[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.]

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