having the right functions there but having some flexibility to
    be able to direct those functions properly.
        We went through this with the Internal Revenue Service back
    in 1998. We came up with significant flexibility, actually,
    more than you are asking for in certain respects. I can tell
    you the Commissioner is using everyone of those flexibilities;
    and, as a result, we are getting a little better service,
    believe it or not, at that agency.
        I am encouraging us to move forward with as much
    flexibility as we can, but we don't want to do anything to hurt
    people's civil rights or people's rights under civil service or
    do things like change the whistle-blower protections or do
    anything else that would affect the merit system which you
    talked about.
        On whistle-blowers, just a quick yes or no, do you provide
    whistle-blowers' protections in this proposal?
        Ms. James. Yes, we would.
        Mr. Portman. And you would support that, full whistle-
    blower protections?
        Ms. James. Absolutely.
        Mr. Portman. With regard to the issue which was raised
    earlier about the President's authority to designate an agency
    as a national security agency, I have a question. I don't quite
    understand, maybe, where we have come out on this. But Mr.
    Frost mentioned the Morella amendment. As I read in the Morella
    amendment, in that approach it would say, in essence, that this
    agency, unlike other law enforcement agencies or security
    agencies, would not be in a position to designate certain
    employees as national security employees for purposes of
    collective bargaining and so on, but, rather, the President
    would have his inherent right to come in really with a rather
    blunt instrument and say the Department itself, because of
    national security concerns, would be subject to this general
    waiver.
        Wouldn't it make more sense for the employees themselves
    who might not be part of an exemption, in other words, might be
    in a collective bargaining unit, for instance, that the
    President did not determine was necessary to determine was
    national--was subject to a national security waiver, wouldn't
    it make more sense for them not to have just the blunt
    instrument of saying everyone needs to be included in this but
    rather the Secretary should be able to pick and choose?
        I would think also, in terms of flexibility, some
    employees, one month or certainly one year to the next might be
    in that category and then might not be in that category.
        I have heard you talk about cross-training. We heard that
    from the Director yesterday or the Assistant to the President,
    Governor Ridge. Could you respond to that and talk about how
    perhaps the President, by having more flexibility, gives
    workers in a sense more flexibility as well and more rights?
        Ms. James. Yes, I would. And, you know, I think one of the
    more eloquent statements that I heard this morning is that
    Homeland Security does not mean workplace insecurity for the
    Federal worker. It cannot, and it will not, and that certainly
    is not the intention of this legislation.
        I think that we are involved in a very delicate balancing
    act. Earlier in my testimony I talked about the fact that we
    are operating in a backdrop of a national war. As a result of
    that, it is imperative that the President and the new Secretary
    have at their disposal the tools with which to balance national
    security and the rights of Federal workers. I think that we
    must provide the opportunity for the President to, not with a
    blunt instrument but very surgically, address a changing
    environment.
        And, in answer to the question regarding what is different,
    the environment changes day by day. The threat today may be
    biological. Tomorrow, it may be something else. As a result of
    that, I think that we need to have the flexibility available to
    say that the President can use that authority. The American
    people trust the President to use that authority wisely. He has
    not misused it, nor has any President. But I think it makes
    more sense to do it in a way that gives more flexibility,
    allows more people who are currently being served by and are in
    unions the opportunity to stay that way.
        There is no intent to use this authority to deny people the
    opportunity for collective bargaining or to be in bargaining
    units. But there is an opportunity to say that that must be,
    and has to be, balanced against changing threats to our Country
    and the environment. It is not that an individual union member
    may become a national risk. That is not what that is about. But
    with the bargaining unit, if the Secretary has to say we are
    going to move this unit, we are going to change some
    authorities, we are going to respond to a threat by changing a
    mission, then it is imperative that they have the opportunity
    to do that.
        In the interest of the American people, balancing the
    individual member's rights against national security, the law
    currently gives that flexibility to the President but does not,
    and has not historically in any way, diminished the opportunity
    for a Federal worker to be involved in a union.
        Chairman Armey. Thank you.
        Mr. Portman. Thank you, Mr. Chairman.
        Chairman Armey. The gentlelady from California, Ms. Pelosi.
        Ms. Pelosi. Thank you very much, Mr. Chairman. I want to
    join you in welcoming our distinguished panel here today.
        I want to take special pride in our two Californians, Ann
    Veneman, Secretary Veneman, who I knew when she was a student--
    I was not--and we are so proud of her. She comes from a very
    distinguished Republican family in California. We are proud of
    her work here.
        And Secretary Mineta. I remember when he was mayor of San
    Jose over 30 years ago. Could you hear all the wonderful things
    I was saying about you? Welcome.
        And we want to welcome the other members of the panel as
    well. We are used to hearing the excellent testimony of
    Secretary Thompson and welcome him here as well.
        I have a very serious concern about this new Department.
    Certainly we should have a department of homeland defense.
    Certainly we should have a very strengthened office of Homeland
    Security in the White House, and I would hope that we can move
    to make that statutory rather than just by executive order.
    Because I think that is in the interest of how to best protect
    the American people--which is the President's standard--how do
    we best protect the American people, and that is the right
    standard.
        I am afraid, as I said in my opening comments the other
    day, that this proposal is old-fashioned in that it is very
    bureaucratic and that, actually, there are only about 125
    municipalities in our country that have a population higher
    than the number of people who will work in this Department. I
    could read off a list here of those that are smaller. You would
    be very surprised at how many great, proud cities in our
    country have fewer people living in them. And this will be
    overseen by the Secretary. I am concerned about certain aspects
    of it being bloated.
        I am concerned, Secretary Thompson, about the $1.8 billion.
    That is a lot of money, even by Washington standards, now under
    the discretion of this new Department Secretary. I will take
    the money any day when it comes to who has the discretion over
    how it is spent. I think it is bureaucratic to go back and
    forth with who has the money, who decides.
        The priorities for biomedical research, we have always said
    should be with the scientists. I think it is bureaucratic to
    talk about some of the other aspects in other departments as
    well, too numerous to mention here.
        One in the Department of Energy, Mr. Secretary, that I have
    a concern about is a new under secretary concept in terms of a
    center of excellence, which had been recommended by the Armed
    Services Committee. Have you established criteria as to whether
    such a center of excellence might be possible? And, of course,
    we view it as less bureaucratic. Would you have any
    suggestions? Would Lawrence Livermore Lab be one that might be
    considered for that?
        Secretary Abraham. Well, our view at this point is we are
    trying to work this in a way that maximizes the talents of
    people throughout the complex. When we first started looking at
    how to best pull together a technology and science support
    effort for the Department of Homeland Security, we thought
    perhaps one lab should take the lead and be in charge. Then we
    realized that we had people throughout--not all the labs
    necessarily but many of the labs who were already working on
    very important research and had expertise that should be
    involved. So that is how we sort of moved into the, as you
    describe it, centers of excellence concept; and we are still
    trying to decide what the best approach is to make sure that
    the Department of Homeland Security could tap all of those.
        Now, whether it makes sense to have a managing office at
    one of the facilities who then oversees or pulls together the
    work that would be done or somehow interrelates with the others
    or not is something we are still trying to assess. We have
    discovered as we look across the complex there are a lot of
    people who are working on these kinds of projects in the labs
    across the country. But it is certainly the direction that we
    are moving towards.
        Ms. Pelosi. Well, I hope we make every decision in favor of
    less bureaucracy and more excellence.
        I wanted to put another concern on the record, Mr.
    Chairman, and I want to address this to all of the Secretaries
    and the Director. Do you agree that the new legislation should
    not alter or diminish the regulatory authority of your
    executive agency or establish regulatory authority at the
    Department of Homeland Security except to the extent that the
    functions of another agency that include such authority are
    specifically transferred by the Secretary?
        I am particularly concerned about the Nuclear Regulatory
    Commission, Mr. Secretary, that the existing authority should
    continue to be exercised, those authorities to assess
    vulnerabilities and critical infrastructures and take necessary
    actions. Of course, the new Department would have access to
    this vulnerability assessment as is appropriate. So I put that
    out there to you.
        Secretary Abraham. I appreciate the point. I would comment
    that the Department of Energy does not oversee the Nuclear
    Regulatory Commission. It is an independent commission.
        Ms. Pelosi. But everything is in flux at this point.
        Secretary Abraham. Right. I just mean in terms of areas of
    my current oversight that is not one of them, and so I don't
    want to try to speak for an independent commission.
        I would just say when I mentioned energy security or energy
    infrastructure there are a variety of areas that are within the
    current responsibility of our department, and those are the
    ones we talked of as being ones that would be, at least in
    part, under the Homeland Security oversight under this
    proposal.
        Chairman Armey. The gentlelady's time has expired.
        Ms. Pelosi. Thank you, Mr. Chairman.
        Chairman Armey. The Chair now recognizes himself for 5
    minutes.
        Secretary Veneman, as I understand it, our House
    Agriculture Committee and your agency got together, worked out
    what you felt was a workable compromise that appears as an
    amendment to the President's plan recommended or passed by the
    Agriculture Committee. Is it also correct that this work was
    cleared with the White House and they, too, find this
    acceptable?
        Secretary Veneman. Yes, Mr. Chairman. In fact, I believe
    that Mr. Ridge yesterday testified that the administration does
    support this amendment by the House Ag Committee.
        Chairman Armey. So we could expect then that this committee
    could probably recognize that good work, that discussion
    between administration and the House and probably be content to
    accept that.
        Secretary Veneman. Yes.
        Chairman Armey. Thank you.
        Secretary Thompson, I want to really get down in the weeds
    with you now. As I looked through the President's proposal, one
    of the things that just baffles me is what I find is a curious
    relationship between your agency and the Department of Homeland
    Security with respect to grant making. I wonder if you
    understand this any better than I do. But it appears from my
    reading that your agency would transfer the funds for grant
    making to the Department of Homeland Security. They would make
    decisions, then they would transfer the funds back to you, and
    you would make the grants. Am I correct in my understanding of
    that?
        Governor Thompson. You are correct.
        Chairman Armey. I assume this is--you know, I kind of grew
    up in a little old rural town in North Dakota where we had this
    theory that every time money passed through a government agency
    you lost 10 percent of it. I am just a little bit worried about
    this money moving back and forth. Isn't it possible we could
    streamline this procedure somewhat by working out some kind of
    cooperative working relationship between the two agencies?
        Governor Thompson. I think we could, Mr. Chairman.
        Chairman Armey. It just strikes me that that is a fairly
    clumsy procedure, and I think this committee might want to look
    at if we can streamline that a little bit. Thank you. I am
    just--I appreciate the affirmation. I was wondering if I was
    kind of a little dipsy reading that. But I do feel better. I
    know you are not dipsy, that is.
        Governor Thompson. Thank you very much, and I know you are
    not either.
        Chairman Armey. I try to find a way to compliment whenever
    I can.
        Secretary Mineta, my vision of the Coast Guard is this is a
    multi-task agency that has personnel and assets that are
    designed and trained to sort of pick up the ball wherever it
    falls. My guess would be that when the Coast Guard sees a storm
    like that which hit our East Coast, I think it was in 1991 or
    1992, that which is known as the perfect storm, they probably
    dropped a lot of other things and said, hey, everybody come on
    over here and get on this job. They probably dropped a little
    bit of their interest in drug interdiction, perhaps even buoy
    maintenance, perhaps in the Gulf Coast or other and moved their
    assets. And from what I understand of the Coast Guard's record
    of performance during that fairly awful time, they were able to
    move with agility and the quickness to be of great service and
    save a great many lives.
        Now what strikes me in this funding formula that the
    committee suggested that we could have a great storm and all of
    a sudden the agency, in their effort to move resources to meet
    that, might say, oh, Lord have mercy, we have run up against
    our 12 percent limit, and we cannot--I think this would be the
    loss of flexibility, that such rigid funding formulas might
    occur.
        I just wondered if you might want to comment or if you have
    any examples of what it is I am searching for here.
        Secretary Mineta. Absolutely. That would be the case, Mr.
    Chairman. When you add up the total that is in the T&I Markup,
    it adds up to 53 percent in terms of the designated amounts in
    that legislation. So, ostensibly, that means that 47 percent
    would be for Homeland Security purposes.
        But the problem is that when you have a cutter that is
    doing fisheries enforcement and then they have to be dispatched
    to a search and rescue mode, again, if you are, as you say, up
    against the percentage and you can't shift the assets or in
    terms of the financial resources, then it seems to me everybody
    loses in terms of the multi-mission capability of the Coast
    Guard. I think one of the things that the Coast Guard is always
    able to do is to be able to respond to surge activities.
        Chairman Armey. So it would be possible that our Coast
    Guard cutter captain might hesitate in responding to an SOS for
    fear that he would offend both an appropriating and an
    authorizing chairman.
        Secretary Mineta. And the helicopter may have to stay on
    the ground instead of going to a search and rescue.
        Chairman Armey. That is a very foreboding circumstance for
    that poor captain to face.
        I thank you; and I recognize the gentleman from Texas, Mr.
    Frost.
        Mr. Frost. I have a couple of questions for Secretary
    Mineta. One of those is a follow-on on Mr. Menendez' question,
    and this relates--and also deals with what Mr. Armey was just
    asking. This regards the nonsecurity functions of the agencies
    in the Department, Coast Guard or other. We have had an
    indication from the Congressional Budget Office that setting up
    this agency is going to cost an additional $3 billion over and
    above the current costs of operating these programs. The
    concern of a lot of us is that when the administration starts
    looking for ways to satisfy that $3 billion that they will take
    that money out of the nonsecurity functions of these programs.
    Because the Secretary of Treasury has said this is going to be
    budget neutral. There is not going to be $3 billion. We are
    going to have savings.
        Our concerns are that those savings will be out of the very
    important nonsecurity functions of the Coast Guard and other
    agencies, and what is to prevent the new Secretary from
    shifting money out of the nonsecurity functions, very valid
    nonsecurity functions of these programs so that there won't be
    $3 billion of transition costs?
        Secretary Mineta. Well, first of all, I think since the CBO
    report just came out OMB hasn't had a chance to really get into
    the report itself. But I think that when you consolidate a
    number of agencies under the Department of Homeland Security,
    or you consolidate any--let's say any department consolidates
    offices within its own department, there are savings that
    result from it. It seems to me that there are things like
    administrative overhead costs, computers, a number of functions
    that, in terms of redundancy, would be eliminated.
        Mr. Frost. Well, Mr. Secretary, there is a disagreement
    between the CBO and some of you in the administration about
    this matter. My only concern is, if the Congressional Budget
    Office turns out to be correct, that there is this $3 billion
    cost, my concern is that would be taken out of search and
    rescue and some very valid functions that the Coast Guard and
    others would be conducting.
        Secretary Mineta. Well, again, I would think that would be
    the responsibility of the Secretary of the Department and,
    again, the oversight responsibility of the Congress.
        Mr. Frost. Mr. Mineta, I have another question, if I may,
    specifically to you. You state in your testimony that we are
    going to meet the deadlines, any deadlines Congress gives us
    with respect to TSA, Transportation Security Agency. It is my
    understanding that TSA will not receive a report from its
    contractor, Boeing, regarding the logistic of installing
    explosive detection machines at our Nation's airports until
    September. Given this tight time frame, do you anticipate that
    TSA will meet its December 31, 2002, deadline of installing
    explosive detection systems at all of our Nation's airports
    requiring such systems?
        Secretary Mineta. We have met every deadline that was
    mandated by Congress, and we intend to meet all of the
    remaining deadlines. The major ones are November 19 for having
    the federalized employees for both baggage and passenger
    screening and December 31 for EDS systems. So our intent right
    now and everything we are doing is gearing to meeting those two
    dates, even with the advent of the concept of the Department of
    Homeland Security.
        What I have said to our people is, don't look over your
    shoulders. We have got a responsibility to meet in terms of the
    Aviation and Transportation Security Act. That is what we are
    concentrating on and literally working on 7 days a week in
    order to comply with these dates, including pushing our
    contractors too--so that we can meet the obligation that we
    have under the law.
        Mr. Frost. Mr. Chairman, I have no further questions.
        Chairman Armey. Thank you. The gentleman from Texas.
        Mr. DeLay. Thank you, Mr. Chairman.
        Director James, I appreciate your testimony; and I
    appreciate the administration's position when it comes to
    personnel matters. If I recall, your position on personnel
    matters is to not to diminish the benefits and rights of
    Federal employees. You articulated that you wanted to protect
    civil rights, whistle-blower, veterans' preferences and all the
    other rights and benefits that they enjoy now.
        I would assume--but what bothers me is the Morella
    amendment expands the rights of Federal employees by omission
    or by contradiction, if you will, under current law. As I think
    you have stated, the President has the authority to restrict
    collective bargaining at governmental units that are critical
    to national security. This is an authority that has been used
    judiciously by both Republican and Democrat presidents since
    the late 1970s, and the Morella amendment would weaken that
    presidential authority or expand the rights and benefits of the
    employees as it pertains to the Department of Homeland
    Security.
        I find it ironic at a time when national security concerns
    are paramount that this provision, the Morella amendment, would
    give the President less authority over the Department of
    Homeland Security than he has over any other department. I
    would ask if you agree with my assessment of the Morella
    amendment in that it expands present rights and benefits of
    Federal employees and how--and I would ask the other
    Secretaries that they might comment as to how that would impact
    the flexibility that you are asking for for this new
    Department.
        Ms. James. I would agree with your assessment, and I am
    convinced that the majority of Americans would agree with your
    assessment as well. When we are operating in an environment of
    a national war, when we are talking about a President and a
    Secretary who will have to make rapid decisions in the interest
    of the American people, it is almost mind-boggling to me that
    at this particular moment in America's history, we would
    diminish the President's authority and the Presidency and his
    ability to move people, make decisions quickly, and do that in
    an environment that would protect us all.
        Saying that, I say it within the context. Of course, we
    recognize the patriotism and the enthusiasm of union members,
    but that is not what this discussion is about at all. This is a
    discussion about the ability of the President of the United
    States to make quick decisions about units of people, to make
    quick decisions about management and to do that in the interest
    of the American people and this is not the time to diminish
    that authority.
        Mr. DeLay. Can other Secretaries speak to how you envision
    the different agencies, offices, and departments could function
    under a diminished authority by the President of the United
    States?
        Secretary Mineta. Mr. DeLay, I am not addressing the
    Morella amendment, but again, I think the whole thrust of this
    legislation is to have flexibility in the Department of
    Homeland Security, just because of its nature. The Department
    of Defense has the ability to be flexible in terms of
    organization of its financial resources, and I think that that
    is what we have to have within the Department of Homeland
    Security.
        And that is the case with TSA and Coast Guard, that we will
    be giving up to DHS, that they have the flexibility. And
    Congress itself, as I recall, in terms of flexibility in
    personnel and procurement activities gave essentially that same
    power to FAA and to TSA, and I believe that comparable language
    is in H.R. 5005 in terms of the flexibility on personnel and
    procurement of goods and services.
        Governor Thompson. Mr. DeLay, with regard to someone who
    has gone through the anthrax thing and been involved in
    something that directly relates to homeland security and how to
    respond quickly, you have to have the Secretary have as much
    discretion and flexibility as possible. If you limit that, you
    are going to abrogate or diminish your mission, and that is
    basically it.
        In regards to the anthrax, that was a brand-new situation.
    Nobody knew what to do. Nobody actually knew what the response
    was going to be, how to respond, and so on. And you have to
    make sure that your experts are in place and you are able as a
    Secretary to make those tough decisions quickly and you have
    individuals that are going to follow through in order to carry
    out that mission.
        That is the same thing in the Department of Health and
    Human Services. That has got to be the same thing, even more
    so, in the new Department of Homeland Security.
        Chairman Armey. Gentleman's time. The gentleman from New
    Jersey.
        Mr. Menendez. Thank you, Mr. Chairman.
        Secretary Mineta, I have the highest respect from our
    service together on the Transportation Committee, but I have a
    difference of opinion of whether TSA has met all its
    guidelines. Depends on how you look at it. They put trace
    devices, not detection devices, which the Congress really did
    not approve. They did not meet their deadline on the 15 major
    airports by the time they were supposed so. So I don't quite
    think we can honestly say, or we might have a difference of
    disagreement as we are interpreting this, that TSA met all its
    deadlines.
        But let me just make sure what I am hearing you say today,
    because what the Transportation Committee did in its amendment
    on TSA is not to prohibit the transfer of TSA but to ensure
    that it would not be transferred until three major issues take
    place: number one, the leadership of the Department as it
    relates to that section of the Homeland Security Act; secondly,
    the deployment of explosive detection systems and all baggage
    being screened; and thirdly, a certification that a sufficient
    number of screeners have been deployed.
        You are telling this committee that TSA will meet all of
    its congressionally mandated deadlines under the act, without
    reservation, yes or no?
        Secretary Mineta. Yes, we are.
        Mr. Menendez. I just wanted a yes or no answer. So you said
    yes. So then why is there an objection to the Transportation
    Committee's amendment, if you are going to meet all the
    deadlines, then it would be transferred into the Department?
        Secretary Mineta. I am sorry?
        Mr. Menendez. If you are going to meet all the deadlines as
    you just stated, then the Department--the TSA will be
    transferred into the Department, so what is the objection to
    the Transportation Committee's amendment?
        Secretary Mineta. Remember, the November 19 date is for
    screeners. December 31 is for EDS. This legislation, if it gets
    passed this year, doesn't become effective until January 1,
    2003. So the effective date of this legislation is after we
    have performed everything under ATSA.
        Mr. Menendez. That is exactly my point. What is the
    objection to the Transportation Committee's amendment if you
    are going to achieve the goals, and those goals will therefore
    take place before the creation of the new Department? There
    should be no objection.
        Secretary Mineta. Well, as I recall under that
    legislation--and I will have to look at it, but I believe there
    were some other requirements.
        Mr. Menendez. Those are the only three requirements. And I
    would ask you to take a look at it at a future time and give us
    a written response.
        [The information follows:]

        The Department would like to amplify why, if the Transportation
    Security Administration (TSA) plans to and does meet every deadline
    imposed for security actions by the Aviation and Transportation
    Security Act, there would be any objection to a proposed amendment to
    H.R. 5005 to delay the transfer of TSA to the new Department until
    three specified conditions (related to the deadlines for the most part)
    are met.
        The most important point is that the President should have maximum
    flexibility to time the transfer of the various agencies to the new
    Department, to deal with inevitable complications that will arise
    during the transition period. H.R. 5005, as introduced, provides a 1-
    year period following enactment to stage the transfers most
    effectively. That flexibility should not be sacrificed.
        One simple reason to reject the proposed amendment to delay TSA
    transfer is simply that the first condition might be manipulated for
    any number of reasons, perhaps by members of the Senate that object to
    the TSA transfer. If the Senate fails to conflrln the new Secretary,
    the Under Secretary for Border and Transportation Security, or an
    Assistant Secretary (if reference is to an Assistant Secretary subject
    to Senate confirmation), the TSA could not transfer to the new
    Department. While this is presumably not the intent of the amendment's
    drafters, it is a distinct possibility.

