[Senate Hearing 107-826]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 107-826
 
                DEPARTMENT OF TRANSPORTATION AND RELAT- 
            ED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
=======================================================================

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   on

                           H.R. 5559/S. 2808

 AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF TRANSPORTATION AND 
RELATED AGENCIES FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2003, AND FOR 
                             OTHER PURPOSES

                               __________

                      Department of Transportation
                       Nondepartmental witnesses

                               __________

         Printed for the use of the Committee on Appropriations




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                      COMMITTEE ON APPROPRIATIONS

                ROBERT C. BYRD, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             TED STEVENS, Alaska
ERNEST F. HOLLINGS, South Carolina   THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            ARLEN SPECTER, Pennsylvania
TOM HARKIN, Iowa                     PETE V. DOMENICI, New Mexico
BARBARA A. MIKULSKI, Maryland        CHRISTOPHER S. BOND, Missouri
HARRY REID, Nevada                   MITCH McCONNELL, Kentucky
HERB KOHL, Wisconsin                 CONRAD BURNS, Montana
PATTY MURRAY, Washington             RICHARD C. SHELBY, Alabama
BYRON L. DORGAN, North Dakota        JUDD GREGG, New Hampshire
DIANNE FEINSTEIN, California         ROBERT F. BENNETT, Utah
RICHARD J. DURBIN, Illinois          BEN NIGHTHORSE CAMPBELL, Colorado
TIM JOHNSON, South Dakota            LARRY CRAIG, Idaho
MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island              MIKE DeWINE, Ohio
                  Terrence E. Sauvain, Staff Director
                 Charles Kieffer, Deputy Staff Director
               Steven J. Cortese, Minority Staff Director
            Lisa Sutherland, Minority Deputy Staff Director
                                 ------                                

          Subcommittee on Transportation and Related Agencies

                   PATTY MURRAY, Washington, Chairman
ROBERT C. BYRD, West Virginia        RICHARD C. SHELBY, Alabama
BARBARA A. MIKULSKI, Maryland        ARLEN SPECTER, Pennsylvania
HARRY REID, Nevada                   CHRISTOPHER S. BOND, Missouri
HERB KOHL, Wisconsin                 ROBERT F. BENNETT, Utah
RICHARD J. DURBIN, Illinois          BEN NIGHTHORSE CAMPBELL, Colorado
PATRICK J. LEAHY, Vermont            KAY BAILEY HUTCHISON, Texas
                                     TED STEVENS, Alaska (ex officio)

                           Professional Staff

                              Peter Rogoff
                             Kate Hallahan
                        Wally Burnett (Minority)
                        Paul Doerrer (Minority)

                         Administrative Support

                               Angela Lee






                            C O N T E N T S

                              ----------                              

                       Thursday, February 7, 2002

                                                                   Page
Department of Transportation.....................................     1

                      Wednesday, February 14, 2002

Department of Transportation: U.S. Coast Guard...................    45

                        Thursday, March 21, 2002

Department of Transportation: Security Challenges for 
  Transportation of Cargo........................................    93

                        Tuesday, April 16, 2002

Department of Transportation: Federal Aviation Administration....   133
Nondepartmental witnesses........................................   183


 DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2003

                              ----------                              


                       THURSDAY, FEBRUARY 7, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:02 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Patty Murray (chairman) presiding.
    Present: Senators Murray, Byrd, Kohl, Shelby, Specter, 
Bond, and Bennett.

                      DEPARTMENT OF TRANSPORTATION

STATEMENT OF HON. MICHAEL JACKSON, DEPUTY SECRETARY, 
            DEPARTMENT OF TRANSPORTATION
ACCOMPANIED BY HON. JOHN MAGAW, UNDER SECRETARY OF TRANSPORTATION FOR 
            SECURITY


