[Senate Hearing 107-43]
[From the U.S. Government Printing Office]



                                                         S. Hrg. 107-43

       DEPARTMENT OF ENERGY NON-PROLIFERATION PROGRAMS WITH RUSSIA

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 28, 2001

                               __________

       Printed for the use of the Committee on Foreign Relations


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

                   U.S. GOVERNMENT PRINTING OFFICE
72-228                     WASHINGTON : 2001



                     COMMITTEE ON FOREIGN RELATIONS

                 JESSE HELMS, North Carolina, Chairman
RICHARD G. LUGAR, Indiana            JOSEPH R. BIDEN, Jr., Delaware
CHUCK HAGEL, Nebraska                PAUL S. SARBANES, Maryland
GORDON H. SMITH, Oregon              CHRISTOPHER J. DODD, Connecticut
CRAIG THOMAS, Wyoming                JOHN F. KERRY, Massachusetts
BILL FRIST, Tennessee                RUSSELL D. FEINGOLD, Wisconsin
LINCOLN D. CHAFEE, Rhode Island      PAUL D. WELLSTONE, Minnesota
GEORGE ALLEN, Virginia               BARBARA BOXER, California
SAM BROWNBACK, Kansas                ROBERT G. TORRICELLI, New Jersey
                                     BILL NELSON, Florida
                   Stephen E. Biegun, Staff Director
                Edwin K. Hall, Democratic Staff Director

                                  (ii)

  


                            C O N T E N T S

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                                                                   Page

Allison, Hon. Graham T., member, Russia Task Force, Secretary of 
  Energy Advisory Board, director, Belfer Center, Kennedy School 
  of Government, Harvard University, Cambridge MA................    37
    Prepared statement...........................................    38
Baker, Hon. Howard H. Jr., co-chair, Russia Task Force, Secretary 
  of Energy Advisory Board, former United States Senator from 
  Tennessee, Baker, Donelson, Bearman & Caldwell, P.C., 
  Washington, DC.................................................    13
    Prepared statement...........................................    16
Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, prepared 
  statement......................................................    11
    Letter from members of the Task Force transmitting a copy of 
      the final report...........................................    52
Cutler, Hon. Lloyd N., co-chair, Russia Task Force, Secretary of 
  Energy Advisory Board, former White House Counsel, Wilmer, 
  Cutler & Pickering, Washington, DC.............................    18
Domenici, Hon. Pete V., U.S. Senator from New Mexico:
    Prepared statement...........................................    11
    News release entitled, ``Domenici: U.S. Should Not Act 
      Unilaterally or Take Axe to Nonproliferation Programs With 
      Russia,'' March 28, 2001...................................    13
Lehman, Hon. Ronald F., former Director, Arms Control and 
  Disarmament Agency, chairman of the board of directors, Keck 
  Center for International and Strategic Studies, Claremont 
  McKenna College, Claremont, CA.................................    33
    Prepared statement...........................................    34
Lugar, Hon. Richard G., U.S. Senator from Indiana, prepared 
  statement......................................................     1
    Statements submitted for the record:
      United States Enrichment Corporation [USEC], statement 
        submitted for the record.................................     2
      Briefing paper on ``The CANDU MOX Option for Disposition of 
        Surplus Russian Weapons-Origin Plutonium,'' March 2001...     7

                                 (iii)

  

 
      DEPARTMENT OF ENERGY NON-PROLIFERATION PROGRAMS WITH RUSSIA

                              ----------                              


                       WEDNESDAY, MARCH 28, 2001

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
SD-419, Dirksen Senate Office Building, Hon. Richard Lugar 
presiding.
    Present: Senators Lugar, Biden, Kerry, Wellstone, and Bill 
Nelson.
    Senator Lugar. This hearing of the Senate Foreign Relations 
Committee is called to order.
    This morning, the committee meets to review and hear 
testimony on the activities of the Baker-Cutler Task Force and 
its Report Card on the Department of Energy's Non-Proliferation 
Programs with Russia.
    We are deeply indebted to Senator Howard Baker and to Lloyd 
Cutler for their leadership, and to the members of their 
distinguished Commission. The Task Force's report has been 
filed, and the experiences and recommendations outlined therein 
should be taken very seriously.
    As I think all of us on this committee would agree, the 
gentlemen who headed the Commission, and those who served, have 
rendered an extraordinary service.
    And without further ado I will submit my statement for the 
record, and turn to the distinguished ranking member, Senator 
Biden.
    [The prepared statement of Senator Lugar follows:]

             PREPARED STATEMENT OF SENATOR RICHARD G. LUGAR

    Today, the Committee meets to review and hear testimony on the 
activities of the Baker-Cutler Task Force and its Report Card on the 
Department of Energy's Nonproliferation Programs with Russia.
    No issue better illustrates the new challenges, complexities, and 
uncertainties faced by the United States in the post Cold War era than 
the proliferation of weapons of mass destruction. American efforts to 
slow or stop proliferation are perhaps the most important foreign and 
national security policies our government is implementing today.
    The Cold War was marked by superpower competition in which the 
United States and the Soviet Union maintained large nuclear arsenals. 
As terrifying as the nuclear competition was, it had one grim 
advantage--both nations had the ability and an interest in preventing 
proliferation and keeping a tight lid on weapons systems. We lived in a 
world in which nuclear annihilation was disturbingly possible, but 
proliferation of the technology was highly unlikely.
    When the Soviet Union collapsed, a new era in world history began. 
The strict controls the Soviet government had employed to safeguard 
these weapons crumbled. Meanwhile, the failure of the Russian economy 
has provided huge incentives to sell these weapons or the scientific 
knowledge of how to make them.
    Rogue nations and terrorist groups can now seek to buy or steal 
what they previously had to produce on their own. They seek ballistic 
missiles and weapons of mass destruction from the former Soviet Union 
as a means to intimidate or terrorize their neighbors and deter the 
United States. This has led many experts to conclude that the current 
threat environment is less stable and more dangerous than during the 
Cold War.
    In addition to unilateral policies, the United States has attempted 
to address these threats through a framework of cooperative programs 
with the former Soviet Union. These cooperative efforts have enjoyed 
many important successes such as the Nunn-Lugar program's removal of 
all nuclear weapons from Ukraine, Kazakhstan and Belarus. Over 5,000 
warheads have been deactivated and more than one thousand missiles and 
missile launchers have been destroyed. Large numbers of weapon- and 
material-storage facilities have received security and safety 
enhancements or upgrades to safeguard them from possible threats. Other 
programs seek to employ former Soviet weapons scientists in peaceful 
projects to reduce the chances of their sharing weapons expertise with 
rogue states and terrorist groups.
    To ensure success, our government must continue to review and 
identify those efforts that have proven effective and seek ways to 
intensify these activities. Likewise, we must acknowledge that some 
policies and programs have not produced the results we had hoped. In 
these areas, we must alter and improve our efforts so as to achieve 
meaningful results.
    The Baker-Cutler Report was an effort by the Energy Department to 
review ongoing efforts and to offer recommendations on how to improve 
its nonproliferation programs. The Task Force recognized that some of 
the programs were succeeding and others were in need of fine tuning. 
But most importantly, this distinguished group of experts and leaders 
came to the conclusion that we must continue our efforts to eliminate 
these threats at their source if we are to continue to safeguard the 
American people.
    The Bush Administration is reviewing our nuclear arms control and 
nonproliferation strategy. I am hopeful they will be guided by the 
Baker-Cutler report's conclusion that the threat from the proliferation 
of weapons of mass destruction is ``the most urgent unmet security 
threat facing the United States today.'' We must respond to this 
threat, and these programs play a critical role in that response.
    I am pleased that my friend and former Senate Majority Leader, 
Senator Howard Baker, has agreed to join us today to share his thoughts 
on the conclusions that the Task Force reached. He is joined by another 
good friend, Lloyd Cutler, Co-Chairman of the Russia Task Force. Mr. 
Cutler is a founding partner of Wilmer, Cutler & Pickering and served 
as Counsel to Presidents Clinton and Carter.
    Following this distinguished panel, we will be joined by Dr. Ron 
Lehman and Dr. Graham Allison. Dr. Lehman was appointed to the 
President's Advisory Board on Arms Proliferation Policy and served as 
Assistant Secretary of Defense and Director of the Arms Control and 
Disarmament Agency under Presidents Reagan and Bush. He also played 
important roles in both the International Science and Technology 
Centers at the Department of State and the Nuclear Cities Initiative at 
the Department of Energy.
    Dr. Graham Allison is a former Assistant Secretary of Defense and 
is currently the Douglas Dillon Professor of Government at Harvard 
University and Director of the Belfer Center for Science and 
International Security. Graham has made tremendous contributions to 
debates over nonproliferation policy and has the added distinction of 
serving as a member of the Baker-Cutler Task Force.
    Before I yield to Senator Biden for an opening statement or any 
comments he may have, I would like to insert in the record some 
briefing materials provided by the United States Enrichment Corporation 
and Atomic Energy of Canada, Ltd.
    Thank you.

    [Additional statements submitted by Senator Lugar follow]:

   PREPARED STATEMENT OF UNITED STATES ENRICHMENT CORPORATION [USEC]

           IMPLEMENTATION OF THE RUSSIAN HEU PURCHASE PROGRAM

                        (Megatons to Megawatts)

                           EXECUTIVE SUMMARY

    This marks the seventh successful year for USEC as the U.S. 
executive agent for the 1993 government-to-government Russian Highly 
Enriched Uranium (HEU) Purchase Agreement. As called for in this 
nuclear nonproliferation agreement, USEC and the Russian executive 
agent, Techsnabexport (Tenex), signed a contract in 1994 that governs 
the commercial implementation of the 1993 agreement. This 20-year, $12 
billion contract facilitates the conversion of 500 metric tons of 
nuclear weapons-derived HEU into low-enriched uranium (LEU) fuel 
purchased by USEC for use in commercial nuclear power plants. The 
program has come to be known as Megatons to Megawatts.
    Russian shipments to USEC of weapons-derived LEU commenced in June 
1995. Since then, USEC has received 84 shipments of 2,203 cylinders 
containing 3,303 metric tons of LEU--an amount sufficient to meet U.S. 
nuclear fuel demand for two years.
    These seven years of implementation of the Megatons to Megawatts 
program clearly demonstrate that both the U.S. and Russian partners 
have been successful in making this 1993 agreement work. In doing so, 
the partners have reduced the threat to world stability posed by the 
proliferation of nuclear weapons and materials.
    The results are impressive. As of March 2001:

          1. Approximately 113 metric tons of Russian warhead HEU have 
        been converted to LEU fuel and purchased by USEC for use by its 
        electric utility customers.

          2. The 113 metric tons of HEU is the equivalent of more than 
        4,500 \1\ nuclear weapons--enough nuclear explosives to destroy 
        every large city in the world. The conversion of this material 
        eliminates its potential use as a nuclear explosive.
---------------------------------------------------------------------------
    \1\ The exact amount of HEU required for a weapon is classified 
information and only estimates are used for illustration purposes.

          3. USEC and Tenex are 40 percent ahead of the original 1993, 
        20-year schedule to convert a total of 500 metric tons of HEU 
        to LEU. This is equivalent to an estimated 20,000 to 25,000 
---------------------------------------------------------------------------
        nuclear warheads.

          4. No taxpayer dollars are required for this program. USEC 
        pays Russia hundreds of millions of dollars a year for these 
        purchases--a total to date of about $2 billion. Russia vitally 
        needs this hard currency to help offset the falling value of 
        the ruble, to meet the terms and goals of the HEU agreement and 
        for trade purposes.

          5. USEC and Tenex have established a strong, flexible, 
        responsive and cooperative working relationship.

          6. USEC and Tenex reached agreement in May 2000 on new 
        market-based commercial terms that would begin January 1, 2002, 
        when the current terms expire. The new terms are under review 
        by the respective governments.

    These achievements demonstrate that the Megatons to Megawatts 
program is working. Government nonproliferation and national energy 
security objectives are being met and sustained by commercial 
transactions. USEC has proven itself to be highly effective as 
executive agent under sometimes difficult circumstances. In fact, it 
has not been smooth sailing during the past seven years of implementing 
this agreement. A number of contentious issues have emerged, ranging 
from the appropriateness of USEC's privatization to issues of over 
payment for, and disposition of, the natural uranium portion of the 
deal.
    Implementation of the contact requires continuing interaction and 
responsiveness. USEC does not act unilaterally in this process. As 
executive agent for the government, USEC is subject to an ongoing 
consultative process that includes direction from the Administration 
before acting on contract matters.
    Still, the agreement has been a success story, and USEC is uniquely 
positioned to continue as the sole U.S. executive agent. USEC's global 
customer base, domestic enrichment operations, unique market 
experience, financial resources and continuing commitment have all 
contributed to the strong foundation that is essential to support the 
continuing implementation of this unique and challenging program.

                               BACKGROUND

    With the demise and breakup of the Soviet Union came steadily 
increasing concerns about the security of nuclear weapons and related 
materials in the former Soviet Union (FSU). As weapons reduction 
programs were implemented, substantially greater efforts became 
necessary for the safe and effective management of the dispersed 
nuclear weapons, stored weapons-grade materials and nuclear materials 
removed from dismantled nuclear weapons. These concerns resulted in 
urgent actions to transfer these weapons and materials from FSU states 
to Russia for safe disposition.
    The U.S. government developed a number of nonproliferation programs 
to assist Russia with its nuclear weapons and nuclear material security 
efforts. Clearly, these activities would prove very costly and require 
significant and ongoing funding that Russia itself can not afford.
    The concept of converting highly enriched uranium (HEU) from 
Russian nuclear warheads into fuel for commercial nuclear power plants 
was first raised in the late 1980s. The biblical entreaty to turn 
swords into plowshares eventually emerged as a self-sustaining 
commercial pay-as-you-go program that established a clear nexus for 
national security and commercial interests.
    To accomplish this, it was essential to provide Russia with badly 
needed hard currency to keep vital nuclear workers employed and to 
secure and reduce its stock of nuclear warhead materials. One approach 
was for Russia to take HEU from its dismantled nuclear warheads and 
dilute it into low-enriched uranium (LEU). This LEU is useless for 
nuclear weapons but is suitable as fuel for power plants. Financing 
this effort was accomplished by the U.S. purchasing the resulting LEU 
fuel from Russia for use in commercial nuclear power plants. The 
program literally paid for itself.
    By 1992, the Bush Administration had matured this concept through 
negotiations with Russia into a mutually acceptable framework. This led 
to the adoption of the 1993 government-to-government Russian HEU 
Purchase Agreement that required commercial implementation by executive 
agents.
    The U.S. Congress authorized, and the Executive Branch designated, 
the United States Enrichment Corporation (USEC) as its executive agent, 
and the Russian Federation designated Techsnabexport (Tenex) as its 
executive agent. On January 14, 1994, during the Presidential Summit in 
Moscow, the parties signed a 20-year, $12 billion contract for USEC to 
purchase the enrichment component derived from 500 metric tons of 
Russian HEU from dismantled nuclear weapons. This amount of HEU 
represents the equivalent of more than 20,000 Soviet-era nuclear 
warheads.
    While the 1993 government-to-government agreement and the 1994 
implementing contract facilitated the beginning of the process, the 
startup also brought the parties face to face with substantial 
technical and financial difficulties. Although the LEU that results 
from blending down HEU has substantial commercial market value to 
Russia, Russia did not have the financial resources necessary to 
process the material. And while it had the necessary facilities, it 
needed technical support to do what had never been done--to reverse the 
enrichment process and dilute the more-than-90 percent bomb-grade 
material down to the 5 percent level with the purity required for 
commercial nuclear fuel. USEC played a pivotal role in solving both 
problems.
    Through a series of advance payments totaling $260 million, USEC 
provided Russia with the financial resources needed to initiate the 
processing of the warhead material. In addition to the financial 
problems, Russia encountered considerable technical difficulties due to 
contamination of the HEU that had to be removed in order to meet 
commercial-quality specifications required by USEC customers. USEC 
assisted the Russians during 1994 and early 1995 to solve these 
technical problems. The first shipment of LEU purchased by USEC from 
Russia was received at the Company's Portsmouth, Ohio plant on June 23, 
1995.

                          ONGOING COOPERATION

    While an overall success, this agreement has also had its share of 
controversial issues and problems, as would be expected in an 
undertaking of this magnitude. Examples include the debate over the 
appropriateness of privatizing USEC and concerns that a private sector 
agent's business motivations would clash with government national 
security objectives. Another issue was Russia's insistence that it be 
paid immediately for the natural uranium portion of shipments. This 
dispute led to the suspension of three shipments by Russia. While terms 
concerning the natural uranium portion were clearly spelled out in the 
agreement, ultimately Congress had to act to resolve that situation. 
While such controversies are often heated and involve various 
constituencies, the track record shows that they were resolved, and 
these outcomes auger well for continuing cooperation and problem 
solving.
    Over the course of the contract, as both a govermnent corporation 
and after July 1998 as an investor-owned company, USEC has accommodated 
Russian requests for special considerations and flexibility. In fact, 
there have been 13 amendments to the contract reflecting the parties' 
ability to make such accommodations.
    For example, in 1994, 1995 and 1996, at Russia's request, USEC made 
payments in advance of delivery of LEU for $60 million, $100 million 
and $100 million, respectively. The first two payments supported a 
presidential commitment at the January 1994 Moscow Summit and an 
agreement reached at June 1995 U.S.-Russia negotiations. The objective 
was to help Russia finance the provision of nuclear fuel to the Ukraine 
in order to secure full implementation of the transfer of nuclear 
weapons from the Ukraine to Russia for dismantling. The 1996 $100 
million advance payment facilitated a U.S.-Russia agreement on enhanced 
transparency measures.
    In 1999, USEC again demonstrated its commitment. In response to a 
request by Minister Adamov to help meet revenue expectations in the 
Russian government budget, USEC advanced Russia $173 million. In that 
same year, as had been done on a number of previous occasions, USEC 
agreed to accelerate its payments for deliveries to accommodate Russian 
fiscal needs. There are many other examples of USEC's assistance to its 
Russian partner. USEC provided Russia with cylinders for the storage of 
uranium at no cost, established a Russian uranium storage account and 
assisted Russia in protecting its Megatons to Megawatts assets in the 
United States. The latter assistance resulted in a presidential 
Executive Order that provided legal protection for certain Russian 
assets in the U.S. on the grounds of national security.

                  INTERRUPTIONS IN SHIPMENTS BY RUSSIA
 
   Despite substantial efforts to accommodate Russia's needs and to 
facilitate the smooth performance of the HEU contract, Russia 
unilaterally suspended scheduled delivery four separate times for 
various reasons not connected with USEC's implementation of the 
contract. While these suspensions were technically Russian breaches of 
contract, USEC was able to overcome the impact of these suspended 
shipments by using its substantial inventory and adjusting its uranium 
enrichment production schedules to meet customer obligations. But this 
came at a price to USEC, which was forced to incur additional 
production costs to compensate for a cumulative delay of 12 months in 
Russian deliveries to USEC. Once again, demonstrating its strong 
commitment to the continuing success of the program, USEC has agreed to 
reschedule delivery of the delayed LEU. These actions could not have 
been possible without USEC's production capability, inventory and other 
unique assets.