        Mr. Menendez. Secondly, I want to follow on Chairman
    Armey's comments. I was not suggesting that nonsecurity
    budgetary functions could not be transferred within nonsecurity
    budgetary functions. I was suggesting that you can't drain
    nonsecurity missions for security purposes. So therefore the
    hypotheses that Mr. Armey put forth, that you so aptly bought
    onto, would not apply here. Would not apply.
        And I am wondering whether the Secretaries would give me a
    yes or no answer. Do you believe that language that preserves
    the nonsecurity functions of departments being transferred out
    of your respective agencies into Homeland Security should exist
    to preserve those nonsecurity functions. If you could just tell
    me yes or no.
        Secretary Abraham. Well, just for our Department, we
    actually aren't moving full departments or subdepartments, we
    are moving programs that are specifically security-related, so
    it's probably less applicable to us.
        Chairman Armey. If the gentleman would yield, I think the
    answer is really found in the committee's mark. The committee
    has put in generous language that describes all of the
    important functions of the Coast Guard, but in addition, rigid
    percentage allocations of funds among these. And what we are
    suggesting is while we want that language that cherishes all
    the functions of the Coast Guard, we don't want the
    straitjacket of those rigid--.
        Mr. Menendez. Reclaiming my time, Mr. Chairman, I am not
    just referring to the Coast Guard. I am referring to preserving
    all the missions.
        I turn to Secretary Thompson and say, you look at what
    Doctor Hamburg has said on the nuclear threat initiative. If
    these programs are carved out of their current habitats and
    moved into this new Department, it will disconnect bioterrorism
    preparedness from other essential components and complicate the
    ability of our public health partners to work together, and is
    likely to weaken and fragment our Nation's capacity to respond
    to infectious diseases.
        And if you look at what Doctor O'Toole said, the Director
    of the Center for Civilian Biodefense at Johns Hopkins, she
    goes on to say that those issues as well of splitting
    bioterrorism preparedness in essence doesn't help us, it hurts
    us.
        So my point is--and I would like to get a response because
    my time has expired--is don't you believe in pursuit of your
    obligation to nonsecurity missions, as well as to security
    missions, that we should have some language here that preserves
    those nonsecurity missions?
        Governor Thompson. Congressman, there is some language on
    page 5 you may want to look at. It is subsection 3: The
    Department, which is the new Department, shall also be
    responsible for carrying out other functions and entities,
    transferred to the Department as provided by law.
        You might want to strengthen that, but that basically I
    think is the language that you are referring to.
        Mr. Menendez. Mr. Chairman, where are you reading from, Mr.
    Secretary?
        Governor Thompson. Reading page 5.
        Mr. Menendez. Of what?
        Governor Thompson. Of the act--proposal--section 101,
    parens 3.
        Chairman Armey. The gentleman's time has expired and if the
    gentleman wishes, we may try to come back to this point.
        Gentleman from Oklahoma.
        Mr. Watts. Mr. Chairman, thank you.
        Director James, we have heard for some time concerning this
    Agency that we need to be lean and mean. And I agree with that,
    but I must confess that in the 8 years that I have been in
    Washington, I have seen very few occasions that we have taken
    to really streamline things and try to make them run
    efficiently and effectively for the American people.
        And I was sitting here thinking about the different ways
    that you can get to that lean and mean posture in the
    government, and one is, you know, sometimes you can have a
    reduction in force. You can have public/private partnerships to
    try to make things work a little better. You decentralize. You
    find waste and abuse in the government. Or you can do what I
    think the President's proposal is trying to do, and that is to
    say, give us flexibility so that we can manage in a streamlined
    way or in an efficient way to focus as much attention on
    protecting the homeland as we possibly can. Give us that
    flexibility.
        So let me ask you to pretend that I am one of those 170,000
    employees that is going to be shifted from agency A, agency B,
    and agency C, over into this new Homeland Security Department.
    I am one of those 170,000 employees. What would you say to me
    to put my mind at ease that I will not lose my job or my
    protections, and what can I look forward to as a worker in
    terms of incentives for doing good work?
        Ms. James. Thank you. We want to create a world-class
    organization where Federal employees will be excited about
    coming to work, looking at the opportunities that are there for
    them to perform and be rewarded for the work that they do.
        What assurances can I give you? I can remember going to
    college the first time, sitting there during orientation and
    being exhorted by the President to look to my left and look to
    my right, and being told that several of those individuals
    would not be there on graduation day.
        Quite frankly, the crisis that we face in the Federal work
    force today is that we could go a long way towards streamlining
    if we did nothing because of the looming retirements that we
    have in front of us. We are not dealing in a situation where we
    have too many workers. We are in a situation where we have too
    few. And, as a result of that, a big part of the challenge is
    going to be, not reductions in force, but how to retain the
    people that we have, how to create an environment where people
    will want to come to work, how to attract the best and
    brightest from the private sector to come in and fill those job
    openings.
        And, so what I would say to the Federal worker who may be
    listening today--and I suspect quite a many from your
    departments are--is that there is an opportunity to join a
    world-class work force, to be in an environment where they will
    have the opportunity to be rewarded for the work that they do;
    where they have a clear mission that is set before them; where
    they have an opportunity to defend this homeland and do
    significant work.
        I think it is a tremendous opportunity. And, knowing the
    Federal workers as I do, I am confident that they will step up
    to the plate to do that and do it with vigor and enthusiasm.
        Mr. Watts. Mr. Secretary Abraham, how important will it be
    for the Nation to have a robust research development test,
    evaluation and acquisition organization within the new
    Department of Homeland Security?
        Secretary Abraham. Well, I think the advantage,
    Congressman, is that it is important for there to be effective
    direction with what already is, I think, a strong program. And
    I think what we are proposing to do here will provide tools to
    people who will have the comprehensive intelligence gathering
    information and threat assessment information to direct those
    assets at the technologies we most need. We have got great
    folks in these laboratories in terms of cutting-edge work. They
    are doing it. But this will give us the kind of coordination of
    that effort that I think is really missing.
        Chairman Armey. Gentlelady from Connecticut.
        Ms. DeLauro. Thank you, Mr. Chairman.
        Director James, I would just like to follow up with you. I
    appreciate the commentary. I think the rhetoric is soaring, and
    I couldn't agree more with the new opportunities, and I have no
    question in my mind about Federal workers, union workers,
    workers who dedicate themselves every single day to their job,
    and the unsung heroes who do this.
        On the other hand, there are practical issues and matters
    that people have to deal with in their lives in order that they
    may sustain themselves and their families. And that has to do
    with benefits. That has to do with pay scales. That has to do
    with pensions. And, quite frankly, we haven't had in the last,
    almost a year, real fine examples of a dedication to what
    happens to workers in a crisis. We have done what we needed to
    do with regard to industry and to make sure that industry and
    airlines are flying and secure and that the companies were
    secure. When it has come to the workers in these institutions,
    we have been less than forthcoming with making sure that they
    sustained their economic livelihoods and their viability.
        So I think that there is a great sense here that--what we
    need to do is to provide assurances to people very clearly
    about what their benefits will be. If you have got an INS
    inspector at the State Department, he or she doesn't get paid
    on the same scale as someone else with different benefits.
        How, in fact, are we going to determine what they are going
    to receive? We are very careful to look at how the various
    authorities and functions are going to be viewed. Everyone
    wants to know how that happens. I think workers have every,
    every single right to want to know before they take that leap.
    And I would say, not for the first time, being patriotic
    Americans; they are patriotic Americans all of the time, and
    the new agencies aren't going to make them more or less
    patriotic.
        But tell me how I sustain myself and my family as you
    decide in the Congress or anywhere else to take my job, put it
    someplace else, and then tell me that I have to rely on the
    goodwill, the trust, the faith of people, and not verify what
    it is that I am going to be able to take home on a weekly basis
    and what protections I am going to have if someone says we are
    going to change the mission, change the allocation, and my
    friend, too bad for you.
        Ms. James. Thank you. Congresswoman, the last thing that we
    are saying in this legislation to the Federal civil service
    worker is, too bad for you.
        Ms. DeLauro. And why not take on the Morella amendment,
    which shows some faith and trust in the worker? Let us start
    from there.
        Ms. James. Let us start from there. You raised several
    issues and I would like to go through them, as many as I
    possibly can, and I do appreciate your passion on behalf of the
    Federal worker.
        Ms. DeLauro. Workers in general, I might add.
        Ms. James. Well, unfortunately, my only responsibility at
    this table right now is the Federal worker, and we share a
    passion for them. You mentioned an INS worker. What is wrong
    with the system we are operating under and why do we need these
    flexibilities? Let me just give you an example. Suppose we have
    a worker who is a GS-9 in one of our agencies somewhere and
    they are doing a great job. They are doing an excellent job.
    And as a matter of fact, what we would like to do is reward
    them with more money as a result of the job they are doing, but
    our current pay system does not allow us to do that. The only
    way we can get that particular worker more money is to promote
    them to a supervisory position, but you know, they don't want
    to be a supervisor. They like the job they are doing. They
    enjoy it and they are quite good at it, but the system in which
    we are operating right now prevents us from doing that. So what
    do you do? You promote that person into a job and make them a
    supervisor, something they never wanted to be, something they
    are not equipped to be.
        We must fix that system and we must have the flexibility to
    do that, and that is what we are talking about. And, right now,
    the legislation as it currently exists in the Chairman's mark
    doesn't allow us to do that. That is why we need the
    flexibilities.
        You talked about the Morella amendment and how in the world
    can we show a good-faith effort to the Federal worker right
    now? Well, quite frankly, we have a responsibility to the
    Federal worker, and to the American people in total, and it is
    a very delicate balancing act. But, quite frankly, when there
    are decisions that have to be made that will protect our
    national interests and protect this Country, we must balance
    those.
        Chairman Armey. I think the gentlelady's time has expired.
        Ms. DeLauro. The fact of the matter is, Mr. Chairman, we
    have a government that has been functioning with all kinds of--
    we have Defense Department's, Justice Department's sensitive
    information, all kinds of structures in place that have been
    thought through and sifted out and vetted. All of a sudden with
    a new Department that is coming up, we want to change the rules
    of the game.
        Chairman Armey. If I may.
        Ms. DeLauro. Maybe we should think about changing the rules
    of the entire--.
        Chairman Armey. This committee will address, I have no
    doubt, the substance of the Morella amendment and the extent to
    which it indeed is what changes the rules of the game from what
    they had been. We will address that later and I thank the
    gentlelady.
        The gentlelady from Ohio.
        Ms. Pryce. Thank you, Mr. Chairman. And if Ms. James would
    like to finish her answer, I would be very happy.
        Ms. James. I would only say and echo what the Chairman was
    about to say, and that is that the Morella amendment expands
    rather than keeps things the way they are. And quite frankly,
    you know, historically, when you look at the Department of
    Defense, that authority has not been abused in that particular
    Department. It has not been abused by any President in the
    history of this Country, be they Democrat or Republican.
        And I think that given the backdrop of where we are right
    now in terms of being a Nation at a war, given the delicate
    balancing act that we have to go through, that we cannot put
    the American people at risk at a time like this.
        Ms. Pryce. Thank you. And reclaiming my time, I would like
    to address Secretary Mineta, one last time, and you made a good
    case of why the Coast Guard and the Transportation Security
    Administration should be incorporated under Homeland Security.
    Can you tell us, in your mind what would happen if that were
    not to take place, how it would affect the entire operation,
    how it would affect Department of Transportation, because that
    is going to be a very difficult thing for us to accomplish.
        And as we as a committee try to mesh the administration's
    proposal with our committee's marks, I think that we would be
    well served to hear from you about what would happen if we are
    not able to do this.
        Secretary Mineta. It seems to me that if the Coast Guard
    and the TSA are not transferred to the DHS but remain in our
    Department, there may be responsibilities on the part of the
    Department of Homeland Security that they will still have to
    carry out on their own. And if that happens, it seems to me, we
    would have duplicative services, one provided by the Department
    of Homeland Security and the other by Department of
    Transportation.
        On the other hand, it seems to me you would have to
    increase liaison between the the Coast Guard and the Department
    of Homeland Security, or between TSA and DHS. Again, it would
    just seem to me it would add to the budget, rather than--part
    of this whole effort is to make it more efficient and to make
    it more effective--take advantage of the savings that would
    come from combining these agencies in the DHS.
        Ms. Pryce. In terms of efficiency, would it have any
    effect?
        Secretary Mineta. I think it would, because the Coast Guard
    would be able to deal with and coordinate their activities
    through all of the intelligence activities of DHS. The
    Secretary of Homeland Security would be in a position to
    utilize the resources of the Coast Guard, based on the
    intelligence that he has about doing things. So, again, it
    would, it seems to me, add to costs if it were remaining in the
    DOT.
        Ms. Pryce. Thank you. Thank you, Mr. Chairman.
        Chairman Armey. The gentlelady from California, Ms. Pelosi.
        Ms. Pelosi. Thank you very much, Mr. Chairman.
        As you know, we have a very serious responsibility here. We
    work in a very bipartisan way, unified way, with the President
    of the United States to protect the American people, a very
    serious responsibility. As we take this next step, we have to
    again meet the President's challenge to do what is best to
    protect the American people.
        I understand the support for the administration's position
    that has been expressed here by a number of the Secretaries and
    by the Director, but I want to see clarification on one point
    because, as I said, we have a responsibility to every person in
    America, particularly to the families affected on September 11.
    They live in their own special fear when they hear a plane
    going over, or when hearing of any incident. It revisits horror
    for them. We would like to remove the risk and provide some
    comfort to them.
        When we talk about the Morella amendment--and you say we
    have to consider the backdrop, we are a Nation at war; indeed
    we are. But I am drawing from your comment that you consider
    that a finite state, and in this special circumstance of a
    Nation at war, this balance is required.
        I believe that the conditions that we put forth as we go
    forward with this legislation are for the very, very long term.
    We are in a different way of life. So we ought not to make
    judgments as if there is some finiteness to what we are doing
    here. This is for the very long term. Threats to our country
    are different now than before. The unimaginable has become
    almost the predictable, sad to say.
        When we are making this decision about the work force, and
    you say we don't want to endanger the American people, I
    completely agree. I think the morale of the work force, the
    respect that we have for them and the job that they do is a
    very important component of protecting the American people.
    Certainly we want to have a Department that is manageable. And
    I fear that this Department may not be.
        But I hope that I am not drawing from your comments an
    inference that you did not intend, and that is that these are
    temporary because it is against the backdrop of a Nation at
    war. We are a Nation in a new state, and we have exposure that
    we didn't realize before. We should have. We didn't. And so
    when we do that backdrop, I think we have to think very long
    term about it.
        And that is what I would like to get back to my question
    earlier. First of all, I want to say to the Secretary of
    Agriculture, I am pleased with the confirmation that you gave
    to our chairman that you would support the amendment that came
    out of the Agriculture Committee.
        I want to address the issue that I talked about earlier, a
    bipartisan amendment that came out of the Energy and Commerce
    Committee that I referenced earlier, but I couldn't hear from
    all of you because my time had run out, and that is with
    respect to regulatory authority.
        For example, Secretary Mineta, would you agree with that
    respect to regulatory authority, this act may not be construed
    as establishing such authority for the Secretary, except to the
    extent that the functions transferred to the Secretary include
    such authority, and that altering or diminishing such authority
    with any executive agency would have to be transferred--
    definitely transferred to that Secretary?
        I can read it another way to you in a briefer form, but it
    basically retains for the Department, the originating
    Department, the regulatory function unless it is spelled out
    that that function is moved to the new Department.
        Secretary Mineta. Well, I would assume that in the case of
    Coast Guard, it is an operating agency as well as regulatory,
    so that since the Coast Guard is being moved intact and in full
    over to the Department of Homeland Security, that the
    regulatory authority would go with it.
        Ms. Pelosi. And that should be spelled out in the
    legislation.
        Secretary Mineta. And that is the way it should be.
        Ms. Pelosi. Mr. Thompson.
        Governor Thompson. I couldn't agree more. That is the way
    it should be.
        Ms. Pelosi. But that it should be spelled out to that
    extent as well. In other words, altering or diminishing such
    authority of any other executive agency, except to the extent
    that a function of such agency that includes such authority is
    transferred to the Secretary by a section specified in the
    legislation.
        Governor Thompson. I don't know what your real question is,
    but I agree with the statement.
        Ms. Pelosi. The question is about regulatory authority, and
    we don't want it to be in a vague state of limbo.
        Governor Thompson. There is no question it has to be, and
    it has to be spelled out.
        Ms. Pelosi. And if it is not, then it is retained by the
    department of origination.
        Governor Thompson. That is going to have to be determined
    by this committee, and this committee should be able to
    determine which Secretary is going to have that responsibility.
        Ms. Pelosi. I was wondering what your point of view is as a
    Secretary.
        Governor Thompson. Unless it is changed or transferred, I
    think it has to be retained by the originating Secretary,
    because that is the one that has the responsibility.
        Chairman Armey. The Chair made an announcement that I will
    recognize the gentleman from Ohio, and the Chair will use his
    time to recognize Mr. Frost for a question, and I believe Mr.
    Menendez, and we will try to wrap this up in the Chair's time
    if the committee will agree. The gentleman from Ohio.
        Mr. Portman. Thank you, Mr. Chairman, and I am glad I
    wasn't at the table having to respond to Ms. Pelosi's question
    because it is a tough one, and I am not sure I understand it,
    but I understand what she is getting at and I think this
    committee will be sensitive to that.
        One specific one and one general one. One of the
    recommendations that comes out of the authorizing committee's
    work, Secretary Abraham, is with regard to the Under Secretary
    for Science Research, and Technology. I believe under your
    proposal, it is a directorship and not an Under Secretary. Do
    you have strong views on that? Some have said if it is a
    director, the director could report directly to the Secretary
    and serve as all of the Under Secretaries, all of whom would
    have science research needs, and also interface with the
    private sector, academia, and others, and adding an Under
    Secretary would add some unneeded bureaucracy. Do you have
    strong views?
        Secretary Abraham. I don't think we have strong views. I
    mean, I think we could support an Under Secretary designation
    as well. As I said in response earlier, the key ingredient is
    the coordination of these programs and the direction that is
    needed. Obviously we have a lot of, as I said, talented people
    and a lot of assets that have been effectively deployed in the
    last few months. But having an office that is trying to set
    priorities for the sort of research in the future is really the
    essential ingredient. But, you know, I think we could support
    an Under Secretary designation as well.
        Mr. Portman. More general question. This has to do with
    this issue of flexibility. I couldn't agree more with Ms.
    Pelosi on her notion of a leaner and meaner department, one
    that can effectively address this agile challenge of terrorism.
        You said a moment ago you are concerned it won't be
    manageable, and I share that concern as well. But I think we
    need to point out a few things, and I want to ask Ms. James a
    few questions. All these people will be in the bureaucracy
    somewhere. In other words, 170,000 employees that would not be
    moved stay in the bureaucracy. We are not growing bureaucracy.
    And in fact, as Secretary Mineta just said, by not moving them
    into a central consolidated function where you get those, as I
    mentioned earlier, synergies or efficiencies, you are going to
    have unnecessary duplication and some inefficiencies. In terms
    of bureaucracy, the people are still there. The question is
    whether they are all working toward a common goal.
        Second, I think we have acknowledged in the Federal
    Government--and I won't put you on the spot--I think the reason
    we are doing this is, in part, we want to change the culture of
    some of these agencies and departments that have all these
    other functions and bring them into an agency or a department
    where the focus, culture, and the mission is the fight against
    terrorism. And to the extent that, post the tragedy in New York
    City we have decided we need to change that culture, it is
    easier to do it in a new culture rather than keeping them in an
    old culture.
        Third, if we are really worried about manageability and
    flexibility and leaner and meaner, we have to give the new
    Secretary the ability to manage, and I would say there are
    three aspects of that. And, Ms. James, I want to ask you about
    the third. First, of course, is some transfer authorities so
    you can move some funds that we appropriate back and forth as
    the challenges change. Second would be the flexibilities that
    we have asked for in the proposal that has come out of some of
    the committees in terms of management/reorganizational
    flexibility generally. And third, of course, is personnel.
        And if you could, Ms. James, just talk a little about if we
    do have these personnel flexibilities, again consistent with
    the merit system and all those principles that I think need to
    be outlined more in the legislation perhaps than in the initial
    draft, but if you outline all those principles, stick to those
    principles, stick to the whistleblower protection, the
    veterans' preference, the other things we talked about, the
    collective bargaining rights, how do we ensure that the
    employees, your people, represented by these four Secretaries
    who are on the line now, have input into the system?
        Roughly 30 percent, as I look at it in the chart, are
    currently represented by unions. So 70 percent would not have
    union representation. Of those represented by unions, I am told
    not all are dues-paying members. So it is a smaller percentage
    than 30 percent. But I think the union needs to be brought in.
    We brought in the National Treasury Employees Union with regard
    to the IRS reforms. They supported the reforms and were quite
    constructive in moving the IRS toward a new more modern,
    leaner, better agency. And a lot of these workers will not have
    union representation. How do you intend to bring these people
    in to make sure they have a stake in this and make sure that
    their needs, concerns, and views are addressed?
        Ms. James. One of the earlier comments alluded to the fact
    that we have great soaring rhetoric, but how do we in fact
    ensure that the details are worked out in such a way that they
    are in the interest of the Federal worker. And I think that is
    an excellent question that deserves an answer, and the answer
    is simply this. The way that the legislation is designed, it is
    so these employees move into the Department whole, as they are,
    with all of their benefits and protections and rights and leave
    and everything that they currently have. I think that the way
    that you ensure a world-class organization is to make sure that
    the people who are doing the jobs are involved in the process
    of setting it up.
        That is one of the reasons that I believe that it would be
    difficult to try to work out all of the details of what that
    would look like through the legislative process. But it is the
    intent to involve all of the stakeholders, involve union and
    nonunion members, involve management associations, in sitting
    down at a table and designing what it would look like if all of
    us could achieve our desire to have a world-class organization.
        I think at the end of that process, it should be said, yet
    again, that it would be an open and a transparent process that
    would go through the regulatory process so that people would
    have the opportunity to comment. We can't get this done in the
    confines of this hearing room. We can't even get it done within
    the confines of the Office of the Secretary or the Office of
    the Director.
        I think the process that we set in place to get where we
    need to be will be an inclusive process and one that includes
    the people who are on the front lines and doing the jobs to
    help design the systems that they will work in.
        Chairman Armey. Thank you.
        The Chair will now use his time, and I believe the
    gentleman from Texas, Mr. Frost, has indicated a specific
    question, and I will share my time with him.
        Mr. Frost. This is a question directed to Director James,
    and I ask that she address this question for the record. I am
    not asking her to answer this question right now.
        There has been a lot of discussion yesterday and today
    about the President's right under an executive order to exempt
    people--exempt certain employees from civil service
    protections.
        And here is my question: What specific criteria did
    President Bush apply when he issued an executive order in
    January of this year to remove 500 employees of the Justice
    Department from union coverage? And what specific criteria
    would you advise he apply in exercising his authority under
    section 7103 of the existing act with regard to the Department
    of Homeland Defense? And you may answer those questions for the
    record.
        [The information was not received in time for the printing
    of this volume. The information, when received, will be
    retained in the Select Committee's files.]
        Chairman Armey. The gentleman from New Jersey has a
    specific question as well.
        Mr. Menendez. Two very brief ones, and I thank you for
    yielding your time.
        Secretary Mineta, if you could answer this yes or no, has
    the Coast Guard done a bad job in defending the security of the
    United States and the territorial waters which it operates in?
        Secretary Mineta. Has not.
        Mr. Menendez. Has done a good job.
        Secretary Mineta. Absolutely.
        Mr. Menendez. Secondly, Secretary Thompson, since I have
    not been able to elicit from the Secretaries a response to my
    question about dual missions, let me ask you this. Under the
    President's proposal, Homeland Security would control both the
    research and preparedness programs at another department. GAO
    found that this structure does not ensure that both the goals
    of homeland security and public health would be met or how
    priorities for basic public health capacities that are
    currently being funded through the dual-use CDC programs will
    be maintained.
        Add to that Doctor Tara O'Toole's comments. She is the
    Director of the Center for Civilian Biodefense at Johns
    Hopkins, who said instead of consolidating similar programs the
    proposed agency would split bioterrorism preparedness programs
    from the related but more encompassing mission of public health
    protection, which is your Department's main objective. The
    country would be forced to create parallel work forces, one in
    Homeland Security for bioterrorism preparedness, and another in
    HHS for normal public health functions.
        And, lastly, Doctor Hamburg's comments which I read to you
    before in the nuclear threat initiative, who said that the
    likely outcome will be to weaken and fragment our Nation's
    capacity to respond to infectious disease, whether occurring
    naturally or caused intentionally.
        Now, just those three independent sources, not any member
    of this select committee, people in the academic community, the
    GAO. My questions are not meant to undermine the President's
    initiative, they are meant to strengthen it.
        In that regard, do you not think that a mechanism could be
    devised under which a memorandum of understanding for those
    functions which the Department of Homeland Security is
    concerned about, by virtue of the transfers proposed here,
    could be achieved in your Department, and we would get the
    synergy, the cost savings, the benefit that we have heard so
    much about in other regards by keeping it in your Department
    with a memorandum of understanding, with the Department of
    Homeland Security getting the synergies about both producing
    research and development that will deal with homeland defense
    issues and public health for which there is so much integration
    in the process?
        Governor Thompson. You raise a very valid question,
    Congressman. But an overall structure to actually accomplish it
    instead of a memorandum of understanding is a consultation
    procedure between the new Secretary of Homeland Security and
    the Secretary of HHS. And so instead of a memorandum of
    understanding, it is basically a consultation procedure that is
    set forth in this proposal, and I think either one of those
    proposals will work well, but I think the one that the
    President advances works better.
        Mr. Menendez. So you dismiss all these criticisms as not
    valid.
        Governor Thompson. I don't dismiss them, absolutely not,
    because all of them are from learned individuals who know the
    programs and have been very much involved in helping to
    strengthen bioterrorism. But overall, the actual dollars and
    consultation really was between Governor Ridge and myself on
    the original program that we advanced in Congress, and it
    worked out very well, and I think it has been working out
    extremely well ever since.
        Mr. Menendez. Consultation is one thing, but budget
    authority which will reside with the Secretary of Homeland
    Security's ultimate authority.
        Chairman Armey. Let me thank the gentleman from New Jersey
    and reclaim my time before it expires. I do want to thank the
    panel. And if I might make a recommendation to Director James
    that in addition to your standard GS ranking, that you create a
    new category called the ``G-whiz 10'' and give it to every
    member of the staff. And we want to thank you for your
    attendance today, and you were very helpful.
        And, without objection, the select committee will stay in
    recess until 2:30 p.m.
        [Recess.]
        Chairman Armey. The Select Committee will come to order.
        We are very pleased to have our next panel of witnesses,
    Representatives Thornberry, Harman, Gibbons and Tauscher--
    otherwise known as the brains of the mob, I believe. We are
    excited about your being here and anxious to get on with your
    testimony, so let me just suggest to you that, without
    objection, we will put your formal statements in the record;
    and we will ask you in your turn to present your summary
    statement.
        We will begin with Mr. Thornberry.

