[Senate Hearing 107-239]
[From the U.S. Government Printing Office]



                                                        S. Hrg. 107-239

           HOMELAND DEFENSE: EXPLORING THE HART-RUDMAN REPORT

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON TECHNOLOGY, TERRORISM,
                       AND GOVERNMENT INFORMATION

                                 of the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 3, 2001

                               __________

                          Serial No. J-107-10

                               __________

         Printed for the use of the Committee on the Judiciary

                                _______

                  U.S. GOVERNMENT PRINTING OFFICE
77-095                     WASHINGTON : 2002

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                       COMMITTEE ON THE JUDICIARY

                     ORRIN G. HATCH, Utah, Chairman
STROM THURMOND, South Carolina       PATRICK J. LEAHY, Vermont
CHARLES E. GRASSLEY, Iowa            EDWARD M. KENNEDY, Massachusetts
ARLEN SPECTER, Pennsylvania          JOSEPH R. BIDEN, Jr., Delaware
JON KYL, Arizona                     HERBERT KOHL, Wisconsin
MIKE DeWINE, Ohio                    DIANNE FEINSTEIN, California
JEFF SESSIONS, Alabama               RUSSELL D. FEINGOLD, Wisconsin
SAM BROWNBACK, Kansas                CHARLES E. SCHUMER, New York
MITCH McCONNELL, Kentucky            RICHARD J. DURBIN, Illinois
                                     MARIA CANTWELL, Washington
                      Sharon Prost, Chief Counsel
                     Makan Delrahim, Staff Director
         Bruce Cohen, Minority Chief Counsel and Staff Director
                                 ------                                

   Subcommittee on Technology, Terrorism, and Government Information

                       JON KYL, Arizona, Chairman
MIKE DeWINE, Ohio                    DIANNE FEINSTEIN, California
JEFF SESSIONS, Alabama               JOSEPH R. BIDEN, Jr., Delaware
MITCH McCONNELL, Kentucky            HERBERT KOHL, Wisconsin
                                     MARIA CANTWELL, Washington
                Stephen Higgins, Majority Chief Counsel
                 David Hantman, Minority Chief Counsel


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

Feinstein, Hon. Dianne, a U.S. Senator from the State of 
  California.....................................................     3
Kyl, Hon. Jon, a U.S. Senator from the State of Arizona..........     1

                               WITNESSES

Hamilton, Hon. Lee, Commissioner, U.S. Commission on National 
  Security, and former Representative in Congress from the State 
  of Indiana.....................................................     9
Hart, Hon. Gary, Co-chair of the U.S. Commission on National 
  Security, and former U.S. Senator from the State of Colorado...     7
Rudman, Hon. Warren, Co-chair of the U.S. Commission on National 
  Security, and former U.S. Senator from the State of New 
  Hampshire......................................................     4

                       SUBMISSION FOR THE RECORD

U.S. Commission on National Security/21st Century, statement.....    27

 
           HOMELAND DEFENSE: EXPLORING THE HART-RUDMAN REPORT

                              ----------                              


                         TUESDAY, APRIL 3, 2001

                               U.S. Senate,
        Subcommittee on Technology, Terrorism, and 
                            Government Information,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:05 p.m., in 
room 226, Dirksen Senate Office Building, Hon. Jon Kyl, 
Chairman of the Subcommittee, presiding.
    Present: Senators Kyl and Feinstein.

  STATEMENT OF HON. JON KYL, A U.S. SENATOR FROM THE STATE OF 
                            ARIZONA

    Chairman Kyl. The hearing will come to order.
    I welcome everyone to this hearing of the Subcommittee on 
Technology, Terrorism, and Government Information. At today's 
hearing we will examine the findings of the United States 
Commission on National Security/21st Century, as presented in 
its report entitled, ``Road Map for National Security: 
Imperative for Change''.
    I know that one of our witnesses, Hon. Lee Hamilton, will 
be arriving shortly, but in view of the fact that we may have a 
vote in the 3:30 timeframe, Senator Feinstein and I would like 
to proceed. We will make our opening statements, and we can 
brief Mr. Hamilton on the wonderful things we had to say after 
he arrives, but that way we can get more quickly to the 
comments that the two of you have to make. So, with your 
indulgence, we will proceed with our opening statements.
    This is the third hearing that this Subcommittee has held 
on the subject of terrorism and homeland defense in the past 
year. Each hearing has focused on the findings of a different 
commission. Each of the commissions has approached the issues 
from a slightly different perspective. It is the intent of this 
Committee to examine the details of their recommendations and 
arrive at a common understanding of the critical 
vulnerabilities that must be addressed through legislative 
action.
    We are poised to begin a new era, and all of the recent 
commission reports have emphasized the changing nature of the 
challenges to the security of our Nation and our people and our 
interests abroad. Although we're considered by most to be the 
sole super power in a complex world, capable of projecting 
power around the globe, the security of our citizens, both at 
home and abroad, is threatened. Terrorist organizations and 
states that support terrorism have recognized the need to 
attack the U.S. in an asymmetric fashion, spending time and 
resources to locate seams in our protection before striking.
    From the tragedy of the bombing of the World Trade Center 
in New York City, to the horrific destruction of the Federal 
building in Oklahoma City, the last decade has witnessed an 
increase in the scale of devastation sought by terrorists 
within our borders. As deadly and devastating as these two 
attacks were, imagine the level of carnage if those responsible 
had been more technically proficient or had weapons of mass 
destruction. And as the bombings of U.S. embassies in Africa 
and the USS Cole demonstrate, Americans abroad remain tempting 
targets for terrorism.
    The Commission represented before us today was established 
by Congress and faced the daunting task of examining the entire 
spectrum of national security, of which homeland defense is 
only a segment. Understandably, its treatment of the issues is 
broad-based. It is my hope, and I think the hope of Senator 
Feinstein and others on the committee, that we can draw from 
these witnesses a greater depth of understanding of the 
vulnerabilities they uncovered in the study, of the structure 
and capabilities of the agencies charged with our Nation's 
homeland defense.
    There are a variety of recommendations presented in the 
report. Some of them, like combining the Coast Guard, Customs 
Service and Border Patrol under the control of a National 
Homeland Security Agency, built upon the foundation of the 
Federal Emergency Management Agency, would entail the wholesale 
restructuring of multiple Federal agencies. Other 
recommendations, like increasing the intelligence capabilities 
of the Customs Service, are less sweeping in nature.
    Regardless of the perceived complexity of the 
recommendations, our discussion here today will lead to a 
clearer understanding of the issues that must soon be addressed 
by the Congress if we are to adequately prepare for the 
national security challenges of the new millennium.
    Senator Feinstein and I, over the course of the next few 
months, will work with members of the Judiciary Committee and 
other committees in the Congress to synthesize the 
recommendations of the Hart-Rudman Commission, and the other 
commissions that have appeared before us, into legislation that 
will address the weaknesses and vulnerabilities highlighted in 
their respective reports.
    We are both pleased to welcome Senators Hart and Rudman 
back to the Senate. Your leadership and diligence as co-chairs 
of the Commission is greatly appreciated. We are also glad to 
see that Commissioner Lee Hamilton, former Chairman of the 
House Committee on Foreign Affairs, could join us here. As we 
mentioned, Representative Hamilton, we decided to begin before 
you arrived, since you probably wouldn't miss much in our 
presentation, but that would enable us to have more time to 
hear from all of you before we have to proceed with other 
Senate business.
    Before we hear from the three of you, I would like to turn 
to Senator Feinstein for her opening remarks.

  STATEMENT OF HON. DIANNE FEINSTEIN, A U.S. SENATOR FROM THE 
                      STATE OF CALIFORNIA

    Senator Feinstein. Thanks very much, Mr. Chairman.
    Let me welcome our witnesses. I think this is certainly a 
consequential panel. You are three people, two in the Senate 
and one in the House, who, have literally decades of experience 
between them, and all of you very respected on both sides of 
the aisle. So thank you so much for being on the Commission and 
also for being here today.
    Let me begin by saying that I agree with the thrust of your 
recommendations, that we need to make fundamental changes in 
our counterterrorism policy. I couldn't agree more that our 
current policy is fragmented, uncoordinated, and unaccountable. 
As I see it, a main problem here is that we don't know who's in 
charge of preparing for and responding to a catastrophic 
terrorist act. We discussed this Mr. Chairman, at the last 
hearing we had.
    For example, the GAO recently found that Federal, state and 
local governments had not agreed on a clear chain of command 
for dealing with a terrorist incident. I disagree with those 
who suggest that such a clear chain of command is impossible, 
or that bureaucratic ``turf wars'' would prevent us from 
designating a lead agency to take charge in the event of a 
terrorist attack. After all, other western industrialized 
countries facing terrorists have met this challenge. As another 
recent GAO report found, of six countries surveyed--ours, 
Canada, France, Germany, Israel, and the U.K.--only the United 
States has failed to determine clearly who would be in charge 
of responding to a terrorist incident.
    Another problem is that the government has spread 
counterterrorism assets over at least 45 agencies, and these 
agencies are not coordinated to prevent or protect against or 
respond to a major terrorist attack. One result is that 
terrorism has a tendency to drop off the radar screen of the 
national security establishment.
    As a former United States Customs Commissioner, Ray Kelly, 
a man for whom I had a great deal of respect, has said, ``The 
whole issue of counterterrorism needs an advocate, a high-level 
person, perhaps a Cabinet officer, to make certain that there's 
consistent attention to the issue.''
    Another problem is that agencies tend to duplicate each 
other's efforts, thus getting in each other's way and wasting 
taxpayers' dollars. As former FEMA chief, James Lee Witt, said 
recently, ``You've got too many agencies doing the same 
thing.''
    In addition, many Federal agencies seem to be focusing on 
general vulnerabilities, rather than credible threats, and on 
worst-case scenarios, instead of likely probabilities. For 
example, HHS has recently tried to establish a national 
pharmaceutical and vaccine stockpile that doesn't match 
intelligence agencies' judgments of the most likely chemical 
and biological agents that terrorists might use.
    Now, such problems are not just bureaucratic. They could 
result in needless loss of tens of thousands of lives in a 
catastrophic terrorist attack. Many experts, including members 
of the Commission, believe that a catastrophic terrorist attack 
is virtually inevitable in the next 25 years. Such an attack 
could take many forms. The most likely one would be an assault 
on a large city with a germ weapon or cyber attack on the East 
Coast air traffic control system. In fact, as a witness told us 
last week at a Subcommittee hearing, a group or nation with a 
budget of around $10 million, and a team of about 30 computer 
experts, could wreak billions of dollars of damage to the 
United States infrastructure.
    Also, we cannot forget the most obvious and probable 
terrorist threat, that from simple conventional weapons. The 
terrorist who bombed the USS Cole, our African embassies, the 
Atlanta Olympics, and Alfred P. Murrah building in Oklahoma 
City, and the World Trade Center all relied on a range of 
readily available, easily obtainable bomb-making materials. For 
example, the urea nitrate bomb used at the World Trade Center 
costs about $400 to make. That bomb caused at least a half-a-
billion in damages and the loss of a lot of American lives.
    To be sure, America has always viewed itself as relatively 
safe from terrorist attack, surrounded as it is by friendly 
neighbors and large oceans. However, the threat of attack 
remains quite real.
    So, Mr. Chairman, I want to commend these witnesses and I 
look forward to hearing their comments. As we discussed at the 
last hearing, I'm one that does believe that we need to have a 
central person in charge, and perhaps the legislation that 
we've been talking about might deal with that question.
    Chairman Kyl. Thank you very much, Senator Feinstein.
    As Senator Feinstein said, we have represented at this 
table here a considerable degree of expertise in former Members 
of the U.S. Congress, and we take very seriously the 
recommendations of the report that you put together and look 
forward to continuing to consult with you as we proceed to try 
to take the three different commission recommendations, and to 
meld them into some cohesive format for legislative purposes, 
and we recognize there will be other responses as well as 
purely legislative.
    Then, as we begin to work with our colleagues in the House 
who have a similar effort underway, to consult with you to get 
your ideas about how best to proceed with this, with the goal 
in mind of at least dealing with the legislative side of this, 
if we can, this year, so I appreciate very much the work you 
have done
    Let me call upon you, Senator Hart, Senator Rudman, and 
Representative Hamilton, to proceed in the way you best deem 
appropriate.