                         PRICING CONSIDERATIONS

    The 1994 contract called for the executive agents to negotiate 
price and quantities each year for the following year. Not 
unexpectedly, this resulted in certain tensions surrounding annual 
negotiations. In 1996, in a mutual commitment to stabilize performance, 
both parties adopted a five-year amendment to the contract that set 
prices and quantities through 2001. While this arrangement solved one 
problem, it created another. By 1998, an unexpected and dramatic 
decline in market prices occurred, due in large measure to excess 
enrichment capacity, lower demand and aggressive pricing by 
competitors. This resulted in a situation where USEC's purchase costs 
for Russian material became higher than market prices. In effect, USEC 
was losing money on each purchase, and the commercial viability of the 
contract was being undermined. Even so, USEC was determined to sustain 
the program going forward. It absorbed the financial losses and 
addressed the issue with the U.S. government and its Russian partner.
    The excellent working relationship of the executive agents 
encouraged candid discussions about this problem over the period of a 
year. In accordance with guidance provided by the Administration in May 
2000, these discussions resulted in an agreement in principle to adopt 
market-based pricing for the remainder of the 13 years of the contract 
and, when approved, will go into effect at the beginning of 2002.
    The terms of this agreement include the following:

   A discounted, market-based pricing mechanism for purchases 
        of LEU derived from 30 metric tons of Russian warhead HEU each 
        year

   The purchase of an additional amount of LEU from warhead HEU 
        through 2004 that makes up for previous Russian delivery 
        shortfalls

   At Russia's request, the purchase of three million Russian 
        commercial (non-weapons derived) enrichment separative work 
        units (SWU) over five years in order to supplement their 
        revenues during the transition to market-based pricing.
          current status of the new contract pricing amendment
    On January 18, 2001, the Administration authorized USEC to complete 
the new terms with Tenex. However, the Bush Administration informed the 
Russian government that it will conduct a review of the overall HEU 
agreement and the proposed amendment. USEC is awaiting completion of 
this review. While the current contract pricing terms expire on January 
1, 2002, USEC orders for 2002 material from Russia must be placed 
earlier than that.
    The timely adoption of new financial terms--which the executive 
agents are ready to execute--is essential to maintain the continued 
success and objectives of the Megatons to Megawatts program. These new 
financial terms are consistent with the national security and economic 
interests of both the United States and Russia. These terms will:

   Stabilize and ensure successful completion of the HEU 
        agreement and contract for the remaining 13-year period on 
        self-sustaining financial terms.

   Provide Russia, through USEC purchases, with vitally needed 
        hard currency to pay workers, to finance nuclear safety 
        upgrades, to clean up contaminated sites and to safeguard 
        nuclear materials. USEC payments constitute about 20 percent of 
        the nontax income of the Russian federal budget.

   Ensure that the remaining Megatons to Megawatts Russian HEU, 
        representing an estimated 16,000 nuclear warheads, will be 
        converted to fuel for electric power plants.

   Aid U.S. national security and nonproliferation objectives 
        at no cost to the government.

            USEC'S COMMITMENT TO THE ROLE OF EXECUTIVE AGENT

    USEC demonstrated a solid and continuing commitment to the Megatons 
to Megawatts program from its inception as a government corporation 
through its privatization in 1998, and during its three years as an 
investor-owned company. As executive agent for the U.S. government, 
USEC has successfully balanced national security policy objectives with 
the objectives of its own commercial interests, in certain cases to its 
own financial detriment, proving that these differing interests can be 
reconciled and well-served.
    USEC remains uniquely suited and committed to its role as executive 
agent for the Megatons to Megawatts program.

   First, no other U.S. entity can as effectively and 
        expediently implement this 20-year, $12 billion national 
        security program and commercial commitment.

   -- USEC has the best combination of customer, market and financial 
            strength to absorb this large amount of enriched material 
            over time without disrupting the market.

   -- Only USEC has domestic enrichment production capability to 
            continue fuel supplies to customers in the event of future 
            Russian supply interruptions.

   Second, USEC is the only domestic producer of enriched 
        uranium fuel and is committed to ensuring that this production 
        continues to meet long-term domestic energy security 
        objectives. In support of those objectives, adoption of the new 
        market-based pricing amendment will strengthen the global 
        competitive position of USEC's Paducah enrichment plant and its 
        1,700 employees.

   Third, USEC has a seven-year track record of successful 
        implementation of this contract.

   -- Without exception, the national security goals of the government-
            to-government agreement and the implementing contract are 
            being consistently met.

   -- As executive agent, USEC has consistently followed the guidance 
            of the U.S. government in the commercial implementation of 
            this program.

   -- USEC has established a rare and continuing record with its 
            Russian counterpart of cooperation, problem solving and 
            long-term trust.

                               CONCLUSION

    As the executive agent for the U.S. government, USEC employees have 
exhibited pride, flexibility and commitment in implementing the 
Megatons to Megawatts program. USEC employees continue to ensure the 
full and timely implementation of the Russian HEU Purchase Program 
consistent with U.S. policy objectives.
    By the end of 2001, USEC will have purchased the LEU equivalent of 
more than 140 tons of HEU--nearly 30 percent of the 500 metric tons 
under the contract. This is the equivalent of an estimated 7,000 to 
8,000 nuclear warheads.
    This historic agreement between the governments of the United 
States and the Russian Federation is being realized 40 percent ahead of 
the original schedule and to the mutual satisfaction of both parties. 
In addition to meeting the objectives of both countries, this agreement 
has significantly reduced the threat of nuclear weapons and 
demonstrated the effectiveness of the commercial implementation of this 
national security program.

                                 ______
                                 

                     MARCH 2001--BRIEFING PAPER ON

The Candu Mox Option for Disposition of Surplus Russian Weapons-Origin 
                               Plutonium

    issue: The CANDU MOX option has been identified as an acceptable 
method for the disposition of excess weapons-origin plutonium by the 
U.S. Department of Energy (``DOE''), and by officials of the Russian 
Federation. The CANDU MOX option is not required to assist with 
disposition of American surplus plutonium; however, it remains an 
important potential solution to enable the Russian Federation to 
achieve its plutonium disposition commitments made under the recent 
U.S.-Russia bilateral agreement on plutonium disposition. As DOE and 
other U.S. agencies consider steps to achieve the full and prompt 
implementation of the U.S.-Russia bilateral agreement, it is vital to 
keep in context the essential international benefits associated with 
the CANDU MOX option, including acceleration of efforts to dispose of 
Russian-origin surplus plutonium.

    conclusion: The CANDU MOX option should receive appropriate 
attention as a potential solution to the problem of achieving the full 
benefits of the doubled plutonium disposition rates as defined under 
the recent U.S.-Russia bilateral agreement. By adding the capabilities 
of existing CANDU reactors in Canada to the disposition mission, 
greater progress can be made to address this compelling international 
issue.

   Continuation of the Parallex Project;

   Development of a trilateral international agreement on 
        plutonium disposition among the Russia, Canada and the U.S.; 
        and

   Inclusion of the CANDU MOX option in ongoing international 
        plutonium disposition planning efforts, including the 
        development of a MOX fuel fabrication plant in Russia with the 
        flexibility to manufacture CANDU MOX fuel.

                             I. BACKGROUND

    As a result of U.S.-Russia bilateral progress in the field of 
nuclear disarmament, there is a surplus of at least fifty metric tons 
of plutonium in each country based on START I levels. The United States 
government has evaluated policy alternatives for the disposition of 
excess weapons-origin plutonium, and is progressing towards 
implementation of a domestic program, while encouraging the Russian 
Federation and the international community to support parallel efforts 
in Russia.
    In a 1994 study, ``Management and Disposition of Excess Weapons 
Plutonium,'' the National Academy of Sciences states that ``the 
existence of this surplus material constitutes a clear and present 
danger to national and international security.'' This statement relates 
principally to the risk of diversion of Russian-origin plutonium for 
terrorist or weapons purposes, which underscores the need for the U.S. 
to pursue policies that support the goal of securing and disposing of 
Russian plutonium.
    DOE has played the central role in developing U.S. plutonium 
disposition policy, which although focused directly on the disposition 
of U.S. plutonium, also has clear ramifications for U.S. foreign 
policy. In the Record of Decision (ROD) for the Storage and Disposition 
of Weapons-Usable Fissile Materials Final Programmatic Environmental 
Impact Statement (Final PEIS) released by DOE on January 14, 1997, DOE 
formally adopted the Final PEIS's preferred alternative to pursue a 
dual strategy for plutonium disposition that includes both 
immobilization and reactor technologies. The ROD maintained the option 
to utilize CANDU reactors for the disposition mission, but conditioned 
such use on the negotiation of a multilateral agreement among Russia, 
Canada, and the U.S. In its ``Decision'' section on page 20, the ROD 
states:

          The Department reserves as an option the potential use of 
        some MOX fuel in CANDU reactors in Canada in the event that a 
        multilateral agreement to deploy this option is negotiated 
        among Russia, Canada, and the United States. DOE will engage in 
        a test and demonstration program for CANDU MOX fuel consistent 
        with ongoing and potential future cooperative efforts with 
        Russia and Canada. The test and demonstration activities could 
        occur at LANL and at sites in Canada, potentially beginning in 
        1997, and will be based on appropriate NEPA review. Fabrication 
        of MOX fuel for CANDU reactors would occur in a DOE facility, 
        as would be true in the case of domestic LWRs. Strict security 
        and safeguards would be employed in the fabrication and 
        transport of MOX fuel to CANDU reactors, as well as domestic 
        reactors. Whether, and the extent to which, the CANDU option is 
        implemented will depend on multinational agreements and the 
        results of the test and demonstration activities.

    DOE has subsequently completed its evaluation of alternatives for 
the proposed siting, construction, and operation of three facilities in 
the U.S. for the disposition of up to 50 metric tons of surplus 
plutonium. In the ROD for the Surplus Plutonium Disposition Final 
Environmental Impact Statement (SPD EIS) released by DOE on January 4, 
2000, DOE selected the Savannah River Site as the location for the 
three facilities. Based on this selection, DOE has authorized the 
implementation of a base contract for MOX fuel fabrication and 
irradiation services, to be conducted by the consortium of Duke 
Engineering & Services, COGEMA Inc., and Stone & Webster (known as 
DCS). The ROD indicated DOE would no longer pursue CANDU reactors for 
the disposition of U.S. surplus plutonium, but that the CANDU option 
was still being considered for the disposition of Russian surplus 
plutonium. On page 28, the ROD states:

        . . . Since the SPD Draft EIS was issued, DOE determined that 
        adequate reactor capacity is available in the United States for 
        disposition of that portion of U.S. surplus plutonium suitable 
        for MOX fuel. Therefore, DOE is no longer actively pursuing the 
        CANDU option. However, the CANDU option is still being 
        considered for the disposition of Russian surplus plutonium. To 
        assist U.S., Russia, and Canada in considering this option the 
        three countries are jointly conducting an experiment, which 
        will involve irradiating MOX fuel pins that have been 
        fabricated from U.S. and Russian surplus weapons plutonium in a 
        Canadian research reactor. This effort involves a one-time 
        shipment of a small quantity of weapons plutonium from the U.S. 
        to Canada.

    Good progress has been made towards the CANDU MOX experiment, known 
as the ``Parallex Project,'' being jointly conducted by the U.S., 
Russia, and Canada. All of the necessary MOX fuel has been fabricated 
in the U.S. at Los Alamos National Laboratory, and transported to 
Canada. A larger quantity of Russian MOX fuel has also been fabricated 
and recently transported to Canada. The experiment in the research 
reactor is set to begin before the end of 2000. The test is an 
important demonstration of tri-lateral cooperation, and demonstrates 
most elements of the infrastructure required to utilize excess weapons 
plutonium as MOX fuel in CANDU reactors. The test will also contribute 
to the database that would eventually qualify weapons-origin MOX fuel 
for use in CANDU reactors.
    An important achievement for the overall plutonium disposition 
program was the signing, on September 1, 2000, of the bilateral 
``Agreement Between the Government of the United States of America and 
the Government of the Russian Federation Concerning the Management and 
Disposition of Plutonium Designated as No Longer Required for Defense 
Purposes and Related Cooperation.'' Under this agreement, each party 
shall seek to begin operation of separate facilities in the U.S. and in 
Russia, not later than December 31, 2007, enabling each party to 
proceed to dispose of plutonium at a rate of no less than two metric 
tons per year, with an obligation on each party to dispose of no less 
than 34 metric tons. The agreement also requires that both parties 
develop a detailed action plan within one year, including efforts from 
other countries as appropriate, to at least double the disposition rate 
(i.e., from two tons to at least four tons per year). It is recognized 
under the agreement that development of near-term and long-term 
international financial or other arrangements will be required to 
support the necessary activities to be undertaken in the Russian 
Federation.
    Based on the above DOE ``Decisions,'' and provisions of the U.S.-
Russia bilateral agreement, it is essential that the CANDU MOX option 
be maintained as an integral part of the potential program for 
disposing of Russian surplus plutonium. In particular, it is necessary 
to send the appropriate signal to the Canadian and Russian governments 
that the U.S. considers the CANDU MOX option to be a potential 
requirement to achieve the Russian obligations under the bilateral 
agreement, including accelerated rate of disposition for Russian-origin 
plutonium.

                        II. THE CANDU MOX OPTION

    Atomic Energy of Canada, Limited (AECL) and Ontario Hydro (now 
Ontario Power Generation, ``OPG'') have worked with DOE throughout the 
PEIS process to support the consideration of the CANDU MOX option B use 
of existing Canadian deuterium (CANDU) reactors B for the plutonium 
disposition mission. Under the original CANDU MOX option, MOX fuel 
bundles (incorporating plutonium from U.S. or Russian dismantled 
warheads) would be fabricated in either U.S. or Russian facilities 
(depending on the origin of the plutonium) and irradiated in CANDU 
reactors operated by OPG. The irradiated fuel bundles would then be 
stored permanently in Canadian secure facilities, subject to full 
International Atomic Energy Agency safeguards and inspections. This 
concept remains unchanged, aside from the current application being 
only the utilization of Russian MOX fuel. The Canadian government has 
made several official statements supporting the CANDU MOX option, and 
U.S.-Canadian cooperation in this area has been the subject of 
conversations and correspondence between President Clinton and Prime 
Minister Chretien.
    Previous technical studies have evaluated three different fuel 
designs that could be used to implement the CANDU MOX option. Appendix 
A summarizes the key parameters from the technical studies, and 
indicates that a single CANDU reactor can consume from 0.8 to 1.5 
metric tons per year of excess Russian plutonium, depending on the 
final MOX fuel design that is selected.\1\ No changes to the CANDU 
reactor plant are required to accommodate implementation of MOX fuel. 
An addition to the planned Russian MOX fuel fabrication facility would 
be required to produce between 28 and 80 metric tons of CANDU MOX fuel 
annually, depending upon the desired rate of plutonium dispositioning. 
Based on AECL and OPG analysis, the CANDU MOX option has the potential 
to serve as a technically reliable, cost efficient and secure component 
of the international plutonium disposition mission.
---------------------------------------------------------------------------
    \1\ There are 22 Canadian CANDU reactors in Canada. The decision to 
consider using MOX fuel in any reactor would be made by the operating 
utility, based primarily on regulatory and commercial considerations.
---------------------------------------------------------------------------

       III. THE CANDU MOX OPTION TO ASSIST THE RUSSIAN FEDERATION

    The CANDU MOX option represents one of the strongest opportunities 
for meaningful collaboration with Russia to achieve symmetrical 
drawdowns of excess weapons-origin plutonium. Russian officials have 
indicated significant interest in pursuing the use of CANDU reactors in 
Canada as one of their preferred options for disposition of their 
dismantled nuclear warheads. It is becoming clear that the initial 
target disposition rate of two metric tons of surplus plutonium per 
year under the U.S.-Russia bilateral agreement, can be met primarily by 
a Russian domestic program; however, involvement of additional 
plutonium disposition capacity outside of Russia may also be required. 
Certainly, to double the rate of plutonium dispositioning, as called 
for under the U.S.-Russia bilateral agreement, will require involvement 
of other reactor systems outside of Russia. The CANDU MOX option is a 
leading candidate to complement the Russian domestic program and to 
provide the additional reactor capacity required to meet the target 
plutonium disposition rates. A doubling of the rate of surplus Russian 
plutonium consumption can be achieved with as few as two CANDU 
reactors. By harmonizing U.S. and Russian efforts toward the common 
goal of reducing nuclear proliferation risks, the CANDU MOX option can 
contribute significantly to the prompt disposition of weapons-origin 
plutonium in a secure manner.

                IV. NEXT STEPS FOR THE CANDU MOX OPTION

A. Parallex Project
    AECL is continuing to work with DOE and Russian officials on a 
project to test U.S. and Russian-origin MOX fuel in a Canadian research 
reactor, referred to as the ``Parallex Project.'' The enabling 
contracts were signed between AECL and the Bochvar Institute in Russia 
and the Los Alamos National Laboratory in the U.S., the two 
institutions which performed the fuel fabrication for the Parallex 
Project. The U.S. and Russian MOX fuel fabrication work has been 
completed, and the MOX fuel bundles from both countries were delivered 
to Canada at the end of 2000. Irradiation of U.S. and Russian MOX fuel 
began on February 3, 2001, and provides a tangible first demonstration 
of parallel U.S. and Russian commitment to the actual disposition of 
nuclear weapons materials.
B. Trilateral Agreement
    DOE's ROD references the development of an international agreement 
between the U.S., Canada, and Russia as the appropriate mechanism to 
move forward with the parallel drawdown of each country's surplus 
weapons-origin plutonium. At the Denver Summit in 1997, the G-7 foreign 
ministers, including the Russian representative, issued a communique 
referencing the CANDU MOX option. At the Birmingham Summit in 1998, 
leaders endorsed efforts to maintain the momentum for parallel drawdown 
of U.S. and Russian surplus weapons-origin plutonium, which is 
patterned after the tripartite cooperation among the U.S., Canada, and 
Russia. The Okinawa G8 summit, in 2000, applauded efforts by the U.S. 
and Russia, while calling for a detailed project plan and arrangements 
for international financing to be developed over the next year, and 
prior to the summit in Genoa.
    The recently concluded U.S.-Russia Agreement on Plutonium 
Disposition is a significant step forward toward the reduction of the 
threat posed by surplus weapons-origin plutonium in Russia. As noted 
above, one of the key outstanding issues that remains to be resolved is 
how to match the need for rapid disposition with available technical 
resources that are supported both politically and financially. 
Therefore, at the same time the U.S. and Russia move forward with the 
implementation of the plutonium disposition bilateral, steps should be 
taken to initiate discussions on trilateral agreements to include 
Canadian support to accelerate the disposition of Russian-origin 
plutonium.
C. Inclusion of the CANDU MOX Option in Ongoing International Planning 
        Efforts
    As plans are developed for increasing the plutonium disposition 
rates in Russia, in accordance with provisions of the U.S.-Russia 
Agreement, the CANDU MOX option should be further evaluated, taking 
into consideration the environmental, technical, and economic factors. 
At the same time, the U.S. government should coordinate its efforts 
with its Canadian and Russian counterparts in order to ensure that 
efforts toward prompt and secure disposition of plutonium are conducted 
in an efficient and timely fashion. Specifically, the CANDU MOX option 
should be integrated fully into the international planning for the 
construction and operation of a MOX fuel fabrication facility in 
Russia, and the related procurement of MOX fuel services.

                               appendix a

                          Summary of CANDU Weapons-Derived Plutonium Management Options
----------------------------------------------------------------------------------------------------------------
                                                                               CANDU MOX Fuel Design
                                                                 -----------------------------------------------
                                                                     37-el MOX       37-el MOX       43-el MOX
                                                                      (1994)          (1996)          (1997)
----------------------------------------------------------------------------------------------------------------
Pu-Disposition Rate (metric tons Pu/year/reactor)...............         1.0             1.5             0.8
Fabrication Plant Capacity (metric tons MOX/year)...............          80              78              28
Net Pu-Destruction Efficiency (%)...............................          34              23              46
Net Fissile Pu-Destruction Efficiency (%).......................          58              41              70
Pu-Disposition Rate (metric tons Pu/GWe.year)...................        1.56            2.22            1.23
Energy Produced (GWe.year/metric ton Pu)........................        0.64            0.45            0.81
----------------------------------------------------------------------------------------------------------------


    Senator Biden. Thank you, Mr. Chairman.
    I, too, will ask consent for my statement to be placed in 
the record.
    And I begin by congratulating you, Mr. Leader. I not only 
thought you were the best leader, and I have said it publicly, 
but now that you are out of the Senate, it does not hurt your 
reputation any more that in the 28 years that I have been here, 
I have found you one of the finest people I have ever served 
with.
    I just warn you, you are going to have a rigorous hearing 
for U.S. Ambassador to Japan; it may take all of about 12 
seconds. But I congratulate you on being willing to take on 
that responsibility. I am truly appreciative.
    Lloyd Cutler is one of the most well-spoken and 
knowledgeable men in this town whom I have ever encountered 
over the last quarter century on matters relating to nuclear 
weapons, proliferation, and arms control. It is an honor to 
have you here.
    I think your report is probably one of the most significant 
and important reports that has been submitted to this committee 
in well over a decade. Without any further elaboration, because 
I want to get to questions and hear your statements, I 
sincerely hope it is well read in the administration, because I 
think you are right on target, and I look forward to going into 
some detail.
    Also, Mr. Chairman, we are also fortunate to have as a 
second panel three very distinguished Americans who have been 
before this committee many times, and I appreciate their being 
here, but we will get to that when we get to them.
    So welcome, gentlemen, and thank you very much.
    [The prepared statement of Senator Biden follows:]

           Prepared Statement of Senator Joseph R. Biden, Jr.