    STATEMENT OF THE HONORABLE MAC THORNBERRY, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. Thornberry. Thank you, Mr. Chairman. Let me thank you
    for having us before you and let me thank each of the members
    of this committee for the time and effort that you are putting
    into this endeavor. You all have full plates already, and this
    is no small responsibility. As someone who cares about this a
    lot and has worked on it for a while, I appreciate the time and
    effort you are putting into it.
        Let me try to make just a couple of summary points. One is
    that the effort to take the Hart-Rudman recommendation to
    create a new Cabinet Department of Homeland Security originated
    in the House. The people you see before you on this panel have
    worked on it together--I nearly said bipartisan but the truth
    is in a totally nonpartisan way for months and months and
    months, and I want to express my appreciation to my colleagues
    here not just for the work they have put in but for the
    attitude and the approach they have brought to this work.
        Now I am sure that if you go down and ask us whether we
    agree or disagree with every single item that you have to
    decide we are not all going to agree with each other. But any
    differences we have have been overcome by our strong feeling
    that we must take bold action to reorganize the Federal
    Government so that we are better equipped to deal with the
    threats we face. I would respectfully suggest that if we can
    carry on that attitude not just with your committee but with
    the whole House then we will all have done our duty.
        You have a lot of issues to sort out. In my mind, some are
    more important, some are less important. Let me just outline
    what I think the three pillars of any Department of Homeland
    Security has to be.
        One of those pillars has to be border security. As a matter
    of fact, if you look, about 90 percent of the people who would
    be in a new Department of Homeland Security are involved in
    border and transportation security. They have to be made to
    work together as one seamless, integrated unit. That is an
    essential pillar.
        Secondly, is cyber and infrastructure protection. We have
    not talked nearly as much about cyber terrorism as we have
    about other kinds of terrorism, and yet we are attacked every
    single day in this country in all sorts of different ways, and
    an integrated, seamless effort to prevent cyber terrorism is
    essential.
        The third pillar, to me, is emergency preparedness and
    response. Every one of us recognizes how important it is for
    those people on the ground--the policemen, the firemen, the
    first responders--to have the resources they need. Building
    upon FEMA's existing structure with 10 regional offices, the
    relationships FEMA has with State and local governments, the
    new Department of Homeland Security would be the key entity to
    help administer grants so they could buy new equipment to help
    provide training so they can get those things they need there,
    to help plan for emergencies and, maybe most importantly, to be
    the channel of communication between the Federal Government and
    the State and local governments.
        Let me give you an example. Suppose the intelligence part
    of this new agency gets information that shopping malls are
    about to be attacked. Well, this part of the Department of
    Homeland Security will get that information out to the people
    who need to know it. They are the communication that says watch
    out at your shopping malls.
        Now, on the other hand, maybe policeman around the country
    see suspicious activity at shopping malls. They feed that
    information back into the Department of Homeland Security, and
    it goes back up the chain.
        This communication with State and local first responders is
    a critical part to empower them to do their job; and that has
    to be, I think, a part of this Department. So those are the
    three pillars I believe.
        Intelligence analysis is also important. The technology
    piece is very critical across all of these areas.
        Let me make just one final point. We all know that any time
    you move money and power around in Washington you are going to
    meet resistance and you are going to step on some toes. And
    we--to get this passed on the floor, we have a delicate job.
    There is no question about that. But I just suggest that what--
    we have got to focus on trying to get it right. We cannot cut
    this in half. We cannot take an incremental approach. There is
    simply too much at stake. So not only as the Select Committee
    but as our leaders, I know and trust that you will help lift us
    all to meet the challenge of doing this job right, because
    there is so much at stake. Thank you.
        Chairman Armey. Thank you.
        [The statement of Mr. Thornberry follows:]

    PREPARED STATEMENT OF THE HONORABLE MAC THORNBERRY, A REPRESENTATIVE IN
                        CONGRESS FROM THE STATE OF TEXAS

        Mr. Chairman,
        I appreciate the opportunity to appear today before the Select
    Committee on Homeland Security.
        As you know, I've spent a good bit of time working on this issue
    over the past 16 months. Clearly, there have been a number of changes
    in the world since I introduced my first homeland security bill in
    March of 2001.
        One thing that has not changed--and, indeed, one thing that has
    become all too obvious--is that America and Americans are increasingly
    vulnerable to a broadening array of threats from a variety of areas and
    actors around the world.
        Ten years ago, Operation Desert Storm showed us it is foolhardy to
    hit us where we are strong. September 11th showed us our enemies are
    actively searching for ways to strike us where we are weak.
        Over the past several years, there have been a number of reports
    and studies that detailed just how vulnerable we are. In January 2001,
    for example, the bipartisan Commission on National Security/21st
    Century--better known as the Hart-Rudman Commission--issued a report in
    which it found that:
              The combination of unconventional weapons proliferation with
            the persistence of international terrorism will end the
            relative invulnerability of the U.S. homeland to catastrophic
            attack. A direct attack on American citizens on American soil
            is likely over the next quarter century. The risk is not only
            death and destruction but also demoralization that could
            undermine U.S. global leadership.
        We have often heard about the dangers associated with nuclear,
    chemical, or biological weapons being smuggled into this country. But
    we could also be devastated by computer attacks against our critical
    infrastructure or by livestock and plant diseases being introduced into
    our food supply.
        Let me give you one fact that caught my attention. Every day $8.8
    billion of goods, 1.3 million people, 58,000 shipments, and 340,000
    vehicles enter our country. But the Customs Service is only able to
    inspect a small fraction of them. The volume of U.S. trade has doubled
    since 1995, and some expect it to double again in the next five years.
        And yet, by every account, we are not doing enough to protect our
    citizens. The Hart-Rudman Commission found, ``[i]n the face of this
    threat, our nation has no coherent or integrated governmental
    structures.''
        A July 1999 report by the Commission to Assess the Organization of
    the Federal Government to Combat the Proliferation of Weapons of Mass
    Destruction concluded that ``a cardinal truth of government is that
    policy without proper organization is effectively no policy at all. If
    the Federal Government's policy is to combat the threat posed by the
    spread of weapons of mass destruction, then the government must be
    organized to do so.''
        A June 2000 study by the National Commission on Terrorism echoed
    this conclusion when it found that ``[t]his country's seeming inability
    to develop and implement a clear, comprehensive, and truly integrated
    national domestic preparedness strategy means that we may still remain
    fundamentally incapable of responding effectively to a serious
    terrorist attack.'' The Commission also found that ``the complex nature
    of current Federal organizations and programs makes it very difficult
    for State and local authorities to obtain Federal information,
    assistance, funding, and support.''
        Homeland security is a big, complex problem. No one bill and no one
    branch of government can address the entire need. We need a strategy to
    reduce our vulnerabilities; we need appropriate funding of the efforts
    we make; and we need effective organizational structures.
        President Eisenhower put it pretty well. He said, ``the right
    system does not guarantee success, but the wrong system guarantees
    failure. A defective system will suck the leadership into its cracks
    and fissures, wasting their time as they seek to manage dysfunction
    rather than making critical decisions.''
        The plan we are considering today tries to deal with part of the
    organizational deficiencies created by having literally dozens of
    agencies with some responsibility for homeland defense. The bill does
    not try to fix all of the problems. It does not deal with the
    military's role in homeland security, for example. But it does try to
    force more integration, coordination, and planning so that we can
    ``prepare for uncertainty.''
        This bill would implement one of the recommendations of the Hart
    Rudman Commission. I think it is important to say a word about that
    Commission. We are all used to commission after commission producing
    report after report, which simply set on a shelf somewhere. If we allow
    the reports of this Commission to simply set on a shelf, history will
    not be kind to us.
        This Commission was unique in the exceptional background,
    experience--and I would say gravitas--of its members. Their political
    philosophies ranged from the left to the right. But they unanimously
    agreed on the nature of the threats we face and on our lack of adequate
    preparation, and most amazingly, they agreed on what we should do.
        The plan we are considering today mirrors and builds upon the
    Commission's recommendations.
        Under the plan:
         Our border and transportation security would be
    strengthened--The plan will consolidate key border security agencies
    such as the Coast Guard, Customs Services, Border Patrol, INS
    inspectors, and USDA border inspectors under one umbrella within the
    new Department.
         Our emergency preparedness and response would be
    improved--The Federal Emergency Management Agency will be incorporated
    into this new department, and its existing framework will serve as the
    focal point for State and local communities to work with Washington in
    planning, preparing, and responding to a homeland threat or attack.
         Our intelligence and critical infrastructure defenses will
    be beefed up--The new department will act as a clearinghouse for
    intelligence information, supplementing the efforts of the FBI, the CIA
    and other intelligence agencies in analyzing and gathering data. It
    will also coordinate and bolster Federal efforts to prevent cyber
    attacks.
         Our defenses against a chem/bio/nuclear/radiological
    attack will be bolstered--The Department would lead the Federal
    government's efforts in this area, helping to coordinate, among other
    things, advancements in science and technology that will help
    strengthen our homeland security.
        The goal of creating this new department is not to add another
    layer of fat to the already bloated Federal bureaucracy. Rather, the
    goal is to realign our government so it is better prepared to prevent
    and respond to homeland threats.
        Just over 50 years ago, Harry Truman called on Congress to realign
    the country's national security structure by creating a new Department
    of Defense. President Truman's vision and the plan that Congress
    ultimately passed laid the foundation for the defeat of communism and
    the victory of freedom in the Cold War. We are at a similar, pivotal
    point today.
        If Congress lets turf battles and jurisdictional disputes get in
    the way of reorganizing our government, it will have failed the
    American people. It is time for us to act.

        Chairman Armey. Ms. Harman.

    STATEMENT OF THE HON. JANE HARMAN, A REPRESENTATIVE IN CONGRESS
                      FROM THE STATE OF CALIFORNIA

        Ms. Harman. Thank you, Mr. Chairman.
        I am fond of saying that terrorists won't check our party
    registration before they blow us up; and in that spirit I am
    really pleased to see a group of friends sitting before you,
    friends who have worked together before and will work together
    after and sitting before a truly bipartisan committee to talk
    about a subject that is not partisan.
        I feel very strongly that what process we use--and this is
    the beginning of a good process--will determine what margin
    this bill will pass by. I am hopeful that we will have at least
    350 votes for this bill, the end product that you report, after
    it is debated on the floor, at least 350 out of 435. We will
    have far more than 218, the bare margin to pass a bill in this
    House. We must have far more than 218. This is about America,
    and this is about our biggest threat, and we have to step up
    together.
        So I urge this committee to continue in this fashion,
    talking to bipartisan groups in this House and to structure a
    process that is open so that those in this House of both
    parties who have a lot to contribute will be able to do that,
    either in committee or on the floor, and the product that we
    pass will be worthy of the best talent that we can marshal in
    the House. That is the biggest point I would like to make.
        Secondly, some of us, including you, were at the White
    House this morning as the President released his strategy for
    homeland defense. It is a very good product, and calling for a
    major reorganization, which is what we are talking about.
        I am pleased to be an original cosponsor of this bill. I
    support this bill as introduced. However, I think it could use
    a little improving, and in the spirit of bipartisanship I would
    just like to offer a few things.
        First of all, I am a member of the House Intelligence
    Committee which, on a virtually unanimous basis, only one
    dissenter, reported some amendments to the bill that I think
    are excellent. What they do is clarify what the analytical
    function is in the bill, make it clear that it is an important
    function and also make clear how it can work to get accurate
    threat information down to first responders. That is a very big
    deal. Information sharing with first responders so they know
    what to look for is one of the key aspects of this legislation
    and a key reason why those who will protect us when the next
    terrorist act occurs on somebody's real estate will be
    effective. So that is one thing that I think is very important.
        Another thing that I think is important is what thousands
    of businesses around the country are telling us. These are the
    folks who are inventing or have invented the cutting-edge
    technologies which are key to making any Homeland Security
    strategy successful. Any strategy depends on leveraging the
    technologies of the private sector, and they need a front door
    to enter this Homeland Security department. That front door is
    not as clear as it should be.
        That is why some amendments offered on a bipartisan basis
    by the House Commerce Committee, of which I am a member, and
    the House Government Reform Committee are very important. They
    will help us build that front door for the private sector so
    that their talent really can be leveraged in protecting both
    public and private infrastructure and American citizens in this
    huge undertaking that we must embark on.
        A final point is this: at minimum, 80 percent of the
    Federal Government agencies with homeland security functions
    will be left outside of this new Department; and maybe, if Ms.
    Pelosi prevails, 90 percent of the Federal Government will be
    left outside of this Department. But regardless of what percent
    is in and what is out, most will be out, and we need to
    coordinate the entire Federal Government in order to implement
    the strategy that the President recommended this morning.
        How do we do that? My answer is that we must provide a
    statutory office in the White House to coordinate or to be the
    architect of the strategy across the Federal Government. We
    will have a new Department. I support it, a big Department. We
    will have a confirmed Secretary of that Department who will be
    the person testifying before Congress. But we have to have the
    capability in the White House for homeland security that we
    have in the White House for national security. We need a sister
    or brother for Dr. Rice in the White House. We need to do in
    this legislation what we did in 1947 when we passed the
    National Security Act, and that is to create by statute a
    Homeland Security Council.
        The White House is concerned about this because they don't
    want someone in the White House to be confirmed. Dr. Rice isn't
    confirmed. They don't want the President's hand to be tied. I
    think the President is helped by having Dr. Rice in the White
    House, and I particularly commend her for her extraordinary
    service and talent. But I think what we need is the mirror
    image of the National Security Council in a Homeland Security
    Council, and I think to do less would compromise our ability to
    coordinate the whole Federal Government.
        In conclusion, I am pleased to see how we are doing. I
    think we all ought to be proud of this. I hope that this room
    will not be large enough to hold all the Members of the House
    who vote for the bill by September 11, but this would be a good
    start if we filled this with those who vote for this bill. Mr.
    Chairman, we celebrate and we put a cornerstone on your service
    in this House because you are leading this effort. I would be
    very proud to be here and very proud of what I, as just one
    member of this very talented body, have been able to
    contribute.
        Thank you, Mr. Chairman.
        Chairman Armey. Thank the gentlelady.
        [The statement of Ms. Harman follows:]
     PREPARED STATEMENT OF THE HONORABLE JANE HARMAN, A REPRESENTATIVE IN
                     CONGRESS FROM THE STATE OF CALIFORNIA
        Thank you Chairman Armey, Ranking Member Pelosi, and Members of the
    Select Committee for inviting me to appear before you today.
        I am here as a co-sponsor and supporter of H.R. 5005 to create the
    Department of Homeland Security. I am proud to have been a sponsor of a
    previous bill with my bipartisan colleagues here today that proposed in
    May a somewhat smaller Department of Homeland Security and a more
    robust White House coordinating function.
        The President's bold proposal expanded the Department that we had
    earlier envisioned, and downgraded the White House office, a subject
    that I will address later.
        Since the bill's introduction in the House, the 12 standing
    committees of jurisdiction have recommended significant and helpful
    changes. I commend this panel for its commitment to work with the
    chairmen and ranking members to incorporate their recommendations into
    a final proposal.
        In particular, I commend the leadership of my two committees,
    Chairmen Goss and Chairman Tauzin and Ranking Members Pelosi and
    Dingell for their hard work and strong bipartisanship in consideration
    of the Department of Homeland Security bill.
        I understand that this body will receive testimony from the
    Intelligence and Energy and Commerce Committees tomorrow. I will only
    focus on a few specifics from each.
        The House Intelligence Committee reported significant alterations
    to the Administration's proposed information sharing and analysis
    center. In my view, our changes promote a more rational and far
    reaching intelligence analysis center that better clarify and empower
    the Department's intelligence role.
        Like the underlying bill, the Department would be charged with
    assessing the nature and level of terrorist threat and disseminating
    information to State and local governments and responders. The
    Intelligence Committee amendment, however, grants the unit better
    access and staff to fulfill this responsibility.
        The Energy and Commerce Committee included language in its mark-up
    promoting public-private partnerships for homeland security. The
    Committee specified that the Under Secretary for Science and Technology
    should serve as a liaison to the private sector, serving as a central
    point of entry for companies with homeland security technologies.
        In my view, this change is essential to respond to the frustration
    from the aerospace and high tech companies around the nation. They have
    products, from biodetectors to information management software, with
    important homeland security applications. But these companies have no
    clear entre to the Federal government to demonstrate their
    technologies. The White House Office of Homeland Security doesn't have
    the mandate, and the Defense Department's Technical Support Working
    Group is understaffed for the mountain of proposals they've received.
        The Department of Homeland Security should be charged with the
    responsibility of providing the private sector, as well as universities
    and others, with a simple point of entry. The Department would be a
    clearinghouse, reviewing and logging technologies and referring the
    companies to the appropriate government entity.
        This function would facilitate the deployment of cutting edge
    technologies into the war on terrorism as efficiently as possible.
        While I do not serve on the committee, I also commend the
    Government Reform Committee for its consideration of the Department
    bill. The Committee included the provisions of the information sharing
    bill passed recently by the House by a vote of 422-2. The bill, which I
    introduced with Saxby Chambliss, directs the President to create new
    procedures to share information on terrorist threats across the Federal
    government and down to the local government and first responders.
        After these provisions are put in place, the police, fire, public
    health, EMTs, and other first responders will know when the FBI or CIA
    has credible information on a threat to their communities.
        This function would be placed with threat assessment and warning in
    Title II of the new Department.
        Finally, I want to focus on the White House coordinating piece of
    the Thornberry-Harman-Tauscher-Gibbons bill, H.R. 4660.
        Even if we agreed that all the agencies under discussion should be
    part of the new Department, 80 percent of homeland security agencies
    would still remain outside the Department of Homeland Security
    umbrella.
        It is critical to coordinate all the programs--including the
    Department of Homeland Security, the CDC, the NRC, DoD, and the rest of
    the alphabet soup of the Federal bureaucracy.
        It is impractical to think that the Secretary of Homeland Security,
    just because she is focused on security efforts, will be able to
    dictate to other cabinet secretaries how to run their security-related
    business.
        Even Governor Ridge, with an office next to the President and
    charged specifically with getting things done, was unable to overcome
    entrenched bureaucracies. A fellow cabinet secretary in a different
    Department will be less able to coordinate across boxes on the org
    chart.
        I recommend adding in this legislation a statutory Homeland
    Security Council, patterned on the National Security Council, which was
    created by statute in the National Security Act of 1947. The Homeland
    Security Advisor, who would be comparable in status to Dr. Rice, would
    not be a Senate confirmed position, and would not be subject to testify
    before Congress.
        The Council, with a permanent staff, would have the position in the
    White House to oversee all Federal homeland security programs and
    efforts. Rather that ``doing''-training, patrolling, collecting,
    researching-the Council would coordinate these activities, compare
    what's being done to what is needed to prevent terrorist attack, and
    advise the President on policy matters.
        The Homeland Security Advisor would also be an ``architect'' for
    the homeland security enterprise, comparing the current capabilities
    with the needs to counter future threats. This means comparing the
    critical tasks, as elaborated in the national homeland security
    strategy, and matching them up with capabilities. If they don't line
    up, the Advisor would recommend new efforts as appropriate.
        As I mentioned, creating in statute a White House function has
    ample precedent. The NSC was created by the National Security Act of
    1947. In the same legislation, Congress created the CIA, the precursor
    to the Department of Defense, departments of the Army and Navy, a
    separate Air Force from the Navy, and called for the Joint Chiefs of
    Staff.
        I thank the Committee, and urge its consideration of these
    priorities in the legislation before the House.

        Chairman Armey. I might mention to the committee and to the
    panel we have just managed to roll some votes on the floor, so
    that we have at least a comfortable hour before we would be
    interrupted.
        With that note, I would like to recognize the gentleman
    from Nevada, Mr. Gibbons.