   STATEMENT OF HON. WARREN B. RUDMAN, CO-CHAIR OF THE U.S. 
 COMMISSION ON NATIONAL SECURITY, AND FORMER U.S. SENATOR FROM 
                   THE STATE OF NEW HAMPSHIRE

    Senator Rudman. Thank you very much, Mr. Chairman and 
Senator Feinstein. Thank you so much for having us here today.
    First let me ask that a rather long statement representing 
the collective view of those of us here, plus former Secretary 
of the Air Force Rice, who was delayed in California, a flight 
that couldn't get here, we ask that that statement be placed in 
the record.
    Chairman Kyl. That will be a part of the record, as well as 
his letter indicating his inability to be here. We certainly 
appreciate his testimony as well. Thank you.
    Senator Rudman. Thank you, Mr. Chairman.
    Let me give you a quick background on this Commission. We 
have been working now for two-and-a-half years. This was the 
brainchild of former Speaker Gingrich and President Clinton, 
who in a conversation 1 day at the White House decided that 
this kind of a broad-ranging study of the United States 
national security for the 21st century ought to be done. The 
Commission was put together by them. It was then turned over to 
DOD for funding.
    Let me just remind you who the members were, because it's 
remarkable when you look at the diversity of the membership of 
this committee, politically and philosophically, that you have 
a consensus on 50 specific recommendations that there was total 
agreement on.
    Of course, Senator Hart and I co-chaired this. Anne 
Armstrong, former Chairman of the President's Foreign 
Intelligence Advisory Board and former Ambassador to Great 
Britain; Norman Augustine, a former Chairman of Lockheed-
Martin, and a member of many commissions in defense.
    John Dancy, former NBC News foreign correspondent and 
Congressional correspondent; John Galvin, former head of NATO; 
Les Gelb held several very important positions in the 
administration, I believe, of President Carter, and then went 
on to become president of the Council of Foreign Relations.
    Also, Newt Gingrich, Lee Hamilton, and Lionel Ulmer, who 
was Undersecretary of Commerce for International Trade; Donald 
Rice, former Secretary of the Air Force, former Chairman of 
Rand Corporation; Jim Schlesinger, who has so many titles, if I 
went through them, I would consume all the time of the hearing; 
Harry Train, a four-star admiral, former CINCLANT; and Andrew 
Young, former Ambassador to the United Nations and, of course, 
Mayor of Atlanta, and the head of many other organizations.
    We worked for two-and-a-half years. This is not a staff-
driven report. This is driven by the Commissioners themselves. 
We had a number of weekend meetings away from the city, in 
which we worked on all of these issues.
    I am pleased to tell you that this report was written not 
to make it easy for you. We did not sit down and decide we will 
recommend what is politically possible. We put down what we 
thought ought to be done. The making of policy, of course, is 
up to you, not us. So we gave you recommendations that we truly 
believe in.
    Before I proceed, let me introduce for the record someone 
who contributed enormously to our effort, and that is former 
retired, four-star Air Force General Chuck Boyd, who was our 
Executive Director. He assembled an incredible staff of people 
who are truly experts in the area to guide the Commission.
    We have been thinking about this issue very diligently now 
for almost 3 years. Remember, our Commission was created to 
provide a long-term perspective on national security problems 
and the structure of the Federal Government. We were not 
looking for easy challenges or easy fixes. We were empaneled to 
make sure our National security mechanisms were not calcified 
in place during the cold war, and that the policies, processes 
and structures we have today are appropriate for the new 
century.
    I am particularly proud of how well the Commission worked 
together and how the Commission applied themselves to some 
tough issues.
    Over the course of those two-and-a-half years, perhaps the 
knottiest issue we uncovered is the one we are here to talk 
about today--the problem of securing our homeland. The emerging 
world we came to understand and described in the first of our 
three reports has sobering implications for this Nation's 
security. That world is one of proliferating dangerous 
technologies in the hands of all manners of actors on the world 
stage, who never before in history could seriously threaten a 
great state such as ours. There are demagogues and tyrants, 
zealots and sophisticated international criminals, and those 
who are, to put it bluntly, just plain nut cases. We have the 
whole panoply of people that we have to be concerned about.
    Add to that resentment against the United States because of 
our success and the prominence that we have--because we are the 
symbol of globalizing trends which are leaving much of the 
world behind, and because, frankly, of the arrogance and self-
absorption we sometimes display--this Nation is more likely 
than ever before to be a target.
    Convinced that the threat is real, dangerous and growing, 
we looked for the overall strategy that we could come up with 
to address the threat, and found none, nor did we find a 
coherent organizational structure designed to implement such a 
strategy, should one exist.
    So, Mr. Chairman, Senator Feinstein, our Commission took 
this issue on in its entirety, and made it our No. 1 national 
security concern, which may surprise you. With all of the 
things we looked at, this was our No. 1 national security 
concern, because we truly believe that, with the enormous 
military power we possess, it is the asymmetric threat that an 
adversary would be able to bring against this great Nation.
    This approach is supported by the principle that authority, 
accountability, and responsibility need to be matched. The 
President is the only one that meets this principle when it 
comes to the overall strategy. Other departmental heads meet 
this criteria for their respective functions and missions for 
certain functions, namely, border security and consequence 
management. We did not find adequate matching of authority, 
accountability, responsibility, or, if you will, budget 
authority. Accordingly, we proposed a realignment of these 
areas to provide the basic tools needed to enhance our security 
and to reduce our gaps.
    Of particular concern is the gap in capability and in 
budgetary resources for these missions. I realize that this 
Committee has endeavored to provide oversight and resources to 
growing demands on our border activities. We salute your 
insight and your resolve in helping these critical activities 
to get the funding they need to meet future threats. But much 
more is needed.
    Thanks, again, for your invitation. I will turn it over now 
to Senator Hart.
    Chairman Kyl. Thank you.

STATEMENT OF HON. GARY HART, CO-CHAIR OF THE U.S. COMMISSION ON 
 NATIONAL SECURITY, AND FORMER U.S. SENATOR FROM THE STATE OF 
                            COLORADO

    Senator Hart. Mr. Chairman, Senator Feinstein, I join my 
colleague, Warren Rudman, in thanking you for your hospitality 
and the work that you're doing on what we believe, 
collectively, to be, as Senator Rudman has said, the No. 1 
security threat to this country in the next 25 years.
    We know that you have already put a great deal of effort, 
collectively and individually, to examine an agency such as the 
Border Patrol, the Customs Service, you and other members of 
this subcommittee, as well as the full committee. We want to 
share with you our thoughts on why consolidation is extremely 
important.
    The Customs Service, of course, was originally created, I 
think, under Alexander Hamilton as a revenue device, a means by 
which we would collect revenues from imports. The role of the 
Customs Service has changed enormously. It is now a law 
enforcement agency, obviously. The Border Patrol has been 
added.
    The Coast Guard, which obviously has had a mission of 
defending or monitoring our shores for 200 years or more, 
carries out its mission. But the fact of the matter is, under 
the revolutions now going on in this country and the world, all 
of these agencies, individually, are challenged, because none 
of them, individually, can answer the threat to this country.
    To quantify that threat, I think some figures are 
important. These are figures from 1999 and, of course, the 
numbers have gone up since then.
    Four hundred and seventy five million crossed our borders 
in 1999, 125 million vehicles, 16.5 million trucks, 5 million 
imported maritime containers, and 21.5 million import shipments 
that needed to be monitored for compliance with over 400 laws 
and 34 international treaties.
    The point is that the volume and velocity of the challenges 
to these separate agencies and, added on to that, the terrorist 
threat which each of these individual numbers represents, or 
could represent, simply overwhelms the maize of 40 or 50 
agencies that Senator Feinstein has mentioned, presently trying 
in some way or other to deal with this problem.
    That's why we have come up with the need for a National 
Homeland Security Agency. It is not, by any means, any 
imperative on anyone's part of this commission, or collectively 
the commission, to create some new Federal agency. We're all 
familiar with the resistance to that kind solution. As my 
colleague, Senator Rudman, has colorfully said, I think, on 
other occasions, the notion of the Tsar doesn't work here any 
better than it worked in Russia, so why should we think about 
creating some sort of a tsar to oversee this maze of Federal 
bureaucracies.
    The fact of the matter is, each of these agencies that we 
recommend consolidating under the National Homeland Security 
Agency, those I have mentioned and those I have not, are 
intended to be brought to bear in favor of a strategy which 
this Commission strongly recommends. Some of our critics have 
already said that we have no strategy for this.
    Indeed, we have a strategy for this security agency. It is, 
first of all, prevention, finding out the threat, identifying 
the threat in very concrete terms, and preventing it from being 
carried out.
    Second, protecting our borders, if that threat gets as far 
as the U.S. borders, either land or sea or air. And then, 
finally, responding. If the worst possible thing should happen, 
an American city or a collection of American cities being 
prepared immediately to respond and limit the damage and take 
care of those in need.
    It has been said that our idea for a homeland security 
agency completely overlooks the state and local component. 
That, also, is not the case. We refer in a number of points in 
our third report--by the way, this is the third volume of three 
reports, the first two laying out the groundwork for this one--
that this homeland security agency must cooperate, in very 
detailed ways, with state and local authorities, as the Federal 
Emergency Management Agency itself does already.
    Finally, there has been criticism, including from the 
National Guard itself, about the role we propose for the 
National Guard in this new agency. The National Guard is given 
a lead, if not the leading role. Certain spokespersons for the 
Guard have resisted that on the ground that this will deprive 
them of their current mission of supporting expeditionary 
forces abroad, follow-on forces and augmenting forces. That is 
not our intent at all, and this has been explained in great 
detail by General Boyd and other representatives of this 
Commission.
    We worked with the Guard throughout the preparation of this 
report. In fact, those of us who have read the Constitution, as 
members of this Subcommittee have done, understand that the 
principal mission, not the sole mission, but the principal 
mission of the militia in this country, from 1789 forward, has 
been the defense of the homeland. So all we're proposing is 
that the Guard restore its primary constitutional obligation to 
its primary mission in the 21st century.
    This is not to deprive the Guard of a role in expeditionary 
activities in the future. It is simply to say that they need to 
pay attention to their primary constitutional duty.
    Mr. Chairman, we are living in a revolutionary time, as we 
did in the mid-20th century. The precedent for this Commission 
can only be found in 1946 and 1947, the period immediately 
following World War II and preceding the cold war. Then a 
collection of commissions--no single commission such as ours--
led to the designation of a foreign policy and national 
security policy, briefly described as containment of communism. 
But that policy led to the creation of the Defense Department, 
the United States Air Force, the Central Intelligence Agency, 
and the statutory framework of the National Security Act of 
1947 which gave us the basis for carrying out the cold war for 
half-a-century.
    The fundamental fact that we all face today is we're no 
longer confronted with a cold war. We are confronted with a 
totally different world: economic globalization and finance, 
world of information and communications technologies, and of 
political democratization and integration. All of those, as we 
have indicated, cause us to believe, and we know will cause you 
to believe, that we must examine every one of our Federal 
structures, as we advocate in this report, including those that 
presently exist and those that need to exist, to address this 
new world.
    I join my colleague, Senator Rudman, in paying enormous 
compliment to General Charles Boyd, a genuine war hero, and the 
superb national security study group, the staff that he put 
together, for the work they have done tirelessly for almost 3 
years to make this report possible, and I hope to make this 
Nation more security.
    Thank you very much.
    Chairman Kyl. Thank you, Senator Hart.
    Representative Hamilton.