    Mr. Chairman, I have long admired the hard work you, Sam Nunn, and 
Pete Domenici invested in laying the groundwork for the various U.S. 
initiatives to help dismantle nuclear weapons and address the ``brain 
drain'' problem in the former Soviet Union. This set of cooperative 
efforts with Russia is probably one of the most cost-effective 
investments the United States has ever made in helping protect our 
national security.
    Mr. Chairman, we are holding this hearing at a rather opportune 
moment. I have been greatly alarmed by recent reports that the 
administration is prepared to propose a full range of spending cuts in 
the Energy Department's non-proliferation programs in Russia. If these 
reports are true, they would sharply contradict statements of support 
during the campaign by President Bush for increased funding for the 
Nunn-Lugar-Domenici programs.
    I strongly urge the administration to conduct a thorough review of 
these programs before choosing to make any cuts. They would be wise to 
consult the recent findings of the bipartisan task force headed up by 
Howard Baker and Lloyd Cutler, our first panel of witnesses.
    This task force makes a strong case that unsecured nuclear weapons 
and nuclear-grade material in Russia are the ``greatest unmet threat'' 
facing the United States today. The task force concludes that the 
President, instead of cutting these programs, should be prepared to 
expand significantly their scope and funding over the next decade in 
order to secure and account for all nuclear weapons-grade material in 
Russia.
    Hence, I look forward to hearing what Mr. Baker and Mr. Cutler have 
to say and I also eagerly await the views of our second panel of 
distinguished witnesses, Ron Lehman and Graham Allison.

    Senator Lugar. I would like to submit for the record a very 
strong statement submitted by Senator Pete Domenici, our 
colleague and Chairman of the Energy and Water Subcommittee of 
the Appropriations Committee. He has much interest in the work 
of the Commission, and I quote from Senator Domenici. ``The 
report envisions an eight-to-ten-year timeframe, at a cost of 
$30 billion. In my view, the national security benefits to the 
United States citizens from securing 80,000 nuclear weapons 
worth of fissile materials is a good investment. We have a 
simple choice: We can either spend the money to reduce the 
threat or spend more money in the future to defend ourselves. I 
am a strong believer that threat reduction is the first best 
approach in this case,'' end of quote from our colleague, Pete 
Domenici.
    [The prepared statement and a news release of Senator 
Domenici follow:]

             Prepared Statement of Senator Pete V. Domenici

    Mr. Chairman, I thank you for the opportunity to offer my remarks 
at today's hearing. As you and today's panelists know, the report under 
discussion--and the general issue of our cooperative threat reduction 
efforts--is critically important to U.S. national security. I thank 
Senator Howard Baker, Mr. Cutler and our other witnesses for taking 
time out to discuss in detail the report's findings and 
recommendations.
    I would like to begin with a quote from President Bush's address at 
the Joint Session of Congress earlier this year. He stated:
    ``As we transform our military, we can discard Cold War relics and 
reduce our own nuclear forces to reflect today's needs.''
    I heartily agree with the objective, but I fear I must take issue 
with the proposed implementation.
    We cannot unilaterally downsize our own nuclear arsenal without 
some assurance that Russia's rebuild capacity is in line with their 
arms control commitments. Additionally, if we do not adequately address 
``the most urgent unmet national security threat for the United States 
today,'' we should have no confidence that changes to our nuclear 
posture will account for the potential proliferation hazard of Russian 
fissile materials and destitute weapons experts.
    U.S. nonproliferation goals cannot be achieved through unilateral 
action. This particular proliferation concern must be addressed through 
cooperation with Russia. No other option exists.
    Allow me to quote also Condoleeza Rice's accurate assessment of the 
situation:
    ``American security is threatened less by Russia's strength than by 
its weakness and incoherence. This suggests immediate attention to the 
safety and security of Moscow's nuclear forces and stockpile.''
    Dr. Rice is just one of many reaching a similar conclusion 
regarding this particular threat. Our witnesses today and their 
bipartisan commission also concluded that the U.S. response is not 
commensurate to the threat.
    I want to touch on just a few of your recommendations, because I 
believe these are essential to a sufficient and efficient response. 
First, the report discusses the dire need for a White House-level 
nonproliferation czar. Second, you also recommend that the President 
develop a strategic plan to address the fissile materials and human 
capital aspect of the proliferation threat. I strongly agree.
    We do not have a coherent, integrated agenda. Overlaps and 
shortfalls exist. A strategic plan should address the scope of each 
specific problem, identify means to reduce the threat, and offer a 
concrete time schedule to reach a definite end goal. Further, we have 
no one person who can view the entire spectrum and identify the gaps, 
remedy turf battles and bring the necessary coordination to get the job 
done efficiently and quickly. I and Senator Lugar have repeatedly urged 
the creation and appointment of a nonproliferation czar and Congress 
has advanced this issue through legislation.
    These are the first two concrete steps toward streamlining and 
enhancing our efforts with Russia. While I understand that the Bush 
Administration is formulating a strategic plan, I have not heard any 
discussion of attaining greater coherence in these programs at the 
White House level. At the same time, the indication would be that the 
Administration's strategic plan intends to take an axe to some of the 
key programs currently involved in addressing the threat.
    The cuts proposed amount to a new strategic direction without any 
involvement of Congress.
    The report envisions an 8-10 year time-frame at a cost of $30 
billion. In my view, the national security benefits to U.S. citizens 
from securing 80,000 nuclear weapons worth of fissile materials is a 
good investment.
    We have a very simple choice: we can either spend money to reduce 
the threat or spend more money in the future to defend ourselves. I am 
a strong believer that threat reduction is the first-best approach in 
this case. Inaction will only drive up costs to defend ourselves 
against unknowables that we could have squelched had we had greater 
foresight.
    I believe this recent report reiterates this point clearly and 
offers several concrete policy recommendations for tackling this 
challenge. I look forward to working with the new Administration to 
ensure that a decade from now we have protected U.S. citizens from this 
proliferation threat and secured a more peaceful future.
    I want to conclude with one additional thought. One of the lessons 
learned over the past decade of cooperative threat reduction is that 
efforts in our mutual interest have continued almost without a hiccup 
regardless of our disagreements with Russia at a different level. In 
other words, we have avoided linkage between these efforts and other 
concerns about Russia's activities that we might have at any given 
time; Russia has done the same. We both have benefitted.
    It is not in our national interest to link cooperative threat 
reduction to any specific disagreement over Russian policy or 
activities. If we wager these programs due to our discontent in some 
other arena, we risk the following: Russia will continue to pursue 
their own security interest, and we will lose the security benefits we 
reap from these efforts. It's a lose-lose for us.
    I thank the members of the panel for being here to testify today. I 
thank you and all the members involved in writing this report for your 
prolonged and serious effort in addressing this most fundamental and 
difficult challenge.
    Thank you Mr. Chairman.

                                 ______
                                 

                     [News Release--March 28, 2001]

       Domenici: U.S. Should Not Act Unilaterally or Take Axe to 
                 Nonproliferation Programs With Russia

    Senator Issues Statement for Foreign Relations Committee Hearing

    Washington, DC.--U.S. Senator Pete Domenici today advised that 
long-term U.S. security needs would be better served by not acting 
unilaterally and taking an axe to cooperative nonproliferation programs 
with Russia.
    Domenici addressed the nonproliferation issue in a statement to the 
Senate Foreign Relations Committee which conducted a hearing on 
Department of Energy Nonproliferation Programs with Russia. The hearing 
specifically addressed a recent report issued by former Senator Howard 
Baker and Lloyd Cutler, co-chairs of the Russia Task Force of the 
Secretary of Energy Advisory Board.
    The Baker-Cutler report recommended the naming of a White House-
level ``czar'' to oversee U.S. nonproliferation programs with Russia, 
and the development of an overall strategic plan to better coordinate 
these programs. Both are recommendations long advocated by Domenici, 
chairman of the Senate Energy and Water Development Appropriations 
Subcommittee that funds these projects. Overall, the report envisions 
an eight to 10-year time-frame at a cost of $30 billion.
    ``These are the first two concrete steps toward streamlining and 
enhancing our efforts with Russia,'' Domenici said. ``While the Bush 
administration formulates a strategic plan, I have not heard any 
discussion of attaining greater coherence in these programs at the 
White House level. At the same time, the indication would be that the 
administration's strategic plan intends to take an axe to some of the 
key programs currently involved in addressing the threat.''
    Domenici noted that the proposed cuts amount to a new strategic 
direction without any involvement of Congress. Domenici, chairman of 
the Senate Budget Committee, will this week introduce the FY2002 budget 
resolution. While the resolution will keep President Bush's 
recommendation to provide a 4 percent increase in federal spending, 
Domenici said Congress may set different priorities for federal 
investment--including those related to DOE nonproliferation activities.
    ``In my view, the national security benefits to U.S. citizens from 
securing 80,000 nuclear weapons worth of fissile materials is a good 
investment,'' Domenici said. ``We have a very simple choice. We can 
either spend money to reduce the threat or spend more money in the 
future to defend ourselves. I am a strong believer that threat 
reduction is the first and best approach in this case. Inaction will 
only drive up costs to defend ourselves against unknowables that we 
could have squelched had we had greater foresight.''
    ``We cannot unilaterally downsize our own nuclear arsenal without 
some assurance that Russia's capacity to rebuild is in line with their 
arms control commitments. Additionally, if we do not adequately address 
`the most urgent unmet national security threat for the United States 
today,' we should have no confidence that changes to our nuclear 
posture will account for the potential proliferation hazard of Russian 
fissile materials and destitute weapons experts,'' Domenici said. 
``U.S. nonproliferation goals cannot be achieved through unilateral 
action. This particular proliferation concern must be addressed through 
cooperation with Russia. No other option exists.''

    Senator Lugar. I am very privileged at this point to 
recognize Senator Baker for his testimony.

 STATEMENT OF HON. HOWARD H. BAKER, JR., CO-CHAIR, RUSSIA TASK 
FORCE, SECRETARY OF ENERGY ADVISORY BOARD, FORMER U.S. SENATOR 
  FROM TENNESSEE; BAKER, DONELSON, BEARMAN & CALDWELL, P.C., 
                         WASHINGTON, DC

    Senator Baker. Mr. Chairman, thank you very much.
    Senator Biden, thank you for permitting me to appear today 
and testify.
    My friend, Lloyd Cutler, and I have worked long and hard on 
this report. We truly hope it is helpful to the committee, and 
we hope it is helpful to the administrative and executive 
department of the Government as well.
    I ask unanimous consent, Mr. Chairman, that my 16-page 
statement be included in the record.
    Senator Lugar. So ordered.
    Senator Baker. In the interest of time, I will try to 
summarize the major points.
    Senator Lugar. Very good.
    Senator Baker. First of all, in keeping with the tenor of 
my friend Pete Domenici's statement, I have often said, and 
will repeat now, that there is a special responsibility in my 
view on the part of the United States and Russia to deal with 
this problem, and to do so promptly and effectively.
    And that is the problem of controlling and preventing the 
proliferation of weapons of mass destruction, because after 
all, Russia and the United States invented the Nuclear Age. It 
was a result of American research and Russian development that 
we entered this age of destruction. It has fallen now to be our 
responsibility to see whether we can survive in that Nuclear 
Age. We invented it; now we have to see whether we can live in 
it or not.
    The most crucial issue really is how----
    Senator Lugar. Mr. Baker, I apologize for interrupting, but 
I can tell that they cannot hear you in the back.
    Senator Baker. This is probably one of the few times in my 
career in this building where people have not been able to hear 
me.
    It is usually the other way around.
    I thank you, Senator. Shall I start over?
    Senator Lugar. No. No.
    Senator Baker. OK. But it is a special responsibility, it 
seems to me, of the United States and Russia to recognize that 
they are the creators of the Nuclear Age, at least in the 
development of the Nuclear Age; and, therefore, I think we have 
a special set of responsibilities to try to minimize the risk 
to civilization as a result of this great stock and store of 
nuclear weapons and nuclear material that exists, not only in 
Russia, but in this country, and other parts of the world.
    Russia, as I say in my statement, has over 40,000 nuclear 
weapons, over 1,000 metric tons of nuclear material, vast 
quantities of chemical and biological weapons and materials, 
and thousands of missiles. The cold war arsenal is spread 
across 11 time zones, but it lacks the infrastructure of the 
cold war.
    My good friend, Bob Strauss--and he is my good friend--was 
designated by President Bush to be Ambassador to, first, the 
Soviet Union and then Russia. In the spirit of that friendship 
and in jest, I wrote him after the dissolution of the Soviet 
Union and said, ``Bob, in my time, I have known a lot of former 
Ambassadors, but you're the first Ambassador to a former 
country that I ever knew.''
    Indeed, that is true. The world has changed. Russia has 
changed. The balance of power between our countries has 
changed. The dangers of the Nuclear Age have changed, because 
we do not now have the discipline, as terrible as it was, of 
mutually assured destruction, and the discipline that was 
imposed by only two super powers in the world.
    But the materials are still there, and the weapons are 
still there. And one of the prime questions addressed by this 
Commission, which I was proud to serve on with Lloyd Cutler, 
was how well protected that material is in Russia, how 
conscious the Russians were of the problems involved, how 
willing they were to undertake the protective measures that are 
necessary to see that it is not diverted, that it is not in the 
hands of other nations, or non-national entities as weapons of 
mass destruction.
    In summary, Mr. Chairman and Senator Biden, I found these 
things: I found the Russians are aware of the problem. I found, 
and I believe our Commission agrees, that they lack the 
resources to deal with the problem efficiently and adequately.
    In some cases, the security and storage of nuclear 
material, and even nuclear weapons, is so primitive that the 
address by the United States and other powers of the world to 
try to reduce the risk simply consisted of providing padlocks; 
in other cases, to provide warm clothing so that sentries could 
walk their posts, or would walk their posts, in times of 
excruciating cold winter Russian weather.
    There are many, many other aspects of the program that have 
been undertaken, and there are many branches to our efforts to 
try to control the proliferation of weapons from Russia and 
elsewhere.
    I commend the Department of Energy, this, and prior 
Secretaries of Energy, in recognizing this problem. I commend 
the Congress for creating a unified structure, with General 
Gordon, to try to oversee this effort. I believe that the 
Congress is in a position to add materially to the safety of 
the world by further addressing the question of storage and 
protection of nuclear material.
    We cannot bear the burden alone in this country. It is 
absolutely essential that other nations of the world recognize 
that they, too, are at risk, and that they must contribute as 
well to the improvement of the safety, security, and storage of 
nuclear material. I believe that can happen, if the United 
States takes the lead.
    It is obvious and equally important that Russia contribute, 
to the extent of their ability, to the improvement of the 
security of these weapons, and that they contribute as well to 
pre-access and transparency, so that we and the world community 
can know exactly what we are dealing with.
    We cannot engage in a program of pouring money into a 
bottomless bucket. We need to know how many weapons there are, 
how much material there is. We think we know, but we need to be 
assured, and the world community needs to be assured that we 
know what we are dealing with.
    But there is an old saying in my state that you cannot do 
nothing, and while our approach to these problems is perhaps 
imperfect and, indeed, they are always imperfect, that is not 
an excuse for inaction.
    So it is my hope that this committee, the Congress, will 
see the urgency in this issue that I see and the committee 
sees. It is my hope that the administrative and executive 
departments of the Government will recognize, as we think we 
recognize, the importance and relevance of an early address to 
these issues.
    This Commission is not trying to substitute our judgment on 
priorities suspending for the Congress, or for the executive 
department, but what we are doing is trying to pinpoint the 
gravity of this risk and to say that time is not on our side, 
and that we must address it carefully, fully, enthusiastically, 
and in full cooperation with the Russian Government, the 
Russian people, and the community of nations around the world.
    I thank you, Mr. Chairman.
    Senator Lugar. Thank you very much, Senator Baker.
    [The prepared statement of Senator Baker follows:]

               Prepared Statement of Howard H. Baker, Jr.