               opening statement of senator patty murray


    Senator Murray. The subcommittee will come to order. This 
will be the first of several subcommittee hearings on the 
Transportation budget for fiscal year 2003. As I review this 
budget, it is clear to me that our subcommittee will face 
extraordinary challenges this coming year, challenges that may 
make the Mexican truck issue seem easy by comparison.
    In his State of the Union message, President Bush said his 
economic security plan can be summed up in one word, jobs, but 
his Transportation budget proposals have cut billions of 
dollars in infrastructure spending. This is the single largest 
proposed cut across the entire Government, and it threatens to 
eliminate over 350,000 jobs across the country.
    During a hearing with OMB Director Mitch Daniels, held 2 
days ago, I questioned the wisdom of this proposal. Director 
Daniels was quick to point out that in making this request, the 
Administration was only following the requirements of the TEA-
21 law. What Mr. Daniels failed to say is that throughout his 
budget proposal, there are hundreds of examples where the 
Administration is asking us to ignore existing law, or to 
change the law.
    Just within the Transportation budget, we are asked to 
ignore current law and to adopt measures to throw several 
communities out of the Essential Air Service Program. We are 
asked to ignore the TEA-21 law and transfer formula funds to 
the President's New Freedom Initiative. We are asked to ignore 
current law and impose new user fees on railroads, shipping 
companies, and transporters of hazardous materials. So I expect 
that one of the issues we will pursue this morning is why the 
Administration supports current law when it requires billion-
dollar cuts in infrastructure investment, but ignores current 
law in so many other places.
    The proposed slashing of highway spending is just one 
challenge we are going to face. The Department of 
Transportation is currently establishing a brand-new agency, 
the Transportation Security Administration, known as TSA. It is 
clear from September 11 that we need to improve security in all 
of our transportation modes. I support the new Under Secretary 
in his major task of securing our various modes of 
transportation against threats of attack.
    To date, the TSA has been funded largely through user fees, 
but for fiscal year 2003 the Administration is requesting that 
direct appropriations for this agency grow from less than $95 
million to $2.2 billion. Dramatic increases are also requested 
for the Coast Guard's efforts in the area of homeland defense, 
and as I said earlier, the President's budget also recommends 
several controversial transportation user fees to partially 
offset the cost of a portion of these increases.
    Finally, the President's budget proposes to freeze 
subsidies for Amtrak. At the same time, we are told that 
Amtrak's president will testify that unless Amtrak gets a 130-
percent increase in funding this year, the majority of States 
across the Nation will lose passenger rail service.
    So this is a challenging year. I would just ask my 
colleagues to keep these challenges in mind as we work on 
developing a budget for the coming year. If this subcommittee 
wants to fully fund the request for security while avoiding 
deep cuts in highway infrastructure, the elimination of 
passenger rail service, and the imposition of new user fees, 
then a budget that holds us to the President's requested level 
will not do the job.
    In order to better acquaint us with the President's 
proposal, we are joined this morning by Deputy Secretary 
Michael Jackson. As many of you know, Secretary Mineta is 
recuperating from hip replacement surgery, and I know I speak 
on behalf of the entire subcommittee in wishing the Secretary a 
speedy recovery. Given the central role of transportation 
security in this budget request, I have also invited the new 
Under Secretary of Transportation for Security, John Magaw, to 
appear with Mr. Jackson.
    We will also hold a hearing on cargo security with the 
Administrators from the Federal Railroad Administration, 
Federal Motor Carrier Safety Administration, Federal Highway 
Administration, Maritime Administration, and the Coast Guard.
    This is the third hearing that Mr. Magaw will participate 
in just this week. Mr. Magaw, we do appreciate your stamina. I 
understand that almost all of the discussion during the two 
previous hearings focused on the huge challenge you face in the 
area of aviation security. In just 11 days the TSA is expected 
to take over the entire screening function at our Nation's 
airports, and in just 10 months the TSA is expected to 
implement a system to screen all checked baggage for 
explosives.
    I do not underestimate those critical challenges one bit, 
but I do represent a State with one of the largest seaports in 
the United States, where every day tons of cargo travels by 
rail and by truck. I want to remind my colleagues that the new 
Transportation Security Administration is responsible for 
security in all of our transportation modes, and I think it is 
not too soon to ask what progress is being made in those areas. 
I appreciate that the TSA must focus on its near-term deadlines 
in aviation, but if the new agency is not yet focusing on port 
or rail or highway security, then we have to ask what is being 
done in other parts of DOT.
    To date, we have received no details on the TSA's budget 
request for $4.8 billion for next year. Instead, we have 
received only a seven-page narrative with no funding figures 
for any individual security activity. As such, I think we will 
need to spend some time this morning pursuing precisely what 
Mr. Magaw believes he can and cannot achieve at that funding 
level.
    While we have many challenges ahead of us, this is 
important work. Transportation is a key part of our economy. 
Our transportation infrastructure affects our productivity and 
our quality of life, and when we make investments in our 
critical infrastructure, we are laying the foundation for our 
future economic growth.
    We welcome the challenges we face, and I look forward to 
working with my colleagues to meet those challenges for the 
benefit of the American people. With that, I recognize Senator 
Bond for an opening statement.