 STATEMENT OF HON. LEE HAMILTON, COMMISSIONER, U.S. COMMISSION 
  ON NATIONAL SECURITY, AND FORMER REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF INDIANA

    Representative Hamilton. Thank you very much. I apologize 
for being a few minutes late, but I got here--
    Chairman Kyl. You didn't miss a thing.
    Representative Hamilton. I got here in time enough to hear 
both the major part of your statement and Senator Feinstein's 
statement. It very quickly became apparent to me that you don't 
need much advice from us. You've got a pretty good 
understanding of the problem of terrorism and what this Nation 
confronts.
    I do want to say a word of appreciation to Senators Rudman 
and Hart. Senator Rudman read a moment ago the members of the 
Commission. If you can get Andy Young and Newt Gingrich to 
agree on things, you're doing pretty well. They did it time and 
time again. They did it on 50 separate occasions. That's no 
small achievement. So we've had very, very good leadership.
    I was impressed, too, in the opening statements that you 
made, about the emphasis you put on how poorly organized we are 
in this government of ours to deal with terrorism, and that's 
really the principal point. We believe that a direct attack 
upon American citizens, on American soil, is very likely in the 
next 25 years, and some of these attacks could be catastrophic. 
That's really what drives this recommendation.
    We made 50 recommendations in this report overall. Seven of 
them were related to terrorism, and that shows you the emphasis 
that the Commissioners gave to this problem. We believe, in 
short, that homeland security simply has to be addressed with 
greater urgency. There is not a single Member of the U.S. 
Senate, and there is not a single Member of the U.S. House of 
Representatives, who does not want to do all they possibly can 
to protect the national security of the United States. We're 
saying that you had better pay a lot more attention to how this 
government--not just this government, but state and local 
governments as well--are organized and financed to deal with 
terrorism.
    We believe that the U.S. Government is very poorly 
organized to deal with these threats, and that the threats are 
genuine. So I endorse the statements that my two leaders have 
made here. We see, as you do, that the growth of terrorism is 
very strong, and the growth of terrorist groups, the 
availability of all kinds of weapons of mass destruction and 
weapons of mass disruption, the vulnerability of the United 
States to all kinds of terrorist threats were very obvious to 
us.
    Most of our recommendations pertained to organization. Now, 
I don't know that we've got it right. It's a complicated matter 
in our government. I think we should be given some credit for 
addressing in detail how we think the U.S. Government should 
organize itself to deal with terrorism. You might have a 
different view of it and different opinions on it. You probably 
do. I'm not sure that any one set of answers is the answer
    But we've made a stab at it, and we've made a stab at it in 
very great detail. The central part of it, of course, is the 
establishment of the National Homeland Security Agency. You 
have already indicated the changes that it would require in the 
government. They are very substantial and they hit upon some of 
the most sensitive political groups in this country, and it 
will not be easy to bring about a reorganization. But we think 
it must be done in order to fight more effectively terrorism.
    I will conclude there because my role here is kind of 
backup to the chairmen, but I fully endorse their leadership 
and the report recommendations.
    Chairman Kyl. Thank you very much, Representative Hamilton, 
and all three of you.
    I think probably the best place to start is with some very 
general questions that are pretty well explained in the written 
report, but I would like to have confirmation of exactly how 
you think this would work and how to address some of the 
sensitive political issues just identified by Representative 
Hamilton. I take your point, Representative Hamilton, that 
almost all of us appreciate fairly well the degree and, to some 
extent, the nature of the threat. The real question then is 
exactly what to do about it.
    I would like to have you identify for everyone present what 
you think the primary mission of this new agency is. 
Specifically, is it to keep terrorists out of the country and, 
in that regard, what do you mean by protecting our borders? Is 
it to gather intelligence and thereby prevent attacks, since 
that's deemed to be probably the most effective way of dealing 
with the terrorism problem, before the fact? Is it to gather 
information relative to an investigation after an attack? Is it 
primarily to deal in a responsive way to the various human 
needs, noninvestigative needs, following an attack, or all of 
the above? That's A.
    And then B, if I could, since you have identified existing 
agencies to perform some of these functions, clarify for us 
whether these agencies will continue to autonomously provide 
the service currently provided, or whether they will 
necessarily be changed, as they are to some extent, 
incorporated into a new agency, to wit: for example, the 
National Guard, will it still have a mission of supplementing 
forces abroad, will the Customs Service still deal with the 
issues of inspecting cargo coming into the country, and will 
the Border Patrol still try to prevent illegal alien smuggling, 
drug smuggling and the like?
    Senator Rudman. Let me lead off and maybe answer your 
questions that way, with all three of us commenting on the 
questions, because I think we all have a different portion of 
the report that we've worked on and I think you would get a 
more complete answer.
    To answer your first question, prevention, protection, 
response, is what's built into this new agency. However, let me 
be very clear that when it comes to prevention, you are quite 
right, Mr. Chairman, that in terms of certain kinds of things 
that could happen in this country, particularly weapons of mass 
destruction, intelligence is the No. 1 factor in doing that.
    We do not suggest for a moment that the major intelligence 
activity will change from where it is today. The major 
intelligence activity resides in the FBI's counterintelligence 
department, its so-called National Security Division, and in 
the Central Intelligence Agency's divisions overseas, 
including, very importantly, their liaison relationships with 
foreign intelligence services. So we are not talking about 
changing that.
    Frankly, as you probably know, I still continue to serve as 
Chairman of the President's Foreign Intelligence Advisory 
Board. I will tell you that, to the extent I can say anything, 
I think they do that very well. It's too bad that most 
Americans can't know what they do because they do it well.
    Now, once you get beyond that, however, we are talking 
about protection and prevention. Let's take the Customs 
Service--and all of them, by the way, will have these roles. As 
to the Customs Service, Senator Hart read a statistic, which is 
a fascinating statistic--I forget the precise number--on how 
many million cargo containers come into this country every 
year. It shocked all of us to know that not only are a fraction 
of those every inspected, for a whole bunch of reasons--and I 
suppose technology will change and maybe they'll be easy to 
inspect them other than the conventional way--but many of them 
are transported huge distances from the port of embarkation. 
They might go from San Francisco to Phoenix and be put in a 
truck depot and not opened for weeks or months. So there is a 
major prevention component with Customs and with the Border 
Patrol in both of those instances.
    All of these agencies would continue to do the functions 
that they do now. The difference is there would be a strategy 
and there would be direction and there would be response.
    Now, let's talk about response. We believe, and we say so, 
that in the event of the unthinkable, a weapon of mass 
destruction essentially being imposed upon the people of any 
major American city in which the loss of life and property 
would dwarf anything we are familiar with, that the only 
organization in the U.S. Government that can deal with it, once 
that happens, is the United States military.
    This is what happens today when we have natural disasters. 
We say the Guard is a very important part of that. But somebody 
has to plan what you do when it happens. Quite frankly, 
although the military spends some time at it, that is not their 
primary mission. So this agency would plan, it would prevent, 
it would protect, and it would plan the response.
    I think I have tried to answer both of your questions.
    Chairman Kyl. That's very helpful. Thank you.
    Senator Hart.
    Mr. Hart. I concur very strongly.
    Again, I think the basic answer to the first question is 
the agencies that currently have statutory task to perform will 
continue to perform them. They will be more closely integrated 
in the performance of those tasks, given, as we have indicated, 
the volume and velocity of the challenge, and they will be 
integrated more closely with the intelligence collection 
agencies and services of the government. So they will know, in 
real time, where the threat is coming from, how it is likely to 
be carried out, rather than just hope that these 40 or 50 
agencies that presently exist will talk to each other when the 
time comes, when the threat arrives.
    Finally, on response, the investigating agencies--you 
particularly questioned the investigation of the crime, if you 
will; terrorism is a crime--that will continue to be the job of 
law enforcement agencies, including the FBI and the others. We 
don't envision the FBI being folded into the Homeland Security 
Agency. It might be, but that's not part of our recommendation. 
The investigation of how this matter occurred will happen in 
due course, given the established capabilities.
    What we're more concerned about in the response is the 
human and property damage, particularly the human damage, and 
the management of that. The Guard's role here is so important.
    As you know, in military terms, we talk about forces being 
forward deployed. The forward deployed forces in our homeland 
is the National Guard. It's not the 82nd Airborne Division or 
the First Marine Division. It's the National Guard, in 2,700 
different units. They are the forward deployed forces under our 
Constitution for this mission. They are not presently properly 
trained or equipped for this mission of response, taking care 
of human casualties, and reorganizing communities that have 
been terribly damaged by such a threat, but they can be, and 
they can be in reasonably short order.
    Finally, anticipating a question, Mr. Chairman, the whole 
issue of civil liberties is one that we dealt with at great 
length, as you can imagine. I will just quote one passage from 
our report because it does involve those of you on that side of 
the table.
    ``Congress is crucial as well, for guaranteeing that 
homeland security is achieved--'' and this is emphasized--
``within a framework of law that protects the civil liberties 
and privacy of American citizens.'' We see you, the Congress, 
the representatives of the people, as the defenders of the 
people's civil liberties in this respect.
    Chairman Kyl. Thank you.
    Representative Hamilton. Mr. Chairman, with regard to your 
comment on the mission of the National Homeland Security 
Agency, I think what impresses me is how dispersed and diffused 
the government is today in dealing with the threat of 
terrorism. We know how hard it is in this government to get 
action unless somebody is in charge. You have got to have 
somebody in charge, and you don't have that today.
    So the principal recommendation, I think, here is that the 
agency will have a leader, that leader will be in the 
President's cabinet, and that leader will have the 
responsibility to plan and to coordinate and to integrate all 
of the activities of government with regard to terrorism.
    If you don't make that change, you will not have an 
effective attack on terrorism in this country. If you've got 50 
people directing the attack on terrorism, you've got nobody 
directing it. You have got to concentrate authority, I believe, 
in order to get things done in the war against terrorism.
    The second point, you asked about the National Guard. 
That's a tough one, and it is politically very difficult for 
each of you to deal with it. The National Guard today is 
equipped to conduct sustained combat overseas missions. What 
we're saying in this report is that the primary mission of the 
National Guard has to be homeland security. That means, without 
any question, that its resources and its organization will have 
to change in a major way.
    They're onsite already, as Senator Hart has said. We think 
it's the natural organization to do it. Every one of us knows 
they step in when you have an emergency in your state today, or 
a disaster, and they do a marvelous job. We think they're the 
key agency here. But it will require a redirection of their 
mission.
    Chairman Kyl. I've got some specific follow-up questions, 
but why don't we go back and forth here, Senator Feinstein, and 
I'll give you an opportunity to step in now.
    Senator Feinstein. Thank you, Mr. Chairman.
    Who would you put in charge? Would it be a cabinet officer, 
would it be a military person, would it be an FBI person, would 
it be the Vice President?
    Senator Rudman. Who in the cabinet would do this?
    Senator Feinstein. Yes. You said it should be a cabinet 
responsibility.
    Senator Rudman. It should be a nominee confirmed by the 
U.S. Senate, a civilian, to be secretary of this agency, who 
will essentially be the director of all these other agencies 
which will be contained therein. It's all in the report, in the 
chart and so forth. So we're talking about elevating this.
    You know, a good question. If I was sitting where you're 
sitting, as Gary and I did for a long time, I would probably 
ask me the following question: ``Well, why don't you give it to 
DOD?'' Well, the simple answer is (a), they don't want it, they 
don't think they ought to have it, because it's a totally 
different mission than the mission of the United States 
military. And they're right. They understand fully that there 
is no one else in this country, in the event of a weapon of 
mass destruction being visited on an American city, there is no 
one else that can respond. The communications, the 
transportation, the medical necessities, the U.S. military is 
primed. But they don't want the responsibility of essentially 
managing and preparing and preventing, other than the 
intelligence they do. That's not what they want.
    If you then look at it, you say, ``Well, do you want to put 