    Thank you for the opportunity to appear before this committee today 
to discuss our recent report on the Russian Nonproliferation Programs 
of the Department of Energy. I recall that I served on this committee 
for 14 of the 18 years I served in the Senate. It is interesting to 
observe how much different it seems on this side of the table from 
where I used to sit. I am pleased to be here with Lloyd Cutler for whom 
I hold such high regard; we have worked together on many projects over 
the years and worked closely on this Russian Task Force report. Thank 
you for your kind words welcoming me to the committee today.
    Since the breakup of the Soviet Union, we have been witnessing the 
dissolution of an empire having over 40,000 nuclear weapons, over a 
thousand metric tons of nuclear materials, vast quantities of chemical 
and biological weapons materials, and thousands of missiles. This cold 
war arsenal is spread across 11 time zones, but lacks the cold war 
infrastructure that provided the control and financing necessary to 
assure that chains of command remain intact and nuclear weapons and 
materials remain securely beyond the reach of terrorists and weapons-
proliferating states. This problem is further compounded by the 
existence of thousands of weapons scientists who, not always having the 
resources necessary to adequately care for their families, may be 
tempted to sell their expertise to countries of proliferation concern.
    In order to assess the Department of Energy's part of current U.S. 
efforts to deal with this critical situation, in February, 2000 former 
Secretary of Energy Bill Richardson asked former White House Counsel 
Lloyd Cutler and me to co-chair a bipartisan Task Force to review and 
assess DOE's Nonproliferation Programs in Russia and to make 
recommendations for their improvement. after nine months of careful 
examination of current DOE programs and review of related 
nonproliferation policies and programs of the U.S. Government, the Task 
Force reached three principal conclusions and formulated one major 
recommendation.
    The most urgent unmet national security threat to the United States 
today is the danger that weapons of mass destruction or weapons-usable 
material in Russia could be stolen and sold to terrorists or hostile 
nation states, and used against American troops abroad or our citizens 
at home. This threat is a clear and present danger to the international 
community as well as to American lives and liberties.
    Current nonproliferation programs in the Department of Energy, the 
Department of Defense, and related agencies have achieved impressive 
results so far, but their limited mandate and funding fall short of 
what is required to address adequately the threat.
    Our Task Force commends current and past Secretaries of Energy and 
General Gordon, the new Administrator of the National Nuclear Security 
Administration, for their dedication, commitment and hard work in 
seeking to address this issue. The cooperation of the Russian 
Federation has also been a critical and significant factor in the work 
carried out to date.
    However, our Task Force concludes that the current budget levels 
are inadequate and the current management of our Government's response 
is too diffuse. The Task Force believes that the existing scope and 
management of the U.S. programs addressing this threat leave an 
unacceptable risk of failure and the potential for catastrophic 
consequences.
    President Bush and the leaders of the Congress face the urgent 
foreign policy challenge of devising an enhanced national security 
program proportionate to the threat.
    An enhanced national security response should include: a net 
assessment of the threat; a statement of a clear, achievable mission; 
the development of a strategy with specific goals and measurable 
objectives; a more centralized command of the financial and human 
resources required to do the job; and an identification of criteria for 
measuring the benefits for Russia, the United States, and the entire 
world.
    Our Task Force offers one major recommendation to the President and 
the Congress. The President, in consultation with Congress and in 
cooperation with the Russian Federation, should quickly formulate a 
strategic plan to secure and/or neutralize in the next 8 to 10 years 
all nuclear weapons-usable material located in Russia and to prevent 
the outflow from Russia of scientific expertise that could be used for 
nuclear or other weapons of mass destruction. Accomplishment of this 
task will be regarded by future generations as one of the greatest 
contributions that the United States and Russia can make to their own 
long-term security and that of the entire world.
    While emphasizing that enhanced efforts are needed from the U.S., 
the Task Force underscores that enhanced efforts are also required from 
Russia. Ultimately, Russia will be responsible for securing its 
remaining nuclear arsenal. If this program is conceived in full 
cooperation with the Russian Federation, is adequately financed, and is 
implemented as part of a growing, open and transparent partnership, the 
Task Force believes that Russia should be ready to take over any 
remaining work at the end of the 8 to 10 year period. If the Russian 
Government is not prepared for such a partnership, then we believe full 
success will not be achieved.
    Bearing this in mind, the Task Force report outlines a suggested 
national security program to secure and/or neutralize all nuclear 
weapons-usable material located in Russia and to prevent the outflow 
from Russia of scientific expertise that could be used for nuclear or 
other weapons of mass destruction. We believe this program could be 
carried out for less than 1 percent of the U.S. defense budget, 
(approximately up to $30 billion over the next 8 to 10 years. The 
Russian Government would, of course, be expected to make a significant 
contribution commensurate with its own financial ability. The national 
security benefits to U.S. citizens from securing and eliminating the 
equivalent of more than 80,000 nuclear weapons and potential nuclear 
weapons would constitute the highest return on investment in any 
current U.S. national security and defense program. President Bush 
should press other major powers such as the European Union, Japan and 
Canada to assume a fair share of the costs of these efforts that will 
enhance the security of these countries as much as that of the U.S. and 
Russia. Contributions from other countries could significantly reduce 
U.S. costs.
            assessing current doe nonproliferation programs
    The Task Force had the benefit of briefings by both government and 
non-government experts and reviews of written materials. Members of the 
Task Force also visited seven sites in Russia in July 2000, reviewing 
DOE programs and meeting with 13 organizations over the course of a 
week. Its members were able to visit only a few sites of the vast 
nuclear complex. those sites may have been in better economic and 
physical condition than others in the complex. Nonetheless, the dire 
state of those sites visited was cause for grave concern.
    The Task Force applauds the accomplishments of the current DOE 
programs and the related programs of other U.S. Government agencies. 
The Task Force in particular commends the dedication to duty exhibited 
by the hundreds of DOE and national lab employees involved in these 
programs. The Task Force was also impressed by the high quality of 
cooperation demonstrated by most of DOE's Russian counterparts during 
the course of its visit to Russia. Both Minatom and the Russian Navy 
provided access to all of the facilities requested, in some cases 
showing Task Force members sites that they had not expected to be 
allowed to visit. Despite difficulties that have emerged in the overall 
implementation of the DOE programs, the Task Force found Russia's 
cooperation to be a significant and positive factor. The United States 
and Soviet Union competed in creating the nuclear age; now the U.S. and 
Russia are cooperating to dismantle it. The Task Force believes that it 
is far better for the United States to be on the inside working 
together with Russia than on the outside with no capability to affect 
Russia's actions.
    However, the Task Force finds very disturbing the ongoing Russian 
trade with Iran in dual-use nuclear technology and missile technology 
and Russia's apparent intention to supply new conventional weapons 
systems to Iran. Despite the fact that these issues have been raised 
with Russia at the highest levels of both governments, the problem has 
not yet been resolved. The Task Force views the failure to resolve 
these issues as very serious and believes the lack of satisfactory 
resolution will increase the difficulties inherent in continued 
cooperation with Russia and in carrying out the Task Force's 
recommendations. While the Task Force affirms that the DOE 
nonproliferation programs are unequivocally in the U.S. national 
security interest, the Task Force is particularly concerned that if 
Russian cooperation with Iran continues in a way that compromises 
nuclear nonproliferation norms, it will inevitably have a major adverse 
effect on continued cooperation in a wide range of other ongoing 
nonproliferation programs. Among other consequences, there will be 
little support in Congress and the Executive Branch for the major new 
initiatives the Task Force is recommending.
    Unquestionably, much has been accomplished by the array of programs 
now being operated by DOE and other U.S. Government agencies. 
Nonetheless, the Task Force believes it is time for the U.S. Government 
to perform a risk assessment based on input from all relevant agencies 
to estimate the total magnitude of the threat posed to U.S. national 
security. The Task Force also believes there is a strong need to create 
greater synergies among the existing nonproliferation programs, hence 
its call for government-wide coordination of the current programs and 
direct White House involvement.
                the task force specifically finds . . .
    By and large, current DOE programs are having a significant and 
positive effect. The strategic plan recommended by the Task Force 
should review the needs of each of these programs and, where 
appropriate, provide for a substantial increase in funding. Expansions 
of program scope and increases in funding, however, must take careful 
account of the pace at which funds can usefully be expended in each 
individual program.
    The strategic plan and the associated budgets should identify 
specific goals and measurable objectives for each program, as well as 
provide criteria for success and an exit strategy. These should be 
factored into the 5-year budget plan currently being developed for the 
National Nuclear Security Administration.
    A major obstacle to further expansion and success of current 
programs is the continuation of differences between the U.S. and Russia 
over transparency and access. As a condition for a substantially 
expanded program, the U.S. and Russia should agree at a high level on 
what degree of transparency is needed to assure that U.S.-funded 
activity has measurable impacts on the program objectives and that U.S. 
taxpayer dollars are being spent as intended.
    Given the gravity of the existing situation and the nature of the 
challenge before us, it is imperative that the President establish a 
high-level leadership position in the White House with responsibility 
for policy and budget coordination for threat reduction and 
nonproliferation programs across the U.S. Government. The President 
should appoint a person of stature who commands the respect and 
attention of relevant cabinet officers and congressional leaders to 
lead this program.
    The U.S. administration of these programs should seek to eliminate 
any unnecessary and overly restrictive controls that hamper swift and 
efficient action. To overcome potential bureaucratic impediments that 
often arise from ``business as usual'' practices within the Russian and 
U.S. bureaucracies, DOE and related agencies should take practical 
steps, including further enlargement of the DOE team working with the 
U.S. Ambassador in Moscow, to ensure the most efficient on-the-ground 
implementation of the programs in Russia.
    It is imperative to mobilize the sustained interest and concern of 
the Congress. The Task Force urges the Congress to consider the 
creation of a joint committee on weapons of mass destruction, nuclear 
safety and nonproliferation, modeled after the former Joint Committee 
on Atomic Energy. Creation of such a committee would ensure that the 
issues receive adequate high-level attention and that Member and staff 
expertise is developed and preserved.
    Thank you again for the opportunity to speak with you today on this 
very important matter.

    Senator Lugar. Mr. Cutler, you have testimony for us.

    STATEMENT OF HON. LLOYD N. CUTLER, CO-CHAIR, RUSSIA TASK 
 FORCE, SECRETARY OF ENERGY ADVISORY BOARD, FORMER WHITE HOUSE 
      COUNSEL; WILMER, CUTLER & PICKERING, WASHINGTON, DC