      STATEMENT OF THE HONORABLE JIM GIBBONS, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF NEVADA

        Mr. Gibbons. Thank you, Mr. Chairman; and, hopefully, my
    testimony won't last an hour.
        What I would like to do is summarize three very important
    points that I want to make. The first important point that I
    think needs to be made is I am honored to be sitting here at a
    table with my colleagues, both Democrat and Republican. This
    has been a bipartisan effort since its inception. Ten and a
    half months ago, Jane Harman and I joined together in an effort
    to do exactly what we are attempting to do here; and it is a
    privilege to watch the process go forward in such a
    bipartisan--in fact, as Mac Thornberry said, nonpartisan
    fashion.
        It is important, in fact, if it is not critical to America
    that during the time intervening since September the 11 that we
    come together as a unifiable body to produce something that is
    far more important to the American people than anything we
    could do and this is the protection of their security.
        The point I want to make in addition to that is the points
    about the bill. We have heard over the last several months
    about the inability of our government to be prepared to be able
    to work in a fashion that would allow it to understand the
    information that it had and to be able to connect the dots as
    we speak. Now, Mr. Chairman, I have seen, as a member of the
    Intelligence Committee with Jane Harman, agencies come in and
    tell us that they had certain parts of the information but were
    unable to communicate, unable to share the information.
        The important thing about this bill is it allows for
    information sharing. What we had prior to this was a large box
    full of puzzle parts, shaken up and mixed up; and each agency
    came in and reached in the box and grabbed a handful of those
    parts and went off to their own department and tried to put the
    puzzle together without talking or looking into what the other
    agency was doing. This whole part about trying to put a puzzle
    together, having parts in one--in many areas, certainly was
    reflective of our inability to handle the information that we
    had.
        I think the legislation--and, in fact, the legislation and
    the amendment that the Intelligence Committee has put together
    will allow us to share information better, creating an
    analytical center which will take the information generated by
    our collectors--and this agency is not a collector. But it will
    take the information generated by our collectors and put them
    together under a microscope with the focus and the intention
    being the protection of America's homeland. This will give a
    new perspective to that information.
        It will also allow for this agency to communicate this
    information both horizontally between Federal agencies and
    vertically between Federal, State and local agencies as well,
    which is very important. It creates a two-way highway where
    information that is generated by our State and local responders
    can flow seamlessly up into our homeland defense department,
    and this will be critical in terms of analyzing and sharing
    this information to produce warnings that are going to be
    meaningful and effective if we are going to protect the
    American defense.
        Then the second issue that I want to talk about was touched
    on by Ms. Harman, of course, is the fact that you need someone
    in there who has the oversight ability and the ability to
    control and direct some of our Secretaries. As she said, 20
    agencies will be brought together in the Department of Homeland
    Security, leaving approximately 80 agencies outside of that
    that will have some representative issue with regard to
    homeland security. The President will need someone that will
    help organize and share and coordinate that information sharing
    among those agencies.
        It is commonly known in the Washington area that the
    greatest parlor game here is turf war, and all of these
    agencies are very protective of their part of this important
    operation that we have got going in this country to protect our
    Nation and its people. If we don't have somebody who can
    oversee statutory authority to oversee and control the budgets
    and make recommendations, then we have not given the President
    the authority he will need to regulate and determine what is
    important among those various agencies and to set priorities as
    was established in his vision and strategy that was released
    today.
        So, Mr. Chairman, I think this bill, among all other
    things, is probably the highest priority bill that we could do
    in this Congress for the American people as directed by our
    Constitution and that is to provide for the common defense of
    this Nation. Thank you.
        Chairman Armey. Thank you, Mr. Gibbons.
        [The statement of Mr. Gibbons follows:]
     PREPARED STATEMENT OF THE HONORABLE JIM GIBBONS, A REPRESENTATIVE IN
                       CONGRESS FROM THE STATE OF NEVADA
        Thank you, Mr. Chairman, and I would like to thank the Committee
    for the opportunity to testify on behalf of H.R. 5005, to establish a
    Department of Homeland Security.
        Ladies and Gentlemen, 10 1/2 months ago the most horrific terrorist
    attack in this nation's history occurred.
        Since September 11th, this country has unified--both at home, and
    abroad--to better prepare our nation for the new security challenges
    that will face us for years to come.
        Here at home, we oftentimes take for granted the liberty and
    freedom we are provided by our service men and women, as well as the
    strength and wealth of our nation.
        To a great extent, September 11th changed all that. Most Americans
    recognize that we must now prepare ourselves, and generations of
    Americans to follow, for the challenges and threats that we now know to
    well exist.
        Over the last couple of months, I have been part of several
    bipartisan, bicameral meeting at the White House with the President,
    Vice President, and Governor Ridge * * * to discuss the future of our
    nation's homeland security.
        The fruit from these meetings are outlined in the legislation
    before us today.
        As I have advocated since October 4th of last year, when
    Congresswoman Jane Harman and I introduced legislation to give cabinet-
    level status and budgetary authority to the Homeland Security office,
    this Congress must give Tom Ridge and his successors the ability to
    succeed in their role as Director of Homeland Security.
        But not only does the Administration need this authority, Congress
    does as well. We must work to craft a bill that will allow Congress to
    maintain the statutory oversight necessary to maintain our role and
    responsibility.
        And most importantly, the American public needs this legislation.
    We cannot afford to let this office be another well-intended idea that
    gets dragged down by the weight of bureaucracy.
        American citizens deserve better.
        As Vice-Chairman of the Terrorism and Homeland Security
    Subcommittee, a recurring theme in our hearings has been the lack of
    information sharing between agencies.
        The so-called ``Phoenix Memo'' is a perfect example. Those in
    charge of connecting the dots do not always get all the dots to connect
    to form a complete picture.
        The FBI may connect some dots, the CIA may connect some dots, and
    the Border Patrol, INS and Customs may connect some dots, but if all
    our efforts still fail to present a complete picture, we may face a
    tragedy equivalent to--or perhaps worse--than those of September 11.
        This ``stove-piped'' information-sharing has got to stop.Never
    before in our nation's history has communication-sharing among our
    national security agencies been as imperative as it is today.
        This Congress has no higher priority between now and the end of
    this session than to give our nation one single agency whose number one
    goal and priority is to protect our homeland. One key issue that must
    be worked out is how the new Secretary of Homeland Security will obtain
    key information from other agencies like the FBI or CIA.
        Will the Secretary be able to ``task'' other agencies for
    information? We in Congress must ensure the new Secretary is able to
    get the right information at the right time.
        Furthermore, once the Secretary of Homeland Security has key
    information, it must be integrated both horizontally and vertically.
    That way, we can ensure we have the right organizations receiving
    critical information--and that the information is shared all the way
    down to the first responder.
        The first responders are the people who play key roles in
    protecting the communities in which they serve.
        Our police, firefighters and medical personnel must be informed of
    threats that exist within their communities so that they are able to
    prepare and protect the communities which they serve.
        Perhaps the most important provision must be the budgetary
    authority granted to the Director of Homeland Security.
        The Director needs more than a good personality and a strong
    commitment to work with others in order to do the job at hand.As Ash
    Carter of the Boston Globe recently noted: ``White House czars have
    historically been toothless * * * unable to control the activities of
    Cabinet bureaucracies. To be effective as homeland security czar, Ridge
    will need * * * influence over the budgets.''
        H.R. 5005 must give the Director of Homeland Defense real ``teeth''
    by granting him the authority to approve or reject any budget that
    pertains to Homeland Security Strategy in collaboration with the Office
    of Management and Budget.
        This means, the Homeland Security Advisor to the President can look
    into the budget for all agencies that play a role in Homeland Security.
        If the Advisor determines there is inadequate funding for a
    specific action or priority that must be taken, they can submit a
    statement of proposed funding and any specific initiatives, which
    permit implementation by the agency.
        Currently, Mr. Chairman, our homeland security budget reflects a
    lack of coherency. Next year, the Federal government will spend nearly
    $38 BILLION on homeland security.
        Under the budget approved by the House, 22 percent of this money
    will be spent by the DoD, 20 percent will be spent by the
    Transportation Department, 19 percent will be spent by the Justice
    Department, and 12 percent will be spent by the Health and Human
    Services Department.
        The remaining 27 percent will be divided among other agencies with
    a piece of the homeland security pie.
        It is imperative that Congress create a single, comprehensive
    agency to take charge of finding duplications or gaps in how taxpayer
    money is spent.
        If Congress wants to ask the Administration how it plans to spend
    this money, it has essentially two choices.
        First, call up all of the Cabinet secretaries who control some
    portion of these programs to testify, or reorganize government in a way
    that makes it more accountable in preserving the security of our
    homeland.
        This bill does that--and that is why I am here to express support
    not only for the legislation before this committee today * * * but to
    express the need for the goals that this legislation outlines, as we
    proceed in the crafting of this new Department within our Executive
    Branch.
        In closing, I want to commend President Bush and Governor Ridge.
        Together, they have carefully crafted a proposal, with the help of
    some select Members of Congress, that will adequately and responsibly
    steer this country in a direction we must now take * * * and they have
    done it while directing an unprecedented war against terrorism
        Not an easy task, Mr. Chairman.
        H.R. 5005 will give our new Director of Homeland Security--and
    those who will follow--the authority and flexibility needed to ensure
    the protection of our homeland.
        I look forward to working with each of you as we work to implement
    the goals outlined in this legislation.
        And I am confident that we can put our differences and egos aside
    in creating and make the changes that the President asked for by the
    end of this Congress.
        Mr. Chairman, I thank you for this opportunity.

        Chairman Armey. And Miss Tauscher.

    STATEMENT OF THE HONORABLE ELLEN O. TAUSCHER, A REPRESENTATIVE
                IN CONGRESS FROM THE STATE OF CALIFORNIA

        Mrs. Tauscher. Thank you, Mr. Chairman,
        Ms. Pelosi, friends and colleagues on the Select Committee.
        I would like is take a moment of personal privilege to tell
    you how honored I am and humbled I am to sit with my
    colleagues, especially Mac Thornberry, who had the prescience
    to take the Hart-Rudman report March of 2001 and turn it into a
    bill well before September 11 that we could all rally around.
        Let me also tell you how impressed I am to sit here before
    all of you. I have been in Congress now for 6 years. I consider
    this to be an American moment where all of you, the leaders,
    the two great parties in the Congress, have come together in a
    totally nonpartisan way to help lead our ability to protect the
    American people; and I really thank you for your service. I
    know that you have many things that you have to do every day
    and constituents and families that need your attention, but the
    work that you will do over the next few weeks to take us to, I
    hope, a good conclusion in early September as Leader Gephardt
    has asked I think is going to talk more to our adversaries
    about how we are as Americans than virtually anything else we
    have done in a nonmilitary way. So thank you very much for your
    service.
        I would also like to just talk for a few minutes about the
    two areas that I have specific expertise in or committee
    assignments on, and I just want to just make one thing very
    clear. I don't think this is about making more bureaucracy. I
    think this is about making bureaucracy work, and I think that
    is the challenge that we have as Americans in a government that
    is sometimes a little leaner, not as lean as we would like and
    certain a little meaner than we would like. But I think this is
    a truly historic opportunity for us. But unless we do that we
    are not going to have a government that is going to truly focus
    on Homeland Security, and that is why I am a huge supporter of
    the chance to do this.
        We know none of this is going to be easy, and we know you
    have got a tough situation ahead of you, but as the ranking
    member of the Armed Services Panel that oversees the National
    Nuclear Security Administration and as a member of the
    Transportation Committee I am just going to focus on two
    critical issues, one in the aspect of the sciences and
    technology to protect our homeland and the second is the
    Transportation Security Administration.
        As you know, the NNSA's three national laboratories, Los
    Alamos and the two in my district, Livermore National
    Laboratory and Sandia Laboratory, have long worked to develop
    technological capabilities to detect, counter and mitigate the
    proliferation of weapons of mass destruction and the threat of
    terrorism.
        The administration's logic for giving the Department of
    Homeland Security responsibility for a central management and
    research facility at one of these labs and having satellite
    centers of excellence at all the national labs is very sound.
    An appropriate degree of central coordination will be necessary
    to insure that the counterterrorism expertise at all three labs
    is tapped into in the most efficient and least bureaucratic way
    possible.
        I support the language reported out of the House Armed
    Services Committee, and I want to thank Ms. Pelosi for speaking
    so eloquently today about my constituents in California.
    Actually, I am sure some of them live in your district at the
    Lawrence Livermore Lab and the Sandia Lab.
        The White House has designated the Livermore National
    Laboratory, but I am not confused. I want this to work. We have
    three great laboratories--two in California, two in New Mexico.
    I am not interested in planting a flag in my district if it is
    going is create the Donner party and have everybody not focus
    on what the mission is.
        So what I believe we need to do is to report the House
    Armed Services language that effectively says that the
    President wants to appoint one of these labs and that he will
    have the discretion to do that. I think that Livermore can
    compete. I think there are lots of logistic reasons, because we
    do have two labs literally across the street from each other
    and we could be the site. But I think it is much more important
    for us not to get into parochial issues and to allow the
    President the flexibility he has asked for.
        I do hope he picks Livermore, but, once again, I think we
    need to do this right. I certainly don't want to go into a
    conferencing situation with the Senate where perhaps we are
    dealing with parochial issues of New Mexico versus California.
    That is the wrong thing for us to do. My constituents don't
    want that, and I hope that you will support the opportunity to
    do what the House Armed Services Committee recommended.
        In report language we do say that the President has
    designated Livermore, but we really want this decision to go
    forward.
        The second issue is the Transportation Security
    Administration. Many of us are on the committee. We understand
    that we had a necessity when we were doing transportation
    security, and during the debate I had hoped that we could
    create the Transportation Security Administration that could
    have gone in a Homeland Security Department. But we didn't have
    a Homeland Security Department then; and, frankly, we needed to
    move and we did.
        Now our opportunity is to do it right; and since we
    couldn't do it right from the beginning, I am concerned that
    moving the TSA into the Department of Homeland Security now
    before the Department of Transportation and the TSA can meet
    their deadlines that we mandated--whether they were achievable
    or arbitrary or not, those are the deadlines, and they need to
    set--they are set higher and train Federal workers. They have
    to deploy explosive detection devices.
        I am afraid this would create too many problems if they all
    of a sudden had to move at the same time. That is why,
    regardless of the deadlines and the underlying legislation to
    create the Homeland Security agency, I support the
    recommendation of the House Transportation and Infrastructure
    Committee to delay the TSA's transfers until certain milestones
    are met. This is not going to create a big problem for us,
    because I am only asking for about 60 days. But they are 60
    crucial days where we need to have the Department of
    Transportation finish their work, which has been difficult and
    perhaps unachievable in the end. But they need that time to
    bridge forward a Transportation Security Administration that
    has at least met some metrics in its infancy, has a sense of
    momentum going forward. Otherwise, my concern is that we will
    hobble the new homeland security administration with a bunch of
    deadlines and a bunch of things that they haven't done with an
    agency that is growing very, very rapidly.
        So I think that it is important that we think about what
    T&I has said. I think we can find some accommodations. I think
    that there is an issue between November--the November deadlines
    for hiring Federal screeners and the January deadlines for
    putting the EDS machines in the airport, and I think that we
    are talking about January anyhow. So I think that there is a
    narrow window there.
        But as we look at the Aviation Subcommittee, of which I am
    a member, we are going to be holding hearings next week to find
    out if the TSA actually is going to meet these deadlines or
    not. We may be able to come forward with some help on how they
    can assure--we can insure that they will. But I think it is
    going to take this historic opportunity for us to try to get
    some of the things that we couldn't do well because of time
    constraints back in September, much better off for the American
    people.
        I am just very pleased to be here. I appreciate the fact
    that you have made time for us to come. Once again, it has been
    a very heartwarming experience, a reaffirmation of America, to
    work with my colleagues; and I thank you for the chance to be
    here.
        Chairman Armey. Thank you.
        [The statement of Mrs. Tauscher follows:]
    PREPARED STATEMENT OF THE HONORABLE ELLEN O. TAUSCHER, A REPRESENTATIVE
                    IN CONGRESS FROM THE STATE OF CALIFORNIA
        Mr. Chairman, Ranking Member Pelosi, thank you for the opportunity
    to testify before this committee.
        I would also like to recognize the strong leadership of my
    colleagues sitting beside me and, in particular, Mac Thornberry who had
    the foresight to turn the recommendations of the Hart-Rudman Commission
    into legislation several months before September 11th ever happened.
        We have a tremendous opportunity to dramatically improve the way
    our government protects the American people.
        This is not about making more bureaucracy; this is about making
    bureaucracy work.
        Creating a new agency headed by a cabinet secretary with robust
    budget authority and the means to coordinate the dozens of different
    parts of the government doing counter-terrorism work is the only way to
    truly focus on homeland security.
        None of this is easy, but I believe we can preserve the core
    mission of the agencies involved while creating a new agency that
    interfaces with first responders and gives them a single place to go
    for any catastrophe affecting the security of our homeland.
        As ranking member of the Armed Services Committee panel that
    oversees the National Nuclear Security Administration and as a member
    of the Transportation Committee, I am going to focus on two critical
    aspects of the Department of Homeland Security: the use of science and
    technology to protect our homeland, and the Transportation Security
    Administration.
        While in a number of areas we have to consider creating new
    security structures, science and technology is one area where we have a
    wealth of resources at our national laboratories already working to
    protect the American people.
        As you know, the NNSA's three national laboratories, Los Alamos and
    the two in my district, Lawrence Livermore and Sandia, have long worked
    to develop technical capabilities to detect, counter, and mitigate the
    proliferation of weapons of mass destruction and the threat of
    terrorism.
        The administration's logic for giving the Department of Homeland
    Security responsibility for a central management and research facility
    at one of these labs and having satellite centers of excellence at all
    the other national labs, is sound.
        An appropriate degree of central coordination is necessary to
    ensure that the counter-terrorism expertise at all three of the labs is
    tapped into in the most efficient and least bureaucratic way possible.
        I support the language reported out of HASC last week because it
    strikes the right balance by assigning responsibility for science and
    technology to a lead lab--a critical measure to ensure accountability
    and prevent dilution of the science and technology effort--and it gives
    the new Secretary the flexibility to select which ever national lab is
    most appropriate.
        As you know, the administration's request specifically designates
    Lawrence Livermore National Laboratory as the lead in this effort.
        I urge this committee to adopt the HASC language as it is too early
    to know how all these details should be implemented and the new agency
    will need flexibility to build an organization that best makes use of
    our vast science and technology resources.
        With regard to transportation security, during debate on the
    sweeping aviation security legislation last year, I was an early
    advocate of housing the newly created Transportation Security
    Administration in a Department of Homeland Security.
        Unfortunately, no such agency existed at the time, and Congress put
    it under the Department of Transportation.
        Because we did not do it right from the beginning, I am concerned
    that moving the TSA into the Department of Homeland Security now -
    before they meet the deadlines Congress set to hire and train Federal
    screeners and deploy explosive detection equipment--would create more
    problems than if the TSA were transferred shortly after the deadlines
    are met.
        This is why, regardless of the deadlines in the underlying
    legislation to create a homeland security agency, I support the
    recommendation of the Transportation and Infrastructure Committee to
    delay TSA's transfer until certain milestones are met.
        This should result in a delay of no more than sixty days and will
    help ensure that the TSA stays focused on its vital mission of
    screening our airports.
        I have concerns, Mr. Chairman, about the TSA's ability to meet the
    deadlines set by Congress and have called for oversight hearings.
        I am pleased that the Aviation Subcommittee will hold hearings next
    week to find out exactly where the TSA is in its plan to meet these
    approaching deadlines.
        Thank you for inviting us to testify today.
        This is an historic opportunity to do what's right for the American
    people.
        The leadership of both parties has agreed to an accelerated
    schedule to mark up this legislation, and I hope we can have a fair and
    open process on the House floor when we debate this bill next week that
    will preserve the bipartisan spirit that has guided us this far.
        I am glad to assist you as your committee moves this landmark
    legislation forward.