                statement of senator christopher s. bond


    Senator Bond. Thank you very much, Madam Chair, and 
welcome, Michael Jackson, John Magaw. We are delighted to have 
you here, and given what the chair has outlined as the 
tremendous responsibilities in your area, gentlemen, I wonder 
how you can spend the time up here testifying on the Hill. 
Perhaps we ought to get you to phone in your answers and let 
you go back to work, because this is a huge, very important 
challenge, and as the chair mentioned, it is not just airline 
security.
    Those of us who fly all the time experience airline 
security efforts but the security of our ports, our rails, our 
trucks--and I took Amtrak to New York and back on Monday, and 
knowing what happened in the Baltimore Tunnel, we have an idea 
of what can happen if a terrorist were to strike a rail asset, 
so you have many challenges, and I will be interested to see 
how you deal with all those challenges and hope that you have 
the time to do them.
    Senator Murray has outlined the major concerns that I think 
all of us have about the adequacy of transportation funding. I 
have great concerns about the shortfalls in highway dollars. I 
was coauthor of the Highway Trust Fund, the realigned budget 
authority provision in TEA-21. We wanted to make sure that 
Highway Trust Fund dollars were spent only for Highway Trust 
Fund purposes, and under the budget proposal, the sum 
apparently has been reduced by $8.6 billion.
    That comes to almost $159 million for Missouri. That costs 
us directly about 6,600 jobs at a time when we cannot afford 
the job loss, particularly when it is important in economic 
security. As I have said in this Committee and elsewhere many 
times, adequate funding for highways is not just a matter of 
convenience or economic viability, it is a question of life and 
death for people who are driving in Missouri on highways that 
are not adequate for the traffic that they hold, so we are 
going to be very interested in your proposals. I know there are 
some legislative proposals. Another committee on which I serve 
will be working on those, and we would welcome your comments on 
those.
    Two particular questions, Michael. I have had many 
conversations with you about trying to find a fair resolution 
for the disputes between the employees and the unions of the 
former TWA and the American Airlines on how to integrate their 
seniority lists to determine who may be furloughed, as 
furloughs continue, unfortunately, because of a decline in 
traffic.
    The Secretary and you and I have had countless discussions. 
My preference would be to solve this by mediation so all 
parties would agree, but as a fallback, my still strong belief 
is that the dispute, if it cannot be mediated, ought to be 
submitted for binding arbitration under the Mohawk-Allegheny 
decision. Indeed, the mechanics of the two lines are currently 
in binding arbitration over this issue, and the reason we 
continue to talk about it, it could be severely disruptive to 
the overall passenger air transportation system and for the 
wonderful, fine American Airlines. If the employees and the 
pilots are in dispute, that is not going to help the provision 
of service to all of us and is not in the interests of air 
transportation.
    Finally, the topic of Vanguard Airlines has been something 
that Secretary Mineta, you and I have talked about a long time. 
Vanguard has on two separate occasions applied for assistance 
from the Federal loan program, and the ATSB has recently denied 
approval of the application, citing Vanguard's inability to 
repay the loan as the reason. It was my understanding when we 
took part in the creation of this that the purpose of that fund 
was to assist airlines that were profitable and were on a 
profit mode prior to September 11, but otherwise could not 
survive after September 11 without the assistance.
    Now, Vanguard is very important to the Kansas area. It 
provides critical value, with revenues, jobs, and service, and 
we have heard people saying we need to keep these otherwise 
viable airlines in operation, so I am going to be asking, since 
apparently, as far as I know, America West is the only other 
airline that has received assistance, with that fund, a large 
fund meant to keep airlines in business, how come Vanguard is 
not able to get that assistance.
    So Madam Chair, I thank you for your indulgence, and look 
forward to the question session.
    Senator Murray. Thank you. Senator Bennett.
    Senator Bennett. I have no opening statement, other than to 
welcome our witnesses here. Thank you.
    Senator Murray. Thank you very much. We have a vote called, 
but I think I will go ahead with your opening statements, and 
we will start with Mr. Jackson.


            statement of deputy secretary michael p. jackson


    Mr. Jackson. Thank you, Madam Chairman. We, too, understand 
that there are many difficult issues to work through in the 
transportation world this year, and we welcome this opportunity 
to have this discussion today and, as we go through the year, 
to work closely with you as we work through these important 
issues.
    On behalf of Secretary Mineta, I am pleased, to discuss our 
2003 budget, and specifically to focus a little bit on the 
Transportation Security Administration. I am pleased to be 
joined today by John Magaw, but I am even more pleased to be 
joined by him every morning as we work through the issues that 
he is working on.