it over at the FBI and move everybody there? Or do you move it 
all under Treasury?'' When you look at all of the options, 
which we did, it became very apparent to us that FEMA had the 
national organization that we were thinking about, but we're 
not talking about putting everybody under FEMA. We're talking 
about merging it into a FEMA-like agency, which is thought of 
as a Federal Emergency Management Agency.
    Well, ``emergency'', I don't know how it's defined in the 
statute, but we're now defining it as not only a natural 
disaster but man-made disasters.
    Senator Feinstein. Because one of the problems, of course, 
is that FEMA is going to be up for a big cut. I know first hand 
that FEMA is severely taxed. I mean, we have big earthquakes, 
we have big fires, big floods. FEMA seems to me to have a major 
emergency just about every year, using all of its resources.
    You point out in your report that FEMA would be the core of 
a new National Homeland Security Agency. I would question that, 
in view of what they already have to do.
    Senator Rudman. Well, we believe, Senator Feinstein--of 
course, you're quite right. I mean, they have a great deal to 
do. If I was from California, I would be very concerned about 
reducing FEMA, because you seem to have all of those big things 
happening out there.
    Senator Feinstein. Right.
    Senator Rudman. The bottom line is, if you bring in the 
other agencies with their budgets, you're not affecting FEMA's 
ability because you're going to bring in some additional 
budgetary authority for the directorate of this new cabinet-
level agency. It's very small, because you're not talking about 
heavily staffing at the top. You're talking about a regional 
organization.
    Could I just come back to something that Congressman 
Hamilton mentioned about the National Guard? What he said was 
correct, but I think the Commission says fairly clearly in 
their report that we're not telling the Guard that you're 
foregoing your traditional role. We're saying you need a dual 
role and you need to be cross-trained, because the chances that 
you're going to be called on for a homeland emergency, in our 
view, is more likely in the foreseeable future than being 
deployed overseas.
    Senator Feinstein. Could I ask you, Senator Hart, do you 
have a figure of how much it would take to fund this new 
agency? Mr. Hart. No, we did not--We specifically decided not 
to try to get into the budgetary consequences. The issue is, 
it's a little like saying the national security of the United 
States for the second half of the 20th century will be 
containment of communism. Now, how much is that going to cost? 
There was no way to know.
    When George Kennan wrote that famous phrase and it became 
the central guiding principle of our National security and 
defense policy for 50 years, it would have been impossible in 
1947 or 1948 to say what that's going to cost. As it turned 
out, it cost trillions and trillions of dollars. I think this 
is for you all to work out.
    Let me follow up on something that Senator Rudman just 
said. We contemplate very clearly this to be a civilian agency. 
In our report we say, given also what he said earlier about the 
role of the Defense Department, its subordination--``it'' being 
DOD--its subordination to civil authority needs to be clearly 
defined in advance.
    You have the bureaucratic problem; you've got the budgetary 
problem; and you also have the constitutional problem. This 
committee, of all the committees in Congress, knows there is 
such a thing called the ``posse comitatus'' act, passed, 
curiously enough, after a very close national election in the 
century before last, 1876, that said you cannot use the 
military in this country for peacekeeping purposes, in effect. 
That was very clearly and strongly founded in constitutional 
principle from the 18th century.
    That principle permeates our thinking about this agency, 
and hopefully will permeate yours, as I'm sure it will. You 
cannot make this a military mission. That's why the Guard's 
role is curious, historically curious. It is important to note 
here that one aspect of what Senator Rudman said about the 
traditional role of the Guard, the traditional role of the 
Guard, in the late 18th and throughout the 19th century, was 
homeland defense. It only became an expeditionary force, if you 
will, in World War I and World War II, actually more World War 
II and the Korean War and thereafter, and now in peacekeeping 
roles in the late 20th and early 21st century. So its 
traditional role and constitutional mission is defense of the 
homeland.
    Senator Rudman. I just want to add one thing, to try to 
give you some sort of answer to your question.
    What we say is, if you take all of these agencies we're 
talking about, take their budgetary authority as it presently 
exists, calculate what essentially the cabinet directorate will 
cost, essentially the staff of who's directing it, the deputy 
directors and so forth, that will give you a pretty good idea 
of the number. In other words, I'm talking about a huge number.
    Now, once they start working and decide a lot of training 
and planning has to take place, you could need a lot of money 
for states and localities to get that done. It is not done 
today. Some cities and states do a good job, others do none at 
all.
    Senator Feinstein. Representative Hamilton, you also 
recommend that the Border Patrol and the Customs Service be 
part of this Homeland Security Agency. Those of us, 
particularly from the southwest, see a very severely taxed 
Border Patrol. As a matter of fact, I think for the last 4 
years we have added a thousand new Border Patrol agents to the 
budget every year, but there still isn't enough. The same thing 
with Customs. And that is just to do those agencies' 
traditional jobs.
    I think you made a good point about the number of people 
coming in, the number of vehicles, the number of ships--I mean, 
the Nation is like a sieve, basically. It's very hard, because 
of the established precedence, to make changes.
    I would see considerable opposition coming from Justice to 
taking Border Patrol and Customs and putting it into a new 
agency. Mr. Hamilton. I suspect you'll see considerable 
opposition to a good many parts of this report, Senator. I 
don't underestimate the political problems that you and others 
would confront.
    I would like to comment first on FEMA, if I may, and then 
on the others.
    I think the Commission really does give a vote of 
confidence to FEMA. We greatly respect the work that it does. I 
think every Member of Congress appreciates how important FEMA 
is in dealing with natural disasters that hit our respective 
states. We think they've done a good job of that. So it's a 
very genuine and logical concern that you would say to 
yourself, ``if it ain't broke, why fix it?'' It's doing a good 
job.
    But our sense is that, if the premise here is that we've 
got to reorganize the government because of the terrorist 
threat, then you have to draw together all of the expertise in 
the government to deal with that threat. It is so imminent, it 
is so powerful a threat, that we've got to rethink the way we 
put this government together.
    So we asked ourselves, which of the present agencies have a 
major responsibility relating to terrorism. We think that FEMA 
does in this respect, and we expand this. But FEMA today deals 
with disasters. If you have a terrorist strike, like Oklahoma 
City, you have a disaster and you have to be able to deal with 
that. So it's a logical extension, it seems to me, to have FEMA 
deal with that kind of a problem, because they do a good job of 
it.
    But it is also true that, if you're going to deal with 
terrorists, you have got to watch what kinds of goods and 
services come into this country, and you've got to keep an eye 
on what kind of people come into the country. Rather than deal 
with that as a separate, isolated problem--with the people over 
here in the Border Patrol and the goods and services over here 
in the Customs Service--you had better get some kind of a plan 
to integrate and coordinate all of this or you're not going to 
do an effective job, because there is obvious overlap in all of 
these things.
    So it is true, that each of these suggestions with regard 
to the Border Patrol, the Coast Guard, the Customs Service, 
there is an understandable esprit in each of those 
organizations because they do an excellent job. But they are 
also operating on a small part of the total problem. You need 
something overall to coordinate it in order to make it more 
effective.
    Senator Hart. May I add--
    Senator Feinstein. Senator, before you answer--you know, 
even the name, the National Homeland Security Agency, has a 
certain ``Third Reich'' tinge to it--when you take all these 
agencies and you consolidate them into a homeland-security kind 
of agency, I wonder what kind of criticism will come on that 
kind of analysis.
    Senator Hart. I'm sure there will be some. We place no 
great emphasis on the name. I am sure that such an agency is 
going to be created because it must be created. What it's 
called will be up to all of you, of course.
    I think you have to take your question and stand it on its 
head. If the worst possible thing happens, as Congressman 
Hamilton has said, we all believe more likely than not that it 
will. It's not a question of whether. It's when. And it's not a 
question of where, but how many.
    Will the American people then want to hear from their 
representatives, when we are unprepared, whose response was, 
``Well, Justice didn't want to turn over its jurisdiction'', or 
we didn't want to interfere with existing bureaucratic 
relationships? That answer just won't wash.
    Senator Rudman. Incidentally, Senator Feinstein, each of 
these agencies would keep its name. We're not saying they 
suddenly get stripped of their identity. They keep their total 
identity, as do the divisions now in DOT or in Justice, such as 
the FBI. They would keep their identity, their budget 
authority, their structure, their system. The difference is, 
they would be part of an agency that is dealing with a problem 
that they all deal with.
    Senator Feinstein. Thank you.
    Chairman Kyl. Let's go back and forth here.
    What about dividing the function into the two seemingly 
logical components? One is the prevention and the other is 
dealing with the disaster after the fact, with prevention being 
primarily the law enforcement responsibility--I mean, that's 
what our police do. They prevent crime and then they 
investigate crime and try to prosecute.
    The Department of Justice has primary responsibility here, 
the FBI, the National Infrastructure Protection Center located 
in the FBI, in the Department of Justice, and the FBI itself in 
terms of its intelligence gathering, plus the CIA. And then you 
have the border protection and Border Patrol, Customs, the 
Coast Guard. Those are the entities that both physically 
protect the border and try to gather the intelligence and 
investigate after the fact.
    Then you have the other component, which is the disaster 
itself, the aftermath of the disaster and how to deal with it. 
The need to have FEMA as the coordinating agency of local 
police and fire, the National Guard, if that's appropriate, and 
for the unthinkable maximum catastrophe, not only the National 
Guard but perhaps other military assets, as you point out.
    What about dividing it into two components so that you, in 
effect, have two umbrella functions, both dealing with 
terrorism, but the two separate aspects of terrorism?
    Senator Rudman. My response would be that the prevention 
function is already split substantially, because the 
intelligence agencies will not be part of this new agency.
    In terms of pure prevention, history has taught us that it 
is very seldom that it's an accident, that we discover that 
something is about to happen that's going to be very 
deleterious to our health. Normally, as you know, from the 
briefings you have had, this comes from very diligent 
intelligence work, here and overseas, done by traditional 
intelligence agencies, including our liaison relationships with 
foreign services, that lead us to this.
    The prevention that we are talking about in this particular 
agency has to do with the prevention of what comes across our 
borders. This is a serious problem. I don't like to talk about 
some of these things, except they've been written about in 
national magazines and in the public sector.
    Let me just tell you why I don't think that works and what 
we're talking about. Unless you have a coordinated prevention 
activity against goods coming into this country, that could 
conceal things that should not come into this country, with all 
those people who are charged with that, the Coast Guard, 
Customs, Border Patrol, essentially working in concert, I mean 
you probably are not going to get it done because you won't 
have a consistent strategy.
    Chairman Kyl. Can I just interrupt and say that point is 
crystal clear and I, for one, couldn't agree more. I think 
that's one of the real values of your report here.
    But my question was, why couldn't you have that 
coordination in organization No. 1, or A, the border protection 
organization, which takes these Customs and Border Patrol 
functions and the Coast Guard and so on, and then have a 
separate disaster response organization which is the FEMA-led 
organization?
    Senator Rudman. You might. I'm not going to--I just want to 
finish one point, though--
    Chairman Kyl. I'm sorry I interrupted.
    Senator Rudman.--and then turn it over to my colleagues.
    You know, I hadn't thought about that, but certain, we 
didn't invent the wheel here. We're delighted to stimulate 
conversation and discussion and let the Congress work its will.
    I would strongly recommend that this Committee look at two 
pieces of legislation introduced in the House, one by 
Congressman Thornberry and one by Congressman Skelton, which 
takes a slightly different approach. But they are both very 
well worth looking at, and they are based to a large extent on 
this report that we've done.
    But to get back to my point--and I take no position on 
this; I have a position--but we're talking a lot about missile 
defense, and we're talking about spending a large amount of 
money for it, and maybe we should. But let me submit to you, 
Mr. Chairman, and Senator Feinstein, that if somebody wanted to 
really do that to us, there's an easier way. There's a way to 
do it without leaving a return address. What is it, 21 million 
cargo containers coming to this country, the majority not 
looked at? How many ships come into this country and dock in 
San Francisco harbor, in New York harbor, in Boston harbor and 
Portland, ME and sit there?
    Unless you have something going on that is focused on that, 
the terrorist, at least the state actor, not the non-state 