    Mr. Cutler. Senator Lugar, I am very pleased to be here.
    We were a unanimous commission, and a non-partisan 
commission, and Senator Baker's statement is essentially my 
statement. I agree 100 percent with it.
    You have noticed, and I believe you have already mentioned, 
that the Commission included, in addition to Senator Baker, 
several of your other former colleagues, including Alan 
Simpson, Sam Nunn, and Jim McClure.
    I think the best way to move forward would be simply to say 
that I was delighted to work again with Howard Baker. I think 
Japan is very fortunate to receive as our Ambassador one of the 
true citizen statesmen of our time, and a person who, 
unfortunately, will no longer be able to concentrate on this 
problem, except perhaps to persuade the Japanese to contribute 
their fair share.
    Senator Lugar. A very good suggestion.
    Mr. Cutler. Thank you, sir.
    Senator Lugar. Let me commence the question period for our 
witnesses.
    First of all, I appreciate your outline, Senator Baker, of 
the tasks ahead of us, and the fact that we must do something, 
and we must do it effectively.
    Essentially, some time ago, just after the breakup of the 
Soviet Union, former Senator Sam Nunn and I offered legislation 
to assist in the elimination of weapons of mass destruction in 
the former Soviet Union. Senator Biden was a part of a 
bipartisan group that came together to support our effort that 
came to be known as the Nunn-Lugar Act.
    Our efforts where augmented by Senator Domenici's efforts 
with programs at the Department of Energy. His efforts were 
crucial, in providing security for thousands of tons of weapons 
materials in which security was either non-existent or very 
difficult despite tremendous progress much remains to be done.
    It has been my experience, even as recently as December of 
last year, when I visited weapons and material storage sites in 
Russia, that there are severe security problems, which require 
our attention.
    One of the criticisms put forth by some is the thought that 
money is fungible. In other words, clearly, there are security 
problems for the Russians. They acknowledge that. The Russians 
understand their citizens are at risk from proliferation of 
these materials, whether they are nuclear, or chemical, or 
biological.
    I believe the moneys we have spent to hire American 
contractors to do this important work in the former Soviet 
Union, through the Pentagon or Departments of Energy or State, 
have been well accounted for, and have accomplished a lot.
    But can you offer some advice as to how we might respond to 
these arguments when we visit with our colleagues in the Senate 
and the House? If we were to spend substantially more money to 
secure these materials from leaking out of Russia to other 
countries, or worse, to rogue states what should we say with 
regard to the fungibility argument?
    We are in a position to make a difference, but at the same 
time, some would say, ``Not a penny more for this, because you 
simply are aiding and abetting modernization of weapons, 
sometimes weapons of mass destruction in newer forms.''
    Senator Baker. Well, let me try to answer, if I may, Mr. 
Chairman. I said earlier on in my remarks that the only thing 
we cannot do is nothing.
    While there are all sorts of arguments about why our 
programs are not totally cost-efficient in Russia, while it may 
be essentially unfair that we bear such a disproportionate 
share of the financial burden, while it may be true that in 
some cases they are of questionable efficiency, it is also true 
that if we do not do it, no one will, not even the Russians, 
partly because they do not have the resources, and partly they 
do not have, I think, the same sense of danger that we have.
    If I were arguing this matter on the floor of the Senate of 
the United States on a matter of appropriations, I would simply 
say that there are not any issues of national defense that are 
more important, in my view, short of ultimate survival of the 
nation, than seeing that we reduce the threat of proliferation. 
And the greatest threat of proliferation is not the development 
of new sources, but the protection and safeguarding of existing 
sources of nuclear material.
    I think we also would argue that we have to have a program 
well developed and executed in order to argue convincingly to 
other nations that they have a stake in this process, and that 
there needs to be further effort to engage other nations in not 
only the financing of these programs, but in their execution.
    I would like to see other European or Asian nations 
involved in visits to Russia to see for themselves what we are 
talking about.
    I guess if I were on the floor of the Senate of the United 
States--and I have not been there for a long time--I would make 
it clear that I am not trying to challenge the financial 
priorities of the administration, but rather pointing out that 
this is a competitor of great importance for available 
resources, and acknowledge that the Congress, with cooperation 
of the executive department, must order those priorities, but 
then try to underscore that there are few priorities on 
national defense that are more important than the avoidance of 
a nuclear catastrophe.
    I probably would take longer time than the Chair would 
grant to me under the circumstances, but that is probably what 
I would say.
    Senator Lugar. Senator Biden, I would ask for extended 
time.
    Senator Biden. Oh, please. Go ahead.
    Senator Lugar. I will ask one more question.
    Senator Biden. No. Take your time.
    Senator Lugar. Let me say that the Task Force recommended a 
higher level leadership position in the White House responsible 
for nonproliferation programs and policy.
    In 1996, the Nunn-Lugar-Domenici legislation called for a 
nonproliferation coordinator at the White House. There was 
great resistance among the bureaucracies involved, quite apart 
from the National Security Council and so forth.
    Now, they have begun to move in that direction. I will not 
try to outline the whole process, but I think that you have 
highlighted very well in your report the need to properly 
coordinate the efforts of multiple agencies on what is 
considered the number one threat facing our country. This is a 
very, very vital mission, we can't afford overlaps and gaps in 
our efforts.
    At some point, the President probably is best served if 
there is somebody close by who tries to inform him of all that 
is being done and what type of leadership structure is 
necessary. But can you outline this a bit more, because I think 
it is such an important part of our response to these threats?
    Senator Baker. I can, Mr. Chairman. Let me first say that I 
am a graduate of the old Joint Committee on Atomic Energy in 
the Congress, and to say parenthetically that I thought the 
whole nuclear program in Defense, and then in civilian 
purposes, lost focus after the Joint Committee on Atomic Energy 
was disbanded.
    But in that same vein, I do think that there needs to be a 
unifying theme, not only in Congress, but also at the White 
House, and throughout the executive department.
    I have had the privilege of serving here and also serving a 
President at the White House, and I can say firsthand from my 
experience that unless somebody focuses on a particular issue 
with energy and enthusiasm, it tends to get lost in the 
shadows.
    And I will repeat, I guess, for the third time now, I do 
not think there is any issue really that is more important than 
making sure we do not annihilate ourselves in a nuclear 
accident of some sort.
    So I would favor, and this report, indeed, recommends that 
there be a coordinating person of high rank who would have the 
ear of the President and have the respect of the Cabinet and 
other agencies of government in seeing that this issue does not 
get lost in the shadows, and that it remains in the forefront 
of the concern of the President and the White House.
    Senator Lugar. Did you take testimony during your hearings 
or deliberations from American officials who are involved in 
these programs or from Russians with who we cooperate? Can you 
outline some of the sources of information that you utilized?
    Mr. Cutler. We did, Senator Lugar. We interviewed all of 
the officials of the DOE who were conducting various programs. 
We heard from all the NGO's who were interested in the problem 
of weapons of mass destruction, including nuclear weapons.
    We made an extended trip to Russia, involving about ten to 
twelve members of our Commission, and we split up into three or 
four task forces within Russia, visiting some of the nuclear 
cities, visiting the submarine bases, where the old nuclear-
powered submarines are being dismantled. We went to the 
Kurchatov Institute, right outside of Moscow, and I think we 
heard from everybody.
    I think it is very important to remember, though, in 
connection with your question about someone in the White House 
giving serious attention to this problem, that there are turf 
wars within the U.S. Government, and within the U.S. 
bureaucracies, that need attention just as much as the many 
problems that are on our agenda with the Russian Government at 
this time.
    And what we need, we think it is trite to say, but like a 
drug enforcement czar--we did not use the word ``czar.'' We do 
not even say who it should be, but to give you a prototype, if 
we had a Senator Baker, someone with his gravitas in the White 
House concentrating on this program, it would be of enormous 
benefit.
    Senator Baker. Mr. Chairman, every President is entitled to 
choose his own organizational structure within the guidelines 
of the statute of the Constitution, but I do not--I totally 
agree with what Lloyd Cutler has said, and I commend it to this 
President and the administration, that there be an enhanced 
focus on this issue, that there be an enhanced organizational 
structure to see that it remains utmost in the scheme of 
concerns for our national security.
    Maybe it should be a portfolio of the chairman of the NSC. 
The chairman of the NSC has a hundred other things competing 
for his or her attention.
    I do think that there needs to be one person whose 
portfolio is exclusively this concern, and that may be an 
existing officer in the White House, an existing position, but 
it ought to be clearly recognized--it ought to be respected 
throughout the government, and recognized as the program of the 
President of the United States.
    Senator Lugar. This concern--I think you are defining it as 
really a concern about the leftovers of the cold war. But you 
define it as ``the existing threat,'' as opposed to all of the 
other threats. This is, in fact, the most important threat that 
our security has.
    Senator Baker. Could I add one other point to that, Mr. 
Chairman? I do not mean to be unduly philosophical or 
psychological about it, but it really boggles my mind that 
there could be 40,000 nuclear weapons, or maybe 80,000 in the 
former Soviet Union, poorly controlled and poorly stored, and 
that the world is not in a near state of hysteria about the 
danger, but it is a function of the human mind that after you 
live with something for a while, you sort of get used to it.
    I guess if we have a single purpose for our Commission, Mr. 
Chairman, it is to refocus public attention and governmental 
attention on the enormity of this danger. And the fact that we 
have not blown ourselves up so far is no guarantee that we 
could not still; or that some rogue nation or rogue group has 
not yet successfully stolen a nuclear weapon does not mean that 
they cannot still do it if all you have is a padlock out there.
    So there ought to be a tight focus within the 
administrative department. There ought to be broad-based, 
bipartisan support from the Congress to do what needs to be 
done, including to fund these programs.
    There ought to be a public reawakening of the danger 
involved, not panic, but a reawakening of the danger. There 
ought to be a call for cooperation by other nations of the 
world. It should not be exclusively our responsibility, 
although, as I say, we and Russia invented the Nuclear Age, so 
we have a special responsibility.
    We ought to make sure that this is carefully coordinated, 
and I think it falls to the lot of the United States, as it 
often does, to see that all of that happens.
    Senator Lugar. Well, I appreciate your testimony very much. 
You know my personal enthusiasm for all that you are saying. I 
would like to express my appreciation to Senator Helms for 
asking me to chair this hearing, so that we could hear that 
testimony, and underline the importance of this Commission.
    Senator Baker. Thank you, sir.
    Senator Lugar. Before turning to Senator Biden, I would 
note we have received a press report from Russian sources that 
Mr. Adamov has been fired from his position as Minister of 
Atomic Energy. The executive director of the Kurchatov 
Institute, that you visited with during your research, will be 
the new director. So there are changes underway as we speak.
    Senator Biden.
    Senator Biden. I am going to yield in 10 seconds to my 
friend from Massachusetts, because he is chairing another 
hearing, and he wants 2 minutes.
    But I do not think we should go any further without stating 
that we would not be where we are today if it were not for 
Senator Lugar. The fact of the matter is, he--and Sam Nunn 
before him--he has been carrying the ball here. And in his low-
key way, he has been the master of the facts and the details 
and is the reason why what we have gotten done has been done. 
His pitch is so compelling.
    So I just want the record to note that and I do not want to 
turn this into a mutual admiration society here, but I really 
mean it Senator Lugar's nonproliferation initiative has been 
the single most significant contribution that I think any 
Member has made to the Congress in the last half-dozen years.
    I hope that with the help of the two of us here, and others 
on his side, we can give him some additional support to raise 
the profile of this issue.
    This is one issue that I find, when you sit down and talk 
with anyone, from the most sophisticated to the most 
unsophisticated American, they get it; they get it. And what I 
worry about, I say to my colleagues, is this mind set that we 
are in now, where we needlessly escalate the rhetoric on things 
where there is genuine disagreement with Russia. We have 
serious disagreements with Russia.
    I have serious concerns about Putin, we all do, but my 
mother has an expression, and I am sure your mother from 
Tennessee has one as well, which is, ``Do not bite your nose 
off, Joey, to spite your face.''
    This is a case where, if we are not careful, we may be 
biting our nose off to spite our face, if we do not follow the 
lead of Senator Lugar and this Commission.
    With your permission, I will yield to Senator Kerry.
    Senator Baker. With your permission, can I say a word about 
Dick Lugar?
    Senator Lugar and I have been friends for a long time. We 
have done a lot of things together, but I would simply add to 
what Senator Biden said. This Commission probably would not 
exist, our concern for this problem probably would not be 
visible on the landscape, and certainly the programs which are 
in place now would not have been created were it not for 
Senator Lugar and Senator Nunn.
    They have made an enormous contribution to the safety and 
security of this country. We simply must not fail to give 
credit where credit is due.
    Senator Lugar. Thank you.
    Senator Kerry.
    Senator Kerry. Mr. Chairman, thank you very much, and I 
thank my colleague from Delaware. I will be very brief, because 
I am chairing another hearing, and I need to get back to it, 
but I did not want to let that prevent me from coming here to 
underscore the importance of this.
    And let me just share, Mr. Chairman, the thoughts already 
expressed. You have been extraordinary on this. You led the 
Senate, together with Sam Nunn, in helping us to recognize that 
the chemical, biological, and nuclear weapons of the former 
Soviet Union were perhaps the goldmine for potential 
terrorists, and for would-be proliferators.
    It is almost extraordinary to me, because we went through 
that period when arms control was on the front burner for such 
a long period of time, and here we are today with really not 
that kind of focus, and it is quite extraordinary.
    What is equally extraordinary is that at least as of this 
moment, the Bush administration not only has no intention of 
revitalizing the support for these programs, but have indicated 
there may be proposed cuts in the non-proliferation programs 
for fiscal year 2002.
    Now, this is absolutely stunning to me. I am sure it is 
stunning to you, and unacceptable, and I hope that in the next 
days wise heads will prevail, and wise men and women will weigh 
in in a way that will change that.
    I thank both of you so much for your contribution to this 
dialog and to this effort in putting this report together, and 
evaluating the non-proliferation programs. I wanted to just 
leave a few questions on the table, if I may, to be answered 
perhaps at a later time, but as part of this record.
    With respect to the Russian plutonium disposition program, 
in September of last year we agreed with Russia to dispose of 
34 metric tons of excess weapons plutonium, and we have 
appropriated $200 million for the program to test and 
demonstrate disposition technologies, but disposing of that 
plutonium is estimated to cost about $2.1 billion.
    And to make up the difference, we have been working with 
our allies in the European community to get them to shoulder 
some of the burden, and that has been somewhat successful, but 
we still need to figure out how we are going to deal with this 
in the long run.
    We have leveraged commercial interests in the nuclear fuel 
market to try to address the highly enriched uranium. And under 
a 1994 agreement, we are authorized to purchase 500 metric tons 
of nuclear weapons converted to low enriched uranium suitable 
for commercial purposes. There is some struggle between your 
report and Russia disagreeing over the economic value of 
plutonium, and that has precluded a similar arrangement with 
respect to plutonium.
    So I would simply want to ask if in this record at some 
point, Mr. Chairman, we could address a series of questions: 
``What is the disagreement over it? What are the major 
challenges to developing a commercial approach for plutonium 
disposition? What will be the impact for non-proliferation if 
we do not develop a funded, workable plan for the HEU and 
plutonium? And will not that problem simply get more 
exacerbated as the unilateral reduction takes place, and it is 
not in place?''
    So, again, I thank you for the work on this, which is 
really so critical, and I wish the entire Congress would--I 
mean we have spent billions, if not trillions of dollars, 
building all of these weapons, facing up to this extraordinary 
threat. And the fact is, the threat is really, while less, not 
that much less in its current form, and we need to pay 
attention to it equally.
    So, Mr. Chairman, thank you very much.
    Senator Lugar. Thank you, Senator Kerry.
    Senator Kerry. And I thank my colleague for letting me 
leave those questions on the table. I apologize for having to 
move to a different hearing.
    Senator Lugar. Thank you.
    I recognize now Senator Biden.
    Senator Biden. Gentlemen, in response to Senator Lugar's 
question about ``How do we make the case for the urgency and 
the danger.'' I want to raise an idea with you and see what you 
both think. We have, understandably, a generic and increasing 
preoccupation among hawk, dove, and everybody in between, about 
weapons of mass destruction, but the focus of the debate seems 
to be moving toward rogue states obtaining weapons of mass 
destruction .
    National missile defense, and the rationale for it, is 
against rogue nations emerging with a long-range missiles 
capability that can, at a minimum, carry a biological or a 
chemical weapon, and possibly a heavier nuclear weapon.
    I think we can begin with the leadership of Senators 
Domenici and Lugar on the Republican side, and a couple of us 
on the Democratic side, to try to get this less a partisan 
``who-is-doing-what-to-whom,'' and ``why is this administration 
cutting,'' and so on and so forth, and instead talk about it in 
an overall context of the threat of weapons of mass destruction 
and the likely vehicles for delivery of those weapons, and 
where the capacity to construct them and to launch them exists, 
whether it is on the head of a missile, or in the hull of a 
freighter coming into the San Francisco Harbor. If we do that, 
I think we might be able to focus press and public attention in 
a way that we are not able to do now.
    Right now, there are basically four programs that have been 
put in place: for securing excess plutonium; for securing 
excess Russian HEU; for improving security in accounting for 
other nuclear materials in Russia, and for downsizing and 
restructuring Russia's excess nuclear complex. And also one 
that you have added in your summary and in your outline of 
proposed spending for insuring transparency in Russia and 
verifiability of the programs.
    All these programs relate, do they not, to the idea of 
constraining and limiting the possibility that a weapon or 
weapons of mass destruction will get in the hands of someone, 
an individual group or a nation-state, that does not have the 
capacity now.
    Is there any fundamental difference between what you are 
attempting to do relative to weapons of mass destruction and 
what we are attempting to do with the national missile defense, 
in terms of combating weapons of mass destruction, in terms of 
the objective?
    Obviously, the means are very different. Am I off in that? 
Am I comparing apples and oranges here, or is the end-purpose 
of each of these proposals, yours here, and a national missile 
defense, basically the same? Is the objective the same, which 
is to diminish the possibility that America, or the world for 
that matter, but America in particular, will be either held 
hostage to and/or subject to being held hostage, or open to an 
attack by a weapon of mass destruction?
    I do not believe this is a case of either/or, by the way. I 
am not playing a game with you, Mr. Leader, that is, ``Well, if 
you are for this, you are against national missile defense.'' I 
am not suggesting that. I am just trying to get a construct 
here.
    Senator Baker. I accept that, Senator Biden, and I 
appreciate the question. It is a penetrating and important 
question, and the objectives are the same.
    They are survival. The point of departure is different. 
That is, are you going to try to interdict the weapons material 
or weapons before they are diverted, or are you going to try to 
catch them after they are launched?
    In an earlier time in my career, in an earlier time in my 
life, I would quickly engage in a conversation about that, but 
I must ask your forbearance. This testimony today is based on 
work that was completed before the President issued his notice 
of intention to nominate me as Ambassador to Japan----
    Senator Biden. Fair enough.
    Senator Baker [continuing]. And I decided in my own mind 
that the appropriate thing to do would be to go forward and 
complete this work with Lloyd Cutler, and to testify about this 
report. But I respectfully request that I may be excused from 
commenting on----
    Senator Biden. Fair enough.
    Senator Baker [continuing]. Other items that have to do 
with policy.
    Senator Biden. Maybe Mr. Cutler would be willing to----
    Mr. Cutler. Senator Biden, I am not subject to that same 
restraint.
    It is true----
    Senator Biden. I wish you were, because I wish you were 
actively----
    Mr. Cutler. I have survived this long without ever having 
been confirmed, but it certainly is true that there is a 
spectrum of weapons of mass destruction that have to be dealt 
with. And we have to ask ourselves: Are our present programs 
well designed to meet those threats, just as you outlined them 
across the board?
    One of the most important points of a hearing like this, I 
think, is to encourage the education of the public. The average 
voter or the average citizen today is perhaps 40 or 45 years 
old. He or she knows nothing about nuclear terror, about the 
bomb shelters we all built for ourselves, about the cases of 
tuna fish, about the exercises in the school room where you 
would train to hide under your desk with a piece of linoleum 
over your head, as if that was going to make any difference.
    The public needs to be reawakened without being panicked, 
as Senator Baker said, about the spectrum of threats, and it 
needs to have the benefit of films like ``Thirteen Days,'' and 
hearings like this. I wish there was some way of getting our 
report into the Congressional Record or someplace where it 
might actually be read or videoed in some way.
    Senator Biden. Well, I assure you, we will get it in the 
``Congressional Record.''
    Mr. Cutler. That will not necessarily increase the 
circulation, but I thank you for the offer.
    Senator Biden. Well, again, and I will yield after this, 
because we unfortunately have additional colleagues here who 
wish to speak, and I know you have to leave, Mr. Cutler, at 
11:00.
    But your report lays out a fairly ambitious blueprint for a 
national strategy to account for and secure all the remaining 
nuclear-grade material in Russia over the next decade.
    You have implied, if not said directly--and I am not sure 
which it is, Mr. Leader--that you think that, for whatever 
reasons, the Russians are prepared to follow through on this 
for their own reasons, that there is not, at this point, a 
significant resistance to us, quote, ``trying to help them with 
their problem,'' which is also our problem.
    The report proposes, over 10 years, a comprehensive program 
that costs roughly $30 billion, about $3 billion a year. I do 
not know how it gets parsed out exactly, but----
    Senator Lugar. That is 8 years.
    Senator Biden. Eight years? So it is a little more than $3 
billion a year then, if we were to implement it. The report 
highlights that this $30 billion is roughly 1 percent of what 
we expect to spend over the same period of time on national 
defense.
    Quite frankly, I think it is going to be less than 1 
percent if we spend it, because I predict we are going to be in 
a position over the next several years where the national 
defense budget is going to be well in excess of $300 billion. 
But for what it is worth, that is my opinion.
    It is a reasonable amount of money, but as pointed out by 
the chairman, there is a counter-intuitive instinct on the 
floor, which I do not quite get, which is that even if it does 
help us, if it helps them, we do not want to do it.
    Now, again, some of it literally is that knee-jerk. Some of 
it is more nuanced and says, ``It is fungible money. It means, 
now, that will enable them to spend time transferring weapons 
to Iran,'' et cetera, but the essence of it is, ``Why should we 
help those guys? They are still bad guys.''
    I think that my friend is correct, that as strange as it 
may sound, if someone were to read this record 25 years from 
now, we are going to have a hard time with this. This is going 
to be a hard deal to sell, and it should be the single easiest 
sell, to spend money on this up here.
    I mean if we can spend $30 billion on a crime bill over a 
period of 8 years, we sure should be able to do this.
    Now, here is my question. I think we are going to be faced 
with a question of priorities. We are not going to get all that 
we think we should get, but I completely concur with your 
report, completely concur. And I want to make the point, and I 
assume our second panel will point this out, that you make some 
constructive criticism about these programs and this report is 
not all Pollyannaish. It is not like, ``Everything is going 
great. This is a wonderful deal. We have no mistakes. There is 
no place we have to tighten up.'' You make constructive 
criticisms about the existing programs I have mentioned, and 
ways in which you would like to screw them down and tighten 
them up.
    But we are going to be faced, I suspect, with the 
requirement of having to pick and choose here, because we are 
not going to get all the money we want. I hope that is wrong, 
but that is my guess.
    If you want to kick this back to the next panel in the 
interest of time, I understand but among the nearly 20 specific 
proposals that your Task Force has made for inclusion in this 
broad strategic plan, are there any that are of considerably 
higher priority in the near-term, perhaps because change is 
taking place so rapidly, that if we do not grab it now, we lose 
it?
    Is there any prioritization within your recommendations? 
What if I said to you, ``OK, fellows, you are not going to get 
$3 billion this year.'' Hopefully we are going to convince the 
administration to restore what they are cutting. I think we 
have to cut this administration, like every administration, 
some slack here. They are brand new. They are just getting into 
this. And they are very qualified people, I do not mean to 
imply that they are not.
    But I have observed, Mr. Leader, that every time we get a 
Governor who is a President--they get elected more than 
Senators do, as you and I both know.
    But they are usually not very surefooted, the first several 
months after they get here, on foreign policy and defense 
matters.
    So I am hopeful. I think that this administration can be 
talked to and may be willing to alter their initial policies.
    But if you are willing, or if you would rather think about 
it and supply it for the record, how would you prioritize if we 
came back and said, ``We are only going to be able to get a 
total of $1 billion this year for your initiatives''? Is there 
any priority within your recommendations, or among them?
    Senator Baker. Senator Biden, in the report we do not 
attempt to prioritize. And frankly, the one reason--I guess the 
reason is because that really is Congress' job sort of to do, 
and we are going to respect--obviously going to respect what 
you decide.
    I have a personal priority. I have not expressed it in the 
report, but I will express it now. I am a little short of 
terrified at some of the storage facilities for nuclear 
material and nuclear weapons; and relatively small investments 
can yield enormous improvements in storage and security. So 
from my standpoint, that is my first priority.
    Senator Biden. An adjunct to that, if I may: Are the 
Russians, in your view, susceptible not only to continuing this 
cooperation, but to us targeting the cooperation?
    In other words, are they susceptible to us saying, ``OK, we 
are not going to be able to get all that is needed, but we are 
going to come up with x amount of dollars, but you must use it 
for security as opposed to something you think is higher 
priority''?
    How likely if you could for the record, is that to work?
    Senator Baker. Well, I think it is likely to work, because 
I think they are very anxious to address this problem. There is 
resistance within the Russian structure to doing anything, just 
like there is in the United States to doing anything.
    Could I take just a minute to give you an example?
    Senator Biden. Please.
    Senator Baker. I have had the privilege of visiting 
Murmansk, the Northern Fleet base, and to see submarines tied 
up that were obviously not working, and to go into storage 
facilities that were barely--and to see flag-rank Russian 
officers humiliated when they said, ``We have to have your 
help. We know what to do, but we have to have your help.''
    I sat there, in a great, long command car, with all this 
braid next to me, thinking, you know, ``How this must rankle 
with him, to hold his hand out to the United States for money 
and assistance,'' but based on that experience and others, I 
think they have crossed that threshold.
    I think they are willing to do what has to be done, and I 
think they are willing to let us decide the priorities, within 
reason. I hope that is right. I think that is right.
    Senator Biden. I will close with this, and yield to my 
friend from Florida, who, I might add selfishly, since it is 
always nice to have new members on the committee, is 
particularly nice to have on the committee because he is so 
knowledgeable. This is a fellow who as has been the case in our 
additions on the Republican side, is a serious member on this 
committee.
    But let me conclude by just citing a couple of statistics 
that you know well, but I want to mention just for the press to 
understand. The finding in the nuclear cities, I will not go 
into the program now, it is that more than 62 percent of the 
employees in these nuclear cities and I remind everyone that 
the Soviets literally built entire complexes and cities with 
thousands of people that were devoted to one and only one 
thing, and that is producing weapons and/or material for 
weapons of mass destruction, earn less than $50 per month.
    These are our equivalent, many of them, of our Ph.D. 
nuclear physicists. These are equivalents of the people who 
work at the laboratories out in New Mexico, whether they are 
washing test tubes, or they are the top scientists, 58 percent 
of the experts are forced to take a second job to earn money; 
14 percent state they would like to work outside of Russia; and 
6 percent express an interest in moving, quote, ``anyplace at 
all to work.''
    Now, we were pretty smart after World War II. We went into 
Germany, and everybody who had a capability to deal with 
serious weapons programs, we took, if we could. What makes us 
think that that same instinct does not exist in Iran, Iraq, 
North Korea, and other countries as well?
    By the way, Russian missile enterprises report the same 
thing, 28 percent of their experts are forced to take a second 
job; 25 percent said they would like to immigrate to another 
country; 21 percent said they would work in a military complex 
in any other country they could get a job.
    I yield. I thank my colleague.
    Senator Lugar. Thank you, Senator Biden.
    I want to recognize Senator Nelson.
    And I also want to recognize that it is 11 o'clock, and we 
appreciate very much your being with us, Mr. Cutler. I 
understand, because you will be at the funeral for Roland 
Evans, our dear friend, the need for you to leave at this 
point. But we thank you very much for testifying for your 
leadership.
    Mr. Cutler. Thank you. And if I can deliver that last 
message to Mrs. Evans, I will.
    Senator Lugar. I wish that you would on behalf of all of 
us. We knew Roland very well. Thank you.
    Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman. In your executive 
summary there are three underlined sentences, the first of 
which is--and I will just take parts out--that weapons-useable 
material in Russia could be stolen or sold to terrorists or 
hostile nation-states.
    Mr. Chairman, the other day I took off down to Oak Ridge. I 
had never been there. I had wanted to, as a member of this 
committee, and as a new member of the Armed Services Committee, 
to have an appreciation for it. By the way, they need a lot of 
new facilities down there. They are still operating in World 
War II buildings.
    But the briefer said something very interesting. He said, 
``We have very strict controls on all of the enriched uranium 
here, and sometimes we cannot account for all of it.''
    If they cannot account for that under strict controls, what 
must it be like in Russia? I would like your comments, Senator 
Baker.
    Senator Baker. Senator, that is a very good question. As a 
matter of fact, Oak Ridge, as you know, is in my home state of 
Tennessee, and I grew up with it. My dad was a Member of 
Congress when it was built.
    The inventory or accounting for uranium, enriched uranium, 
is a difficult job, because it goes through a process, and some 
of it stays behind, and not just in Oak Ridge, but for a long 
time there was a great concern that we had lost a significant 
amount of nuclear material in a little place called Apollo, 
Pennsylvania, and they finally messed around with it and 
decided, ``Well, maybe it was still in the barrier pipes, and 
maybe not. Maybe it went someplace else,'' but it is not easy.
    In this country, we are talking about grams and micrograms 
of material. In Russia, I am talking about kilograms of 
material. I am talking about finished weapons that are barely 
protected. I am talking about doors that have an ordinary 
padlock on them, and sometimes not even that. The principle is 
the same, but the order of magnitude is vastly different.
    I must say that, if I could, on your time, Senator, the 
remark made about nuclear scientists, the nuclear cities, I 
think in a way is as important as the protection of nuclear 
material. It is clear that a number of talented scientists have 
already migrated to other countries, are already engaged in the 
development of material that can lead to weapons of mass 
destruction. That is a more difficult problem than finding 
padlocks that will hold a door closed. I do not know what we 
can do about it.
    Of all the programs we have, maybe the nuclear cities 
program is the least successful, but it is because the problem 
is so diffuse, and there is really not an easy answer for it.
    In Oak Ridge, to use your example, I remember when the 
Federal Government sold the facilities, the houses and what 
not, and kept the manufacturing facilities, and the transition 
to a peaceful settlement was complete, thorough, and 
successful.
    But you cannot do that in Russia, because there is still an 
overlay of the old Soviet hierarchy. There are still people 
there that have no place to go. There is still a reluctance on 
the part of industry or private enterprise in Russia, or 
anyplace else in the world, to going behind those locked doors 
and barbed wire fence.
    Conserving the intellectual resources in this field, 
protecting it, keeping it out of hostile hands, is at least as 
difficult, perhaps more difficult, than protecting nuclear 
material and nuclear weapons.
    I have no answer for you, sir. I am sorry I do not. But I 
am glad you went to Oak Ridge. We will invite you back.
    Senator Nelson. It was a good lesson.
    Now, when the old Soviet Union started to break apart, 
instinctively, since I had some knowledge of the space program, 
and some knowledge of the Soviet space program, the direction 
that we were heading, regarding the cooperation with the 
Soviets was a correct one. And it has certainly borne out, I 
think, to be a policy that is in the interest of the United 
States, where we are cooperating. Indeed, we are building a 
space station together right now, as we speak.
    But how many more of these things--so that admiral that you 
were talking about, that is perhaps being seduced by some 
terrorist organization, or that scientist, or that engineer, 
that we could have cooperative programs with them, which 
helping them is clearly in the interest of the United States.
    Final question: We have to make a decision. I am on another 
committee that I was fortunate to be appointed to, which is the 
Budget Committee. We are going to mark up a budget next week.
    Senator Lugar. I would not consider that good fortune, but 
that is another----
    Senator Nelson. Well, I have members who still have not 
forgiven me. If we could ever get out of our partisanship 
streak and start to strike a budget that is in the best 
interest in a bipartisan way--we are not even going to have a 
markup in the committee, because the chairman is refusing.
    But be that as it may, I have to deal from the deck of the 
cards that I have been delivered. And one of the things that we 
have to do is to provide for expenditures, having to deal with 
the subject of your report. I take it that you have said here, 
and for the record, that those expenditures need to go up.
    Senator Baker. I have said that, and the report says that. 
I have also said, Senator, that I am in a, I suppose, delicate 
position in that I am now the nominee, the President's nominee, 
to be Ambassador to Japan, so I have to--I do not have to, but 
I am going to walk a fine line, and tell you that I think the 
funding should be increased, and I have said that in the 
report.
    I have not tried to establish priorities between the 
several programs, and that is, I respectfully submit, this 
Congress' responsibility and the administration's 
responsibility.
    I commend you for bringing up these points, and I 
understand the frustration that you express. I have been there; 
I have done that. I know how that works, but there is an 
answer, and you will figure out.
    I have enormous respect for the Senate, and I have seen it 
in its best times and its worst times, but even its worst times 
are better than anything you will find any place else in the 
world.
    Senator Nelson. Thank you, Mr. Chairman.
    Senator Lugar. Thank you very much, Senator Nelson.
    Let me add that the International Science and Technology 
Centers at the Department of State that your commission came in 
contact with is a multi-national affair. This year the United 
States is providing about 60 percent of the total budget. The 
program is providing 25,000 stipends, to former Russian weapons 
scientists, to work on peaceful projects instead of emigrating 
to rogue states. Now, that is probably not all of the 
scientists with weapons knowledge. It was 18,000 the year 
before when I visited, so we are making progress.
    This is an attempt to independently finance these people in 
projects other than weapons of mass destruction. I would say 
that has had a retentive force that is considerable.
    I noted when I was there in December that the whole Russian 
Government adopted a budget of $50 billion. It is 
inconceivable, as we talk about our budget that, approximately 
$7 billion, single-digit, $7 billion was for their defense 
budget. As Senator Biden just mentioned, we are heading toward 
$300 billion.
    Now, this is an improbable circumstance for our colleagues 
to understand, but $7 billion does not go very far if you are 
trying to pay and feed the troops, and many are not getting 
paid or fed; providing to retirees, et cetera pensions. So we 
are back up against the problem of security, whether it is the 
padlocks or the scientists. The question is, who in the world 
ought to care about it, and essentially, what should we do and 
how much should we spend?
    Finally, I would just unite my friends, all of our friends, 
Senator Pete Domenici and Senator Nelson by saying at least on 
this they are on the same wavelength. Senator Domenici has 
protested vigorously with the administration, particularly the 
changes in the Department of Energy areas. He is interested in 
the others, but he has tremendous knowledge about these 
problems, and I support him.
    So we will not get you into that fight, Senator Baker, but 
I would just say that we probably have a degree of bipartisan 
budgetary unity at least in one area, and we are grateful for 
that.
    We thank you so much for coming this morning. This has been 
wonderful to have you once again back in the Senate where you 
belong.
    Senator Baker. Thank you.
    Senator Biden. Mr. Leader, maybe with your new job--and I 
mean this sincerely--you will be able to use your considerable 
persuasive abilities to make the case to the Japanese that they 
are very much in jeopardy as well. I am not being facetious 
when I say that. I mean it sincerely.
    Senator Baker. Well, thank you. I appreciate the remark. I 
am sitting here struggling with what I could say in reply.
    Senator Biden. No. I am not asking you to reply.
    Senator Baker. Thank you.
    Mr. Chairman, thank you.
    Senator Biden, thank you.
    Senator Nelson, I thank you.
    It has been a real pleasure, and my experienced with Lloyd 
Cutler has been extraordinarily positive, and I hope all of 
this has been helpful.
    Senator Lugar. It is very helpful. Thank you.
    It is a privilege now to call our next panel. The Honorable 
Ronald Lehman, former Director of Arms Control and Disarmament 
Agency, under President Bush, and Assistant Secretary of 
Defense under President Reagan. He was recently appointed to 
the President's Advisory Board on Arms Proliferation Policy; 
and the Honorable Graham T. Allison, member of the Russia Task 
Force, Secretary of Energy Advisory Board, now director of the 
Belfer Center, Kennedy School of Government, Harvard 
University, in Cambridge, Massachusetts.
    Dr. Lehman, it is great to have you back before the 
committee, and likewise, Dr. Allison. I will ask you to testify 
in the order that I introduced you, and we will ask you to 
proceed with your testimony, Dr. Lehman.