                                overview


    President Bush is requesting $59 billion for the Department 
of Transportation, which is an 8 percent increase over the 2002 
budget, if the TEA-21 formula adjustments for highway were not 
included. But they are included, and these required adjustments 
mean that we have to tighten our belt and be very careful as we 
work through the challenges that we have on the transportation 
funding. Most DOT programs will, nonetheless, see an increase 
in 2003.
    In his State of the Union address last week, President Bush 
said that his budget will support three preeminent goals for 
America: winning the war both at home and abroad, protecting 
our homeland, and reviving the economy. The DOT budget focuses 
on delivering performance against these three objectives, and 
it recognizes that we have these three preeminent challenges 
this year to deal with and is committed to meeting them.


                 transportation security administration


    The events of September 11 underscore the importance of 
transportation, as you have said, Senator Murray, on homeland 
security in particular, and our budget requests $8.8 billion 
for homeland security.
    The President's budget requests $4.8 billion for the 
Transportation Security Administration. Honestly, we will have 
to come back in the next few months and help unpack the details 
of that budget. I will be happy to talk through how we see it 
and how we arrived at this number, but we recognize that there 
are several key decisions that will play out over the next 
couple of months and drive the 2003 budget as we stand up the 
Transportation Security Administration.
    The $4.8 billion will be funded by a combination of direct 
appropriations, with offsetting collections estimated in the 
proposed budget at $2.2 billion.
    TSA has been given an unprecedented task in standing up a 
full Federal takeover of the airport security responsibility, 
including all passenger baggage screening functions. By the 
middle of this month, aviation security will become a direct 
responsibility of the Federal Government, rather than the 
airline industry. TSA has much to do, but we are prepared to 
meet the task and to make it happen. Again, I would be happy, 
along with Under Secretary Magaw to talk about the details of 
how we plan to move forward with the TSA.


                              coast guard


    The President's budget includes the largest increase in our 
Nation's history for the Coast Guard. It provides $7.1 billion 
in search and rescue enhancements and increased port security. 
The President has proposed $500 million to fund the Coast 
Guard's Deepwater project, which will replace our aging fleet 
of boats, planes, helicopters, and cutters, with state-of-the-
art equipment. This committee has supported this procurement, 
which will take place over several decades, and we start in 
earnest with the work this year.
    Our budget proposal also includes $90 million to improve 
maritime safety. This initiative will modernize the maritime 
``911'' system and eliminate existing radio coverage gaps along 
our coast to enhance the Coast Guard's ability to conduct 
search and rescue missions.


                            highway funding


    The Department's mission is, of course, much more focused 
on other priorities beyond the homeland security priorities 
that are so pressing in this year. First is an issue on the 
minds of many of us and one that the committee has raised this 
morning--the required adjustment to Highway Trust Fund spending 
in 2003. The reason for this, obviously, is embedded in the 
Transportation Equity Act for the 21st Century (TEA-21). TEA-21 
guaranteed that highway funding would be tied to Highway Trust 
Fund tax receipts. It accomplishes this through a series of 
annual adjustment mechanisms, as this committee knows.
    As a result of our strong economy over the last 3 years, we 
have enjoyed record funding for surface transportation, well 
above the baseline forecasts in the initial authorization bill. 
But because of the economy's slowdown in 2001, there was a drop 
in tax receipts flowing into the Highway Trust Fund requiring a 
downward adjustment.
    The President's budget fully funds the guaranteed funding 
level set in TEA-21. As we make plans to reauthorize TEA-21 in 
2003, we will work with Congress to evaluate any type of 
legislative mechanisms that could help to decrease the funding 
volatility that we are seeing in this program. We want to 
engage the Congress in a discussion of the volatility that we 
have seen and the mechanisms that might diminish that 
volatility.