        Chairman Armey. I want to thank all the panel.
        It is our custom in this committee then to proceed under
    the 5-minute rule and for me to ask full cooperation on the
    part of everybody on the committee and panelists alike to try
    to conform to that rule. We will begin with Mr. DeLay from
    Texas.
        Mr. DeLay. First, let me say I really appreciate the work
    that you have done even before 9/11. You had the foresight to
    understand the importance of protecting and defending the
    American people; and you have been very persistent, every one
    of you, in pushing your ideas and certainly participated in
    this process. I commend every one of you, not only in the work
    that you have done but also commend you for working together.
        Because of the 5-minute rule, I have learned that if you
    ask one question that is all you get. So I want to ask two that
    maybe you can--the entire panel can speak to.
        One is the jurisdiction issues that this Select Committee
    is going to have to deal with, and Ms. Tauscher has already
    touched on one of them, the TSA, but there is also in your
    committee a recommendation that we not move the Coast Guard
    into the Department of Homeland Security and there are some
    other issues out there. I would ask you to comment on what your
    recommendations to this Select Committee would be in dealing
    with those issues, most importantly, the Coast Guard and TSA
    and any others that you may--I mean, there is the INS problem
    of whether we split INS and what we do with the State
    Department.
        The second issue is one that came up at the Government
    Reform Committee, and that was an amendment by Ms. Morella that
    changed how the President can operate when it comes to
    collective bargaining. In fact, the amendment, as I read it,
    changes what is presently under current law, and that is that
    the President has the authority to restrict collective
    bargaining at governmental units that are critical to national
    security. Democrat and Republican presidents have used that and
    have used it judiciously ever since the 1970s.
        What the Morella amendment does is basically says, for the
    Department of Homeland Security, you will treat the employees
    differently than any other department in our government. In
    other words, it restricts the President's ability to waive
    collective bargaining for those that are--for those employees
    that may be involved in direct national security issues.
        So if you could speak to those two issues, I would
    appreciate it.
        Mr. Thornberry. I will try to start very briefly.
        The Coast Guard has got to be a part of this Department. If
    we are to have effective border security and port security,
    they have to be part of this. They cannot be out there by
    themselves, and I don't think it works to split the Coast Guard
    in half. They have to be part of it.
        The Transportation Security Administration, I think, does,
    too; and I don't know of much controversy about that.
        I think INS is a turf question. Frankly, I can see a
    variety of arguments. What you have to have is the Border
    Patrol. They have to be part of this. Now, whether the service
    part of INS--we did not include it in our legislation in the
    part of homeland security. I think that is one of those
    issues--in my mind, that is important, but it is not as
    critical as the others to making this work.
        On the other point, I think that it would be a mistake to
    give the President less flexibility than he has now. I think to
    get this new organization going he has to have some added
    flexibility. Now maybe we--I will just throw out, maybe we can
    restrict that added flexibility in terms of time or in
    particular ways so that people are reassured, but I think to
    make this work the things like the reprogramming and the other
    things, that flexibility has to be there.
        Ms. Harman. I have been saying that the war on terrorism
    has expanded to the war on turf. That may be the tougher war.
    But we have to win that one, too. I think this Congress will be
    measured by whether we win that war or not, and I predict that
    over time we will have to change our own structure in order to
    be more effective in authorizing and appropriating funds for
    the homeland security effort for the country.
        I think all of us on this panel were together on a bill
    before the administration proposed its bill that would have had
    a smaller department and a more robust White House function. I
    am prepared to go with this version, but I do think many in
    Congress have valid concerns about how big it should be. It
    would be a terrible mistake if we spent all of our time
    transitioning to this big structure and forgot about focusing
    on the threat. That, obviously, is not the point; and Norman
    Ornstein wrote an interesting piece in the Washington Post on
    Sunday making the point that we might get lost here.
        So my comment is just that I think you ought to be a little
    bit open to some of the concerns expressed, but I do agree
    that, at a minimum, we have to have one integrated digital
    border system and everything that goes into protecting our
    borders has to be linked together or we will not be able to
    keep the evildoers out and make certain we know who is in.
        Chairman Armey. I am afraid I have to call time on this
    question. I am sorry. Maybe we can come back to it later. Ms.
    Pelosi.
        Ms. Pelosi. Thank you, Mr. Chairman. With our colleagues,
    we will just go back to the regular order.
        Thank you all very much for being here and for your
    leadership and your early leadership on this very important
    issue. Did you hear the wonderful things I said about you?
        I keep forgetting that button.
        I always begin my comments by referring to the families
    affected by September 11, and I know we all carry them in our
    hearts. When we met with the families as part of other
    responsibilities here, they have told us that when a plane
    flies over or they hear the warning of a threat the horror for
    them is revisited, not that it ever leaves but it is
    intensified. So we owe them to act in a very bipartisan way. We
    are walking on hallowed ground here, and we want to do the
    right thing.
        My concerns are about the size of this new department. I
    would prefer your suggestion--your early suggestion of
    something very strong in the White House and leaner in terms of
    the bureaucracy outside the White House.
        I would hope, Mr. Chairman, that we could make the
    suggestion that several of our colleagues here, including
    Congresswoman Harman, about strengthening the Office of
    Homeland Security in the White House by making it statutory,
    not just its existence springing from an executive order. I
    don't know if we have that authority in our bill, but I hope
    that we could consider that because I think that is very
    important.
        I have had conversations with Mr. Gibbons about the need,
    as has been mentioned here, of having our entire government
    responsible for Homeland Security and that coordination could
    happen at the White House. I don't want us to have any more or
    less bureaucracy than we need within the new Department. There
    is some cost involved in this transition as well as time.
        Secretary O'Neill was here the other day, and in the
    questions that Mr. Frost asked of the cost involved in
    transitioning, he said it shouldn't cost much. There is no
    reason I can't still be the landlord for the Customs Service.
    Just change the sign on the door.
        Maybe that is the way the administration intends to go. I
    don't know. But I mentioned this morning to the President,
    after we had our public meeting, there are only 125
    municipalities in the country that have populations bigger than
    this new department will have. 150, 160, 170,000 and below is
    where most people live in this country. So I would hope that we
    could have something much leaner than that population so that
    the Secretary can be coordinating and dealing with the threat,
    the risk, and the response, God forbid, if it is needed, rather
    than with the management of this gigantic new department.
        So make no mistake. If we need it to be that big, okay. But
    let's subject those suggestions to the congressional scrutiny
    that is necessary. Tell me what you think now in light of the--
    I heard what you said, Congresswoman Harman, about the original
    proposal and how you wholeheartedly support the President's
    proposal. From your experience to each of the other members of
    the committee, I would like to know what your preference would
    be, to be closer to a leaner model, technologically based, with
    coordination with a very strong element in the White House or
    this larger entity.
        Mr. Gibbons. Perhaps I will start with that, since we
    finished over here. My preference would be to have one that is
    very efficient, very flexible, almost an expeditionary model,
    if you will, of our government where we can be mobile enough to
    react to situations that arise that we don't predict, that we
    don't foresee at this point in time.
        I agree that having a department with 170,000 people in it
    seems unwieldy, almost bureaucratically burdensome. I think
    this is the one reason why, when you look at the difficulty of
    all of the responsibilities, you either strip responsibilities
    from agencies to put them into a smaller one, or you bring the
    responsibility with a department to a common leadership role.
    This is the justification for having an advisor to the
    President on top of all of the Secretaries that could advise
    the President and make recommendations to the President, on
    giving directions to the Secretaries of various departments
    that will have a responsibility for homeland defense.
        One of the other challenges, for example, would be to take
    the analysis or the intelligence part. Will the homeland
    defense department be able to task our CIA or our FBI once it
    has information in its hands that says that we need to be
    focusing some of our resource collection on a specific item or
    a specific person? In order to do that, someone outside of the
    chain of equal power, in other words, Secretary to Secretary,
    is going to have to make a decision on where resources will be
    spent.
        This is why I believe that if you have an agency, even if
    this has certain departments, certain responsibilities within
    its own domain, that you have somebody who is making
    recommendations in the process to give direction for
    coordination. Without the coordination, without the information
    sharing, you will be reaching back into that box of puzzle
    parts and taking your part, your handful and running off to
    your room and trying to put the puzzle together. You need
    somebody to coordinate it and somebody to give direction to it,
    and how they work that out I think is something that this
    Congress and future Congresses will be doing in the future.
        Chairman Armey. I am sorry. The gentlelady's time has
    expired. The gentleman from Oklahoma.
        Ms. Pelosi. Thank you.
        Mr. Watts. Well, I surely appreciate you all's time as
    well, and I appreciate very much the work that you guys have
    done on this. And I have--that is spooky for politicians to
    hear those kind of noises behind them. I have seen much of the
    work that each of you have done, some of the comments that you
    all made over the last--or post September 11 on this issue, and
    I--in the President's legislation, he is asking for some
    flexibility for the new homeland defense department and trying
    to manage this thing.
        Two things I would like to ask. One, there is a transition
    period of about a year. We had Tom Ridge here yesterday, and I
    questioned deeply whether or not a year is going to be adequate
    time to make a transition. I would like to get your thoughts on
    that.
        Secondly, last week in the Government Reform Committee, as
    you all know, Congresswoman Morella offered an amendment which
    was adopted by one vote limiting the President's ability to
    restrict collective bargaining rights at the Homeland Security
    Department on national security grounds.
        I know that each of you serve with me on the Armed Services
    Committee. I would like to get your thoughts on that as well.
        Mrs. Tauscher. Mr. Watts, I strongly support the Morella
    amendment that provides the agency's employees the right to
    collective bargaining.
        But when we were creating--if you think about a couple of
    years ago, Mac Thornberry and I were the parents of the
    National Nuclear Security Administration. We took the nuclear
    weapons components of the Department of Energy, and we moved
    them into a semiautonomous agency specifically to get them out
    of a kudzu-laden bureaucracy where, you know, the Department of
    Energy regulates refrigerator coolant, and it had the nuclear
    weapons. Unfortunately, not a lot of people were paying
    attention to the nuclear weapons. So we decided it was
    important to move them into this new semiautonomous agency, and
    we can probably get you some of the language that was used at
    the time.
        But it gave the administrator of the NNSA some opportunity
    to work with the Civil Service employee unions to provide what
    I think we all agree is some necessary flexibility but not to
    bend the collective bargaining pieces into a pretzel. I think
    that the people that are coming into this new agency are going
    to be tremendously energized. They are the front-line defense
    in a new war with tremendous vulnerabilities in this country.
    They want to preserve their civil rights. We should preserve
    their abilities to have the kind of rights in their job that
    they have had before. But I think we have to be thoughtful
    about what we term as flexibility versus what we take as an
    opportunity to change what I think are fundamental rights of
    these employees.
        Mr. Thornberry. If I might just--I think a year is
    certainly enough to move things around for budget purposes and
    for the lines of authority. Of course--and my colleagues know
    better than I--but the intelligence analysis piece is not going
    to be all done and up and running as it should be in a year. I
    would suggest, just as we have continued to make refinements on
    the nuclear weapons part that Ellen was just talking about, we
    are going to have to make some refinements as we go along. We
    won't get it perfect. We will have to watch how this transition
    process goes and try to make improvements as we feel like they
    need to be.
        If I could just take a second and go back to one point, Ms.
    Pelosi, that you have--because I have listened carefully on
    television to all y'alls comments.
        Ms. Pelosi. I hope that you heard me compliment you on
    your--
        Mr. Thornberry. I did, and thank you very much. But I have
    just a slight concern about the talk about the size of this
    Department. Ninety percent of the people in this Department are
    border and transportation security. I don't think many people
    want to do with fewer Border Patrol agents or fewer screeners
    at the airports, and I know you are not for that. But my point
    just is, 90 percent of these people are in those two functions.
    So I think we have to be--we want them together. We want them
    working together and hopefully that is an outcome.
        Thank you for letting me get that in.
        Ms. Harman. Well, the clock is ticking, so in 15 seconds or
    less I think a year is maybe too long. I think the goal is to
    protect the American people, and we need to front load the most
    critical tasks.
        I suggest that whatever we create, however big or small the
    Department is, it has the capacity quickly to prevent terrorist
    attacks, to shore up our infrastructure and to help us respond
    quickly. If we can't do those things tomorrow, I think we are
    vulnerable. So I would just urge us to front load the most
    critical tasks.
        Chairman Armey. Thank the gentlewoman.
        I believe we are getting the hang of this.
        The gentleman from Texas, Mr. Frost.
        Mr. Frost. Thank you, Mr. Chairman. I, too, was at the
    White House this morning; and I think the--Ms. Harman's
    comments were very important which she made directly to the
    President urging that we have a procedure that would permit the
    final result to be a large vote in favor of final passage. I
    concur with that, and I hope that we can get 350 Members on
    final passage at least.
        My question is to Ms. Harman. Hypothetically, if this
    committee and ultimately the Rules Committee were to adopt a
    procedure that did not permit votes on individual amendments on
    the floor on some of the matters that have been strongly
    supported by the committee's original jurisdiction, what do you
    think the result of that would be in terms of our ability to
    get a large vote for a final passage?
        Ms. Harman. Well, it is a hypothetical question, and I
    think it depends in large part on what this committee reports.
        Mr. Frost. Assume for the sake of argument that the
    committee reports something that is substantially similar to
    the President's original proposal.
        Ms. Harman. I don't assume you would do this. In fact, I
    assume you will not do it. But if the impression in the House
    was that you ignored the work of the committees and ignored the
    good suggestions from a large number of Members on a bipartisan
    basis and then closed the rule, I don't think that would be
    very good for a big vote on passage or even for passage.
        I hope this committee will not only listen to us--we are
    just four people--but will take the good ideas from the
    committees, will be open to refining the bill--not throwing the
    bill out but refining the bill in good ways, will think about
    this issue of how fast will this be up and running--because we
    are vulnerable this hour, this day--and will report something
    that reflects a lot of the good ideas in the House.
        If that is the case, then I can imagine a rule that at
    least gets us to consider the whole thing in a reasonable
    period of time, open to some amendments. I don't think it has
    to be a totally open rule, but it really depends, Mr. Frost, on
    what the reported bill looks like; and I would urge inclusion
    of the good ideas brought forward in this House.
        Mr. Frost. Thank you.
        I do have one other matter I would like to discuss with you
    and other members of the committee. I don't think that my
    friend from Texas, Mr. DeLay, was intentionally trying to
    misstate what had been done in the Government Reform Committee,
    but I would like to clarify one point and then ask your
    comments.
        Under current statutory law passed in the late 1970s, only
    the President may exempt employees from Civil Service
    requirements. He must--he can do so by executive order. Under
    the bill introduced--under the President's bill, H.R. 5005,
    introduced by you and other Members, a number of Members, there
    is a provision, section 730, which vastly expands the authority
    of the government to exempt Civil Service--employees from Civil
    Service protection. It cedes this authority to the Secretary of
    the new Department; and the Office of Personnel Management,
    without any action of the President, gives them the right and
    does not set any particular standards for exempting employees
    from Civil Service protection.
        The Government Reform Committee then adopted as its base
    text language written by Mr. Burton, the chairman, a
    Republican, which basically wiped out the provision, section
    730. That is that provision ceding the authority to the
    President previously had giving that authority to the new
    Secretary and the OPM Director. Then that text was adopted; and
    then the Morella amendment was added on top of that, which
    would further refine the President's' authority to issue a
    executive order.
        Now I guess the first question is, what is wrong with Mr.
    Burton's amendment? Forget about the Morella amendment for a
    minute. What is wrong with what Mr. Burton did in just saying
    we are not going to give the Secretary and the Director of OPM
    the authority to exempt people? We are going to put it back so
    that only the President could do that. Is there anything wrong
    with that?
        Mr. Gibbons. Let me say I think the issue here is time.
    Does the President have to micromanage each and every
    individual? There is nothing wrong with collective bargaining
    or the rights that our civil service employees have negotiated.
    Let me say that my issue with this would be that if it is
    currently, in the opinion of Congress, that the standard that
    we meet today by having the President be the person responsible
    for waiving any right of a negotiated agreement is
    satisfactory, and if Congress feels that that waiver can be
    done in a timely fashion in the face of a national crisis, then
    I would say there is nothing wrong with Mr. Burton's language.
        Mr. Frost. And I would hope--.
        Chairman Armey. Sorry, the gentleman's time has expired.
        Mr. Frost. --the committee seriously considers Mr. Burton's
    language and consider it on the floor.
        Chairman Armey. Gentlelady from Ohio.
        Ms. Pryce. Thank you, Mr. Chairman.
        Would any of you care to discuss the risks involved to
    industry, and how we can encourage industry to be open and
    above-board and completely honest about what the risks may be?
    Of course, that involves the Freedom of Information Act, and
    that is a balancing act that we must do and there is a lot of
    controversy surrounding that. And I am sure that you all have
    given that a lot of thought, and I just would like to hear each
    of your expressions of what this committee should do. So I will
    stop now and allow you to address it.
        Mrs. Tauscher. Well, Ms. Pryce, I think what is important,
    I know in my district where I have the headquarters of
    ChevronTexaco, PeopleSoft, and Safeway stores, soon after
    September 11 they went on to their public, very used Web sites
    and began to scrub them of just gratuitous information that was
    on there; just nice stuff that was up there, like friendly
    information that was very dangerous, on second view, in the
    context of September 11. And they have aggressively gone about
    taking some of that information down. A lot of it was
    gratuitous. It was stuff they volunteered to tell people.
        But I think we have, once again, a balancing act. The right
    to know--certainly in northern California, George Miller's
    district, my district, we have a Dow Chemical plant. Is there a
    right to know of my constituents of what kind of chemicals are
    there? Absolutely. But the way we do that and the context in
    which we do that, the partnership among the local governments,
    certainly the first responders, the EPA has a lot of that
    information. You know, how do we make sure the right people
    have information so they can act appropriately at the right
    time to protect in the case of an attack or an accident?
        So these are difficult situations. I know Mr. Gibbons and
    Ms. Harman have worked hard on this issue. Let me turn it over
    to them.
        Mr. Thornberry. On the FOIA issue, it seems to me if a
    company has to produce information now that is subject to the
    Freedom of Information Act, we ought to leave that alone. If
    they are going to produce new information about their
    vulnerabilities that is not now required, maybe we ought to
    look at protecting that, because otherwise they are simply not
    going to tell us their problems.
        And so I know you put a lot of discussion into this and may
    want to consult with the lawyers more, and certainly they know
    more than I, but it seems to me it is not hard to get what we
    want on both sides.
        Ms. Harman. I think the goal here is to get companies to
    come forward voluntarily with new information that could be
    helpful in the homeland security effort, and new products, and
    we are going to have to consider how to protect their trade
    information against competition and how to indemnify some of
    their products if they are offered in good faith and there is
    no reckless conduct. I think those are hard issues, but I think
    this committee should grapple with them.
        I just wanted to say to Mr. Frost, I have been thinking
    about Mr. Burton's amendment, which I was not aware of. We
    don't want to derogate existing law, I don't believe. I think
    there is a careful balance struck. Nor do we want to weaken or
    offer different treatment of employees in this administration
    from other administrations. So I think you have a very
    interesting idea. And I would just point out that the President
    this morning said to us in the group, he is not trying to
    fiddle with collective bargaining. He thinks that those
    processes should be left in place.
        Mr. Gibbons. Let me go back to your question. I think the
    greatest tool we have in our inventory is good intelligence.
    First of all, warnings are created by the fact that we are
    supposedly gathering the information. I have created in my
    district in the State of Nevada, a homeland security committee
    which is made up of both first responders and industry
    officials, bringing them together to talk about their
    weaknesses or talk about their needs and where one can benefit
    the other. And I think if we all went out and created the same
    within our districts and looked internally, then Congress
    doesn't have to be the one who sets out in an enormous process
    of trying to manage and trying to protect each and every
    individual agency. This is going to be one where first
    responders, police, fire departments, National Guards, are
    going to be there first. They should be working closely with
    private sector agencies.
        Our worst enemy is the Web, and it has information, all
    kinds of notorious information that can be used against us in a
    whole panoply of contrived and thought-up terrorist acts. We
    have to be able to react to it, and that is where good
    intelligence warnings and preparation come into hand.
        Chairman Armey. The gentlelady's time has expired. The
    gentleman from New Jersey.
        Mr. Menendez. Thank you, Mr. Chairman. I want to commend
    all of you for the work you have been doing collectively and
    individually. I think it is remarkable and it has in part led
    to some of my questions over the last several days. And I would
    like to take this opportunity to--especially to Ms. Harman and
    Ms. Tauscher who serve as--in the Democratic Caucus' Task Force
    on Homeland Security and are chairs of the different working
    groups--for all of the work they have done in that regard as
    well. And I would like to pick your brain a little bit about
    some of the issues we have been raising and see where you are
    at.
        Mr. Gibbons described that this Department has proposed--
    provides the opportunity--allows, I think were your words, for
    information sharing. My concern is that there are no mechanisms
    to guarantee information sharing in the legislation.
        So I would like to know, do you believe that language that
    provides for mechanisms for information sharing to actually
    take place is worthy of being considered, one.
        Two, are there mechanisms to protect nonsecurity missions
    transferred into this Department which presently do not exist
    in the legislation? That was a good part of my questioning
    today. Do you believe that providing for mechanisms to protect
    nonsecurity missions within the Department would be
    appropriate?
        Thirdly, I think I heard the discussion on FOIA, and I
    basically agree. I just want to make sure that as I read the
    legislation right now, a chemical company in my district in New
    Jersey gives all their chemical ingredients to Homeland
    Security and avoids the right-to-know law. I don't think that
    is the administration's intent, but the language could be used
    that way and I want to firm that up.
        And, lastly--I want to lay out all the questions and let
    you take up the time in that regard. But, lastly, I am
    concerned on this whole question of separating public health
    research, and I raised it with Secretary Thompson.
        And whether you look at Margaret Hamburg, the Vice
    President of Biological Programs for the Nuclear Threat
    Initiative, who believes in her words that we will weaken and
    fragment our Nation's capacity to respond to infectious
    disease, whether occurring naturally or caused intentionally;
    or Doctor Tara O'Toole at the Center for Civilian Biodefense at
    Johns Hopkins, who believes that the country would be forced to
    create parallel work forces, one in Homeland Security for
    bioterrorism and preparedness, and another in HHS for public
    health functions; or whether you listen to the GAO report that
    found that the structure proposed for the research and
    preparedness program at another department does not ensure that
    both the goals of homeland security and public health will be
    met--is that an area that we should reconsider in the context
    of achieving the synergies, the cost savings, the benefits that
    we want to achieve?
        Those are my four major areas of questions, and allow any
    one of you to take whatever parts of it that you want.
        Mr. Gibbons. Let me start, Mr. Menendez, with the
    intelligence part. I believe that the amendment that was passed
    in the Intelligence Committee allows for and, in fact, does
    permit sharing of information between agencies, both
    horizontally and vertically. Again, it goes back to my thought,
    in addition to how do you task various agencies who are
    collecting that information with pointing out weaknesses or
    areas that they should be interested in. This is why we need, I
    believe, either a director or an adviser to the President who
    can direct these various agencies in--.
        Mr. Menendez. Just to note, that is not in the President's
    bill as is. It is important to note that that is something for
    the committee to consider.
        Ms. Harman. If I could just add to that point, I believe in
    the Government Reform Committee, Mr. Shays added the text of a
    bill this House passed 422 to 2, that was coauthored by a
    number of us here, that would require the government to
    implement a program to share information across the Federal
    Government on potential threats, and then vertically down to
    first responders, stripping out the sources and methods, so
    that people without clearances can receive the information and
    know what to do.
        I think that that is a very good road map and it is
    certainly in the material before you. And I would urge you to
    adopt what the Intelligence Committee did on this point, plus
    the bill that I think all of you probably voted for on the
    House floor a couple weeks ago.
        Mrs. Tauscher. One of the issues on intelligence that has
    concerned me for a long time is you cannot just view this
    Homeland Security Agency as a customer. It is a permeable
    barrier from top to bottom. Literally, the dots are connected
    of the 87,000 different jurisdictions in this country, of which
    every one is now basically a combatant.
        So this Agency, it will be the ability to do the four A's;
    they have to analyze, they have to archive, they have to
    advise, and they have to alert. So they are just not going to
    be a customer per se of intelligence.
        It is important that you have a procurement strategy that
    decides that people have the right kind of ability to have
    interoperability to talk to each other. So I think this is
    very, very complicated. And I think your questions are good
    questions, but I also think there is a necessity and an urgency
    to create this Department so you do have a Cabinet Secretary
    that can begin to do the work that subsequently answers many of
    your questions. Congress is just beginning its job.
        Chairman Armey. Thank you. The time has expired. The
    gentleman from Ohio.
        Mr. Portman. Thank you, Mr. Chairman. I would like to start
    by commending the four of you, first, because you were ahead of
    the curve, along with Bob Menendez and J.C. Watts and a few
    others, only a handful here in Congress. You were talking about
    this and pushing some on this long before C-SPAN was covering
    your comments, and we appreciate that.
        Second, it is because you have worked--just as we want this
    Agency to work--you have worked seamlessly, with agility,
    sometimes flexibility, because you come together I know with
    some differences and work them out. And, finally, you have left
    your partisanship behind as you worked on this project. So it
    has been impressive to watch it, and I have enjoyed working
    with you.
        I want to ask you some questions, and the Chairman may not
    give me a second round, so if you could just give me a quick
    yes or no and answer in unison.
        First, do you all think the Transportation Security Agency
    ought to be part of this new Homeland Security Agency?
        Ms. Harman. Yes.
        Mrs. Tauscher. Yes.
        Mr. Gibbons. Yes.
        Mr. Thornberry. Yes.
        Mr. Portman. Do you all think the Department of Immigration
    as it relates to the Border Patrol ought to be part of this new
    Agency?
        Ms. Harman. Yes.
        Mrs. Tauscher. Yes.
        Mr. Gibbons. Yes.
        Mr. Thornberry. Yes.
        Mr. Portman. Do you think the Customs Service ought to be
    part of this new Agency?
        Ms. Harman. Yes.
        Mrs. Tauscher. Yes.
        Mr. Gibbons. Yes.
        Mr. Thornberry. Yes.
        Mr. Portman. Do you all think that the Animal Plant and
    Inspection Service, so-called APHIS over at the Department of
    Agriculture, ought to be part of this new Agency?
        Mr. Thornberry. As the Ag Committee has changed it, I think
    that is one example where the committees have done great work.
    They took out the border piece and left what we didn't need for
    this Department, and that is the right answer.
        Mr. Portman. Do you think the Coast Guard ought to be part
    of this new Agency?
        Ms. Harman. Yes.
        Mrs. Tauscher. Yes.
        Mr. Gibbons. Yes.
        Mr. Thornberry. Yes.
        Mr. Portman. Right there, you are over 90 percent. How
    about the immigration processing function--Immigration Service
    processing function?
        Mr. Thornberry. I mentioned that I can see all sorts of
    arguments there. I would probably say yes, because I don't know
    where else it gets better, but it is one of those things that
    could be argued in a variety of ways.
        Ms. Harman. I would argue that whatever we do with it, we
    have to totally reform it. One of the huge vulnerabilities is
    the inability of our agencies to keep out people who should be
    kept out or to monitor student visas when they lapse.
        Mr. Gibbons. And I would say that in addition to reform we
    must make sure that the information collected through the INS
    is coordinated with our other intelligence agencies so that we
    can determine whether or not the individuals we are admitting
    are on any watch list.
        Mr. Portman. Ellen.
        Mrs. Tauscher. I also think it is a tremendous asset for
    intelligence. The good news is that there are a lot of things
    we can learn from that function and that we have to know. And
    these are people that are also going to be providing, I think,
    maybe a high level of security information, but it needs to be
    able to go in the bin.
        Mr. Portman. Do you think FEMA should be part of this
    Agency?
        Mrs. Tauscher. Yes.
        Mr. Gibbons. Yes.
        Mr. Thornberry. Yes.
        Ms. Harman. Yes, I think it should be the basis of the new
    Agency.
        Mr. Portman. How about the Federal Protective Service that
    protects Federal buildings--these are some of the smaller ones.
        Mr. Thornberry. Yes. I think it makes sense.
        Mr. Portman. How about the Secret Service?
        Mr. Thornberry. It was not in our original bill, but given
    the role they have taken at Super Bowls and Olympics and that
    sort of thing, I think it makes sense.
        Mr. Portman. In Salt Lake, and they handled the Super Bowl.
    I would just make the point--and, again, I agree with
    everything that Ms. Pelosi has been saying about leaner and
    meaner, and this needs to be a 21st century agency, and we need
    to rely on technology and coordination. But 170,000 people is
    just what you all have said is necessary. And I don't get hung
    up on the numbers. I mean, being leaner and meaner means we
    work better with what we have. The alternatives are not good,
    which is to leave out agencies that have a direct impact not
    just on homeland security, as Ms. Harman said. There is another
    80 percent of the government that has something to do with
    that.
        But these are agencies that have a direct impact on our
    borders and direct impact on the security of our country in a
    way that, if they were not a part of it, it would not work as
    well. I would also say that it is still going to be there in
    the bureaucracy. And to the extent that you can consolidate and
    get some savings out of that not just in terms of people, but
    in terms of effectiveness, I think it is worthwhile in the
    synergies we can get out of that. What we need to do is be sure
    we have management flexibility and personnel flexibility.
        And I would just quickly comment on Mr. Frost's questions,
    because I think he said--maybe Tom DeLay didn't state it quite
    right. I am not sure that we stated it quite right the second
    time around in terms of the general issue. Section 730 does not
    exempt employees from all civil service protection. What it
    does say, you are going to follow the basic principles of
    merit, and that the Agency would come back to us with a
    recommendation on a new system, but it would not take people
    out of civil service protection.
        Second, this whole issue of the national security waiver,
    and you answered this well, but as I understand it--and, again,
    I may be missing something here--this agency is not like the
    FBI and it is not like any other agencies, the DEA, the Secret
    Service, the agencies of the Department of Defense, the
    Department of Energy defense programs, AID, parts of FEMA,
    where the President does have the ability to go in on a
    selective basis and deal with collective bargaining rights,
    exempt people from collective bargaining rights for national
    security reasons. The alternative is to come in with a big club
    and to say the whole Agency is exempt, which I think is not as
    good for the employees and doesn't make for a leaner and meaner
    agency.
        So with that, Mr. Chairman, I yield back my time.
        Chairman Armey. Thank the gentleman. Gentlelady from
    Connecticut.
        Ms. DeLauro. Thank you very much, Mr. Chairman. Let me say
    thank you to my colleagues. I would just say to you that we
    have heard a lot of testimony in the last 2 days, and I think
    it is always true, very much for Members in listening to other
    Members who have spent a very, very long time pursuing these
    issues and these areas, and the four of you and the folks who
    are on committees, I think you get a certain sense of
    reassurance or understanding of the issues from another
    Member's perspective, especially people who are recognized in
    their particular areas.
        So I just say to you, thank you very, very much and this is
    very much appreciated.
        I want to say two things quickly, and then I would like to
    get back to the public health issue, because, as Congressman
    Menendez focused on that today, and I focused on that
    yesterday, and I think there are important pieces here. If you
    would just take a look at--and for no real comment today,
    because we are talking about the FOIA issue, there is exemption
    4 of FOIA which already protects from disclosure certain
    confidential or trade secret information that private entities
    may supply to the government.
        That was reinforced by the commentary of a FBI official,
    the Director of the National Infrastructure Protection Center,
    where he said, we believe that there are sufficient provisions
    in the FOIA not to protect information that is provided to us.
        I would ask you to take a look at that and also to consider
    on the proposal, the current proposal, and what surrounds the
    issue of the Inspector General with regard to this Agency as to
    how it regards the Defense Department and Justice and to see--
    because I would love to get your views at another time, soon,
    on what you think in that area.
        Let me move to the public health issue, because I think
    that it is critical about seeing whether or not we are going to
    bifurcate agencies that are doing an unbelievable job already,
    and they are tried and true. Doctor Hamburg's remarks, Doctor
    O'Toole, the GAO, I might comment to you, was concerned. They
    concluded that giving the Secretary of Homeland Security
    control over programs to be carried out by other departments
    will create confusion about roles and responsibilities for
    certain health functions could lead to difficulties in
    balancing priorities with regard to transfer of dual-purpose
    programs, concerns with priority setting, concerns with
    transfer of control. It goes from academics to government
    agencies.
        And I received a letter from Bob England, Health Director
    from the Milford Health Department--and I would like to put
    this in the record--who said, if funding is transferred away
    from public health systems, away from professionals who already
    know how to contain outbreaks, spread of disease, but are
    rarely given adequate tools to do so, the result will be a less
    adequate level of bioterrorism preparedness and continued
    performance in everyday disease control. There is real concern
    out there about this issue across the line.
        I don't know amongst you who has focused their time and
    attention on this particular issue. I just would love to get
    your comments and be further enlightened about this from your
    perspective.
        [The information follows:]