actor--even the non-state actor in some of these cases--but a 
state actor is going to find it's going to be better for their 
health to do it without leaving a so-called return address. 
Therefore, if you're going to have a truly effective prevention 
function, it ought to have a strategy and a coordination. 
That's why we recommend it.
    However, Mr. Chairman, what you recommend might well work, 
as long as those principles are kept in mind.
    Representative Hamilton. Mr. Chairman, we're dealing with a 
single phenomenon, and the phenomenon is terrorism. The 
question is, how do you secure the homeland and how do you 
organize yourself best to do that.
    You put forward a very logical solution, and my reaction is 
it's an awful lot better than what we've got now, the way you 
would organize it.
    But I would go further. I don't think a separation between 
prevention and response is advisable, because I don't think the 
U.S. Government does a very good job on interagency 
coordination. My experience with the Federal Government is that 
you have to have somebody in charge. When you have interagency 
or interdepartmental groups meeting, nobody is in charge unless 
the President is there or his representative--and that's not 
usually the case in interagency meetings. Therefore, you have 
nobody in charge and everybody is protecting their turf, and 
you do not have the kind of sharing of information, 
communication, intelligence, coordination and integration that 
you really deal with the phenomenon.
    I, then, think you're better to have a single agency here, 
but your proposal is a lot better than what we've got because 
what you've got today is 40 or 50 or 60 agencies out here, all 
going their own way, and you cannot get interagency 
coordination under that circumstance, no matter how smart you 
are.
    Chairman Kyl. Could I ask you this question, then, just so 
it's clear in my mind.
    Let's say that you have either one or two agencies--leaving 
that issue aside--but you have a cabinet level officer in 
charge of what is currently called the Coast Guard, the Border 
Patrol, Customs, and various intelligence gathering activities 
that relate to that as well, which has as one of its missions 
the ferreting out and protection against terrorism. But those 
same entities have an existing function as well, which 
presumably would remain as part of their mission. In the case 
of Customs, inspecting cargo for other purposes as well, 
collecting duties and so on, the Border Patrol dealing with the 
influx of illegal aliens as well as drug smuggling and so on, 
and Coast Guard, the drug smuggling and other activities that 
it engages in.
    Is it your view that [a], all of those missions would still 
remain missions, in addition to the terrorist mission, and [b], 
that they would all perform those missions under the new 
jurisdiction of this new entity, rather than the Treasury, 
Justice, and Coast Guard, Transportation?
    Senator Hart. Yes. I think the answer, Mr. Chairman, is 
yes. I don't think you can move part of these agencies. That's 
inviting bureaucratic chaos, I think. I think that if you move 
the agency there would probably be, who knows--you all would 
decide this. A new directorate for the sub-responsible official 
for the terrorist threat under that agency head reports to the 
head of the Homeland Security Agency, whatever it's called.
    Chairman Kyl. And in the case of the other--Let's assume we 
divided this into two pieces, rather than have one overarching, 
just for the sake of discussion here. The other piece is the 
aftermath, the disaster response.
    Now, there, of course, you mentioned the local responders. 
Obviously, they're still local, but they're coordinated better 
from someone nationally. But you have the National Guard and it 
would still remain with its current organizational structure, 
presumably, but there would be some general in charge of the 
terrorist response function of the National Guard within this 
overall organization, is that correct?
    Senator Rudman. And the regular forces response.
    Chairman Kyl. Right. I mean, maybe you have two--
    Senator Rudman. You might have only one who would have to 
have liaison with both.
    Chairman Kyl. Right.
    Senator Rudman. Let me make one comment, though, before we 
leave this subject. I think it's one that you will quickly, 
knowing your jurisdictional responsibilities, recognize.
    You know, I had the pleasure of either chairing or being 
the Ranking Member of the State, Commerce, Justice Subcommittee 
of Appropriations for a long time--in fact, Senator Hollings 
and I used to play musical chairs, depending on who was in the 
majority. It was very much of a bipartisan committee--
    Chairman Kyl. We still can't make up our minds.
    [Laughter.]
    Senator Rudman.--dealing with some pretty interesting 
issues. I will tell you that, from my observation, agencies 
like Customs, a part of Treasury, Border, part of Justice, 
Coast Guard, part of Transportation, are kind of the ``poor 
cousins'' within those agencies, and they really are--
    Chairman Kyl. You won't get any argument from us there.
    Senator Rudman. You're going to be very, very fortunate if 
the cabinet officer in charge goes down there and says 
``hello'' once every year, let alone get around to the various 
stations where people are working.
    We think this is a national security issue of paramount 
importance. It ought to have strong leadership, strong 
strategy, and strong organization.
    I will tell you, without quoting anyone--because they would 
probably find their desk cleaned out tonight--that a number of 
folks we have talked to who work for these places would love to 
be part of an organization that cared about them and their 
mission.
    You know, as far as the difficulty that Congressman 
Hamilton was referring to, and what you referred to, Senator 
Feinstein--and you're quite right--I would tell you that in 
reading the history of 1947, 1948, 1949, when there was going 
to no longer be a Secretary of War who had the authority, or a 
Secretary of the Navy who had the authority, the Army was going 
to lose the Air Force, you would think you were cutting the 
Nation in half--I mean, the debate that went on here in these 
halls and in these rooms.
    I think this is hard, but more difficult reorganizations 
have been undertaken in the national interest.
    Chairman Kyl. Senator Feinstein.
    Senator Feinstein. Thanks, Mr. Chairman.
    You're right. I think one of the problems with Customs 
right now that it's kind of a stepchild in Treasury. I think it 
has a mixed mission. Treasury Secretaries generally want it to 
more of a trade facilitation agency rather than a law 
enforcement agency, so you have that natural conflict.
    I know when I came here we had a trade man in charge of 
Customs, and then Ray Kelly, who, of course, had a law 
enforcement orientation, became the new Director of Customs. So 
I can understand taking Customs and putting it into this 
security agency. I think there is a good fit. But I think when 
you take the Border Patrol you've got a possible problem there.
    Now, having said that, there has been discussion about 
taking the Justice agencies dealing with immigration-related 
concerns and doing a split there between enforcement and non-
enforcement responsibilities. Maybe that could happen. And I 
see a natural with the National Guard.
    Let me ask this question. If you involve the Coast Guard, 
do you have a posse comitatus problem?
    Senator Rudman. I don't believe so. They have a very 
substantial law enforcement authority now, and have for a long 
time, the enforcement of maritime laws, drug smuggling, 
espionage. They are not considered traditionally a defense 
agency. They are considered something quite different. I do not 
think posse comitatus has the same relationship with the--
    Senator Feinstein. You see, part of the problem, too, with 
Customs, is that it has a much broader responsibility. All 
kinds of contraband comes into the country, agricultural 
contraband, drug contraband, money contraband, you know, as 
well as weapons. It's a two-edged sword. There is virtually no 
transparency today in weapons trafficking. As you know, the 
United States is a big small arms supplier and the largest 
weapons seller in the world today is the United States.
    I have problems with including FEMA in a homeland security 
agency, but I can see an agency where you have the National 
Guard, you have the Coast Guard, you've got Customs, you've got 
perhaps some connection into the Border Patrol or an adjunct to 
Border Patrol that deals with these issues, under a cabinet 
level, anti-terrorist security-type infrastructure.
    My big concern is that I've had a hard time really getting 
the American people to take terrorism seriously. Our national 
identity is not to be protectionist. It's to be open: everybody 
visits, everybody comes, everybody goes, and nobody wants to 
worry about whether documents are counterfeit-proof. We also 
get into this in other areas with green cards and things, and 
there's a horror where people are worried about national 
identification cards. So I think there's a fine line that this 
agency would have to tread, to avoid giving goose-bumps to the 
American people.
    Senator Hart. We had the same problem throughout the cold 
war, at the beginning and throughout, and that was the division 
in this country as to how big that threat was, how real it was. 
You know, I suppose it divided us in a way, all the way up 
until the fall of the wall. There was resistance in creating a 
Department of Defense at all, and certainly a resistance in 
creating a permanent intelligence agency. People resisted that 
on civil liberties grounds and so forth. I think that struggle, 
that tension in American society, continued throughout the--
    Senator Feinstein. But the American people don't have the 
ability to have a classified briefing on terrorist cells in 
this country, and once you've had that briefing, you can't 
really discuss it with them, either. Therefore, how you can get 
national support for a homeland security agency is of great 
interest to me.
    Senator Hart. There's only one person that can do that, and 
that's the commander in chief, the President of the United 
States.
    Senator Rudman. There's no question in my mind that you 
focus in on an extraordinarily difficult subject for anybody in 
public office, and that is, how do you convince the American 
people that the year 2001 is very different than the years 
past, that there are people who cannot assault us in a 
conventional military way and would like to find a way that was 
asymmetrical, nonconventional, to hurt us.
    Some people who are experts in the field, academics and 
others, have said to us you will never have people understand 
it until it happens. That's a horrible thought. But I can only 
think of your State, Senator Feinstein, and all of a sudden 
people take for granted all these lights and the air 
conditioning, and those who live in rural areas, their water 
pumps, nobody even thinks about it until suddenly there's a 
major shortage. Then the area goes into some sort of an 
outrage, a panic, how did this happen.
    What we are talking about, Mr. Chairman, Senator Feinstein, 
is very different than that. We are talking about a major blow 
against a major American city, and we think this government 
ought to look at it very closely.
    Of all the things we looked at, if anyone told me when I 
took on this assignment 3 years ago--I thought we would look at 
the organization of the military and the CIA, the State 
Department, and we did. We did all of those things. But if 
anybody told me that the No. 1 concern of this diverse group of 
Americans, including several four-star flag officers who had 
served this country so well, including Chuck Boyd, would be 
that homeland security was the No. 1 threat to this country in 
the next 25 years, I would have been very, very surprised. But 
we came to that conclusion.
    Chairman Kyl. Well, that's the headline for the press 
release.
    [Laughter.]
    Senator Rudman. We don't issue any.
    Chairman Kyl. But your point is well taken, that part of 
this is an education process.
    I have a question that I kind of was saving until last, and 
I don't want to ask it yet, but it has to do with how we 
persuade our Congressional colleagues on how to give up 
jurisdiction so there's coordination in the Congress as well. 
Think about that for a moment.
    But do you have recommendations--because we're just as 
diffuse in our organization here, as you well know, as the 
executive branch is--do you have any ideas about the increase 
in expenditures that will be necessary to meet these needs, 
both generally -because I'm sure the existing functions of 
these organizations, like Customs and Border Patrol and so on, 
are going to have to continue to be funded at increased levels 
just to do what they currently do.
    Secondly, specifically with regard to intelligence, and I 
especially address this to Senator Rudman, but either of the 
other two are also able to get into that, not in terms of 
actual dollars but some kind of percentage increase, because 
you make that recommendation, and yours is not the only 
commission to recommend a greater intelligence commitment, 
which takes dollars.
    Senator Rudman. My view on the intelligence commitment in 
particular, or the commitment--
    Chairman Kyl. Well, both. I was asking generally about what 
kind of a cost you might associate with the creation of this 
new entity and the performance of its function well--I mean, 
when you talk about some kind of mechanism for inspecting a lot 
of cargo holds and so on, obviously that's going to be a new 
commitment. And then, second, specifically as to the 
intelligence function.
    Senator Rudman. I have felt for a long time that, although 
the intelligence numbers are not known in detail, they were 
known a couple of years ago, the top line, and they haven't 
been published since.
    But I have been a strong advocate, to anyone who would 
listen, that we need a substantial--I'm talking maybe as much 
as a quarter increase across the major intelligence agencies, 
of whom, as you know, Mr. Chairman, the CIA is the smallest of 
those agencies.
    Your second question is very difficult. I would have to 
answer it parenthetically this way. You are in a better 
position to know currently what is needed to buildup Customs 
and Border Patrol, to take those two--certainly the Border 
Patrol--to meet its current function. You have some thought 
about that because you've been doing it. So I won't deal with 
that. But to do this incremental function, I think it's a 
fairly small increment because they would be doing much of this 
in terms of what they're doing already. When you're inspecting 
cargo for contraband, you're inspecting it for weapons of mass 