   STATEMENT OF HON. RONALD F. LEHMAN, FORMER DIRECTOR, ARMS 
   CONTROL AND DISARMAMENT AGENCY; CHAIRMAN OF THE BOARD OF 
DIRECTORS, KECK CENTER FOR INTERNATIONAL AND STRATEGIC STUDIES, 
           CLAREMONT MC KENNA COLLEGE, CLAREMONT, CA

    Dr. Lehman. Thank you, Mr. Chairman, Senator Biden. I am 
honored that you have asked me to come back again, and I 
actually think this is a terribly important effort.
    As you know, I have been deeply involved in this effort for 
many years, but I am speaking today not on behalf of any 
particular program, but rather to help you engage in this 
reexamination, which I think is terribly important to keep 
momentum for these revolutionary and, I think, vital efforts.
    I have a statement that I can submit for the record, if you 
wish, and keep my remarks very brief, because you have already 
gotten into many of the issues that are, in fact, in the 
statement.
    Let me simply say that I think Senator Baker and Lloyd 
Cutler, and their Task Force, did an excellent job, and I 
really would echo some of the important points they have made 
about the utility of these programs for the national security 
of the United States, and for our overall non-proliferation 
objectives, but I also want to emphasize the other side of the 
coin that they highlighted.
    This should not become a cheerleading session. We have 
problems. We need to address those problems. Indeed, the 
strategy needs to be clearer; the goals need to be clearer.
    Senator Baker noted that they had not made some of the 
tough calls on priorities. Frankly, I found myself in much 
agreement with the priorities that he personally described, but 
I think these are issues that need to be addressed, and we have 
an important opportunity now, because we have a new Congress, 
we have a new administration, we have a new National Nuclear 
Security Administration, and now we have changes in Russia. 
What better time than right now to get these programs on the 
right track?
    Let me say that some of the areas that I think need 
particular attention, in addition to strategy, goals, and 
priorities, I think we really do need to look at the dynamics, 
more objective measures of merit, greater coordination, less 
bureaucratic encumbrances. I think it is right to emphasize 
that this is just not a DOE problem. We have other departments 
and agencies that contribute, and it is not just a nuclear 
problem.
    For example, it is important to deal with the biological 
weapons issues, the chemical weapons issues, and the means of 
delivery of all of these systems, and, frankly, some of the 
advanced conventional capabilities as well.
    I think it is important that the new administration take a 
good look at this, to make sure that the programs are 
accomplishing what they are doing, that they are not being 
counterproductive.
    It is not just that we want to get our money's worth, 
although, I want to emphasize the importance of that, but not 
just for obtaining congressional support for funding and public 
support, but, in fact, we ought to know whether or not we are 
doing a good job, because resources that are spent in one area 
that could have been spent to address another issue, another 
threat, even within these areas, is, in a sense, an opportunity 
cost. We need to address that.
    Finally, in your review, and I will urge the new 
administration in their review, really spend some time with the 
people in the field who are actually implementing these 
programs, and not just the United States, and not just the 
Russians, because there are a number of other countries that 
are participating in some of these programs, that are very 
important strategically, and from a non-proliferation point of 
view.
    The second thing is, I think, as was correctly pointed out, 
a number of these organizations and efforts are 
intergovernmental, multinational. The ISTC, which you have 
mentioned, has as its members Japan, as well as the European 
Union, and numerous other countries. Some of them need to do 
more and do better, just as we need to do more and do better.
    So let me stop there and simply say: I strongly support 
these programs. They are revolutionary new tools, but they need 
to be honed. We should not be penny-wise and pound-foolish, but 
also we should not be foolish. We need to make sure we are 
achieving what we need to achieve.
    Thank you, sir.
    [The prepared statement of Dr. Lehman follows:]

              Prepared Statement of Hon. Ronald F. Lehman

    Mr. Chairman, Distinguished Members of the Committee on 
ForeignRelations:
    I am honored that you have asked me to testify today. This re-
examination of the U.S. effort to engage the republics of the former 
Soviet Union in cooperative nonproliferation and threat reduction is 
necessary and timely. By insisting that the tough questions about the 
relevant programs be answered quickly, you who helped create those 
programs can give momentum to the most important of them. I will do my 
best to help. I have been involved in some of these programs in the 
past and continue to be involved with others now, but I am here today 
as a private citizen and not as a representative of any program or 
organization.
    It is a privilege to follow the testimony of Howard Baker and Lloyd 
Cutler, the Co-Chairs of the Russia Task Force created by the 
Department of Energy's Secretary of Energy Advisory Board. I have had 
the pleasure of working with each of them and with several members of 
their Task Force numerous times over several decades. I count among the 
Task Force members several good friends including Senator Jim McClure 
of Idaho who gave me my first job in Washington many years ago. I also 
had the opportunity to meet with the Task Force members during their 
deliberations. At that time, I was involved with DOE in the development 
of an accelerated conversion plan for the Russian nuclear city of 
Snezhinsk, in the Urals. Because of the fine work of the Task Force in 
preparing their report, my presentation today can be brief.
    The Task Force is correct in saying that these DOE programs--and I 
would add related programs in other Departments and Agencies--offer 
important enhancements to our national security and could use more 
resources. But they are also correct to emphasize that all of these 
programs would benefit greatly from a clearer vision of goals, 
strategy, and priorities. All of these programs also need a more 
systematic approach, greater internal and external coordination, 
stronger leadership, and less bureaucracy. A bold review of these 
programs in the context of changing circumstances, new challenges and 
past history is greatly needed. Such a review is necessary to build 
bipartisan support and public support for the efforts necessary. More 
importantly, such a review is needed to make certain that they achieve 
their goals and are worth the cost.
    Much of what I say will only bring emphasis to points already made 
in the Russia Task Force report. As in that report, I wish to focus on 
the big picture and avoid nit picking. And yet, although I have a 
similar view, I want to offer a slightly different perspective, drawing 
upon a number of lessons learned in the creation and implementation of 
these programs. Again, the view I offer goes beyond the Department of 
Energy programs. Any review must consider all of the U.S. and 
international efforts and how they work together. For example, related 
programs, important and successful, involve the Departments of Defense, 
State, Justice, Commerce, Transportation, and others. Among these are 
the Defense Department's Cooperative Threat Reduction (CTR) program and 
the State Department's science centers: the International Science and 
Technology Center (ISTC) based in Moscow and Science and Technology 
Center of Ukraine (STCU). Note that many of these programs involve 
other countries. The United States and Russia must improve their 
efforts, but other countries also could do more. My remarks are meant 
to include all of these programs in general, although my detailed 
knowledge of each of them varies considerably.
    Let me here simply summarize my theme. All of these programs for 
hands-on cooperation give us much needed new tools for dealing with the 
post-Cold War challenges of proliferation of weapons of mass 
destruction and for shaping relations with other nations. They are 
essentially international security tools; tools that must be more 
finely honed. They evolved from efforts at hard-nosed, practical and 
often technological engagement during the Cold War, such as the Joint 
Verification Experiment (JVE), but they have always been instruments of 
broader social interaction and change.
    These programs are highly leveraged when they involve meaningful 
peer cooperation to meet common challenges: soldier to soldier; 
scientist to scientist; citizen to citizen, and I might add, 
parliamentarian to parliamentarian. They are also more effective when 
guided by high standards and movement toward the best practices of 
management and professionalism. They are weakened when they are guided 
by unfocused policies, dominated by remote bureaucracies, conducted in 
a government business as usual manner, or judged only through vague 
measures of merit. Furthermore, these programs cannot be divorced from 
the broader strategic, political, and economic background. These 
programs are meant to influence developments in those spheres, and the 
reality is that their success is influenced by those developments in 
turn.
    A new Administration, a new Congress, and the new National Nuclear 
Security Administration (NNSA) give us an urgent window of opportunity 
to make the changes that may be necessary. During this review, I would 
urge that care be taken not to disrupt the momentum of high priority 
programs; for example, nuclear Materials Protection, Control and 
Accountability (MPC&A). At the same time, it is my belief that of all 
these programs would benefit from a fresh scrub.
    More importantly, they would all benefit from a new look at what 
goals, all commendable, deserve the highest priority and in what 
timeframe. Take, for example, our concerns about many aspects of 
nuclear proliferation: the spread of weapons know-how, the spread of 
technology and equipment, and the spread of fissile materials. How do 
we prioritize among these? And are they to be address more by 
downsizing institutions and reducing infrastructure or by keeping 
scientists in place and enhancing their facilities? And the nuclear 
threat is not the only threat. What priority do we give to BW, CW and 
means of WMD delivery? All are a threat, but which is the greatest 
threat? Even within the nuclear realm, we must consider trades and 
triage. It has long been conventional wisdom that potential 
proliferators can easily get everything they need for nuclear weapons 
except the material. That is all too true, but still an 
oversimplification. Many potential proliferators or terrorists don't 
have the knowledge and the technology, but may, in fact, seek to obtain 
a full-up nuclear weapon.
    The United States with all the money it could ever make available, 
cannot make every risk disappear any more than it can by itself float 
the Russian economy. Indeed, there are no systems we can put in place 
anywhere that will absolutely eliminate all dangers of diversion, 
particularly in the face of the so-called ``insider threat.'' We can, 
however, help reduce the threat. Only part of that is through the 
introduction of measures such as Western style inventory management and 
physical protection. Much of this is by being a catalyst for awareness, 
initiative, responsibility, and personal accountability at all levels 
throughout the countries of concern. In the case of Russia, we must 
make it absolutely clear that Russia is responsible for the security of 
its material. The U.S. can and, I believe, must help, but paternalism 
will only be counterproductive.
    And new thinking is needed about what policies and procedures will 
best achieve those goals. Perhaps new or different approaches are 
needed. Indeed, a review is needed of what programs should be 
essentially government to government and what programs are best left to 
industry or non-profits, in either tight or loose cooperation with 
government. Many of these programs are very centrally international 
security cooperation programs and their core must remain government to 
government, military to military, laboratory to laboratory, and the 
like. In other areas, we must face one of the realities of the modern 
world; namely, that the private sector can bring to many of these 
challenges more resources, greater know-how, and more free energy than 
can government. In areas in which our national security interests are 
enhanced by economic development, the role and resources of the private 
sector are vastly larger. The government sector is notoriously weak at 
demonstrating to formerly centralized economies and their institutions 
how to make a real profit in a real market economy. This is not to say 
there is no important government role. It is a question of the right 
role and the proper balance.
    A related question is that of metrics of success. The measure of 
merit for these programs is not money out the door. Indeed, in some 
cases, there has been a reluctance to introduce real measures of merit 
for fear that this or that program will be found wanting. These 
measures of merit need not always be numerical, but they ought to give 
some insight into the value of the program to both sides. Above all, we 
must ask the difficult question of whether the provision of funding in 
some cases is counterproductive. If we do not take more seriously the 
evaluation of the quality of the output, it is hard to justify to the 
Congress, to the Public, and to ourselves even small inputs. To 
establish meaningful measures of merit, however, we must acknowledge 
that these programs serve many different purposes, all at the same 
time. They are primarily nonproliferation programs, and yet from them 
we--and our counterparts in participating countries--can receive 
greater and mutual scientific advancement, economic gain, and 
reassuring transparency. We can, in short, normalize our relationships. 
We must not forget, however, that these programs are important 
precisely because the situation is not normal. Russia and numerous 
other nations are going through difficult transitions in an age of 
rapid change and great turmoil in much of the world. Some of these 
programs are most valuable when relations deteriorate.
    The multiple utility of these programs requires all the more that 
they be well coordinated: within each Department or Agency, within the 
U.S. Government, with foreign governments, and with the private sector. 
Without proper coordination, mistakes are made and synergism is lost. 
Within these programs can be found examples of the value of working 
together. Fine professionals, many of them unknown to members of this 
Committee, have made these programs advance, often in the face of 
immense obstacles created by legacies of the Cold War and the 
propensity on all sides to substitute ``administrivia'' for management. 
This Congress and the new administration would contribute greatly to 
the effectiveness and morale of public servants if they could cooperate 
with each other and with other nations involved streamlining necessary, 
but excessively cumbersome procedures, for example, for travel, access, 
and interaction. Many of the problems are found in the host countries, 
but some debilitating problems are to be found in our own.
    Mr. Chairman, in summary, these programs have given us 
extraordinary new tools that are desperately needed to deal with 
proliferation of WMD. They involve tough, hands-on, practical 
engagement that is needed in this dangerous era of transition. Now is 
the ideal time for a review of each of the programs individually, but 
also of all of them in their totality. All of these programs have had 
some success, but many of these programs have fallen far short of what 
was originally promised. Even as new programs have been started, 
follow-up on existing ones is often weak. All of these programs are 
underfunded, but some are more urgent than others, and most would 
benefit from longer term budget planning and stability. Although none 
of these programs has matured as rapidly as we would like, some need 
more balanced participation or a handoff strategy. This is not the same 
as an exit strategy, but some thinking should be given to that as well.
    All of these programs have weakness that can and should be 
corrected. Ideally, the total would be greater than the sum of the 
parts. In fact, a blurred vision of the objectives, parochial 
implementation, and uneven cooperation with other nations may have 
resulted in the total being less than the sum of the parts. There are 
many lessons to be learned and no one person or place that can impart 
all of those lessons. All of these programs involve a number of truly 
heroic and largely unappreciated individuals who do the work necessary 
to move mountains only to move molehills. You, Mr. Chairman, have 
worked with some of these individuals, and I think you understand the 
kind of very fine professionals to whom I refer. I hope that the 
Congress and the new administration will talk to those people who 
actually implement these programs--especially those in the field--as 
they conduct their reviews. Thank you.

    Senator Lugar. Dr. Allison.

STATEMENT OF HON. GRAHAM T. ALLISON, MEMBER, RUSSIA TASK FORCE, 
   SECRETARY OF ENERGY ADVISORY BOARD; DIRECTOR, THE BELFER 
   CENTER, KENNEDY SCHOOL OF GOVERNMENT, HARVARD UNIVERSITY, 
                         CAMBRIDGE, MA

    Dr. Allison. Thank you very much, Senator. It is a great 
honor for me to appear before the two of you.
    If I go back to an earlier point that was made, I believe 
strongly, and have written that the most significant piece of 
legislative initiative in the period after World War II is the 
legislation for which you and Senator Nunn were responsible. So 
in some sense, we are discussing floods with Noah, so I 
apologize for that, but it is a great pleasure to be here.
    I will try to be very brief and pick up the comments that 
have already been made, because I think Senator Baker and Mr. 
Cutler rightly represented the Task Force of which I was a 
member, and pleased to serve as a member. So just by way of 
introduction, what I offered and what I submitted are three 
simple questions, it seems to me.
    The first question, which Senator Biden has already 
addressed directly, is: Is the principal finding of the Baker-
Cutler Task Force true or false? Is it correct that, as the 
Task Force says, the most urgent unmet national security threat 
to the United States today is the danger that weapons of mass 
destruction, or weapons-useable material in Russia, could be 
stolen, sold to terrorists or hostile nations, and used against 
American troops abroad, or citizens at home?
    As Senator Baker said, if one agrees with that proposition, 
virtually everything else follows. If that proposition is 
incorrect, then maybe there is a different discussion. So I 
think that is a good place to start.
    The second question goes particularly to the point that 
Senator Biden raised in his earlier comment. Relative to other 
items in the U.S. defense and national security programs, 
relative to the rest of the spending and the $300 billion-plus 
Defense budget, or other related national security budgets and 
programs of the U.S. Government, for example, the National 
Defense Missile, called for by President Bush, where does what 
you might call a national nuclear defense, if we were to choose 
a word, that the Baker-Cutler Task Force recommends, rank?
    Specifically, as you look at the spectrum of threats to 
American citizens at home as Senator Biden was saying, where do 
weapons of mass destruction, warheads delivered by long-range 
missiles for which we might need a missile defense, rank in 
comparison to the loose nuke threat that the Task Force is 
focusing on?
    I think rightly, as you suggested, Senator Biden, that one 
needs to look at the whole spectrum, and to think of these not 
as contrary items, but as part of an overall defense effort 
looking at U.S. interests.
    Finally, if one accepts the Baker-Cutler diagnosis, what 
should Congress do? Well, the Task Force, as you have already 
mentioned, Senator Lugar, recommends that the President in 
consultation with Congress, at the beginning of a new 
administration now, promptly formulate a strategic plan, with a 
specific goal, the goal being to secure and/or neutralize all 
nuclear weapons, and all weapons-useable nuclear material in 
Russia within the next 8 to 10 years.
    So set a very high mission and objective, and to that end, 
have a strategy, organized and planned, almost like this was a 
military operation, as if it were Desert Storm, or something 
else, something that mattered centrally to the well-being of 
the Nation.
    To that end, we outlined a plan--not a final plan, but we 
outlined what it might look like, and we gave a sketch of a 
budget, at a level of about $3 billion a year over the 8 to 10 
year period, which we think should be shared significantly with 
allies. And I am confident that with Ambassador Baker in Japan 
we will be much more successful in actually getting the 
Japanese to contribute to this effort, and, indeed, to the 
Russians, because, again, part of what the plan called for is a 
transition to an end-state, in which the Russians will be able 
to sustain themselves with other income, for example, income 
that could come from spent fuel storage schemes of the sort 
that have been proposed and that are now under very active 
discussion.
    So to conclude, obviously, as Members of Congress, or as an 
expert, I would be--I am somewhat reluctant to offer tactical 
advice to Members, particularly to the father of the Nunn-
Lugar, but I think that sometimes the temptation is to say, 
``Well, let us impose a legislative requirement that the 
administration submit such a plan,'' and having, while in the 
Defense Department, written some such plans, they usually 
elicit a bureaucratic response that does not engage people 
seriously.
    Much more important, indeed, I think what is central here, 
is that people who believe in this analysis need to engage 
members of the administration, and Members of Congress, and the 
public in a debate about a comprehensive strategy that deals 
with the most urgent threats.
    In that context, looking at national missile defense and at 
the danger of weapons or weapons-useable material being stolen 
from Russia as part of the same picture, and if it needs to be 
addressed in the same terms, then ask ``Which is more urgent? 
Which is larger? What is the prospect that the action that we 
could take would have the desired effect?'', to that end, I 
would recommend to you, as I do in my submitted testimony, a 
speech that your colleague, Senator Nunn, is going to give at 
the National Press Club tomorrow, trying to engage more of the 
public in this debate.
    Thank you very much for letting me appear.
    [The prepared statement of Dr. Allison follows:]

            Prepared Statement of Hon. Graham T. Allison \1\

    It is an honor for me to appear before the Senate Foreign Relations 
Committee today as part of your review of Department of Energy 
Nonproliferation Programs with Russia. Members have received copies of 
the Baker-Cutler Task Force Report \2\ and have heard from Messers. 
Baker and Cutler. I will therefore forego a lengthy opening statement 
and respond to Members' specific questions.
    In three minutes of introductory comment, let me suggest three 
central questions for Members' consideration.