                             safety funding


    The Department's 2003 budget also offers several other 
initiatives to support the country's air, land, and sea 
transportation system. Safety remains the priority of DOT. 
Nearly $8 billion of the President's request is dedicated to 
improving transportation safety for all Americans. Aviation has 
certainly been a major focus of that investment in safety. The 
2003 budget for the Federal Aviation Administration (FAA) 
reflects the Administration's strong commitment in funding 
safety efforts.
    Recovering from the events of September 11, air traffic is 
now beginning to grow again. We see that the capacity problems 
we were worried about last spring and summer have not 
disappeared. They will recur, and we must be prepared to 
contend with them. The total FAA program budget request of $14 
billion is 1.7 percent higher than 2002, when adjusted for 
changes that migrate various parts of the FAA into the new 
Transportation Security Administration. We are requesting $3.4 
billion in our FAA 2003 budget for our airport improvement 
activities.
    The President's 2003 budget also requests $371 million for 
activities of the Federal Motor Carrier Safety Administration, 
up 8 percent over 2002. I want to again thank this Committee 
for helping us work through the NAFTA trucking issues. The 
President is requesting $116 million for the Federal Motor 
Carrier Safety Administration to improve our southern border 
safety enforcement and continue the deployment along the border 
that we launched with this committee's strong work.


                     public and rail transportation


    For 2003, the President is proposing a record $7.1 billion 
for public transportation. The budget request includes funding 
29 new starts, projects that will carry over 190 million riders 
and save over 61 million hours in travel time.


                     federal transit administration


    Within the 2003 Federal Transit Administration proposal, 
$145 million is dedicated to the President's New Freedom 
Initiative. This program will make transportation more 
accessible for persons with disabilities. A competitive grants 
program will make $100 million available for alternative 
transportation services, and the remaining $45 million will go 
to pilot projects that promote innovative approaches to 
overcoming transportation barriers for persons with 
disabilities.
    The 2003 budget also includes a placeholder request for 
Amtrak of $521 million, and we recognize it is as such. 
Understanding Amtrak's precarious financial circumstances, we 
must decide precisely what type of inter-city rail network we 
need, what we can afford, and how we can sustain it over time. 
The Administration is prepared and eager to engage with the 
Congress in a discussion on this issue. Last summer, Secretary 
Mineta called for an early reauthorization of Amtrak and inter-
city passenger rail issues, and we expect that this issue will 
be a focus of subsequent and more detailed conversations with 
the committee.
    This is a strong 2003 budget supporting the President's 
goals for air, land, and sea transportation. My prepared 
remarks focus only on a few highlights, and the rest of the 
Department obviously contributes to the core goals of the 
Department.
    To conclude, Secretary Mineta and I believe that the 2003 
budget for DOT will clearly enhance homeland security, but also 
manage to sustain the goals that are core to DOT's mission. We 
know that it is a tough year financially, but we believe the 
budget will help us do the job. We look forward to working with 
the subcommittee and all members of the Senate as it considers 
the President's 2003 budget. I will be happy to answer any 
questions that you might have. We have a prepared text for 
submission to the record with your permission.
    [The statement follows:]