destruction as well. I don't think you're talking about a huge 
amount of money for those agencies. I think you are talking 
about some money for a directorate.
    Chairman Kyl. Well, the directorate would probably be the 
smallest amount.
    Senator Rudman. Very small.
    Chairman Kyl. But the operational part, as you point out, 
as Senator Hart pointed out, we inspect only a fraction of--I 
mean, those were startling statistics, the number of cars, the 
number of people--
    Senator Rudman. It's unbelievable.
    Chairman Kyl. Right. And we can today only inspect a 
fraction because of the huge costs associated with that.
    Now, we are developing some relatively sophisticated 
equipment which makes it a lot easier. That will also cost 
money. So if we do this right, I'll bet you, if we increased by 
an order of magnitude the amount of money available to Coast 
Guard, Customs, and to some extent, Border Patrol, for just 
these kinds of inspections, we would also have more than an 
order of magnitude increase in confiscation of contraband, 
including drugs, arms, et cetera, as well as have a lot better 
handle on finding terrorist equipment or people.
    Senator Rudman. You're in a better position to know that, 
certainly today, than I am. But I would make this observation. 
Years ago, when I was sitting where you're sitting, if you look 
at those expenditures compared to the other expenditures of 
this government, and what they can bring us in returns, it's a 
relatively small amount of money.
    Chairman Kyl. Could I make just one other point before one 
of you make it, and that is, of course, while most of the work 
is tough, gumshoe kinds of intelligence work, we did, in fact, 
stumble upon something, and it was the Customs Service which 
stumbled upon the illegal entry into the country from 
Vancouver, Canada into the United States, which then led to, 
through some very good intelligence work, the information that 
enabled us to stop certain terrorist activities that related to 
foreign terrorist cells.
    Senator Hart. We didn't have the staff capability to do a 
complete budget of this new agency. I can see one area of 
increased expenditure would be in the response area, frankly, 
and that is for the acquisition of mobile hospitals, portable 
communication systems in the affected areas. We had those 
during the cold war. We had buried kind of container-sized 
small hospitals underground throughout the United States. We 
might need to have some capability of that sort. But in the 
grand scheme of things, it's budgetarily not that much.
    On the role of Congress, you did, in fact, touch a 
sensitive nerve. There were four members of this Commission who 
were former Members of Congress, both House and Senate, and we 
grappled with the Congressional problem. In Recommendations 46 
through 49, we, in effect, say Congress, get your act together. 
There's one in 48 that says Congress should rationalize its 
current Committee structure so that it best serves U.S. 
national security objectives. Specifically, it should merge the 
current authorizing committees and the relevant appropriation 
subcommittees.
    Senator Rudman. That's on page 111, by the way.
    Senator Feinstein. Thank you very much.
    [Laughter.]
    Chairman Kyl. My question was, do you have any suggestion 
to us as to how we can override the natural turf protection of 
our colleagues so that they can posit it all within the 
Subcommittee of the Judiciary Committee, before--
    Senator Rudman. I would answer this way, Mr. Chairman. With 
great determination.
    [Laughter.]
    Representative Hamilton. I think probably as an initial 
step, what you would have to consider is some kind of a special 
ad hoc committee, made up of the various committees that have 
jurisdiction, and have them engage the question of homeland 
security, and then determine what kind of changes need to be 
made in the Congress.
    I wanted to take your question on costs. One of the 
prerogatives of serving on a commission like this is that you 
don't have to deal with money problems. You do there. Nor do 
you have to deal with the priority question of all of these 
competing priorities that come to you. We didn't have to deal 
with all of that.
    I have seen the figure that we now spend about $12 billion 
a year dealing with homeland security, in a very broad sense. 
That's intelligence, FBI, DOD and everything else. My view of 
all of this on costs, in a general way, is that the primary 
recommendations we make really are organizational. They are not 
huge costs, but there are some costs involved. I suspect they 
would not be more than a few billion, two or three billion 
dollars per year, for a period of years, to meet the kind of 
problems we're confronting. In other words, we're not talking 
about huge new expenditures, I don't believe. We are talking 
about major and very difficult organizational changes.
    What it all comes down to, in my mind, is a pretty simple 
question: how serious do you think this problem is? If you 
think, as Senator Feinstein says, what the American people 
think is not a big deal, then we're flapping in the breeze 
here. Our recommendations are worthless.
    On the other hand, if you take the premise that we took on 
the commission, that this is the No. 1 national security 
problem, you are then prepared to make all kinds of 
organizational changes and resource allocation changes on the 
basis of that premise. It all depends on your premise.
    Senator Feinstein. Could I just say one thing?
    You may have misunderstood me, Congressman. What I was 
saying was it is difficult to make the case for reforming our 
counterterrorism policy without violating classified 
information.
    Representative Hamilton. I understand the burden of 
political leadership is substantial here. It is not hard to 
make the case of the World Trade bombing. It is not hard to 
make the case of the Oklahoma City bombing. It is not hard to 
make the case in my home State of Indiana, where you have a 
reservoir that furnishes water to the entire city of 
Indianapolis that is totally unprotected, and that all you've 
got to do is step up to that reservoir and toss an item this 
size into that reservoir and you bring down the entire city. It 
is not hard to make the case that a computer whiz bang who's 15 
years of age can screw up the Pentagon computer systems. Those 
are not hard to make.
    I don't think it's hard to make the case that the 
sophistication of the terrorist today is miles from what it was 
a few years ago. I don't think it's an easy case, but I think 
you can make that case. I think it's the responsibility of 
political leadership to try to make the case.
    Senator Feinstein. You also discuss State Department 
reorganization in this report. You make the point that, because 
of difficulties within the State Department, the department has 
been weakened.
    But I'm curious, how does that relate to the security 
apparatus that you're proposing?
    Senator Hart. I think to a person we concluded that the 
State Department is becoming dysfunctional. It is simply not 
dealing with the world of the 21st century. It's not structured 
to deal with the world of the 21st century, not just the 
terrorist threat or its role in dealing with that, but its 
entire mission.
    We have focused, by virtue of the mandate of this 
subcommittee, on terrorism, homeland security and so on. We 
think the entire national security apparatus of this government 
must be overhauled and reformed in light of a new world. Our 
first report was entitled, ``A New World Coming''. It's already 
here. But we're still dealing with the world as if it were the 
cold war world of the 20th century, and it's not. It's changing 
every day.
    The State Department is not properly structured, internally 
or in its outreach function, to deal with that world. We lay 
out some guidelines and discussed those personally with 
Secretary Powell, and he took great interest in our 
recommendations because he has concluded himself, very early 
on, that he's dealing with an agency. He's being told by career 
Foreign Service officers in the agency that it's dysfunctional. 
That's almost not in dispute any more. The question is what to 
do about it. We have offered one blue print.
    But it is very hard to find anyone to step up publicly out 
of that Department and say, ``we're doing a great job and we 
shouldn't change a thing.'' They might say it inside, but 
they're not about to say it outside, and certainly not to you.
    Senator Feinstein. We have just gotten copies of both the 
Skelton and the Thornberry bills. Does the Commission have a 
preference?
    Senator Rudman. We haven't had a chance to look at them in 
detail. One of them just came out recently. The Commission is 
going to get them circulated in the next few days.
    I know, when I first looked at Congressman Thornberry's, I 
thought he was headed in the right direction. I haven't had a 
chance to look at Ike Skelton's that closely, but we will, and 
we'll tell you what we think.
    Senator Hart. By the way, unlike many other commissions, we 
are continuing on, not forever, you'll be happy to know, but 
under General Boyd's direction, we turn money back to the 
Federal Government, even though we traveled to 25 or so 
countries around the world--
    Chairman Kyl. This is outrageous.
    [Laughter.]
    Representative Hamilton. One thing we do is we really try 
to strengthen the Department of State with our recommendations. 
We think the Secretary of State should be the principal foreign 
policy adviser to the President. We think that the National 
Security Adviser should play a less visible role, more of a 
coordinating role, and not be the principal adviser.
    We've got a lot of very controversial recommendations in 
here with regard to the Department of State as well. We do put 
out a very detailed plan of reorganization. We think it would 
be better than what you now have. But there are many different 
ways to approach that question. But the bottom line is, we want 
to strengthen the Department of State and the role of the 
Secretary of State, and we're quite encouraged by the way the 
Bush administration and Secretary Powell are developing that 
aspect of their foreign policy mechanism.
    Senator Rudman. In fact, the National Security Council 
model--not the subject of this hearing at all, but you might be 
interested--is remarkably very close to what we recommended. We 
take no credit for it. They obviously had in mind putting that 
in place based on a lot of folks who were witnesses, if you 
will, before us. Dr. Rice's role is very important and 
different than it's been in the past.
    Chairman Kyl. I think both of us are ready to conclude this 
hearing. But we're going to need your continued input and help. 
We appreciate the fact that you have some continuing role and 
would very much appreciate the ability to visit with your staff 
as well because of the significant amount of work that they 
have put in for the evaluation of not only the legislation 
already introduced, but to help us put things together.
    I must say that the final result may not look exactly like 
what you have proposed, but clearly, the thought you put into 
this and the recommendations will generate the conversation 
that will certainly, at least, I hope generate a response that 
we can, at the end of the day, be proud of here.
    With that, Senator Feinstein, any other closing remarks?
    Senator Feinstein. Yes, Mr. Chairman. My view is that we 
are not ready, we are not prepared, we are disorganized. We 
don't really understand this world of terrorism. And terrorism 
is antithetical to American values because it's so bloody 
cowardly. So there is a disconnect there.
    Having said that--and I can only speak for myself--I think 
we need to do some things. I think we need to sit down and take 
counterterrorism policy in a different direction. I think we 
need to put together a better way of functioning. So my mind is 
open and I would like to work toward proposal that makes 
practical sense, is realistic, and has the critical mass--
though I hate that phrase--to move the proposal forward. I 
think it would be imperative that we work with you, that we 
work with others who have become heavily involved in this 
field, and I would think we're in for a long-term haul. But I 
think we need to do it.
    Both Senator Kyl and I have had briefings, and I think 
we're of a like mind, that we're not where we might be, not 
where we should be, that there are better ways of doing it. 
Maybe we ought to just get cracking and look at them and try to 
put something together.
    Chairman Kyl. I totally concur. You might be aware that we 
tried a modest, a very modest approach at an anti-terrorism 
bill at the end of last session and were unsuccessful in 
persuading our colleagues of the urgency of it, as well as the 
efficacy of its provisions. And it was really modest.
    Senator Rudman. Mr. Chairman, let me just respond to both 
of you.
    This Commission not only has a small staff that is still in 
place, but we use a working group of 20 of the great experts in 
their fields in this country, academic and otherwise. Any help 
that you or your staff needs, General Boyd assures me we can 
furnish it, in any subject that we have covered in our report. 
I hope you will call on us.
    Chairman Kyl. We certainly will.
    Senator Hart. Mr. Hart. Mr. Chairman, two observations. 
One, by and large, the media has taken this report seriously. I 
think there is a little confusion as to whether or not this is 
just another commission and may not have gotten the 
perspective. There have been one or two major news agencies 
that for some reason have not paid as much attention to this 
report as they should have. We're hopeful that they will. That 
is also, as you well know, part of the education process of the 
people in this country.
    Finally, if I may, with your permission, I would like to 
amend a previous answer regarding the role of the National 
Guard by a quotation from the new commander in chief, President 
Bush. He said to the Guard, within the past several weeks, ``As 
threats to America change, your role will continue to change. 
The National Guard and Reservists will be more involved in 
homeland security, confronting acts of terrorism, and the 
disorder our enemies may try to create. I welcome the important 
part you will play in protecting our Nation and its people.''
    So, for those who have taken issue with us on this 
question, I think the President of the United States 
understands very clearly the direction we should be going.
    Chairman Kyl. Thank you, and thanks for that clarification. 
Thank you very much for your testimony and we very much look 
forward to working with you on this important problem.
    With that, this meeting is adjourned.
    [Whereupon, at 3:36 p.m., the Subcommittee was adjourned.]
    [A submission for the record follows:]