          1. The threat. Is the principal finding of Baker and Cutler 
        in the DOE Task Force true--or false? Specifically: are Baker 
        and Cutler--and their colleagues former Senators McClure, Nunn, 
        Simpson and other members of the Task Force--correct when they 
        assert that: ``The most urgent unmet national security threat 
        to the United States today is the danger that weapons of mass 
        destruction or weapons-useable material in Russia could be 
        stolen and sold to terrorists or hostile nation states and used 
        against American troops abroad or citizens at home''? Or are 
        they incorrect?

          2. Priorities. Relative to other items in U.S. defense and 
        national security programs, for example, the National Missile 
        Defense called for by President Bush, where does the ``National 
        Nuclear Defense'' that the Baker-Cutler Task Force recommends 
        rank? Specifically: as one analyzes the spectrum of threats to 
        American citizens at home, where do weapons of mass destruction 
        warheads delivered by long-range missiles rank in comparison to 
        the ``loose nukes'' threat the Task Force spotlights?

          3. Prescription: If one accepts the Baker-Cutler diagnosis, 
        what should Congress do? The Task Force calls on the President, 
        in consultation with Congress, to quickly formulate a strategic 
        plan to secure and/or neutralize all nuclear weapons and 
        weapons-usable material located in Russia within the next ten 
        years. To that end it offers a sketch of a plan for ``finishing 
        the job'' and suggests a budget of approximately $30 billion--
        to be funded by the U.S., our allies, and Russia. At the end of 
        this road in 2010, Russia would have in place the programs and 
        income streams to sustain this posture.

    Congress can, of course, impose a legislative requirement that the 
administration submit such a plan. Such a requirement would most likely 
elicit a bureaucratic response.
    Instead, I would urge Members who are persuaded by the Task Force 
report to engage key members of the administration on these issues. 
Members might communicate their readiness to address National Missile 
Defense as a part of comprehensive strategy that deals with the most 
urgent threats.
    My suggestion is not that you hold missile defense hostage to what 
I believe are larger and more urgent threats, but rather that you 
stimulate serious debate among members of the administration, Congress, 
and the public about nuclear and other WMD threats to Americans' lives 
and liberties. As part of that effort, let me commend to you and others 
here a speech your former colleague Senator Nunn will deliver at the 
National Press Club tomorrow.
--------------
    \1\ Douglas Dillon Professor of Government at Harvard and Director 
of the Belfer Center for Science and International Affairs.
    \2\ ``A Report Card on the Department of Energy's Nonproliferation 
Programs with Russia,'' United States Department of Energy, The 
Secretary of Energy Advisory Board, January 10, 2001.