        Mr. Thornberry. If I might start, Ms. DeLauro. The short
    answer is this provision was not in our bill that we introduced
    originally, so none of us have focused on it in depth.
        But let me say this. Clearly defense is, prevention of
    bioterrorism is a critical part of what this Agency needs to do
    and what our government needs to do. Now, it is easier said
    than done, but it seems we can have the necessary assurances
    that the important public health functions continue. These
    people as I understand it are not really going to move. One
    source of their funding comes from a different place. And we
    are going to have to make it all fit together. I realize that
    is your job, and it is easier for me to say it than to do it. I
    just don't see why it should be an insurmountable obstacle.
        Ms. Harman. I think it is a hard issue. If I had to make
    the call, I would not move it in here. But what I would have in
    here is all the technology to create syndromic surveillance so
    we know what is showing up in our hospitals and to make sure
    that electronically we can make sure we have surge capacity and
    move people around in the event of a terrorist attack. But I
    don't really care whether the smallpox epidemic was caused by a
    random bug or a terrorist, and I don't think we need take 3
    nanoseconds to analyze that, we need the capacity, period, and
    we need to robustly fund it.
        Chairman Armey. I am the final questioner in this round. I
    might advise the panel that we will have a second round, and
    further advise the panel to--if you have a burning notion that
    you want to share with the panel, jot it down and I will
    surrender my last 5 minutes to this panel for your final
    thoughts.
        In the meantime, let me also ask you if you would for the
    benefit of this committee take the time in the next day or so
    to find the Burton language and study it if you will. It is my
    understanding it has been worked out with the Office of
    Personnel Management and vetted with the White House and very
    likely might serve us well, and we would value your opinion on
    it.
        On this question on FOIA, I am fascinated because one of my
    favorite songs is ``Nobody's Business,'' I think first done
    well by Eartha Kitt, most recently by Hank Williams, Jr.
    Nobody's business but my own. Fundamental American right to
    proclaim it is nobody's business but my own. FOIA, I believe,
    is designed to protect America from a government that operates
    in secret. The idea that we might apply FOIA to private
    business enterprise and compel them to divulge information that
    might put them at risk for reckless lawyers or put their own
    security of their operation at risk for villainous deeds does
    not strike me as a very wise extension of FOIA, nor one that is
    consistent with foundation rights in America. Which is to wit,
    as I have said, the right to say to you, it's none of your
    business what I am doing.
        I wonder if you would comment on that.
        Mr. Thornberry. Mr. Chairman as I say, to me we should
    leave FOIA as it is for existing requirements and in general. I
    think with this law what we should try to do is do the
    organizational part without changing more substantive law than
    we need to change. That makes all of our jobs easier. We ought
    to leave it where it is. But to the extent we need private
    businesses to tell us, the Federal Government, about their
    vulnerabilities, to work with us to reduce their
    vulnerabilities, to the extent we are asking them to volunteer
    information that they do not now have to give us, I think they
    have to be protected from that.
        Ms. Harman. I agree with Mr. Thornberry, but I think our
    language has to be very careful so we don't create what Mr.
    Frost called a loophole. We don't want to give the opportunity
    for those who could not shield their information otherwise, to
    dump it in here and say, ``Oh, sorry, now the public can't
    know.'' There is a valid public policy purpose to getting
    businesses to come forth and help us. There is also a valid
    public policy purpose to protect and preserve the goals of
    FOIA.
        Mr. Gibbons. I would join with Mr. Thornberry and Ms.
    Harman in their comments on this, and only to remind the panel
    that in the law we do protect companies who in terms of
    lawsuits make a remedial correction to a deficiency. If they
    put out into the public information which allows a terrorist to
    attack and injure people, then they themselves can be held
    liable for that information which they put out there. And so we
    have got ourselves into a very difficult position on this
    issue, but I do believe that we should allow FOIA to remain
    unaltered.
        Mrs. Tauscher. I agree.
        Chairman Armey. We talked a little bit about our concern
    that the Transportation Safety Agency may not fulfill all of
    the congressional mandates by the time this new Department
    might be created in law, and your suggestion, Ms. Tauscher, is
    that we might want to leave this Agency out until such time.
        Isn't it conceivable that another alternative might be for
    us to look at those deadlines that this Congress sets some
    time--at an earlier time in this process; perhaps deadlines
    that may have been overly optimistic and naive, and seize the
    opportunity with this legislation to correct those deadlines so
    we can move the Agency as we move everything else?
        Mrs. Tauscher. You know, I think we can be like all good
    American women and multitask. I think it would be smart to look
    at those deadlines, because I believe they were arbitrary and
    unachievable. That is why the Aviation Subcommittee, at my
    request last week, is going to have hearings, both open and
    closed, with the Transportation Security Agency and ask them
    point blank whether they can deliver on those deadlines, the
    mid-November deadline for hiring Federal screeners, and the
    January 1 deadline for the EDS machines.
        And last week we had a 435-Member frequent flyer focus
    group when we dealt with the arming of pilots. And I don't
    think anybody flies more than Members of Congress. And I think
    what my constituents tell me at home is that they perceive that
    the pilots were talking about very serious vulnerabilities,
    that the cockpit doors have not been armorized, they have been
    reinforced by Home Depot, and that we need to do the right
    thing. That is an April 9 deadline. We should look to move that
    up, and we should look to do it in a very responsible way
    because that is what people believe will protect them.
        Ms. Harman. I strongly agree. I represent LAX, where there
    was a shooting and three deaths at the El-Al ticket counter a
    couple of weeks ago. And I am worried about the security of
    that airport. And I was yesterday with the new TSA director on
    his first day on the job at LAX talking about the deadlines.
        I think Mrs. Tauscher is right in that we should accelerate
    doing a few things well, like installing sensors and fortifying
    cockpit doors, and then we should delay a few things that we
    know that are going to be disasters, like the installation of
    outmoded equipment that weighs too much to be supported on the
    floors of our current airports, and wait until it miniaturizes
    and put in leaner and more efficient machines next year.
        Chairman Armey. Round 2, the gentleman from Oklahoma.
        Mr. Watts. Mr. Chairman, I will yield my time--or forego my
    time.
        Chairman Armey. Gentlelady from California.
        Ms. Pelosi. Thank you very much, Mr. Chairman. I want to
    get back to my lean, unflabby department for the future, and I
    want to respond to what Mr. Thornberry said earlier as well as
    my distinguished colleague on the panel. And that is, I am not
    saying that we should have any fewer than the number of people
    we need to be doing the job of protecting the American people
    and reduction of risks. What I'm saying is do they all have to
    be managed and administered by this one Secretary?
        The point is that we want him or her to have the ability to
    be thinking in a very forward thinking way about our collecting
    the intelligence, analyzing--they won't be collecting it, they
    will be receiving it, perhaps they will task back. When we
    present our proposal tomorrow from the Intelligence Committee,
    I think you will see that it is a constructive improvement on
    the President's bill and one that I hope that this committee
    will accept.
        And so it is not a question of whether we have the same
    number of people protecting the American people. It is a
    question of who is responsible for the general administrative
    management of these people, rather than the coordination of
    their activity.
        That is why I think your original suggestion of a strong
    Office of Homeland Security in the White House was brilliant,
    because that is where the coordination would take place, rather
    than Burton's, and then have this leaner department.
        I also think, as I said again in my opening remarks last
    week, they say in real estate the three most important points
    are location, location, location. In this case I think it is
    localities, localities, localities. Across our country--that is
    where the risk is, that is where the great ideas are, and that
    is where the need is also for resources from the Federal level.
        So I would like to see this Department being a place that
    is a grant-maker to exploit the opportunity, possibilities, and
    needs that are out in the localities. And they are not
    universally excellent.
        Mr. Gibbons has talked about what he has done in his area.
    We who live in earthquake country know that our emergency
    services are well matured in this regard, and we can always do
    better in light of terrorism. But some of our colleagues have
    come to us and said in rural areas we have volunteer fire
    departments and we have needs that are quite different from
    what you have. So we need this Department to be thinking about
    how do we use the resources that we have to exploit the
    opportunities that are there in the localities, where I say the
    fear, the needs, and the good ideas are.
        So it is not about having anything less to protect the
    American people. It is about having a Secretary whose focus is
    on that, and not on the management responsibilities which can
    be burdensome, and the additional bureaucracy.
        Mr. Thornberry. Thank you, Ms. Pelosi. And I appreciate the
    chance to discuss this some more.
        The second part of your statement, I agree completely. I
    think that is why it is so essential that you have this FEMA-
    like structure that can help this communication with the State
    and local folks. If we empower those emergency responders on
    the ground, we will have done a tremendous benefit in this
    bill. It is one of the highest goals I think of this proposal.
        On the administrative part, let me give you this concern.
    For all of the different agencies on the borders, they have
    approximately 11 different databases, many of them have
    different systems of communication, some of which do not even
    operate with one another. And my concern is that Tom Ridge and
    100 people in the White House cannot go down to that level of
    detail and coordinate to make sure they buy the same radios,
    that their databases are compatible. Only somebody with a
    direct chain of command and the budget authority, i.e., a
    department Secretary with a direct chain of command, can make
    those things happen on the ground. That is why they have to be
    brought together.
        Ms. Pelosi. I understand that, and I think we should
    subject every suggestion to the scrutiny and to the analysis
    that you just gave. And I am not saying there shouldn't be a
    Department, I think there should be a Department, but we select
    with care what must absolutely be there, because some of these
    agencies do so much other than terrorism, and you know that and
    we have been down that path before.
        Mr. Thornberry. If you are going to take part of border
    security, you got to go ahead and take the Coast Guard, the
    Customs Service and the Border Patrol if it is going to work.
        Ms. Pelosi. Let me just say that the great genius of FEMA
    is that it is not a permanent work force. It is something that
    is drawn upon in time of emergency. They call upon people with
    experience to come in and do this. FEMA will now have an
    enhanced role and maybe a permanent work force. I don't know
    how it will play out, but it is going to need more resources.
    So we cannot really say that this is budget-neutral. And I
    think we have to be careful, as the President said in his
    strategy, that we have to reduce risk and we have to be
    judicious in the use of our resources as we give them priority
    in fighting the war on terrorism.
        Chairman Armey. Gentlelady's time has expired. Gentlelady
    from Ohio.
        Ms. Pryce. Thank you, Mr. Chairman. You truly are experts
    among us and I didn't take an opportunity to thank you for
    doing the hard work to advance this to the point where we could
    actually make some sense of it when our work started. So I
    wanted to let you know how grateful we are to all of you.
        Since we touched on TSA and the first time we have been
    brave enough to consider reconsidering some of it, are there
    other parts of that bill, for lack of another word I might use,
    but are there other parts that we should reconsider at this
    point? Did we do any of it wrong? Is there room to improve upon
    it while we are looking at some parts to perhaps reconsider at
    least in terms of deadlines? Would anybody care to touch that
    one?
        Ms. Harman. I think we intended to move quickly to make our
    airports safer. That was absolutely critical to do in order to
    get the American people flying again. And as one who represents
    an airport, the economy around my airport is absolutely
    devastated and hasn't rebounded because of the decrease in
    flying. But I do think we could do better. I think TSA is an
    analog agency in a digital age, and we need to be creating a
    more technology-based, smarter agency that manages risks
    better. Throwing a lot of people and a lot of money at the
    problem I don't think will fix it.
        The recent poll--I think that was a poll or survey that TSA
    did or someone did of our airports--was devastating and shows
    that we have enormous gaps. So I think this is the right time
    to reinvent TSA and accelerate those things we can do well at
    this minute before the deadlines we set, and to push back
    deadlines that we can't meet effectively. I think the American
    people will understand, and I would urge that in this bill we
    make some of those changes.
        Mrs. Tauscher. I will tell you, the citizenship
    requirements that we put in are very onerous for many of our
    airports to meet. I think we have to find a balance between
        Ms. Pelosi's airport in San Francisco that is in my area.
    Eighty percent of the screeners are legal aliens but are not
    citizens, and many of them have applications to become
    citizens. And it is a train wreck for us to figure out how to
    meet these deadlines, which is one of the reasons why SFO is
    one of the top five airports to opt out.
        I think that we all believe that we need to have background
    checks. It is difficult to do a background check on someone if
    they are not a citizen. But there are many people in this
    country that are working, through the ability of getting their
    citizenship papers, who are hardworking Americans that have
    worked in these airports, that deserve a chance to keep their
    job. They are trained. They are going to get more training. So
    I think the citizenship issues that we put in the bill are
    honorable but perhaps unachievable, and I am not sure that they
    actually deal with what we were afraid of at the time, and I
    think we should relook at those.
        Mr. Gibbons. Let me add just in the brief time we have left
    that I believe that the original bill, H.R. 5005, was merely a
    framework within which we could add our ideas and improve the
    bill to make it work. There are those people in Congress here
    who have many more years in Federal Government and experience
    than I have, and are able to look at these issues and say, this
    will or will not work; therefore, we should do it this way. I
    think those are taken in good faith both by the administration
    and by us, by everybody on this committee.
        We will, of course, be working on this bill for a
    considerable time in the future. This Congress, the next
    Congress, and perhaps Congresses to come, will be making
    additions, changes, deletions as we go. So I don't think that
    we have the infinite wisdom today to sit down and say that
    everything we are doing today is cut in concrete, will work,
    and should never be changed. But I think we have started down
    this road with the right idea and we have got to make it work.
        Mr. Thornberry. I agree. I would just say in general I
    would not want to refight all of those battles on this bill.
    Maybe there are some things we can agree with, and maybe some
    deadline flexibility is appropriate, but let us not take on
    more than we need to here.
        Ms. Pryce. Thank you. I yield back.
        Chairman Armey. Gentleman from Texas, Mr. Frost.
        Mr. Frost. I agree with my colleague from Texas, Mr.
    Thornberry, that we should resist the temptation to make this a
    Christmas tree; that while I have great sympathy for changing
    those deadlines, I do not think it is appropriate to put it in
    this bill, because we will then create opposition for this bill
    on the floor that would otherwise not be there.
        Secondly, I know my friend Mr. Portman did not mean to
    misstate what is in section 730, so I will read the section
    into the record, because Mr. Portman said there was a provision
    in that section that would have the Secretary's work come back
    for further consideration by Congress, and of course that is
    not in this section.
        The section reads as follows:
        Notwithstanding any other provision of this title, the
    Secretary of Homeland Security may, in regulations prescribed
    jointly with the Director of the Office of Personnel
    Management, establish and from time to time adjust the human
    resources management system for some or all of the
    organizational units in the Department of Homeland Security
    which shall be flexible, contemporary, and grounded in the
    public employment principles of merit and fitness.
        Now, the provision that Mr. Portman may have been thinking
    about actually is in Mr. Burton's amendment, the committee
    amendment, which provides that not later than 5 years after the
    effective date of this act, the Secretary shall submit to
    Congress a proposal for a demonstration project, the purpose of
    which shall be to obtain the human resources management system
    in which the judgment of the Secretary is necessary in order to
    enable the Department to best carry out its mission.
        So there is authority in the committee version, the
    provision written by Mr. Burton, for the Secretary to come back
    to Congress. And I think that is appropriate. But it is not in
    the underlying bill as 5005, as submitted to this committee.
        I would ask, Members, do you have a view on this? I know a
    couple of you stated a view briefly, because it was at the end
    of my last exchange, about the underlying provision drafted by
    the committee by Mr. Burton, which basically puts us back in
    the status quo, basically returns us to current law, and then
    provides for a demonstration project. Do you have any views on
    that?
        Mrs. Tauscher. I support putting it back the way it was.
        Mr. Gibbons. I think I answered your question.
        Ms. Harman. I think the Thornberry rule of not taking on
    additional fights might apply here, too.
        Mr. Thornberry. And the chairman has asked us to review the
    Burton language again, which I think we intend to do and see.
        Mr. Frost. I thank you, because this is in the spirit, Mr.
    Chairman, of bipartisanship in trying to narrow the differences
    that may exist between the two sides and trying to provide
    something from this select committee that will have broad
    agreement.
        I have no further questions and yield back my time.
        Chairman Armey. Gentleman from Ohio.
        Mr. Portman. I thank you, Mr. Chairman, and again
    appreciate everything this panel has done to help us get to
    this point, and as important as it will be to get this bill
    passed, and I think you are going to be key to that, I really
    do. I think as we get to the floor, Mr. Chairman, we are going
    to be relying on these four individuals and others who have
    been involved.
        But I think what is even more important is what happens
    next, and I would love to have your thinking today about how
    this gets implemented, because it does relate to what we are
    doing today in two respects. I think we can put in language
    which provides some important flexibility, particularly on the
    management side, to be able to get this up and going in a way
    that does protect our citizens.
        And second, I think it relates to congressional oversight
    and the need for ongoing oversight to be sure that some of
    these issues--which frankly we cannot iron out through
    legislation, but will only be discovered once we begin the
    process of consolidating and hopefully finding those synergies.
    There will be issues I think that will come up that we can't
    predict today.
        Could you comment on what happens next and particularly
    what you think about flexibility?
        Mr. Thornberry. Just to start briefly, I do think
    flexibility is important, particularly in the transition phase.
    But let me give you one other example. And Ms. Tauscher and I
    dealt with this in dealing with nuclear weapons. Part of the
    Department of Homeland Security is going to fight cyber
    terrorists. In other words, we have to go hire people who are
    computer experts, take them away from Silicon Valley salaries,
    to come work for the government. Some sort of flexibility on
    pay so that you can get the kind of people you need to do that
    kind of work is essential.
        We had to do the same thing in nuclear weapons. We had to
    find people who were going to supervise nuclear physicists, who
    were among the smartest of anybody in the world. So there has
    to be some flexibility, I think, to make this work right. And
    that needs to be taken into account as you all move along.
        Ms. Harman. Applying the Thornberry rule, there is learning
    in other departments like the CIA and the Defense Department
    about hiring some of these whiz kids to run the computers and
    invent the new technologies, and maybe we just need to borrow
    that and apply that in spare amounts to those functions of the
    new Department, rather than scare a lot of folks about the fact
    that we are going to take away their civil service protections.
    That would be one comment.
        But two other points. First of all, whatever is in this
    Department, it will require a strong leader as Secretary,
    somebody very skilled at merging cultures, and reaching for the
    private sector. Doing the politics of Washington is no easy
    feat, and there aren't that many people around who can do that.
    And I hope that the President chooses wisely.
        I would like to commend Tom Ridge for the service he has
    given us. I assume he is at the top of any list. But I hope
    that the President picks somebody with all of those skills, and
    that would be my second point.
        Last point, and it relates to something Ms. Pelosi said.
    Every act of terrorism is local. It happens on somebody's real
    estate. It could happen again in Washington, but it could have
    easily happened in Los Angeles, Cleveland--pick one--and we
    will be measured not by how we move the boxes around--that is
    an arcane exercise that Washington loves--but by what tools,
    resources, and information and interoperable communications we
    get to those who will be on that piece of real estate to
    prevent something or protect something or respond to something.
    And if our exercise in remodeling doesn't give them the tools,
    we will have failed, no matter what we put in this.
        So I hope we will keep our eye on what the goal is, and the
    President's strategy this morning laid out that goal very well,
    and that is what this committee should be about, achieving the
    goal.
        Mr. Gibbons. This is the largest reorganization of any
    government we have seen since 1947. I think the collective
    wisdom of this panel of putting it together and getting the
    bipartisan contributions and looking at all of the agencies and
    committees that have had some input into this and taking a
    serious look at that and not merely going with blinders on and
    saying this is the only way we can approach this will be the
    answer to how we get this bill moved through Congress with a
    bipartisan and large vote.
        Mrs. Tauscher. I will tell you, this has to be a vote of
    350-plus, because we are going to have to spend a lot of time
    looking through the rear view mirror and a lot of time deciding
    that this law of unintended consequences--which will grip us
    the moment that the President signs it, and we say, oops, we
    forgot that, or not enough this or not enough that. This is
    spaghetti sauce. We are going to have to keep tasting it and
    adding, and we are going to have to make sure--you know, would
    rather have it be spaghetti sauce than sausage making, but I
    think we have to have everybody in the boat; otherwise we are
    going to be pointing at each other and picking it apart and not
    moving forward together to fix it, that is what we are going to
    have to do for a long time.
        Chairman Armey. Gentleman from New Jersey.
        Mr. Menendez. Thank you. I enjoy spaghetti sauce.
        Mrs. Tauscher. And I make a good one.
        Mr. Menendez. Hopefully we can make a good one of this
    Department without too many tries.
        I want to go back to my original line of questioning
    because I only got one answer of the four, and I know I laid
    out a lot.
        Question: Should there be mechanisms to protect nonsecurity
    missions in this legislation? I think that is one of the
    concerns that people have on the floor. I think you will have a
    lot more willingness to get to that 350, maybe far beyond it,
    if nonsecurity missions are protected by language that ensures
    that we have--for example, for argument's sake, is the
    budgetary provisions of nonsecurity elements of an agency being
    transferred in and are protected as a base line and for which
    you could transfer, but not to deplete for security purposes.
    You have a lot maybe less resistance to the Coast Guard going
    in, so it can still have environment and navigational issues
    and search and rescue.
        If you are representing some fishing community, you are
    going to care about your spouse coming back alive. So you want
    that search-and-rescue mission to be a reality.
        So don't you think we can create language here that will
    give us a sense of security and not strap the administration
    beyond it necessarily? Because if we are arguing in the first
    instance we are going to preserve all of those nonsecurity
    missions, then why not have language that deals with that?
        And secondly, what about this whole research and
    development issue on the question of health in the health-
    related field, the public health field? I think we are going to
    lose some of the synergies that this committee has talked
    about, some of the savings this committee has talked about,
    some of the goals this committee has talked about.
        And I am worried about all of these academicians that have
    raised questions, the GAO that has raised questions. Is there
    not a better way in that respect?
        So those are my two major--and I would like each of you to
    respond if you can to each of them.
        Mr. Thornberry. Mr. Menendez, on the nonsecurity missions,
    a couple of points. One is I think beefing up FEMA, giving it
    more resources, having more regular communication with the
    State and local folks, is going to put FEMA in a better
    position to deal with hurricanes. In other words, what we are
    doing really is elevating some of these agencies--FEMA, to take
    this example, so that they are in a better position.
        Coast Guard--you know, I am a long way from the ocean in my
    district, but I believe we have to put more resources into the
    Coast Guard. I think it will get more resources in the
    Department of Homeland Security, whose primary mission is to
    keep us safe, than left in a Department of Transportation which
    has other missions associated with it. I think it is better.
        Second point I would make, that is part of our job in
    Congress. We appropriate the money. We do the oversight. It is
    part of our job to make sure that they take care of the
    fisheries and the other things that the Coast Guard is
    responsible for.
        Having said all that, if there is a way to put some
    guidelines in to give people other reassurance, I would like to
    look at them because I would rather have constraints than to
    not have the Coast Guard as part of it, because I believe it
    falls apart if we leave out a major element like that.
        Ms. Harman. I have been involved over 10 years and a lot
    efforts by Congress to micromanage things and set ceilings and
    put caps and the rest of it, and I would generalize and say
    that most of the time we have been wrong. And I would much
    prefer, Mr. Menendez, to have good leadership of this
    Department and good oversight over this Department and watch
    carefully to be sure that other missions are fulfilled. There
    may be more efficient ways to fulfill them. I wouldn't like to
    freeze resources in place, especially in a budget deficit
    environment.
        On the public health piece, I think you were out of the
    room when I answered Ms. DeLauro by saying my call would be to
    leave it out, but to have in this Department the capability to
    do syndromic surveillance so we know if strange things are
    turning up at our hospitals all over the country and to manage
    surge capacity of our hospitals. Those are two contributions we
    could make through this legislation. But I would keep our
    public health effort intact, because it doesn't matter to me
    whether the smallpox epidemic was started by a terrorist or
    started by accident.
        Mr. Gibbons. Fifteen seconds. Let me see if I can answer
    your question. The question would be whether or not you weaken
    the agency from which the agency departs to go to Homeland
    Security to the point that that agency can't conduct the
    remaining balance of its mission. It is mission versus
    transferring agency.
        And let me say, for example, the Treasury Department has
    the responsibility to ensure the protection and the security of
    our currency. That office also transfers that authority to
    enforce that to the Secret Service. If you transfer the Secret
    Service protective mission to Homeland Security, can the
    Treasury still enforce monetary security; in other words making
    sure that our money system is safe? I think they can. But the
    question would be if you transfer one, do you weaken the other
    so it is ineffective? And we don't want to do that. We don't
    want to micromanage that decision.
        Chairman Armey. Let the Chair observe that the Chair
    expects to be called on the floor within the next 10 to 15
    minutes. That being the case, and in light of the fact that
    Chairman Sensenbrenner has agreed to come back after the votes
    are taken, I would suggest that we proceed in this manner; that
    we now have two members of the committee remaining who would
    have their second round. The Chair would reserve his final
    place in the second round, as we said, for the panel to make
    their final observations for the committee. By that time, my
    expectation is we will be into the vote and recess the
    committee following your comments, and then reconvene the
    committee 5 minutes after the last vote in this series is
    taken, to hear Chairman Sensenbrenner and his ranking member.
    That being the case, let me go to the gentleman from Texas, Mr.
    DeLay.
        Mr. DeLay. Thank you, Mr. Chairman. I apologize for having
    to step out and have missed some of your answers. I want to
    revisit, since we ran out of time, an issue that will be a
    problem for this committee, and that is the human resource
    issue. And I just want to give you the benefit of testimony by
    the administration, who has over and over again said we don't
    want to undermine the benefits and rights of Federal employees,
    that we want to protect their civil service rights, their
    veterans' preference rights, their whistleblower rights, all of
    those rights.
        The problem is in Government Reform an amendment was passed
    that actually puts the President--or gives the President less
    authority over the Department of Homeland Security than he has
    in any of the other departments, and it all focuses on
    security, and that is the right to waive collective bargaining
    rights when it affects national security.
        And I don't think, Ms. Harman, you spoke to that in your
    answer. And I would give you the opportunity to answer that, as
    Mr. Thornberry already has and the other three.
        Ms. Harman. I think I did, Mr. Delay. While you were gone,
    we were talking about the Burton language which was offered in
    Government Reform.
        Mr. DeLay. The Burton language isn't what we are talking
    about.
        Ms. Harman. I understand. We together have been coming to
    the view that that might be the preferred language, the Burton
    language, not the other language that I think you are now
    referring to. The goal would be to continue present law and
    have it apply to this Department, not to change present law.
        There is now operating here the Thornberry rule, which is
    not to open issues if you don't have to.
        Mr. Gibbons. I would agree, Mr. Delay, with my colleagues
    that we have looked at this issue and believe that flexibility
    should remain as it is written in the laws today, allowing the
    President to make those decisions; and should Congress feel
    that that is inadequate at a time of national security, to come
    back at some point and discuss that as a single issue, an issue
    which all can be part of, rather than incorporating it into a
    bill which is an either yes or no on the bill against one
    single issue; if you want to incorporate the ideas of the full
    committee, that perhaps Mr. Burton's language best accommodates
    that issue.
        Mrs. Tauscher. I agree, Mr. Delay. Existing law is the way
    we should go, and we shouldn't try to encourage the kind of
    problem we might have if we went a little further than that.
        Mr. DeLay. I yield back.
        Chairman Armey. Gentlelady from Connecticut.
        Ms. DeLauro. Thank you, Mr. Chairman. Let me, if I can,
    just go back on the issue of the Inspector General, if I can.
    Section 710 of the proposal prohibits the Inspector General of
    this new effort from doing work in areas that involve certain
    information. Let me just fast-forward that. We have at
    Defense--there isn't any question about protecting sensitive
    information.
        Everyone is on board in terms of the effort of national
    security and threats to national security. But at Defense and
    at Justice, as I understand this, they have similar limitations
    on access. But in those areas, the IGs are directed to report
    to Congress if the relevant Secretary impedes their access to
    necessary information. In the case of the Inspector General for
    the new Department, this check, if you will, on Secretarial
    interference has been eliminated. Instead, the proposal gives
    the responsibility of reporting interference with an IG
    investigation to the Secretary. So instead of coming to the
    Congress if you have got a problem as the IG, you go to the
    Secretary. If the problem is with the Secretary, you are
    building in here a conflict of interest.
        So what I wanted to just probe with you, should we follow
    the model again of agencies that in fact are dealing with
    absolutely sensitive issues? We know--I mean, we have got a
    Department of Defense. We have a Department of Justice. That is
    serious and sensitive material all of the time.
        I have asked my question. I don't want to belabor it.
    Should we just use the model that we have?
        Mrs. Tauscher. Yes, I agree. I think we should use the
    Department of Defense and DOJ model; which I think, once again,
    we are going to be fine-tuning this legislation for a very long
    time. We should be open to doing that. We should be trying to
    improve on a constant basis, but at the minimum I think we
    should do what they do, and then if we have to fix it later we
    can.
        Mr. Gibbons. I would agree. The Department of Defense model
    would be my preference in all of this versus having an IG that
    reports directly to the Secretary who has authority to respond
    and react to an incident or a situation within his own
    division. So I think the report should bypass and go to an
    independent oversight authority.
        Ms. Harman. I see no reason to change present practice
    either.
        Mr. Thornberry. The only question I would have is how does
    the CIA work, maybe some of those other entities, and my
    colleagues on the Intelligence Committee might know the answer
    to that. I would be curious as far as the administration's
    reason why they think it should be different from the
    Department of Defense, and maybe check on some of these other
    precedents as well. It seems to me it is an issue that we can
    work out.
        Chairman Armey. If I may advise the committee on further
    reflection, for the sake of the committee, we will adjourn
    after our final statements, with the anticipation of reengaging
    our panel from the Judiciary Committee. Should that be
    impossible, we would adjourn until 10 o'clock tomorrow morning.
    The chairman of the committee will advise members of this
    committee, perhaps by an announcement between votes, if we are
    indeed coming back.
        So I have been assured that we can reengage that panel, but
    schedules being what they are, we should leave ourselves with
    the flexibility to dance to the right or dance to the left, and
    we will certainly dance in either case.
        So with those observations and with the concurrence of the
    committee, that we would adjourn, with the anticipation of
    coming back 5 minutes after the next vote or until 10 o'clock
    tomorrow morning.
        I would like to now give the panel your 5 minutes, 1 minute
    15 seconds apiece, to give us your last bit of advice. We will
    start--let's start with Mrs. Tauscher.
        Mrs. Tauscher. Thank you, Mr. Chairman,
        Ms. Pelosi, and members of the committee. I am just very
    thankful that I was able to come and to provide, you know, my
    limited experience on what we can do. I am certainly available
    to help in any way I can.
        What I think is the most impressive thing is how you are
    working together. The tone that you are all using, the
    professionalism, and I think this is--not only are the American
    people watching and our allies, but our adversaries are
    watching. This is another point, the vulnerability for us;
    whether we can manage to do this so that we can respond and
    protect ourselves. And I think that the Congress is well up to
    the task. I am very very proud of this institution. I am proud
    of all of you, and I thank you for your hard work.
        Chairman Armey. Thank you.
        Mr. Gibbons. Mr. Chairman, Ms. Pelosi, I too want to thank
    this committee for its diligence and its work and its
    commitment to this issue. Ten and a half months ago this Nation
    underwent a significant change. Change is not easy. The thing
    my mother used to tell me: The hardest thing about change is
    not accepting the new, but letting go of the old.
        I believe that what we have before us is an opportunity to
    create something new, but it is going to require letting go of
    the old. Highway 50 is a two-way street into Washington, D.C.
    It is both coming into Washington and it leaves Washington. Not
    all good ideas emanate out of Washington, D.C. We ought to be
    able to understand that this is going to be felt mostly in our
    districts, in our localities, and we ought to be at least aware
    and cognizant of the fact that ideas are going to come and we
    are going to have to make changes in the future.
        This is the most important focus on any piece of
    legislation that we have before Congress today, and that is to
    ensure the protection of America's citizens and its homeland.
    And to do that, we must all commit ourselves to the very job
    that we have been doing. I am very proud of my colleagues for
    their effort in all of this and I want to thank you for the
    opportunity to be here.
        Ms. Harman. Thank you, Mr. Chairman and ranking member. I
    have held a lot of events recently on Homeland Security in my
    district, and I think it is still true that first responders
    don't understand this bill. They just ask, how much money do we
    get? And while I think money matters, it is not what will
    secure the homeland. We have to have a strategy. We have to
    implement it wisely, and I think we will be measured by whether
    first responders and citizens have all the tools, not just
    money, but training and information and interoperable
    communications to know what to do, and whether or not we
    achieve the goals of the President's strategy to prevent
    attacks to protect our infrastructure and to respond
    effectively.
        So that is what we have to keep our eye on, not which box
    goes where. I would just urge again that we look for a huge
    vote in the House and we have a process that lets our House
    Members who know a lot about this--since every one of us
    represents the same amount of real estate--lets our House
    Members buy into this bill. There are a lot of good ideas in
    this House, and the product will be better if all of us have a
    chance to speak.
        Mr. Thornberry. Mr. Chairman, there were a couple of issues
    we did not have a chance to get to. One is cost. I would
    recommend that your staffs actually read the CBO cost
    estimates. Two thirds of their $3 billion cost estimate is new
    things, things the government does not do now, the new
    Intelligence Analysis Center and so forth. Their estimate on
    the cost, even under CBO's counting no savings, is $1 billion
    over 5 years. I am just saying we need to look down into it.
        We are going to spend more money on homeland security. The
    question is are we going to spend it as effectively as we can.
    That is what our goal is.
        The second point we didn't have a chance to talk about is
    technology. It is boring and complicated to talk about how you
    identify and develop and field the technologies that are going
    to save lives. But again, you have some good people working for
    you. Getting those details right is important. We cannot stand
    a 20-year procurement cycle like the Department of Defense has
    to develop--to get technology out there for the policeman and
    firemen to use. We have got to do better.
        The last point I would say is this. It is hard to talk
    about this topic without being melodramatic, because so much is
    at stake. And yet I do believe that, as Mrs. Tauscher said,
    people are watching us, even our adversaries. It is true that
    the safety of our children depends on how we behave, how we act
    in the next few weeks. And I trust and know that this select
    committee will lift us up to the challenge, not just here, but
    on the floor and beyond.
        And thank you for what you do.
        Chairman Armey. And let me thank the panel. Let me just say
    freedom deserves service like yours. And with that, the
    committee stands adjourned until whatever.
        [Recess.]
        Chairman Armey. The committee will come to order. The
    committee would like to welcome the distinguished Chairman of
    the Judiciary Committee. It should be noted that both Chairman
    Sensenbrenner and Ranking Member Conyers of the Judiciary
    Committee were invited at this time so as to not interfere with
    a markup they will have tomorrow. They are going out of order,
    and the Chair has been advised by Ranking Member Conyers that
    he is not available to testify at this time.
        Chairman Armey. So at this time we will say to you, Mr.
    Chairman, we would be pleased to put your formal statement in
    the record, and we would like at this time for you to give us
    whatever statement you would like to give.