                       SUBMISSION FOR THE RECORD

 Statement of Gary Hart, Warren Rudman, Lee Hamilton, and Donald Rice, 
   Members of the U.S. Commission on National Security/21st Century,

    Mr. Chairman,
    We are honored to be here today on behalf of the U.S. Commission on 
National Security/21st Century, which, as you know, submitted its final 
Phase III Report on January 31st. As you also know, this federal 
Commission was chartered to undertake the most comprehensive 
examination of the national security apparatus of the United States 
Government since the passage of the National Security Act of 1947.
    It has done so. The Commission examined national security in its 
broadest sense, not ``defense'' as traditionally defined. We looked 
well beyond budgetary and election cycles, out to a quarter century. We 
decided among ourselves that we owed the American people our best, not 
the most easily agreed, solutions to the problems we face.
    The Phase III Report recommends an integrated program of reform 
built on a sound analytical foundation, based on a single key premise, 
and shaped by a unitary core principle.
    That foundation consists of the first two phases of our work: a 
thorough analysis of the future global security environment and the 
development of a U.S. National Security Strategy to deal with that 
environment. That foundation generated the premise that habits 
hardwired into government during a half-century of Cold War, grown 
bureaucratic and lethargic, now inhibit our capacity to understand and 
manage new challenges and opportunities.
    Those habits must be replaced by a new principle: that a culture of 
strategic thinking and action permeate the U.S. national security 
establishment. That principle, however, requires that there be a 
coherent strategy process and a sound organizational structure for 
national security--and right now we have neither. We have not had in 
recent years an adequate top-down process of integrated strategy 
formulation, where priorities were determined and maintained, and where 
resources were systematically matched to priorities. There has been 
almost no effort to undertake functional budgeting analysis for 
problems that spread over the responsibilities of many Executive Branch 
departments and agencies--the result being that it is very difficult 
for Congress to have a sense of what an administration is doing with 
respect to major national security objectives. There has been no 
systematic effort from the NSC to direct the priorities of the 
intelligence community, to align them with the priorities of national 
strategy.
    The Commission has made several recommendations with regard to this 
larger, generic problem. We believe that significant policy innovations 
cannot be generated or sustained in the absence of managerial reform.
    In our view, the need for such a process and structure is urgent, 
and the stakes are high. In the world we have left, for example, the 
designs of other states occupied us. In the world we have entered, 
political forces both above and below the state are increasingly 
important, and some of them are very dangerous. To deal with the 
specter of mass-casualty terrorism on American soil, for example, we 
urge the U.S. Government to realign and rationalize its approach to 
homeland security. We propose the consolidation of several existing 
assets into a National Homeland Security Agency, with cabinet status 
and a director who is a statutory advisor to the National Security 
Council. By bringing the Federal Emergency Management Agency together 
with the Coast Guard, the Border Patrol, and the Customs Service--and 
by combining the government's dispersed cyber-security programs, as 
well--the whole of our effort will exceed the sum of the parts. Only by 
planning ahead, too, can the assets of the Department of Defense be 
engaged in homeland security without jeopardizing core constitutional 
principles.
    We will return to this proposal in a moment, for it is clearly the 
focus of this hearing today. But since the Phase III Report is an 
internally integrated program of reform, predicated on the centrality 
of strategy, it is not possible to appreciate fully our proposal for a 
National Homeland Security Agency without the proper context. That 
context includes the Commission's proposals to reform the State 
Department, the Defense Department, government personnel systems, and 
the Congress, too.
    Thus, in the world we have left, the strength of our adversaries 
concentrated our attention. In the world we have entered, the weakness 
of other countries is among our greatest problems. We need a State 
Department--and an intelligence community--sophisticated and adept at 
anticipating and preventing conflict, economic instability, and 
terrorist mayhem. The Commission thus recommends major changes to the 
crippled and resource-starved State Department that exists today, and 
it recommends new emphases in intelligence efforts as well. We also 
urge that the Secretary of the Treasury be made a statutory member of 
the National Security Council, for a preventive strategy must 
incorporate fully the economic dimension of statecraft to succeed in 
the era ahead.
    In the world we have left, too, mass and might constituted the 
sinews of national power. In the world we have entered, knowledge and 
agility are vital. This Commission views U.S. shortcomings in science 
policy and education as national security problems. We recommend major 
investments to bolster science and mathematics teaching, and a doubling 
of the public research and development budget within this decade. In 
this light, we also recommend major changes in how the Defense 
Department does business for, as it stands now, the Pentagon is 
manifestly incapable of transforming American military capabilities to 
accord with 21st century conditions. It is so massive and mighty that 
it is muscle-bound; it is not flexible and agile enough even by half.
    The Commission also urges major initiatives to stem an incipient 
crisis of competence in government due to looming personnel 
deficiencies in the Civil Service, the Foreign Service, and the Armed 
Forces. And we call upon Congress to facilitate Executive Branch reform 
and to put its own two houses in order. To that end, we recommend that 
authorization and allocation processes be combined into single 
committees and subcommittees.
    We four and the other ten members of this Commission together 
represent a diverse array of political views and professional 
experiences. Yet, we propose fifty major recommendations for change 
without a single dissent or reservation, suggesting that our road map 
for reform is politically practical. And reform we must. The 
consequences of embracing the status quo are more dangerous to this 
nation than any likely external foe. If we hold to the present, we will 
lose the future. We challenge the complacent among us to show 
otherwise, and we applaud those Members of this Sub-Committee, and 
other committees in the Senate and the House of Representatives, who 
understand the imperative for change.
    Let us now return to the matter at hand: terrorism, counter-
terrorism, and their related intelligence aspects. Other Members of 
Congress have already asked this Commission why is there no 
comprehensive national strategy to combat terrorism? We started our 
answer by pointing out that dealing with terrorism is an inherently 
difficult problem, for several reasons.
    As we all understand, terrorism is varyingly motivated. Sometimes 
the motives are instrumental--a desire to draw attention to a cause, to 
extort money, to goad a target government into counterproductive 
responses. But sometimes the motives are not instrumental--revenge for 
slights real and imagined, religious exoneration, or cult-like 
impulses--such as those of the Aum Shinrikyo movement--difficult for 
outsiders to fathom.
    Sometimes terrorism emanates from states, sometimes from small 
groups or even individuals, and sometimes it comes from combinations of 
state-sponsorship with other actors. Determining the source of any 
particular terrorist act can be difficult, and it is often the 
intention of terrorists to make it difficult.
    The geographical sources of terrorism are wide. Terrorism comes 
from no one region of the world and, as we have learned, it includes 
domestic elements as well.
    The wages of terrorism are also wide. Aside from Americans who are 
killed by terrorist acts, we and others pay a host of indirect prices--
from expensive security precautions to the institutionalized fear that 
comes from having hideous acts imposed upon us. The crushing of entire 
societies, too, such as that of Algeria in recent years, imposes a 
price on the entire international community, one with which the United 
States invariably must deal.
    Terrorism also takes several tactical forms: assassination, 
bombing, biological or chemical attack, cyber-terror, and, potentially, 
terrorism involving weapons of mass destruction. It is very hard to 
plan adequately for such a wide array of problems.
    There is a wide array of targets, too, a complexity that has 
generated considerable confusion. While most scholars define terrorism, 
in its basic form, as essentially attacks on civilians, some observers 
include attacks on uniformed military personnel operating abroad as 
forms of terrorism. Others disagree, considering such attacks, such as 
those on the U.S.S. Cole, Khobar Towers, and the Marine compound in 
Lebanon in October 1983, to be more like forms of warfare.
    The distinction is not just definitional or theoretical, as those 
on this Committee well understand. It influences how the U.S. 
government approaches policy solutions to such problems. This raises a 
key issue, which is the increasing tendency for national security and 
law enforcement to merge with one another. The present inclination of 
the U.S. government, which is to treat even the most expansively 
defined ``terrorist act'' as a criminal act, is, in our judgment, the 
right thing to do. At the very least, however, we must be honest with 
ourselves about the consequences of the choices we make.
    Clearly, too, such choices have organizational implications. This 
Commission has concluded that, with respect to terrorism, the current 
distinction between crisis management and consequence management is 
neither sustainable nor wise. The duplicative command arrangements that 
have been fostered by this division are prone to confusion and delay. 
We believe that the National Homeland Security Agency should develop 
and manage a single response system for national incidents, in close 
coordination with the Department of Justice and the FBI. This would 
require that the current policy, which specifies initial DOJ control in 
terrorist incidents on U.S. territory, be amended once Congress creates 
NHSA. We believe that this arrangement would in no way contradict or 
diminish the FBI's traditional role with respect to law enforcement. 
Obviously, the organizational implications of how we define and deal 
with terrorism are wider even than this. Given this diversity of 
motives, sources, tactics, and definitions, the responsibility for 
dealing with terrorism within the U.S. government ranges over several 
Executive Branch departments and agencies, as well as over several 
Senate and House committees on the Legislative Branch side. Developing 
an effective comprehensive strategy for dealing with terrorism would be 
difficult in any event, but under these circumstances it becomes more 
difficult still.
    The U.S. Commission on National Security/21st Century concluded 
that, however difficult the problem of terrorism may be, we simply must 
do a better job of dealing with it. The problem has already caused us 
grievous trouble, and it is getting worse. The vector between the 
threats we face and the organizational responses at our disposal is 
getting wider. The Commission's Phase I Report concluded that the 
prospect of mass casualty terrorism on American soil is growing 
sharply. That is because the will to terrorism and the ways to 
perpetrate it are proliferating--and merging. We believe that, over the 
next quarter century, this danger will be one of the most difficult 
national security challenges facing the United States--and the one we 
are least prepared to address. The Commission's Phase II Report, on 
strategy, focussed directly on this challenge, arguing that the United 
States needed to integrate the challenge of homeland security fully 
into its national security strategy. The Phase III Report devotes its 
entire first section--one of five--to the problem of organizing for 
homeland security. We have argued that to integrate this issue properly 
into an overall strategic framework, there must be a significant reform 
of the structures and processes of the current national security 
apparatus.
    Before discussing the details of a National Homeland Security 
Agency, we wish to stress what the Commission intends, and does not 
intend, to achieve with this recommendation.