                Prepared Statement of Michael P. Jackson

    Mr. Chairman and members of the Subcommittee: On behalf of 
Secretary Mineta, I am pleased to appear before you today to discuss 
the Department's budget request for fiscal year 2003 and, more 
specifically, the budget for the Transportation Security 
Administration--TSA. Joining me today is Mr. John Magaw, our Under 
Secretary of Transportation for Security.
                                overview
    President Bush is requesting $59 billion for the Department of 
Transportation (DOT). This is an 8 percent increase over the 2002 
budget, if TEA-21 formula adjustments for highways are excluded. With 
those required adjustments, however, we are tightening our belts, 
particularly on highway spending. Most DOT programs will nonetheless 
see an increase in 2003.
    In his State of the Union address last week, President Bush said 
that his budget will support three preeminent goals for America: 
winning the war--at home and abroad; protecting our homeland; and 
reviving the economy.
    Secretary Mineta testified before Congress last month about lessons 
of September 11, about how our transportation system is critical to the 
security of every American--and to the Nation's economy. DOT plays an 
important role in meeting all three of the President's goals, and our 
budget reflects that fact.
    In 2003, we will continue our efforts of 2002 by focusing the 
Department's resources in a significant way to meet President Bush's 
three-part commitment. The Secretary and his entire team stand ready to 
work with President Bush, Congress and the American people. We will 
meet the President's goals.
               homeland security--tsa and the coast guard
    The events of September 11, 2001, underscore the importance of 
transportation security as part of America's homeland security. 
Protecting airports, seaports, bridges, highways, pipelines, passenger 
and freight rails, and mass transit against the threat of terrorism is 
imperative. In 2003, added emphasis on this mission will be reflected 
in resources for personnel, technology and equipment to meet 
transportation security challenges. This is most clearly evident in the 
budgets of two DOT agencies: the Transportation Security Administration 
and the Coast Guard. In total, DOT's 2003 budget requests $8.8 billion 
for homeland security.
    In November, President Bush signed the Aviation and Transportation 
Security Act, establishing the TSA. While the initial focus of the TSA 
will be in the area of aviation where deadlines are specified in law, 
TSA will ultimately work to enhance security in all modes of 
transportation.
    The President's budget requests $4.8 billion in funding for the TSA 
in 2003, an increase of $3.6 billion above the level of funds provided 
directly to TSA in 2002 and $2.5 billion above the security-related 
amounts appropriated to both TSA and the Federal Aviation 
Administration (FAA) for TSA related activities. The $4.8 billion would 
be funded through a combination of direct appropriations, offsetting 
collections in the form of the passenger security fee of $2.50 and a 
fee to be paid by airlines. The total for the offsetting collections is 
estimated to be about $2.2 billion. Resource information for the 
Federal Air Marshal program can be provided in a classified document or 
briefing.
    John Magaw--former Director of both the Secret Service and the 
Bureau of Alcohol, Tobacco and Firearms--joined the DOT team to lead 
the new TSA as Under Secretary of Transportation for Security. With 
John, Secretary Mineta's team is working closely with the Office of 
Homeland Security and with multiple Federal, State, local and private 
partners in this vital work.
    TSA's budget is presented in a service-oriented manner, rather than 
being broken down based on types of costs, such as operating expenses, 
capital costs, and research. These broad service areas are security 
operations, law enforcement, intelligence, and security regulation 
enforcement, and include headquarters and field resources with 
administrative, support and management personnel.
    For the first time, beginning on February 18, aviation security 
will become a direct responsibility of the Federal Government rather 
than the airline industry. There is much to do to make this transition, 
and TSA is on track to make it happen.
    TSA has been given an unprecedented task in standing up a full-
Federal takeover of much of airport security, including all passenger 
and baggage screening functions. Our budget proposal includes funding 
for security screeners, law enforcement officers, screening management 
and Federal supervisors, as well as for baggage screening technology to 
ensure that the Congress's mandate that all bags are screened is met. 
We will also fund the development and acquisition of new security 
technologies that will better enable us to perform the important 
aviation security functions.
    In addition to TSA, virtually every other part of the Department is 
working to improve homeland security. The Coast Guard, the Maritime 
Administration, and the maritime industry are working together to 
enhance our maritime and port security efforts. This work is critical, 
as 95 percent of America's overseas commerce travels through our 
Nation's seaports.
    Recently, President Bush spoke in Maine about the importance of the 
Coast Guard in protecting homeland security--and he praised the 
magnificent work of its men and women. The President's budget includes 
the largest increase in spending for the Coast Guard in our Nation's 
history. It provides $7.1 billion in search and rescue enhancements and 
increased port security. Also included is a commercial navigation user 
fee, to help pay for increased port security needs.
    The President has proposed $500 million to fund the Coast Guard's 
``Deepwater'' project. Deepwater will replace our aging fleet of boats, 
planes, helicopters, and cutters with state-of-the-art equipment--
delivered over more than two decades.
    Deepwater will rely upon a new performance-based approach to the 
acquisition of major assets. This investment will increase the Coast 
Guard's effectiveness in saving lives and assuring homeland security. 
It will equip the Coast Guard to protect the environment and enforce 
immigration, drug, and fishery laws at sea.
    The Department's mission is, of course, focused on many other 
important priorities.
                                highways
    First is an issue that is on the minds of many of us--the required 
adjustment to Highway Trust Fund spending in 2003. The reason for the 
adjustment can be found in the law that sets highway funding--the 
Transportation Equity Act for the 21st Century (TEA-21).
    TEA-21 guaranteed that highway funding would be tied to Highway 
Trust Fund tax receipts. It accomplishes this through a series of 
annual adjustment mechanisms. As a result of a strong economy, for the 
past three years TEA-21 has provided record-level funding for surface 
transportation--well above baseline levels forecast in the 1998 
authorization.
    Because of the economy's slowdown in 2001, there was a drop in tax 