        STATEMENT OF THE HONORABLE F. JAMES SENSENBRENNER, JR.,
                  CHAIRMAN, COMMITTEE ON THE JUDICIARY

        Mr. Sensenbrenner. Thank you, Mr. Chairman, for the
    opportunity to appear before this committee. The events of
    September 11th forever altered our collective sense of
    invulnerability to terrorist attacks on American soil. As it
    has done repeatedly since September 11, the Judiciary Committee
    has answered the President's call by vigorously and diligently
    discharging its responsibility to ensure the security of all
    Americans. The Judiciary Committee has expeditiously responded
    to terrorist threats by spearheading bipartisan legislation
    such as the PATRIOT Act, the Border Security Enhancement Act,
    the Antiterrorism Explosives Act, the Terrorist Bombing
    Convention Implementation Act, the Cybersecurity Enhancement
    Act, and the Homeland Security Information Act. In addition,
    the committee has engaged in robust and ongoing oversight of
    Federal law enforcement agencies in the wake of these attacks.
        As introduced, H.R. 5005 would transfer several existing
    law enforcement agencies into a new Department. On July 10 the
    Judiciary Committee favorably reported amendments through H.R.
    5005 by voice vote. While consistent with the articulated
    mission of the Department of Homeland Security, the proposed
    amendments recommend important structural changes which would
    strengthen America's ability to effectively assess, prevent,
    and respond to terrorist threats. Of no less importance, the
    committee makes critical recommendations to help safeguard the
    civil liberties and freedoms cherished by all Americans.
        The Judiciary Committee was the first to respond to the
    urgent need to address systemic problems within the Immigration
    and Naturalization Service, and our restructuring legislation
    passed the House by a vote of 405 to 9. The amendment reported
    by the committee to this bill build on this critical
    legislation. We support the bill's transfer of immigration
    enforcement functions to the Department of Homeland Security
    where they can be integrated into a comprehensive and
    coordinated Federal border security unit.
        At the same time, we strongly support maintaining
    immigration services in the Department of Justice and not
    transferring it to the Department of Homeland Security. INS
    service problems are legendary, and Congress must ensure that
    immigration services are no longer sacrificed in favor of
    enforcement priorities. The best way to do this is to have
    services and enforcement in two different departments, which
    was originally recommended by the Jordan Commission on
    Immigration Reform several years ago. By separating these two
    functions and elevating the status for immigration services
    within Justice, the committee's proposal would prevent these
    services from being subsumed by the massive size and scope of
    the new Department and ensure agency immigration services will
    receive the resources necessary to treat legal immigrants with
    the professionalism they deserve.
        Second, the committee supports shifting FEMA's Office of
    National Preparedness to the new Department, but not the entire
    agency. FEMA's main mission is to respond to natural disasters
    and to dispense aid, not terrorism. In conjunction with FEMA's
    Office of National Preparedness, the Justice Department's
    Office of Domestic Preparedness would also be transferred to
    create a central office within the new Department for Federal,
    State and local training and coordination on terrorist attacks.
    FEMA does not provide crisis management training or support to
    States and localities, but its transfers to the new Department
    would be incompatible to the missions of both. Preserving FEMA
    as an independent Agency will ensure that the new Department's
    large bureaucracy is more streamlined and more focused.
        The fifth Under Secretary under which FEMA would have been
    placed becomes unnecessary, as the Office becomes much smaller.
    Therefore, the committee recommends the elimination of the
    Under Secretary for Emergency Preparedness for Response, and
    then the transfer of the remaining functions to the Under
    Secretary for Border and Transportation Security under title IV
    of the bill.
        Third, the committee recommends transferring the Secret
    Service to Justice. Unlike most other law enforcement agencies,
    H.R. 5005 would transfer to the Department of Homeland
    Security--the main mission of the Secret Service is the
    investigation of financial crimes, including counterfeiting,
    and the protection of certain government officials, not the
    protection of the border. Shifting the Secret Service to the
    Justice Department would ensure that its fundamental law
    enforcement mission is not compromised or diluted.
        Finally, the committee recommends the adoption of important
    safeguards to protect individual rights and civil liberties.
    These include heightened whistleblower protections, a more
    independent Inspector General, the creation of a Deputy
    Independent Inspector General for Civil Rights and Civil
    Liberties, and the appointment of a privacy officer to protect
    against the unauthorized use or disclosure of personally
    identifiable information.
        The Judiciary Committee strongly supports the establishment
    of a Federal department whose primary purpose is the protection
    of our homeland against terrorist threats, and I believe our
    recommendations help advance this crucial goal and should
    provide valuable guidance to the select committee as it
    completes the critical task of shaping the Department of
    Homeland Security.
        I appreciate the opportunity to testify here, and let me
    just wave to the committee a comparison of two charts. One is
    the chart that the President has recommended, which you can see
    has quite a few boxes in it and five separate divisions. The
    other is the chart which we recommend that has fewer boxes, one
    fewer Under Secretary, and fewer employees than was recommended
    by the President.
        I thank the committee for their indulgence and I will be
    happy to answer questions.
        [The statement of Mr. Sensenbrenner follows:]

       PREPARED STATEMENT OF THE HONORABLE F. JAMES SENSENBRENNER, JR.,
                      CHAIRMAN, COMMITTEE ON THE JUDICIARY

        Chairman Armey, Ranking Member Pelosi, and distinguished
    members of the Select Committee on Homeland Security. Thank you
    for inviting me to present the views of the House Judiciary
    Committee concerning H.R. 5005, President Bush's proposal to
    create the Department of Homeland Security.
        The events of September 11th forever altered our collective
    sense of invulnerability to terrorist attacks on American soil.
    As it has done repeatedly since September 11, 2001, the
    Judiciary Committee has answered the President's call to action
    by vigorously and diligently discharging its responsibility to
    ensure the security of all Americans. The Committee has
    expeditiously responded to terrorist threats by spearheading
    bipartisan legislation such as the PATRIOT Act, the Border
    Security and Enhancement Act, the Antiterrorism Explosives Act,
    the Terrorist Bombing Convention Implementation Act, the
    Cybersecurity Enhancement Act, and the Homeland Security
    Information Act. In addition, the Committee has been engaged in
    robust and ongoing oversight of Federal law enforcement
    agencies in the wake of these attacks. While these steps have
    made Americans less vulnerable to terrorism, the work of
    Congress is far from complete. As introduced, H.R. 5005 would
    transfer several existing law enforcement agencies into a new
    Department of Homeland Security with over 170,000 employees.
    The proposed Department's central, predominant purpose is to
    assess and prevent terrorism and other threats affecting
    America's internal security. The Judiciary Committee's
    jurisdiction over subversive activities affecting the internal
    security of the United States, the nation's immigration and
    naturalization laws, Federal civil and criminal procedure, and
    administrative law and procedure makes it uniquely positioned
    to assist the Select Committee as it considers legislation to
    establish the Department of Homeland Security.
        On June 23, 2002, we were pleased to welcome Homeland
    Security Director Tom Ridge before the Judiciary Committee. In
    addition to receiving Director Ridge's testimony, the Judiciary
    Committee Subcommittees on Crime, Terrorism, and Homeland
    Security; Immigration, Border Security, and Claims; and
    Commercial and Administrative Law conducted separate hearings
    to examine this proposed legislation. The Committee's
    recommendations reflect the views received at these hearings,
    as well as extensive consultation with Administration
    officials, outside experts, and the conclusions of several
    congressionally-chartered antiterrorism commissions. Several of
    our recommendations, including the separation of immigration
    enforcement from services, the Department's focus on border and
    transportation security, the preservation of most of FEMA as an
    independent agency, and heightened DHS scrutiny of visa
    issuance by State Department consular offices, were echoed in a
    recently-issued, comprehensive Brookings Institution assessment
    of the President's homeland security proposal.
        On July 10, the Judiciary Committee favorably reported
    amendments to H.R. 5005. Most of these changes are contained in
    a Manager's Amendment which I was pleased to introduce with
    Ranking Member John Conyers. While consistent with the
    articulated mission of the Department of Homeland Security, the
    proposed amendments recommend important structural changes
    which would strengthen America's ability to effectively assess,
    prevent, and respond to terrorist threats. These amendments
    would also create a more focused Department, better able to
    respond to existing and emerging threats. Of no less
    importance, the Committee makes critical recommendations to
    help safeguard the civil liberties and freedoms cherished by
    all Americans.
        The Judiciary Committee was first to respond to the urgent
    need to address systemic problems within the Immigration and
    Naturalization Service, and our INS restructuring legislation
    passed the House by a vote of 405-9. The amendments reported by
    the Committee build on this critical legislation. The Judiciary
    Committee supports H.R. 5005's transfer of immigration
    enforcement functions to the Department of Homeland Security,
    where they can be integrated into a comprehensive and
    coordinated Federal border security unit. The Committee
    preserves the core of the Administration's proposal to create a
    seamless web of law enforcement at the border by placing
    various border law enforcement agencies below one
    Undersecretary, most notably the Customs Service,
    Transportation Security Agency, Coast Guard, and immigration
    enforcement and border patrol from the INS. At the same time,
    the Judiciary Committee strongly supports maintaining
    immigration services at the Department of Justice. INS service
    problems are legendary and Congress must ensure that
    immigration services are no longer sacrificed in favor of
    enforcement priorities. By separating these two functions and
    elevating the status for immigration services within the
    Justice Department, the Committee's proposal would prevent
    these services from becoming subsumed by the massive size and
    scope of the new Department. These reforms will end the INS's
    mission overload and ensure that immigration services will
    receive the resources necessary to treat legal immigrants with
    the professionalism that they deserve.
        Second, the Committee recommends transferring the Secret
    Service to the Department of Justice. The Secret Service is
    unlike most other law enforcement agencies that H.R. 5005 would
    transfer to the Department of Homeland Security. Its main
    mission is to investigate financial crimes, including
    counterfeiting, and to protect certain government officials--
    not to protect the border. Shifting the Secret Service to the
    Justice Department would ensure that its fundamental law
    enforcement mission is not compromised or diluted in the
    proposed Department.
        Third, the Committee supports shifting the Federal
    Emergency Management Agency's Office for National Preparedness
    to the new Department, not the entire agency. FEMA's main
    mission is to respond to natural disasters and to dispense aid,
    not to prevent terrorism. In addition, the Justice Department's
    Office for Domestic Preparedness should be transferred to DHS.
    In conjunction with FEMA's Office of National Preparedness, the
    Office of Domestic Preparedness will create a central office
    within the new Department to coordinate the Federal, State, and
    local response to terrorist attacks. This new office should be
    under the authority of an Under Secretary for Enforcement and
    Security to assure that law enforcement and crisis management
    functions are given priority, consistent with the Department's
    principle mission.
        The Committee amendments also provide definitions for key
    terms contained in the bill. These include the definition of
    terrorism, critical infrastructures, and the crucial
    distinction between crisis and consequence management. Defining
    these terms will help focus the mission of the Department.
        Finally, the Committee recommends the adoption of critical
    safeguards to protect individual rights and civil liberties.
    These include heightened whistleblower protections, a more
    independent Inspector General, the creation of a Deputy
    Independent General for Civil Rights and Civil Liberties, and
    the appointment of a privacy officer to protect against the
    unauthorized use of disclosure of personally-identifiable
    information. The Judiciary Committee strongly supports the
    establishment of a Federal Department whose primary purpose is
    the protection of the American homeland against terrorist
    threats. Our recommendations help advance this crucial goal and
    should provide valuable guidance to the Select Committee as it
    completes the critical task of shaping the Department of
    Homeland Security.
        I appreciate the opportunity to work with the Select
    Committee as it considers legislation to ensure that Congress
    fulfills its most fundamental obligation to provide for the
    security of the American people.