    We conceive of the National Homeland Security Agency is a part of, 
not a substitute for, a strategic approach to the problem of homeland 
security. Some have claimed that this Commission's proposal for a 
National Homeland Security Agency is an organizational fix without a 
strategy. This claim is twice mistaken.
    First, within Section I of the Phase III Report, the rubric 
``Organizational Realignment'' is item ``B.'' Item ``A'' is called 
``The Strategic Framework,'' where we make clear that the Commission's 
proposed strategy for homeland security is three-fold: to prevent, to 
protect, and to respond to the problem of terrorism and other threats 
to the homeland.
    Second, the Commission insists that its strategy for homeland 
security must be part of a broader national security strategy itself. 
That is why we argue that a ``Czar'' model to deal with this problem is 
inappropriate. Nothing would be more likely to keep homeland security 
separate and apart from national security writ large than such an 
``off-line'' approach.
    Clearly, then, the National Homeland Security Agency is embedded 
within a strategy for homeland security, and the strategy for homeland 
security is embedded in a national security strategy. It follows, 
therefore, that the National Security Council will still have the 
critical role in coordinating the various government departments and 
agencies involved in homeland security. In the Commission's three-fold 
strategy for homeland security--prevent, protect, and respond--many 
departments and agencies must concert their efforts. The Department of 
State has a critical role in prevention, as does the intelligence 
community and others. The Department of Defense has a critical role in 
protection, as do other departments and agencies. Many agencies of 
government, including, for example, the Centers for Disease Control in 
the Department of Health and Human Services, have a critical role in 
response.
    Obviously, we are not proposing to include sections of the 
Intelligence Community, the State Department, the Defense Department, 
and the Department of Health and Human Services in the National 
Homeland Security Agency. Nor are we attempting to exclude or to 
diminish their roles in the interagency process. As with any other 
complex functional area of government responsibility, no single agency 
is adequate to the task of homeland security.
    That said, the United States stands in dire need of stronger 
organizational mechanisms for homeland security. It needs to clarify 
accountability, responsibility, and authority among the departments and 
agencies with a role to play in this increasingly critical area. 
Authority and accountability for the strategic direction of the federal 
government rest with the President, not a policy coordinator or 
staffer. Authority and accountability should be vested in the same 
individual to the extent possible for specific functions, not spread 
across jurisdictional boxes that have no relation to 21st century 
challenges. We need to realign the diffused responsibilities that 
sprawl across outdated concepts of jurisdictional boundaries.
    We also need to recapitalize several critical components of U.S. 
Government in this regard. Some of these components are now in the 
wrong departments, which accounts for the lack of attention and support 
they receive. While the overall strategic direction of the federal 
government must start with the President, supported by the NSC and its 
staff, stronger organizational mechanisms are needed to execute the 
layered strategy we propose. Our strategy, which emphasizes prevention 
and response as a means of strengthening our deterrent, reflects the 
realities of the 21st century. But our organizational entities to 
execute the border security and crisis management functions are too 
fragmented. We need to realign these capabilities to make them more 
flexible and agile. At the same time, we need to ensure that we can 
provide maximum support to the State and local officials who will 
ultimately face the crises. In our view, we need a Cabinet-level agency 
for this purpose. The job is becoming too big, and requires too much 
operational activity, to be housed at the NSC staff. The NSC and staff 
should focus on the strategy and the matching of resources to 
objectives. Operational details and daily operations cannot be 
successfully managed out of the White House. As we have already said, 
they are much too important to a properly integrated national strategy 
to be handled off-line by a ``czar,'' which would split out a major 
national security threat from the NSC and staff that should be dealing 
with it.
    Most important, the task requires an organizational focus of 
sufficient heft to deal as an equal in this domain with the Departments 
of State, Defense, and Justice. Lacking such a focus, it is hard to see 
how we will ever be able to create an efficient and effective 
interagency mechanism to deal with this problem.
    Mr. Chairman, this Commission's proposal for a National Homeland 
Security Agency is detailed with great care and precision in the Phase 
III Report. With your kind permission, we would like to include both 
our institutional reform section and our homeland security section for 
the record--for we see no need to repeat word for word what the Report 
has already made available to all. However, we would like to describe 
the proposal's essence for the subcommittee.
    We propose a Cabinet-level agency for homeland security, whose 
civilian director will be a statutory advisor to the National Security 
Council, the same status as the Director of Central Intelligence. That 
Director will be appointed by the President and confirmed by the 
Senate. The basis of this agency will be the present Federal Emergency 
Management Agency (FEMA). Added to FEMA will be the Coast Guard (from 
the Department of Transportation), the Border Patrol (from the 
Department of Justice), the Customs Service (from the Department of the 
Treasury), the National Domestic Preparedness Office (NDPO), currently 
housed at the FBI, and an array of cyber-security programs now housed 
varyingly in the FBI, the Commerce Department, and elsewhere.
    Together, the National Homeland Security Agency will have three 
directorates (Prevention; Critical Infrastructure Protection; and 
Emergency Preparedness and Response), and a National Crisis Action 
Center to focus federal action in the event of a national emergency. 
The Agency will build on FEMA's regional organization, and will not be 
heavily focussed in the Washington, DC area. It will remain focused 
instead on augmenting and aiding state and local resources. The purpose 
of this realignment of assets is to get more than the sum of the parts 
from our effort in this area. Right now, unfortunately, we are getting 
much less than the sum of the parts.
    Thus, we are not proposing vast new undertakings. We are not 
proposing a highly centralized bureaucratic behemoth. We are not 
proposing to spend vastly more money than we are spending now. We are 
proposing a realignment and a rationalization of what we already do, so 
that we can do it better. In this regard, we intend for the union of 
FEMA, Coast Guard, Border Patrol, Customs, and other organizational 
elements to produce a new institutional culture, new synergies, and 
higher morale. We are proposing to match authority, responsibility, and 
accountability. We are proposing to solve the ``Who's in charge? '' 
problem at both our borders and in disaster management.
    Perhaps most important, we are proposing to do all this in such a 
way as to guarantee the civil liberties we all hold dear. In our view, 
it is the absence of effective strategies and organizations that is a 
threat to civil liberties. Since Defense Department assets would have 
to come into play in response to a mass-casualty attack on U.S. soil, 
the best way to ensure that we violate the U.S. Constitution is to not 
plan and train ahead for such contingencies. The Director of the 
National Homeland Security Agency, I repeat, is a civilian, subject to 
confirmation and oversight by the Congress. If no such person is 
designated responsible ahead of time to plan, train, and coordinate for 
the sort of national emergency of which we are speaking, I leave it to 
your imaginations--and to your mastery of American history--to predict 
what a condition of national panic might produce in this regard.
    Let us now briefly address the matter of intelligence as it relates 
to the matter of homeland security. The Phase III Report addresses this 
question in two places: in Section I in the context of the NHSA 
proposal, and in Section III on Institutional Reform under the heading 
of ``The Intelligence Community.''
    As to the former, the Report stresses that good intelligence is the 
key to preventing attacks on the homeland and urges that homeland 
security become one of the intelligence community's most important 
missions. Better human intelligence must supplement technical 
intelligence, especially on terrorist groups covertly supported by 
states. Fuller cooperation and more extensive information-sharing with 
friendly governments will also improve the chances that would-be 
perpetrators will not reach U.S. borders. In our view, the intelligence 
community also needs to embrace cyber threats as a legitimate mission, 
and to incorporate cyber-intelligence gathering on potential strategic 
threats from abroad into its activities. To advance these ends, we 
recommend that the National Intelligence Council: (1) include homeland 
security and asymmetric threats as an area of analysis; (2) assign that 
portfolio to a National Intelligence Officer; and (3) regularly produce 
National Intelligence Estimates on these threats.
    As to the last, we stress the need for better human intelligence on 
terrorist threats. We need not rehearse for this subcommittee all of 
the sensitive and difficult areas that attend this question. But it is 
our judgment that we must bolster the quality and quantity of those 
entering the community's clandestine service, as well as the 
recruitment of those foreign nationals with the best chance of 
providing information on terrorist threats to the homeland. Along with 
the National Commission on Terrorism, we believe that guidelines for 
the recruitment of foreign nationals should be reviewed to ensure that, 
while respecting legal and human rights concerns, they maximize the 
Intelligence Community's ability to collect intelligence on terrorist 
plans and methods. We recognize the need to observe basic moral 
standards in all U.S. Government conduct, but the people who can best 
help U.S. agents penetrate effectively into terrorist organizations are 
not liable to be model citizens of spotless virtue. This is not a 
choice, in our view, between values and pragmatism. After all, the 
saving of many thousands of innocent lives is a value, too. Finally in 
this regard, we have recommended giving greater intelligence priority 
to the analysis of economic and science and technology trends, where 
the U.S. Intelligence Community's capabilities are inadequate. We also 
recommend that Congress support this new emphasis by increasing 
significantly the National Foreign Intelligence Program (NFIP) budget 
for collection and analysis. What has this to do with terrorism? 
Plenty!
    The sources of terrorism overseas inhere in cultural proclivities 
and socio-economic conditions. If we do not understand those 
proclivities and conditions, we will be unable to anticipate and 
prevent terrorist movements from arising to harm the United States, its 
interests, and its allies. Moreover, as we and others have indicated, 
terrorists, along with all essentially weak actors, incline toward 
asymmetric strategies in attacking the United States. Non-state groups 
can get enormous leverage in the pursuit of such asymmetric strategies 
through new technologies, particularly well-funded political movements 
in which terrorism is a tactic but not a raison d'etre. In an age when 
critical scientific discoveries and technological innovations are being 
generated increasingly in the private sector--and when technological 
security itself must therefore be redefined--it is incumbent on U.S. 
intelligence agencies to monitor carefully the potential interstices 
between technological innovation, high-end science and technology 
espionage, and terrorist organizations.
    Mr. Chairman, one final point, if we may. All fourteen of us on 
this Commission are united in our belief that our Report constitutes 
the best road map for the United States to see to the common defense. 
All fourteen of us, without dissent, agreed to put the subject of 
homeland security first and foremost in that Report. All fourteen of 
us, seven Democrats and seven Republicans, are determined to do what we 
can to explain our recommendations on this matter in a fully bipartisan 
manner. We thank you, Mr. Chairman, and this subcommittee for the 
opportunity to testify today. We look forward to working with you to 
advance our common goal of a safe and secure America