receipts flowing into the Highway Trust Fund. In 2003, highway 
obligations will therefore be 29 percent below the 2002 level. Actual 
spending, which typically lags obligations on these multi-year highway 
projects, will fall nationally in 2003 by roughly 3 percent.
    In a nutshell, spending for highways will be lower in 2003 based on 
a formula set in law that adjusts spending to Trust Fund receipts. The 
President's budget fully funds the guaranteed funding level set in TEA-
21. As we make plans to reauthorize TEA-21 in 2003, we will work with 
Congress to evaluate legislative mechanisms that could decrease funding 
volatility.
    The Department's 2003 budget also offers several other initiatives 
to support the country's air, land and sea transportation systems.
               aviation and surface transportation safety
    Safety remains a cornerstone priority at the DOT. Nearly $8 billion 
of the President's request is dedicated to improving transportation 
safety for all Americans.
    In addition to homeland security and safety, improving mobility 
while protecting the environment remains a focus of so much of our work 
at DOT. In recent years, the United States has invested billions of 
dollars in transportation in order to accomplish these multiple goals.
    Aviation has certainly been a major focus for that investment. The 
2003 budget request for the FAA reflects the Administration's strong 
commitment to making air travel safer and more efficient.
    Recovering from the events of September 11, air traffic is now 
beginning to grow again. The FAA must continue its efforts to provide 
for increased efficiency and capacity within our Nation's airspace.
    The total FAA program budget request of $14 billion is 1.7 percent 
higher than in 2002, when adjusted for changes in mission related to 
the TSA. We are requesting $6 billion for operating and maintaining the 
air traffic control system, $700 million for FAA's air traffic control 
system modernization, and $290 million for safety related technologies 
and systems to prevent runway incursions and other accidents.
    We are requesting $3.4 billion in our FAA 2003 budget for airport 
improvement activities.
    Turning from aviation to surface transportation, here too the focus 
on safety is at the heart of our work at DOT. Sadly, traffic crashes 
claimed over 40,000 lives annually, accounting for over 90 percent of 
transportation-related deaths. The Department's goal is to reduce 
highway deaths through education, research and new technologies--and 
rigorous enforcement of our traffic and safety laws.
    To achieve our highway safety goals, the budget calls for $200 
million for the National Highway Traffic Safety Administration's safety 
research and information programs. It provides for $225 million in 
grants to states for their highway safety programs.
    The Federal Motor Carrier Safety Administration (FMCSA) has been 
working to achieve the goal of reducing truck-related fatalities from 
more than 5,000 in the year 2000 to less than 2,700 by the year 2010.
    The President's 2003 budget requests $371 million for motor carrier 
safety activities, 8 percent more than 2002. The budget provides $190 
million to support continued research and enforcement of FMCSA's 
interstate commercial carrier regulations. It includes $165 million for 
Motor Carrier Safety Assistance Program State grants.
    I again want to thank you for supporting our commitment under the 
North American Free Trade Agreement in DOT's 2002 Appropriations Act. 
The President is requesting $116 million for FMCSA to improve our 
southern border safety enforcement program. This will support the 
comprehensive Federal and State safety enforcement presence at the 
U.S./Mexico border that is being deployed this year.
                     public transportation and rail
    Public transportation--transit, commuter rail and buses in urban, 
suburban and rural areas of the country--reduces traffic congestion and 
enhances mobility. For 2003, the President is proposing a record $7.2 
billion for public transportation. The budget request includes funding 
for 29 new starts--projects that will carry over 190 million riders and 
save over 61 million hours in travel time.
    Within the 2003 proposal for the Federal Transit Administration, 
$145 million is dedicated to the President's New Freedom Initiative. 
This program will make transportation more accessible for persons with 
disabilities. A competitive grants program will make $100 million 
available for alternative transportation services and the remaining $45 
million will go toward pilot projects that promote innovative 
approaches to overcoming transportation barriers for passengers with 
disabilities.
    The 2003 Budget also includes a placeholder request of $521 million 
for Amtrak. Understanding Amtrak's precarious financial circumstances, 
last summer Secretary Mineta called for passenger rail reauthorization 
in 2002, in advance of the expiration of Amtrak's current 
authorization. We must decide precisely what type of intercity rail 
network we need, what we can afford, and how to sustain it over time.
    On other rail matters, the President's budget supports beefing up 
the safety program at the Federal Railroad Administration, recommending 
$195 million for safety initiatives and rail research efforts.
                             other programs
    The Research and Special Programs Administration (RSPA) oversees 
the transportation of hazardous materials, including America's 2.1 
million miles of gas and oil pipelines. The President's Budget includes 
$64.5 million to hire new pipeline inspectors and to initiate a 
research and development program for the safety of our energy 
infrastructure.
    RSPA's budget also includes $2.1 million for the Office of 
Emergency Transportation's Crisis Management Center, which demonstrated 
its critical importance to the Nation on September 11 as the 
Department's intermodal communication center.
    In addition to the previously mentioned Coast Guard budget, our 
budget proposal includes a $90 million initiative to improve maritime 
safety. This initiative will modernize the maritime ``911'' system and 
eliminate existing radio coverage gaps along our coast and enhance the 
Coast Guard's ability to find those in distress.
                               conclusion
    All up, this is a strong fiscal year 2003 budget supporting the 
President's goals for air, land and sea transportation. My prepared 
remarks focus on only a part of the whole picture. Yet each 
organization within DOT contributes indispensably to accomplishing the 
DOT goals I have outlined.
    To conclude, Secretary Mineta and I--along with his DOT leadership 
team--believe that the President's 2003 budget for DOT will clearly 
enhance homeland security--significantly. But more, it will improve 
transportation safety, maintain America's critical transportation 
infrastructure, increase transportation capacity, protect the 
environment, and improve mobility. In short, it will do the job.
    We look forward to working with this Subcommittee and all members 
of the Senate as it considers President Bush's 2003 budget request.