    Senator Lugar. Well, thank you very much for that 
testimony.
    I would just start by saying that I think you have 
highlighted what I found to be the two most important points of 
the report. First of all: Is the threat of these weapons of 
mass destruction the greatest threat we face?
    I believe that it is, but you have to say, compared to 
what, the Russian Armed Forces, the Chinese Armed Forces, the 
armed forces of somebody else? What are the other threats out 
in the world?
    As you think through the ways in which more Americans might 
lose their lives, our cities might be destroyed, and other 
terrible things happen, what we are talking about today is the 
biggest threat.
    Now, we may be in denial about it, but nevertheless, it is 
there. And the Commission has once again sort of put its arms 
around the situation, but then gone beyond that to say for $30 
billion over 8 years, you could do something effectively about 
all of it. Now, this is with cooperation of Russia.
    I think it is counter-intuitive for many people as to why 
over the course of 10 years Russians would cooperate with us, 
would guide us into more and more layers of the problem, but it 
was not difficult for this Commission to understand. It is 
because these items are a threat to Russia too. It is their 
lives; whatever is going to be left of their country is also at 
stake.
    They have built an awesome amount of weaponry that has 
overwhelmed them, and it might overwhelm us. So that is why we 
must take these threats seriously and respond to them in a 
coordinated well-rounded fashion.
    Ron Lehman has been through all of the difficulties of 
working on these programs with Russia. It is difficult, because 
some problems to dispose weapons materials affects markets in 
the United States. They sometimes become commercial problems.
    Some would say, ``Well, this is absurd. Here, we are 
talking about the future of the world, of mankind, people being 
blown up, and you are talking about the price of uranium going 
up and down in the United States.''
    Well, it is a concern for those people in a very parochial 
way, and we understand that. But on the other hand, we have not 
ever been able to come to grips with exactly how the flow of 
this goes on, even if there are willing sellers and buyers. 
Even as we speak, with the privatization of a part of this, we 
have considerable difficulty; but, nevertheless, that is a 
worthy objective. These programs take these dangerous materials 
out of circulation.
    Likewise, the plutonium has been even tougher. Now, Senator 
Domenici, to his credit, has done a lot in this area. He has 
tried to move both the last administration and this one into 
this area, but the Russians have been very reluctant, as you 
know. They have felt there was value in every ounce of the 
plutonium.
    Now, they are prepared to talk about changing a third of it 
into reactor fuel. But even then, this is an objective that 
will require considerable international negotiation with 
Russian partners, because it is not very clear how we get to 
the end of the road, even if the funds are available to do it.
    But at least you have tried to quantify this with a 
strategic plan of the fact that this is the biggest threat, and 
this is how we might all proceed to save our two countries and 
the rest of the world in the process.
    I remember, Dr. Allison, one hearing in which you appeared 
another witness brought to that hearing a steel shell, that he 
calmly removed during the course of his testimony, and laid out 
on the table. He then used a Geiger counter to show that he had 
radioactive material.
    And this disturbed some people in the audience, including 
some Senators, who were looking at all of this.
    He pointed out that if the material was highly enriched 
uranium in this particular shell, he would be close to having 
what he needed to make a nuclear weapon. As a matter of fact, 
the particular blow would be four square miles around it.
    Now, for the benefit of my colleagues, I visited a chemical 
weapons storage site in Russia as scheduled, 1,200 miles east 
of Moscow. I asked a Russian major to photograph me putting an 
85-millimeter shell filled with sarin gas, taken right off the 
shelf there into the thin briefcase. There was room for three 
more in the thing.
    Two million shells were filled with poison gas. It wasn't 
nuclear but deadly nonetheless. I tell this story to show that 
the threats we face are vast and diverse. These chemical 
weapons were stocked in a wooden building with glass windows. 
Security was good, because the United States had provided 
assistance to improve hardware at the site.
    Our hope is that we will soon begin destroying the Russian 
chemical arsenal one weapon at a time.
    But that will require appropriations from both the House 
and Senate. And for the last 2 years, the House has said 
``no.'' So we have considerable work to do, even with those 
things that are the most obvious, in terms of proliferation. 
This 2 million shells are stacked like logs there, and they are 
portable, either by a human being, or many could be taken out 
in a normal car.
    This is why the problem is urgent; although many people 
have wrestled with it temporarily. There is the destruction of 
the plutonium, the sale of the uranium, the destruction of 
these chemical weapons. It can be done, and our Government has 
done a good job of identifying the problems, and moving toward 
solutions.
    Let me just ask: You both have mentioned other countries 
getting involved in the response to these threats. The Germans 
are involved with the chemical weapons business, but they are 
the only other country making a substantial contribution.
    How do we go about effectively engaging the attention of 
other countries that it is their world, too? In other words, 
one thing that some Members of Congress would say, I think 
quite rightly why us? Why the United States? Some would say, 
``They made their bed. Let them sleep in it.'' They have 
created a horrible mess, and their country may blow up over 
there. But if that were to happen we would be adversely 
affected, this is one of the problems of living in a small 
world.
    Both of you have been involved in this, and that is why I 
ask you. You have traveled widely. You have talked to people in 
NATO, as well as in Japan, or elsewhere, who might have an 
interest in these threats. Do they see it in the same way? 
Would they agree with the thesis of the doctrine that has been 
introduced today: that this is the most urgent security 
problem, not only for us, but really for them, too? Would 
either of you comment?
    Dr. Allison. I will make a quick comment, because basically 
I agree here with everything that you have said. There has been 
a temptation by other countries, particularly ones that have 
the means, including Germany and Japan, to say ``This is an 
American problem. Americans deal with nuclear weapons. We are 
not part of that story.''
    We have been unsuccessful and ineffective in pressing these 
countries to the extent that we should have. So that is my 
bottom line on it.
    I believe that for us and for them, there is a temptation 
almost, as Senator Baker was saying earlier, to believe that 
this is happening on a different planet, and if it were on a 
different planet, it might be too bad for this generation of 
Russians.
    As a veteran cold warrior, I would normally say that they 
should have to make their own bed, but this is not somewhere 
else and consequences of this could happen here. The job of 
people who are taking responsibility for American security is 
to do what is necessary for American security, even if, quote, 
``fairness'' is not the result.
    Finally, I think that Senator Baker will have his work cut 
out for him, but I remember very well Desert Storm, and I 
remember another Baker, Jim Baker, who went out to Japan, 
initially with a proposal that they contribute to what was 
actually a great victory that affected oil prices, of which 
Japan was a significant beneficiary.
    Initially, the proposition was that Japan could not pay 
more than--I cannot remember, but I think it was $200 million. 
And eventually, they said, well, maybe they could contribute 
$500 million, but Senator Baker left with $12 billion, $12 
billion.
    I think it was a failure of the Clinton administration not 
to get some significant contribution from Japan, and I would 
say similarly from Europe, but it will not be voluntary; it 
will be extracted.
    Senator Lugar. Well, I appreciate that point, because 
without putting extra burdens on Senator Baker's confirmation, 
I am hopeful that there will be some transference of this 
experience that he has had.
    As others might point out, there were contributions from 
other countries too. I cannot recall, but it was an 
international effort, $50 billion or $60 billion was sent to 
pay for the war, essentially, because the security interests of 
other nations were at stake. Without that fuel coming from the 
Middle East, their economies are dead. They understood that.
    I remember being in the White House with former President 
Bush when he got the call from the Japanese Prime Minister for 
the first $1 billion, and he was elated that finally they were 
making some headway.
    Now, maybe as you have looked at these issues, you have 
identified potential donors. I am sort of trying to tease this 
out in the process of utilizing your experience, but I think we 
are going to have to think through this.
    And I hope the administration will try to think along with 
us because this is expensive, and my guess is $30 billion will 
not cover all of it.
    Finally, we have to come to grips, if we ever got 
agreements on final reconciliation of all the weapons and 
materials, we would have to understand that previous experience 
would indicate that prices escalate as you proceed.
    Dr. Lehman, do you have a thought about it?
    Dr. Lehman. Mr. Chairman, just to illustrate why it is so 
important to work with our friends around the world: As Graham 
was answering your question, my pager went off. One of our 
colleagues in Brussels wanted to tell me that there had been 
changes at the Ministry of Atomic Industry in Russia, and to 
make sure that I rushed to see the latest information.
    I think you are absolutely right. We need to work very 
closely to get more international buy-in. Let me begin with an 
anecdote that is a confession of a mistake I made, an 
inaccurate analysis.
    When we were first engaging in the Stockholm negotiations, 
I was very nervous, because I was used to multinational 
negotiations in which you had a divided alliance, non-neutral 
and non-aligned nations that are not entirely neutral and not 
entirely non-aligned, and a fairly rock solid Warsaw Pact.
    I was wrong, in fact, largely because the Transatlantic 
Alliance was under pressure. In the INF context, the Alliance 
stepped up and coordinated its efforts extremely well. It 
became--it was one of the high points of Alliance success.
    In the East, largely because of developments such as 
solidarity in Poland, we began to see the first signs of 
fissure. But one of the most important developments was that 
because all the countries involved had to negotiate about their 
own assets, their own forces, and their own interests, we 
suddenly discovered that the neutral and non-aligned were much 
less willing to simply tell us what we had to do, and rather 
had to look out for their own interests.
    The result was an agreement that actually served everyone's 
interest, and turned out to have revolutionary security and 
political impact.
    Why do I tell this story? Because you asked about the 
Chemical Weapons Convention and destruction. I was deeply 
involved in that negotiation, and as you know, some people 
blame me for its successful conclusion.
    Having said that, let me say that one of the issues I had 
to deal with throughout the negotiation was going to many of 
our allies and friends and colleagues around the world and 
asking them, ``Do you understand the financial implications of 
the types of things that you are insisting upon, because we are 
not going to pay all the bill?''
    Well, as you know, the United States has an uneven record 
of paying its bills, but nevertheless, we are the big 
billpayer. I think we have to go back to some of these 
countries and remind them that they have obligations, because 
how can we persuade our people, our Members of Congress that 
this is so important if nobody else thinks it is?
    Senator Lugar. Indeed. Well, I appreciate both of your 
comments on this. They are very important.
    Senator Baker, in response to a question, I think, from 
Senator Biden or someone else, indicated that you needed 
somebody in the White House close to the President to 
coordinate all of this. If it is the most important security 
issue, it deserves that kind of coordination and attention.
    Conceivably, if this person were there, he might very well 
conduct these negotiations, and with the strength of the 
President, approach our allies and tell them its time to ``pay 
up.'' I think it will take this kind of effort as opposed to 
Members of Congress opining about it and sort of suggesting 
that everybody ought to be thinking about it, because I think 
this is a big sum of money.
    It is either important or not important, if we decide it is 
very important, it should happen. So the question then is: 
Tactically, how do you do it after you have determined a 
strategy?
    Let me turn now to my colleague, Senator Biden.
    Senator Biden. Mr. Chairman, I would like to pursue three 
different avenues, and if I do not get done within my time 
allotted here, maybe I can come back to it, because I do not 
want to trespass on the time of my friend from Florida.
    Mr. Secretary, you have been involved with several 
administrations. Your knowledge base is deep and respected, and 
you are not considered to be easily duped or Pollyannaish about 
what possibilities exist--I mean this sincerely--with Russia, 
or any other country that we have been at odds.
    Dr. Allison, you have worked with Democratic and Republican 
administrations. Sometimes I suspect critics would suggest that 
you are too enamored with--I think you are not--but too 
enamored with the prospects of treaties and agreements with the 
Russians, a category I am often placed in. So you have slightly 
different perspectives, and you both have considerable 
knowledge bases.
    One of the things, I think, in order to get to where 
Senator Lugar acknowledges we have to get, to figure out how we 
can get the administration, to decide at some point that this 
is a priority. And there has to be some coordination--whether 
it is by a single person, or whatever it is. There has to be 
someone who can speak with authority, when they arrive at a 
consensus on how to deal strategically with this problem.
    I might note, by the way, before I begin with a specific 
question, that your threat analysis--and you cannot see this 
chart, nor can anyone else--but your threat analysis is no 
different from the unclassified threat spectrum put out by the 
Joint Chiefs of Staff. I know you have copies of this.
    The vertical line on the one side is the potential damage 
to our vital interest, and the horizontal line is the drain on 
our military capability. This line is the threat continuum, in 
terms of from most likely to least likely, and the other line 
is the probability of occurrence.
    What we are talking about here ends up here, although it is 
not laid out the same way you laid it out in your report. A 
terrorist attack has a much higher probability than a strategic 
missile attack, rogue missile attack, major theater wars, et 
cetera.
    So the assessment here, I guess the only point I am wishing 
to make is: It is not as though this report came along and 
differs in any material way from what others tell us about the 
threat. In terms of your question, Graham, ``Is the principal 
finding of the Task Force true or false,'' the fact is that the 
Intelligence community and the Defense community of this 
country have reached a similar conclusion that it is a 
relatively high threat, and it is a higher threat than many 
other things that we talk more about.
    But what I want to get at here is coordination: This is not 
directed at this administration; let us talk about the last 
administration. I was somewhat frustrated by the fact that the 
last administration, although generally acknowledging this 
problem, and although supporting the initiatives with more 
money, did not go the whole route, and take this coordinated 
notion, and try to put it in place, as did the guy who 
literally thought of and drafted the Office of National Drug 
Control Policy. He spent 8 years realizing that not only did 
Presidents Nixon and Ford not like it, but President Carter did 
not like it either, and President Reagan did not like it 
either. No President wanted to acknowledge the need to take 32 
agencies dealing with drug problems and have some coordinated 
strategy.
    So I understand the institutional resistance to new 
structural frameworks to deal with the problem. But talk with 
us a little bit about: Why is this such a hard sell, even with 
an administration that you think would be ideologically more 
inclined to support such an initiative, and not fear, as I am 
speculating, that it would be put in competition with other 
things they place a higher priority on?
    Could you be a little constructively critical for me as to 
why more was not done in the last administration?
    Dr. Lehman. As you know, most of my friends feel very 
strongly about economic engagement, and most of my friends are 
right. All of my friends are right. You have to make these 
tough tradeoffs. Different departments and agencies have 
different emphasis, different programs. To some degree, the law 
tells you that what you believe is where you sit. You have 
certain mandated responsibilities.
    My own view, as Senator Baker's, is to some degree you have 
to give the President some freedom to organize, but in the end, 
that also suggests that we know who should be held accountable 
and is responsible. It is the President.
    Now, over the years, there have been a number of ideas 
about how you help the President, because the President has 
many responsibilities. The ideas of czars come and go. Some 
czars have actually worked, but it is usually because the 
person is very competent, very influential, and has the ear of 
the President.
    Senator Biden. Right.
    Dr. Lehman. If they do not have the ear of the President, 
then they need to have a lot of other ears, and that is hard.
    Let me also comment: You may remember some years ago you 
drafted legislation to create a nonproliferation agency. I said 
to you at that time, ``We do not need that agency, because it 
already exists.'' That was my agency at the time. I said, 
``Times have changed. Our priorities need to change, and this 
is exactly what we ought to do, is to give that agency a strong 
mandate.''
    In the end, the decision was made to move it in a different 
direction, to eliminate that agency completely. The rationale 
for that action was, correctly, that everybody should care 
about proliferation, but when everybody cares about 
nonproliferation, who do you hold accountable for 
nonproliferation?
    Senator Biden. Exactly.
    Mr. Lehman. Well, you hold the President accountable, but 
he has to be doing other things. So where do I come out? Based 
on having served in just about all the departments and agencies 
at one time or another, I have become NSC-centric. I think you 
have to have a strong NSC staff, not to run programs, not to 
implement, but on behalf of the President to make sure that his 
interests are being served, and that everybody is coordinating, 
and that there is a coherent strategy, coherent priorities, and 
effective implementation.
    Now, you can give them all the titles you want, but in the 
end, if the President says, ``My view is Cabinet government,'' 
and you have rogue departments and agencies, you do not have 
effective government, the end.
    Senator Biden. Let me ask one more question.
    And I would like you to answer as well, Graham; but, Ron, 
if you would follow-on. How much of a role does ideology play 
here in this issue of nonproliferation?
    Here, we had one administration that came to office, was 
there for 8 years, and said nonproliferation was their highest 
priority. Remember that? That is what they said. They said that 
it was--well, I think they said the highest at one point, if I 
am not mistaken, but a very high priority. They talked about 
it, and we still did not get the kind of focus we are talking 
about.
    I am not sure--and in fairness to this administration, it 
is brand new, only 8 weeks, or 9, whatever it is but how much 
of a role do you think higher priorities play in not addressing 
this subject? If I can make an analogy to a totally different 
issue, so that I am not making judgments about this 
administration, years ago, I drafted a piece of legislation 
called the Violence Against Women Act. Now, you may say, what 
does that have to do with this? It does not have anything to do 
with this, except the point I am about to make. I thought when 
I drafted that--and I worked on it a long time--that the groups 
that would be the happiest with me, most embrasive of the 
initiative were the leading women's groups in America, the 
National Organization for Women, all the various organizations. 
They were resistant. They did not support the legislation for 
the first couple of years.
    First of all, I was suspect, because I was a guy. A guy was 
writing this--and I am not being facetious now; I mean this 
seriously. Second, because, as I learned--I was so confused 
about this, I could not figure it out, but once I figured it 
out, I was able to get around it--there was a genuine concern 
that if this became the priority in the Congress, the issue of 
choice on procreation would be relegated to a less important 
standpoint, and the issue of gender--an issue of sexual 
preference, that is, homosexuality being given an equal 
standing--would further be reduced, and the focus would be that 
we all, not wanting to address those, would turn and say, ``OK. 
We are going to deal--to satisfy the, quote, `women's groups'--
we are going to deal with this issue.''
    Well, when I found that out, what I did was, I literally 
went out in the field. I went to Rhode Island for a conference 
with all the providers of help for rape victims, and all the 
providers and I went to other states. And then the word got 
back here that this was a big deal to women out there, and all 
of a sudden things began to change. My legislation got support. 
It passed. Now it is a bipartisan and strongly endorsed notion.
    The reason I mention this to you is that I cannot quite get 
set in my mind what we have to do to--we move the fulcrum here 
on this issue--to shift the emphasis to what everyone, I have 
to believe, knows in their gut and knows intellectually is very 
important. But there seems to be almost, in my mind, in my 
judgment, an unwillingness to address nonproliferation as 
frontally as they would like to, for fear that some other item 
on their agenda will take a back seat, or will not be given 
significant priority.
    I will read from one paragraph in the report, Graham, on 
page eight. It says, ``Through 1999, Congress authorized some 
$3 billion for these programs. The Clinton administration's 
expanded threat reduction initiative proposes to spend $4.5 
billion over the 2000 to 2004 timeframe. This is an 
insignificant amount of money compared to U.S. spending on 
nuclear weapons during the cold war. It is estimated that from 
1940 to 1996, the U.S. spent more than $5.8 trillion in 
constant 1996 dollars on this nuclear weapons program.
    ``For fiscal year 2001, the Defense Department plans to 
spend roughly $7.3 billion, more than a 25 percent increase 
than the previous year to defend and counter the worldwide 
proliferation threat posed by weapons of mass destruction. For 
a small fraction of that sum, DOE and other U.S. Government 
agencies, are working to eliminate critical elements of the 
global proliferation threat. Accelerating this process to 
secure all attractive systems and weapons-useable material is a 
worthy and important goal.''
    Now, the reason I read this is it seems as though, to me, 
there is a mind set over there in both administrations that 
maybe this competes with other things that we want to have 
happen more.
    A very long question. I will not ask any more, but can you 
followup, Ron, and speak to that for me? And then, Graham, if 
you could answer the whole question. And I will yield the 
floor.
    Dr. Lehman. That is one of the great and big questions. Let 
me try to be somewhat brief. All of these issues have many 
dimensions. They have economic dimensions, both overseas and at 
home. They have environmental dimensions. Many of them, like 
material disposition, are related to your view of energy 
policy, disarmament policy, and all of these weigh on the 
priorities you give to the nonproliferation aspect. And even 
within the nonproliferation aspect, there are different 
calculations you have to make.
    That is why I say in the end, you cannot confine this to 
one department, one type of weapon, and one type of approach. 
You have to integrate that. Frankly, I do not think anyone has 
actually done that very well yet.
    Now, having said that, I think your reference to charts 
like this was very useful, because to some degree you are 
dealing with the probabilities of something happening versus 
the consequences if it happened.
    I have a chart I sometimes use that has a curve from the 
cold war that basically says, you know, all-out nuclear 
exchange, the probabilities are very low, but the consequences 
are very high, and if you check the box, the size of the threat 
is a certain size.
    If you go out and you look at wars in the Nth world, the 
probabilities are very high, but in many cases the consequences 
are very low, and you can draw a box that calculates the size 
of that threat. Now, it is all kind of subjective.
    Then I asked people, what does that curve look like today? 
It is very interesting to just give people a blank piece of 
paper and draw it, because they all draw it quite differently. 
For nuclear abolitionists, it is a very steep curve, having to 
do with the U.S. and Russia; and, in fact, for some of the 
Western abolitionists, it is the U.S., because we are viewed as 
an arrogant superpower; we are the threat; we are going to 
cause the incident.
    On the other hand, if you go to the Pentagon and say, 
``Draw your curve,'' it is going to be a very flat curve. They 
are not too much worried about the central nuclear exchange; 
they are worried about the fact that in these areas where the 
probable threats are rising, the consequences are also rising, 
because of the spread of weapons of mass destruction potential 
and capabilities.
    Someone has to step back and do that kind of analysis. As 
Aristotle said, ``We should not demand more precision than the 
subject matter warrants,'' and I think if you get a lot of 
Beltway Bandits coming in with fancy charts with real numbers, 
be suspicious.
    Having said that, I think reasonable people can take a look 
at the threats and make reasonable judgments about the 
priorities. Some of those issues come up right in what you are 
talking about. For example, the whole question of plutonium 
disposition, that needs a good look.
    I tend to agree with what I think I heard Senator Baker 
say, which is, some of the most important things you have to do 
is influence the behavior of the Russians, because, first of 
all, it is their responsibility to guard their material. The 
material that gets stolen, or maybe more importantly, the 
weapon that gets stolen, if it is stolen by a Chechyan, he may 
not be interested in the United States.
    I was in Moscow 2 weeks ago, and I was rather pleased to 
see in the newspaper a real debate over the consequences of 
arms sales and technology sales among the Russians, saying, 
``Why are you selling to some of these people?'' Now, in some 
cases, these are sales to countries that were fraternal friends 
and allies of the Soviet Union, and there was not a lot of 
belief that some of those countries will be threats.
    In other cases, there was some skepticism, but what I also 
found interesting was the Russian public and intelligencia 
asking the question, ``How much are we secretly subsidizing 
these sales? How much are we increasing our future financial 
mortgages?'' Well, they need to have that debate, but we need 
to help. We can help, and that is why I think these programs 
are important.
    Now, let me get to the thing that has to do with the 
consequences of special interests and the process that you-all 
know better than I know. Years ago, when I worked on the staff 
of the Senate Armed Services Committee, one of my additional 
duties was to deal with the national security stockpile. So I 
was the new kid on the block; I wanted to do my job well and 
professionally, so I thought it would be appropriate to go look 
at legislative intent, ``Indeed, what is the law? What is it we 
are supposed to do?''
    Well, with a little bit of tongue-in-cheek, let me 
summarize what the Congress in its wisdom had passed and 
Presidents had signed. You buy when things are scarce. You sell 
when they are plentiful. You do so at no cost to the 
government, and without impacting on the market price. Well, 
you know, I was young, and so I figured, ``Well, all right, I 
will do that.''
    Let me tell you something: The consequence of this 
legislation, cumulative over time, no one in particular to 
blame, was most of the national security stockpile of the 
United States was junk, not relevant to anything we were going 
to do.
    On the other hand, there were a few items in that stockpile 
that had appreciated at an incredible rate, and this turned out 
to be some of the best investments that government had ever 
made. It may be the only time in history that anything the 
United States did ever made a profit, at least with respect to 
those items.
    I raise that example, in part, because it is not this 
issue, but to highlight in a more neutral context the kinds of 
issues that I am afraid people are going to have to step up to, 
because when--you ask how many billions of dollars do we want 
to spend on putting U.S. plutonium in glass, or mobilizing it 
in some way, versus how much we want to put on making sure that 
the Russians actually not only have physical security, but they 
actually have all the other methods under way to make sure they 
have a handle on their material.
    Some years ago, about five or six--no, more than that, 6 or 
7 years ago, after the National Academy of Sciences did its 
study on long-term plutonium disposition, there was sort of an 
internal brainstorming session. And a large number of 
government officials got together and informally went off in 
groups, and I was asked to chair a little group on the 
international security consequences of long-term plutonium 
disposition.
    And I did not have any particular ax to grind, but one of 
the things I learned was that special interests manifest 
themselves in many strange ways, but in the end, that group 
reached a consensus. And I think that it is a consensus that we 
ought to at least revisit and check to see if it still applies 
today.
    And that was that the most important long-term security 
implications of plutonium disposition were the short-term 
security implications, because what was clearly the case is 
that because we were trying to go to the Russians, get in their 
face, and say, ``You do not understand. Plutonium is bad,'' 
they would not engage us on securing plutonium.
    Now, fortunately, we were able to turn that around and 
finally get them to engage, but they saw this as a conspiracy. 
Some describe it to me as potential economic warfare. Well, the 
truth is that we in the United States are not enamored of a 
plutonium economy. Some in Russia are totally enamored of a 
plutonium economy.
    Those are, in many cases, economic issues, but they in 
other aspects become disguised as nonproliferation issues, even 
though they are truly important nonproliferation consequences.
    I have probably gone on too long. I will stop there.
    Senator Biden. Dr. Allison.
    Dr. Allison. I will make three points quickly. First, the 
puzzle you raised, Senator Biden, about why it is hard to raise 
$1 billion a year, as the Clinton program roughly has been, or 
$3 billion, as the Task Force calls for to address the most 
important threat to U.S. national security: It is a puzzle, and 
I think your notion of trying to understand how the fulcrum 
works and where and how it might be moved, is very important.
    If the Defense Department had as a mission homeland 
defense, which is emerging, and if we are asked and required to 
explain how in order to defend the American homeland this issue 
was addressed, and where in the Defense budget, and where in 
the Defense programs it was dealt with, one might be able to 
get it better into a picture, rather than having it spread. 
That is my first point.
    The second point on your question of high-level 
coordination: As Nunn-Lugar-Domenici had recommended, the Task 
Force recommends that in the White House there should be 
somebody, as Lloyd said, of gravitas, with the President's 
confidence, able to deal with the rest of the U.S. Government, 
able to deal with the Congress, and also able to deal with oyr 
allies.
    As you heard from Senator Baker's presentation, he has this 
issue; he understands it deeply, and cares very deeply about 
it. My hope was that this was going to be his assignment, so I 
am not proposing that you divert him from Japan--though, he 
would have taken this assignment, I believe, and he would be 
able to do this assignment, but he is the kind of person that 
you need.
    The final, third point on your first question: If you go 
back to Nunn-Lugar in 1991, or your puzzle about Clinton, and 
the Clinton administration, the highest priority, but not 
really a strategic plan for getting the job done, and not the 
budget that would go against a program of that sort, Nunn-Lugar 
was conceived in a deficit-defined environment. So you can 
remember very well that anything that costs money, ``Forget 
it.'' Even in and through most of the Clinton administration 
there was a deficit-defined environment.
    The reason why, the Task Force believes, this is a very 
special opportunity for the new administration and for Congress 
now, is that this is a new environment. And one can ask the 
question relative to the crime bill that you mentioned, or 
relative to national missile defense, or relative to many 
things that are elsewhere in the budget, ``How important is 
this? How much impact can you make on it? And for how much?''
    Senator Biden. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Lugar. Senator Nelson. Let me mention to all 
Senators that a vote will occur at 12:15.
    Senator Nelson. Mr. Chairman, I will be very brief. It is 
an honor for me to participate here with two Titans on this 
subject----
    Senator Lugar. That means we are old.
    Senator Nelson [continuing]. And likewise, on the panel, 
both panels.
    I think we have a job to do. Picking up on what Dr. Allison 
has just said, in this environment of a surplus, we better 
strike while the iron is hot, because a year from now there may 
not be as much surplus, and if this is a high national 
priority, we better strike.
    And, Mr. Chairman, you ought to be having a prayer session 
with Senator Domenici, so that he has a sufficient amount in 
that mark.
    Mr. Chairman, you also ought to be having a conversation 
with Senator Byrd and Senator Stevens, so that there is an 
appropriate amount in that appropriations bill. And you give me 
the orders, and I will be your lieutenant, and I will go carry 
some of the water for you.
    I am curious, Dr. Allison. Back in 1992, I had the 
privilege of being at your Institute of Politics, and it was 
right at the time that the Soviet Union had started to 
disintegrate. And I had posed the question to you, ``Do we 
think that the tactical nuclear weapons are going to get out 
into hands that would do dastardly things?'' And you felt 
fairly confident at the time that they were not.
    Would you bring that answer forward, now another 8 to 9 
years, not only with regard to the tactical nuclear weapons, 
but with regard to the uranium, and plutonium, and so forth?
    Dr. Allison. Well, it is a good question. Let me try to 
answer briefly. I think it is a remarkable fact for which we 
should all give thanks every day, and I do, that no tactical 
nuclear weapons, of which there were some 15,000 or 17,000 
spread across the former Soviet Union, came loose, and found 
their ways into the international arms bazaars.
    I do not believe that would have happened without Nunn-
Lugar, which is part of the reason why I am such a great fan of 
what Senator Lugar and Senator Nunn did. It would have also not 
have happened without a good appreciation by the Russian 
military and Russian security services of their own self-
interest.
    If this was something they were doing for us as a favor, 
this would be one subject, but as Senator Lugar said, one of 
the nice features of this is that you are building on a 
foundation, a bedrock of genuine common interests, because as I 
explain to Russian colleagues every time I see them, which is 
almost every other day, the first target for a tactical nuclear 
weapon in the hand of a Chechyan is not New York, and it is not 
Washington. It is Moscow; it is Petersburg; it is right there 
at home. So that has been, I think, a great accomplishment.
    Second, I think, without Nunn-Lugar, you would not have 
seen four strategic nuclear arsenals, Russia, Ukraine, 
Kazakhstan, and Belarus--shrink to one. So all the weapons, 
more than 2,000 weapons or missiles that were aimed at the 
United States are now completely gone. So all that is back in 
Russia. So that is the good news.
    The bad news is that over the last decade as we have 
watched this story, Russia has become more chaotic, more 
criminalized, more corrupted. So I still regard it as a 
remarkable fact every day that professionals who are in this 
system, and who sometimes do not have their pay provided for 
some period of time, and two or three of them, if they got 
together, could successfully steal this material, have so far 
not--that it has not happened.
    So I would say we can give thanks for what has been 
accomplished. We can look at what we have learned in this 
initial period.
    But the reason why I think there is an urgency for getting 
on with the job now is that tomorrow you could see a rupture 
after which we might say, ``Well, this was inevitable. There 
was not much we could do,'' whereas, in fact, I think that 
actually, given the mentality now, the recognition of the 
problem, and all that has been learned in the work of Nunn-
Lugar to this period, it is timely for a plan to get the job 
finished.
    Senator Nelson. Mr. Chairman, let me just express my 
appreciation, also, for the leadership that you, and Sam Nunn, 
and Joe Biden took on in this early in the nineties. Now, this 
magnificent creature that you have created has to be fueled 
with additional fuel, so let us go do it.
    Thank you, Mr. Chairman.
    Senator Lugar. An excellent sentiment. I really appreciate 
that very much, because as Senator Biden and I were just 
discussing, it is wonderful to have new allies, and you are 
one, Senator Nelson, and we appreciate that.
    Let me just thank both of you very, very much for your work 
on this Commission, and for your work throughout the years, as 
distinguished public servants, as genuine thinkers, inside and 
``outside the box,'' or wherever you were doing this thinking, 
because you have enriched our hearing today and our 
understanding and I think our resolve to move ahead.
    Senator Biden. Mr. Chairman, before you close, could I ask 
unanimous consent that the letter from the members of the Task 
Force, Baker, McClure, Butler Derrick, David Boren, Sam Nunn, 
Lee Hamilton, Gary Hart, Alan Simpson, et cetera, be entered 
into the record?
    Senator Lugar. Yes, indeed.
    [The letter referred to follows:]

                                          January 18, 2001.
The Honorable Joseph R. Biden Jr.
United States Senate,
221 Russell Senate Office Building,
Washington, DC.

    Dear Senator Biden:
    The condition of nuclear materials, weapons and scientists in 
Russia presents an urgent risk to national security.
    We are writing as a result of our just-concluded work as members of 
a bipartisan task force, commissioned by Secretary Bill Richardson, 
which examined the Department of Energy's nonproliferation programs in 
Russia. A copy of our final report, ``A Report Card on the Department 
of Energy's Nonproliferation Programs With Russia,'' is enclosed. Our 
findings confirm that Russia's current inability to secure nuclear 
material and technical talent presents rogue nations and other bad 
actors with an unprecedented opportunity to steal or buy nuclear 
materials and technology.
    No one in our bipartisan group dissented from the conclusion that 
the current U.S. nonproliferation programs are inadequate to meet the 
threat of proliferation of nuclear materials and expertise.
    U.S. government programs have achieved some remarkable successes, 
but continuing at current levels won't get the job done quickly enough. 
Therefore, we recommend heightened attention to this issue, increased 
funding for these nonproliferation programs, including increased allied 
funding and participation, and formulation of a coordinated government-
wide strategic plan to secure and neutralize this nuclear material and 
expertise.
    Sustained support from Congress is an essential prerequisite to 
success in this endeavor. We urge you to work with the new President to 
strengthen the U.S. nonproliferation effort. Your efforts will make a 
major contribution to world security and will mean a great deal to the 
dedicated staff who keep these programs running.
    Thank you for your consideration.

            Sincerely,

                    Howard Baker.
                    David Boren.
                    Gary Hart.
                    James McClure.
                    Sam Nunn.
                    Alan Simpson.
                    Butler Derrick.
                    Lee Hamilton.
                    David Skaggs.

    Senator Biden. As well Mr. Chairman, I am asking your 
permission and permission of the witnesses for some of us to 
submit--and I will not burden you with a lot of questions--but 
several questions about two areas.
    I would like you, if you would, to think about what it is 
that you can criticize most in the existing programs, and where 
their shortfalls are. Because I do not think we should go into 
this in a way that says, ``Everything is wonderful the way it 
is, and no need to change''; and second, if you would be 
willing to expand on where the economic interests and the 
strategic interests butt heads most often. It would be useful 
for me to educate myself, but also for us to educate our 
colleagues on this issue.
    Senator Lugar. I would certainly encourage the witnesses to 
respond, if you would. You have given us a number of practical 
examples from your experience. That is why the questions are 
especially relevant, because you have had to work with the 
bureaucracy, in addition to your own idealism, and that would 
be helpful to this committee, and to all others who are 
interested in pursuing this.
    We thank you very much. The hearing is adjourned.
    Senator Biden. Thank you, gentlemen.
    [Whereupon, at 12:15 p.m., the hearing was adjourned.]