        Chairman Armey. I thank the gentleman for your testimony. I
    have your testimony here. I do not have a copy of the two box
    diagrams you had.
        Mr. Sensenbrenner. The staff will provide you with those.
        [The information follows:]

        Chairman Armey. I would appreciate that and I am sure the
    other members of the committee would as well.
        It is the custom of this committee to now proceed to the 5-
    minute rule. It is also the usual practice of the chairman of
    the committee to reserve himself for the last place in the
    order. And with that, let me now recognize the gentlewoman from
    Ohio for her first 5 minutes.
        Ms. Pryce. Well, thank you, Mr. Chairman. This will be my
    only 5 minutes. Chairman Sensenbrenner has been very patient
    with us today, and I just have a very brief question to begin
    with. Mr. Chairman, you indicated that there are three boxes in
    your committee's chart, is that correct?
        Mr. Sensenbrenner. Four.
        Ms. Pryce. Four. But fewer employees.
        Mr. Sensenbrenner. Yes.
        Ms. Pryce. And does that come from the INS function that
    was not transferred?
        Mr. Sensenbrenner. It comes from the INS function, the FEMA
    function, and transferring Secret Service into Justice rather
    than putting it in Homeland Security.
        Ms. Pryce. Okay. But the Federal Government would still
    have the same number of total employees. They are just in
    different boxes, some of them.
        Mr. Sensenbrenner. That is correct. The charge that we got
    from this committee was to deal with the organization; not the
    authorized numbers of employees, whether it is too many, too
    few, or just right. I guess we will do that later on, both in
    terms of the authorization and appropriations process.
        Ms. Pryce. Well, I think this definitely is the first step
    and that we need to put something on paper. And even through
    our own deliberations in this committee and on the floor and
    through conference, it will probably be a moving target, but I
    hope nobody thinks that this, even what we do end up passing,
    is the final set-in-stone version and that we can't change it,
    because it does need to be tested and tried, and I don't think
    that we need to pretend that it is going to be perfect right
    out of the box. But with that, Mr. Chairman, I will yield back.
        Thank you very much.
        Chairman Armey. Thank you. Ms. Pelosi from California.
        Ms. Pelosi. Thank you, Mr. Chairman.
        Welcome, Mr. Chairman, and thank you very much for your
    patience. More importantly, thank you for your leadership. Your
    committee has worked so hard and largely in a bipartisan way
    since September 11 on so many different issues, and we
    appreciate your good work and your presentation on the Homeland
    Security Department. Our chairman referred to it as the custom.
    You realize we are 1 week old in our hearings. And he referred
    to the usual practice, which is now 3 days old. But
    nonetheless, I appreciate the opportunity to have questions and
    give the last word to our very distinguished chairman.
        There have been some who have talked about a fifth box,
    substituted wherever for INS under the Homeland Security
    Department. The Attorney General has testified here that he
    would like the INS to stay together so that the protections of
    civil liberties and the rest that go with dealing with the INS
    are there with the enforcement function as well as with the
    services function. Would you like to comment on that?
        Mr. Sensenbrenner. Well, you know, let me say, Ms. Pelosi,
    that the committee has given considerable thought, and I have
    given even more thought to how best to deal with INS. Everybody
    agrees that INS has to be split between the enforcement
    function and the service function. The Jordan Commission
    recommended that the service function of INS within the United
    States be transferred to the State Department, so the green
    cards and the adjustments of status and the naturalization and
    all of these other things would have been handled by employees
    of the Department of State in the INS offices all around the
    country.
        When the Judiciary Committee dealt with the INS
    restructuring bill, we were not all that confident that the
    State Department would do any better job than the Justice
    Department in dealing with legal aliens who wish immigration
    services, who are not criminals, who are not conspiring to
    violate the law, and who wish to become productive and tax-
    paying members of American society, hopefully becoming citizens
    at the end of the process.
        Moving both service and enforcement into the new Department
    of Homeland Security would result, we fear, in service getting
    stripped of the resources that it needs not only to deal with
    the 5 million case backlog that presently exists in the service
    end of INS, but dealing with new petitions as they come in
    should the Congress change the immigration law. And the
    Department of Homeland Security is even more of a law
    enforcement agency than the Department of Justice is, and given
    the reprogramming authority that the executive branch has
    requested for this new Department, at least initially, and the
    bill that is before us, we were awfully afraid that the service
    end of the split INS would be dealt with even more as a
    stepchild than it is currently under the Department of Justice.
        Now, there was a proposal by Ms. Jackson Lee in the
    Judiciary Committee to basically pull out the enforcement part
    of INS and to have a new Under Secretary created where there
    would be the enforcement part of INS and the service part of
    INS in separate bureaus under the newly created Under
    Secretary. The down side in that, as I see it, is that the
    desire to have a seamless border security agency would end up
    being destroyed, because if the President's bill is passed and
    you have this fifth department with the immigration inspectors
    at ports of entry and the Border Patrol reporting to the fifth
    Under Secretary, and the law enforcement functions of Customs
    and the Coast Guard reporting to another Under Secretary, you
    know, then we start getting back to the current
    dysfunctionality that we have.
        So the conclusion that was reached is to keep law
    enforcement seamless, which means that Border Patrol and the
    immigration inspectors and the ports of entry would be, you
    know, in one vertical line authority that would be up under
    Homeland Security. But that would really mean that services
    would be, you know, kind of out in the box, off into never-
    never land. And that is why we decided that it probably would
    be better for services to be kept in Justice, because that way
    there would be no raiding of the services' money to provide for
    more enforcement, as there is currently in Justice, and I think
    there would be increased pressures if both services and
    enforcement and INS were in the new Department. So that is why
    we reached the conclusion that we did.
        Ms. Pelosi. I appreciate your very valuable contribution
    and all of the work that is implied in that.
        Mr. Chairman, do you go next and then I will go next, or
    should I just do another one?
        Chairman Armey. Why don't you go ahead?
        Ms. Pelosi. I just wanted to say how pleased I was to see
    in your presentation the heightened whistleblower protection
    because much has been said here about whether whistleblowers
    are covered in this bill and this and that. But under what we
    have seen in the past months, we know that we have to pay very
    special attention to whistleblowers, so I like that word
    ``heightened.''
        And I also just wanted to talk about the creation of a
    Deputy Independent General for Civil Rights and Civil
    Liberties. I think never has that been more important.
        Is that what we are envisioning under Justice, a Deputy
    Attorney General?
        Mr. Sensenbrenner. No, this would be in the new Department
    of Homeland Security.
        Ms. Pelosi. In the new Department, an Independent General
    for Civil Rights.
        Mr. Sensenbrenner. Right.
        Ms. Pelosi. And that would fall under what block?
        Mr. Sensenbrenner. Let's see, I am really not sure about
    that. Let me just see.
        The Inspector General's Office would be right under the
    Secretary and Deputy Secretary. If you look at the organization
    chart that was prepared by the Judiciary Committee, which is
    our recommendation, the IG's office would be there and there
    would be an Independent Deputy Inspector General that would be
    dealing with the civil rights issues, and there also would be a
    privacy office there to make sure that identifiable personal
    information did not spill out into the public domain.
        Ms. Pelosi. I appreciate that very much, because as the
    ranking member on the Intelligence Committee, a concern that we
    have is we want to have all the best intelligence at the
    disposal of the Secretary and certainly the President of the
    United States. But there is some concern that with that much
    information, especially about so many individuals from our
    country, some precautions would be needed, and it seems that
    you have done that.
        I appreciate your testimony. Thank you, Mr. Chairman.
        Chairman Armey. Mr. Chairman, let me, first of all,
    appreciate--from your own testimony you remind us about your
    earlier work in response to the new circumstance we have in the
    world after 9/11 of last year. The PATRIOT Act, a big job, we
    all worked on that very important piece. Border Security and
    Enhancement Act, the Anti-Terrorism Explosive Act, the
    Terrorist Bombing Convention Implementation Act, the Cyber
    Security Enhancement Act, and the Homeland Security Information
    Act. The Cyber Security Enhancement Act, very important matter
    that has been addressed before this committee.
        Now in these six pieces of legislation that we have seen
    here, we have done a fairly fundamental restructuring of the
    foundation and the laws about rights and activities in America.
    Is there anything that you do in your recommendations on this
    Homeland Security bill that would enhance any of these bills,
    second-guess, fine tune, add to any of these, or do you see any
    area where we need to make changes in the underlying law?
        Mr. Sensenbrenner. The question, Mr. Armey--the first part
    of your question is that in the amendment that was adopted, the
    H.R. 5005, there are no changes to any of these other laws. The
    charge that the standing committees were given by the House and
    by your committee was to review H.R. 5005 and make our
    recommendations on where these various agencies should reside,
    and that is what we did.
        Now, in terms of the broader issue, Mr. Conyers and I
    jointly sent a 47-question letter on oversight of the PATRIOT
    Act to the Attorney General. He did not view it as a valentine,
    and the due date for the response of the letter was last
    Friday. He has asked for an extension of time. We have granted
    him an extension of time.
        I am sure he does not like to spend his time sending a
    response back, but it is my intention to release the response
    to the President if there are further questions that need to be
    asked, Mr. Conyers. I will attempt to have a joint follow-up
    letter, and if there are hearings that are necessary on the
    responses we will have those hearings, assuming that the
    leadership does not require us to report out a few more bills
    in order to fill up the House calendar.
        Chairman Armey. I might--I believe--see if my observation
    here is correct. It has been the tradition and the practice in
    America to honor and protect individual rights of persons
    without distinction between citizen and noncitizen. I do not
    believe we changed that when we did, for example, the PATRIOT
    Act. We have still, despite the enormous threat we have,
    despite the fact that many nations across the globe make the
    distinction between the rights to protect citizens and
    noncitizens, it is still the practice in America, is it not, to
    maintain no distinction between citizen and noncitizen and the
    respect of the right of persons in America and should we
    continue with this, I think, extraordinary American tradition?
        Mr. Sensenbrenner. I don't see that there is anything that
    has happened since 9/11 to change this extraordinary American
    tradition. The vast, vast majority of noncitizens in the United
    States are honest, law-abiding, tax-paying individuals. Some of
    them have elected not to petition for naturalization. Some of
    them do. That is their business.
        What the PATRIOT Act does is that those noncitizens that
    might be wishing ill to America, to its institutions and to its
    people, we expanded the time that they could be held without
    being charged from 48 hours to 7 days. And anybody that is held
    after 7 days has to be held pursuant to the order of a judge
    for either an immigration violation, an accusation of an
    immigration violation or an accusation of a criminal violation.
        One of the things that I hope to do in a few minutes is to
    talk to a group of people, members of the European Parliament,
    you know, that seem to think that the PATRIOT Act allowed for
    indefinite detention. If there is indefinite detention, it is
    due to a judicial order that has been validly entered after the
    7-day period. The standards for that type of a detention order
    are the same in the case of a criminal indictment where a
    magistrate judge would make a determination on whether someone
    was--had a danger of flight or was a danger to society if they
    were released on bond. If they were, either of them, then bond
    can be denied; and that is very clearly constitutional.
        Chairman Armey. Thank you for that; and could you remind
    me, what was the vote on the PATRIOT Act in your committee?
        Mr. Sensenbrenner. The version that was reported from the
    committee was unanimous. That means Maxine Waters and Bob Barr
    both voted aye on the same bill.
        Chairman Armey. Marvelous achievement.
        Mr. Sensenbrenner. That didn't happen on the floor, but--.
        Chairman Armey. Do you recall the vote on the floor?
        Mr. Sensenbrenner. On the floor?
        Chairman Armey. Yes.
        Mr. Sensenbrenner. I believe there were about 60 no votes
    on that.
        Chairman Armey. But clearly, in a way, whether in your
    committee or on the floor, the Congress of the United States,
    the House of Representatives affirmed in the PATRIOT Act our
    commitment to maintain the rights of persons in America.
        Mr. Sensenbrenner. Absolutely. And I would not have voted
    for any bill, regardless of how it was phrased, that trampled
    on the rights guaranteed to people in the United States by the
    Constitution. If that is to be done, it must be done by
    constitutional amendment, and I doubt there would be many
    Members of the House that would support that type of an
    amendment.
        Chairman Armey. Well, thank you. And I might mention, Mr.
    Chairman, in these trying times, when risks increase and fears
    sharpen, a position in defense of liberty such as you have just
    stated is one that is not always applauded. So let me take my
    moment to applaud you for that.
        Mr. Sensenbrenner. Well, I thank you on that. But, you
    know, the people who signed the Declaration of Independence
    took a position of--in defense of liberty, and they pledged
    their lives, their property and their sacred honor, and they
    had a lot of all three of those when they put their names on
    the bottom of the Declaration of Independence.
        Chairman Armey. Thank you.
        Ms. Pelosi. Mr. Chairman, may I join you in commending the
    distinguished chairman for his very eloquent response to your
    questions as well in support of freedom.
        Chairman Armey. Thank you. I believe--I see we have been
    joined by Ms. DeLauro.
        Ms. DeLauro. Thank you very, very much, Mr. Chairman.
        Mr. Chairman, I apologize for being late and not hearing
    all the past commentary. I will be mindful of your time and try
    to ask a couple of questions.
        My question is about the Inspector General. As I
    understand, the proposal from the administration would limit
    the new Inspector General's access to information, doesn't give
    the IG the ability to report to Congress if the Secretary
    impedes his or her access. As in the case of the Defense
    Department or the Justice Department, can you explain how you
    address this in your mark? Does your language mirror the DOD IG
    language; and, if not, how does it differ?
        Mr. Sensenbrenner. Well, the introduced bill required the
    Secretary to report to the Vice President and the Speaker that
    he had exercised the authority to limit the scope of an IG's
    investigation for specific reasons, largely relating to
    national security. The Judiciary Committee did not agree with
    that.
        The amendment would expand the reporting requirements by
    directing the Secretary to notify the IG, not the Vice
    President and the Speaker, of the reasons for exercising the
    authority, then requiring the IG to report or to forward the
    notice and the reasons to the President, the Senate, the
    Speaker of the House and the appropriate committees and
    subcommittees and requiring the Inspector General to report
    whether he agrees or disagrees with the Secretary. If the IG
    disagrees with the Secretary, the reasons for the disagreement
    must be reported to Congress, which I presume would be a matter
    of public record.
        This amendment makes the reporting requirements for the
    proposed new Department consistent with provisions relating to
    Inspector Generals of the CIA, Treasury, Justice and the
    Defense Department, so we don't have a different type of IG in
    the new Department. We have the same type of IG in this
    Department as we have in the existing Departments.
        Ms. DeLauro. Let me just quickly--your committee
    recommended creating a Deputy IG for Civil Rights and Civil
    Liberties. How you came to the decision and do you think that
    this type of position would serve the country better than
    creating a Special Office of Civil Rights, Immigration and--.
        Mr. Sensenbrenner. I get a little bugged at the tables of
    organization that have been bandied about that kind of look
    like a very complex integrated circuit that would more properly
    come out of Silicon Valley than out of the United States
    Capitol.
        By having an independent Deputy IG, you know, he would not
    have the status of being an IG--meaning one was appointed by
    the President and confirmed by the Senate--but would have the
    independence of an IG basically to call matters as that
    official saw those matters. So I think that, you know, what we
    did was kind of a compromise in this to have this Deputy IG who
    has got the functions for civil rights and civil liberties to
    be in the same box but to give that person at least some
    independence in actions relative to investigations falling
    under their jurisdiction.
        Ms. DeLauro. A visa question. The committee recommended
    processing functions in State Department. I commend the
    decision. I have a couple of questions. How will State
    coordinate with the Department of Homeland Security to look
    over visa applications to determine which ones should be
    refused? Who determines if an application will be bumped to
    State? Will they all go to State? Who has the final
    jurisdiction if there is a disagreement?
        Mr. Sensenbrenner. Ms. DeLauro, I will be very honest. I
    did not vote for the Hyde amendment that set up what is in the
    Judiciary Committee's amendment. I do favor transferring the
    functions of visa issuing into the Department of Homeland
    Security because that essentially is a security issue and
    should not be a foreign policy issues.
        Having voted against the amendment, I can't give you the
    most objective assessment, but my fear is that the amendment
    that Mr. Hyde proposed and which was adopted here as well as in
    the IR Committee and in the Government Reform and Oversight
    Committee kind of is a two-headed animal dealing with visa-
    issuing questions of people who might be of questionable
    security should they enter the United States. I don't think it
    is exactly clear on who will have the final say on whether an
    applicant that falls into a watch list type category or comes
    up with funny answers in a visa interview will make the
    determination on whether the visa application is approved or
    rejected.
        So I can't answer that question, and I do think that this
    needs some clarification.
        Ms. DeLauro. I just have one more quick question, and then
    I will be done.
        Chairman Armey. One more quick question.
        Ms. DeLauro. Are there plans to put the INS reforms passed
    by the House in place? Well, are there plans to put the reforms
    that were passed--is that--are those reforms going to go into
    the--.
        Mr. Sensenbrenner. Before you came, Ms. DeLauro--.
        Ms. DeLauro. I apologize.
        Mr. Sensenbrenner. What the Judiciary Committee recommended
    is to keep services in Justice. The fear that we have is that
    if INS services go into an agency that is even more devoted
    than the Justice Department to border security and enforcement
    and with the broad reprogramming funds authority that the
    administration has requested in this bill, the chance of
    services being treated as more of a stepchild than under the
    present arrangement is even greater.
        You have to realize that the INS services end are dealing
    with legal aliens in the United States. They are people who
    want to obey our laws. They are not terrorists. They ought to
    be treated promptly and professionally, which is not the case
    at the present time.
        The Jordan Commission originally recommended that services
    and enforcement be put in two separate agencies. We couldn't do
    it with the INS reform bill that was passed by the House, but
    we do it here by keeping it in Justice and then bumping up the
    person who would oversee the services to an assistant attorney
    general level so he would be equal with civil rights and
    criminal and antitrust and civil and the other divisions in
    DOJ.
        Ms. DeLauro. Thank you very, very much, Mr. Chairman, and
    thank you for your thoughtfulness in this process.
        Chairman Armey. Thank you.
        We have Mr. Portman from Ohio and Mr. DeLay from Texas.
        Mr. Portman. Thank you, Mr. Chairman.
        Mr. Chairman, I appreciate your being here and the thought
    you have put into this. A couple of quick questions, and I will
    try to be brief.
        With regard to the Inspector General--getting back to that
    for a moment--you have recommended a Deputy Inspector General
    for Civil Rights. Are there any other agencies that have a
    Deputy Inspector General for Civil Rights to your knowledge?
        Mr. Sensenbrenner. I am not aware of any other agencies
    that do. Of course, we do have a Civil Rights Division in the
    Justice Department that has got extremely broad authority.
        The reason we have recommended a Deputy--an independent
    Deputy Inspector General for Civil Rights is, given the
    sensitivity of this new homeland security agency and the fact
    that, you know, it will be dealing with issues that pose civil
    rights questions much more often than any other department of
    the Federal Government, including the existing Justice
    Department, and that is why the feeling of the Judiciary
    Committee is that there had to be a watchdog over that and a
    place where complaints of civil rights violations could be
    dealt with very promptly and professionally. Because if there
    are rogue agents or employees at the new Department of Homeland
    Security that trample on the Constitution and rights guaranteed
    by law, I think we are all going to want to put a stop to that
    as quickly as possible; and one of the best ways to do that is
    to have an independent Deputy IG that would deal with those
    kinds of allegations.
        Mr. Portman. Mr. Chairman, we have heard earlier this week
    and even as recently as this afternoon from some of our
    colleagues about the Secret Service and where it ought to be.
    Governor Ridge believes it is appropriate that it be part of
    the new homeland security agency. Some of our colleagues who
    looked into this issue over the years really, not just the
    weeks or months, have said they think that because of the
    functions the Secret Service has, particularly the increasing
    function it has with regard to major events like the Super
    Bowl, like the Olympics, which were related to a terrorist
    threat in both cases, that it ought to be part of this agency.
        Your proposal, as I read it, would move the Secret Service
    from the Treasury Department but would put it instead at the
    Justice Department and not in the Department of Homeland
    Security. Can you just speak briefly about that, why you think
    that is important?
        Mr. Sensenbrenner. The primary role of the Secret Service
    is the investigation of financial crimes and counterfeiting and
    protection of certain designated government officials,
    principally the President and the Vice President, and do not
    have anything to do with terrorist threats. In fact, someone
    who joins the Secret Service as an agent has to spend at least
    7 years in the financial and counterfeiting end of the Secret
    Service before they can even apply to go onto the protection
    detail.
        What agency is designated to investigate terrorist threats
    on major events like the Olympics and the Super Bowl is the
    call of the President. The role of the Secret Service has
    traditionally been law enforcement on the financial crimes,
    which I don't think has anything to do with Homeland Security,
    as well as the protection of government officials. So the
    President can designate some other branch in the Department of
    Homeland Security. But sticking the people who investigate the
    counterfeitings and identity thefts and financial mismanagement
    into an agency other than the Justice Department is going to
    result in a duplication and bifurcation of those services which
    we felt was not a good idea.
        Mr. Portman. Thank you, Mr. Chairman.
        Chairman Armey. Mr. DeLay.
        Mr. DeLay. Well, being one of last of the questioners, Mr.
    Chairman, you always get your questions asked; and Mr. Portman
    just asked my question about the Secret Service. So I will have
    to defer to the answer that you gave, Mr. Chairman; and I have
    no further questions.
        Chairman Armey. Mr. Chairman, I also have no further
    questions. Again, let me thank you and your committee for your
    continuous outstanding work and appreciate your time and
    patience today.
        Mr. Sensenbrenner. And thank you for taking me out of order
    so I can do more outstanding work in an all-day markup
    tomorrow.
        Chairman Armey. My pleasure.
        This committee stands in recess until 10 tomorrow morning.
        [Additional material submitted for the record follows:]

     Questions Submitted for the Record to the Honorable Norman Y. Mineta,
         Secretary of Transportation, by the Honorable Rosa L. DeLauro

        Question. Protecting our nation's ports is a critical piece of
    homeland security. Currently, Customs is only able to screen 2 to 3
    percent of the large cargo containers that enter the United States.
    That leaves us highly vulnerable to the importation of any number of
    threats from abroad.
        How will moving Customs into the new department improve
    performance?
        Does the President's proposal include adequate funding to inspect
    all Customs-related products?
        Will the new department implement new strategies to secure our
    ports?
        Answer. The proposed Department of Homeland Security will bring
    unity of effort and unity of command to homeland security, with clear
    lines of authority to get the job done. By bringing together the
    various Federal entities that support port security, the Department
    will have a common operational picture of available resources, a more
    comprehensive view of all known threat information, and a command and
    control structure that swiftly exerts tasking and initiates
    coordination to best employ available enforcement and security
    resources against specific threats. The Administration agrees that
    protecting our nation's ports is critical to homeland security. As
    such, moving the Customs Service to the new department is a necessary
    step to improving port security. Proposed legislation in both the House
    and the Senate reflects Congressional agreement that the Customs
    Service is integral to the new department.
        The Administration presently has in place two important initiatives
    to address port security. First, the Department of Transportation and
    Customs established the Container Working Group, and the ``Operation
    Safe Commerce'' Interagency Working Group to address cargo security
    measures and to prototype technology and procedures to improve the
    security of the supply chain. Second, the Customs' Container Security
    Initiative and Customs Trade Partnership Against Terrorism (C-TPAT)
    seek to foster partnerships with various entities, including businesses
    and foreign ports, to protect the security of cargo entering the United
    States while improving the flow of trade. The cooperation and synergies
    built through these initiatives would be strengthened in the proposed
    Department of Homeland Security.
        At the same time, the National Strategy for Homeland Security
    identifies initiatives to improve port security. The new Department
    would work to implement these initiatives and others that arise as the
    difficult task of identifying threats and analyzing vulnerabilities
    proceeds.
        Question. The Administration proposes to transfer the Coast Guard
    to the new Department of Homeland Security. Rather than moving the
    Coast Guard, my colleagues on the Transportation Committee have
    recommended creating a new undersecretary for homeland security to act
    as a liaison to the new department.
        If the Coast Guard is transferred to the new department, how will
    you ensure that this move will not disrupt the Coast Guard's long time
    relationships and coordination with other Federal, State and local
    agencies?
        Answer. The Coast Guard is unique in the Federal government as a
    military service that is also a law enforcement agency, a regulating
    agency, a protector of the environment, and provider of humanitarian
    services. The success in each mission area is built not only upon the
    exemplary men and women of the Coast Guard, but also the extensive
    supporting and supported relationships at the Federal, State,
    international, and local levels, with non-governmental organizations,
    and public and private interests. This is why it is so critical, and
    the President's proposal calls for, the Coast Guard moving intact so
    these relationships can continue to be exercised every day. These
    relationships will easily transition with the Coast Guard to the new
    Department. The President's proposal mirrors the approach used in 1967,
    when the Coast Guard was transferred intact to the new Department of
    Transportation from the Department of the Treasury. The Coast Guard was
    the only element of the new Transportation Department that had existed
    elsewhere in the Government that was not re-created in the new DOT. Its
    ``whole cloth'' transfer then taught us a great deal about how to
    transfer it this time with a minimum of disruption to its operations
    and relationships.
        Question. If the Coast Guard were a part of the Department of
    Homeland Security, how will the Administration make sure that missions
    unrelated to homeland security, like search and rescue missions, are
    not given second priority?
        Answer. In proposing the Department of Homeland Security, the
    President recognized that the new Department would have a number of
    functions that are not directly related to securing the homeland
    against terrorism. The Administration has stated repeatedly its
    commitment to ensuring that missions unrelated to homeland security
    suffer no detriment. Specifically, The Secretary of Homeland Security
    will assume responsibility for all of the Coast Guard's statutory
    responsibilities to conduct both maritime homeland security (MHLS) and
    non-MHLS missions and will be held accountable for their successful
    performance. A robust Coast Guard, properly funded as contained within
    the President's budget requests, will continue to effectively execute
    all missions regardless of the Service's departmental organizational
    location.
        Question. Since the Coast Guard's responsibilities will most likely
    increase if it is included in the new department, will the
    Administration request more funding for the Coast Guard in future
    budgets?
        Answer. The Administration's budget requests have supported the
    Coast Guard's requirements and will continue to do so in the Department
    of Homeland Security.The Coast Guard's required operational
    capabilities have already increased as a result of increased emphasis
    on Maritime Homeland Security. The additional responsibilities that
    Coast Guard has assumed since 9/11/01 are determined by the nation's
    needs and will not be driven by the Coast Guard's reorganization under
    a new department. In the long run, the co-location of the homeland
    security component agencies in a new department and the consolidation
    of their administrative functions and business systems can produce
    savings that may reduce budgetary needs below what Coast Guard would
    require if it remained in the Department of Transportation.

        [Whereupon, at 6 p.m., the committee was recessed, to
    reconvene at 10 a.m. on Wednesday, July 17, 2002.]