                           AVIATION INCIDENT

    Senator Murray. Thank you very much, Mr. Jackson.
    Mr. Magaw, I understand you do not have an opening 
statement but will be available for questions.
    Mr. Magaw. That is right. I will be available for 
questions, but I also believe my responsibility is to report an 
incident to you this morning that you may not have heard of 
yet, and I do not want to leave this hearing without telling 
you about that incident. However, I can only give you partial 
information because that is all I have right now. United 855, 
en route Buenos Aires from Miami, had an incident occur early 
this morning. The cockpit door was kicked by a passenger. The 
panel, or the bottom portion of it, was damaged, but the door 
held. The crew and others assaulted and injured the person. The 
flight landed in Buenos Aires. They did not divert and go to a 
different location.
    The person, as I understand it, is now in custody but is 
injured, maybe seriously injured, and is being treated. The 
information about what was used to injure the individual varies 
in four or five things, so I do not want to state what that is. 
Actually, one of the things that they used to injure the 
individual was a fire extinguisher, and that is about what I 
have right now.
    I did get the call a few minutes after the air traffic 
control towers were notified. I got the call around 4:40 this 
morning, and the plane did land safely around 8:00 a.m., in 
Buenos Aires.
    Senator Murray. Thank you, Mr. Magaw, and I am sure we will 
have questions about that. I have a number of questions as well 
about the budget. There is a vote in progress. Senator Shelby 
has already voted, so I am going to let him make his opening 
statement and do questions, and then I will be back in a 
minute.

                 STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you. Thank you very much. I am going 
to welcome you--you have been welcomed by the chairman, but 
welcome you to the hearing. I look forward to our discussions 
this morning on the Department of Transportation's 2003 budget 
request. Hopefully we will have an opportunity to look under 
the hood of the budget request and to better frame what this 
request means for the Department's multifaceted agenda.
    While the Transportation budget request is fairly 
straightforward, it does rely in a small part on some of the 
same tried and rejected budget gimmicks such as new user fee 
taxes. Although the Transportation budget request avoided the 
wholesale reliance on new user fees taxes that characterized 
the last Administration's submissions, somewhere the budget 
gnomes just could not let go completely.
    The request continues the proposal for $65 million in new 
user fee taxes for rail safety inspection and a hazardous 
materials safety program even though these proposals have been 
submitted to Congress and dismissed for the past 5 or 6 years, 
and the request resurrects a Coast Guard navigation fee for 
$165 million that has also been rejected previously by the 
Congress. I would be surprised if they fare any better this 
year.
    Although the hole in the budget created by the user fee 
requests is smaller than in years past, even a small hole will 
have to be made up somewhere. Because of the funding 
distortions caused by special budgetary treatment for other 
capital accounts, closing this gap will likely come at the 
expense of those accounts that have the greatest difficulty 
absorbing the shortfall, but the difficulties presented by the 
user fee taxes budget gimmick pale in comparison to the $8\1/2\ 
billion cut in highways.
    In the years past, I have contended that the special 
budgetary treatment of the highway, transit, and aviation 
capital accounts put pressure on FAA operations, Coast Guard 
operations, and Amtrak subsidies. This year, the special 
budgetary treatment for highways puts pressure on itself as 
well as those other accounts. Clearly, restoring some level of 
reason to the highway account will be the biggest issue that 
the transportation budget will face in 2003.
    I understand that the budget request complies strictly with 
the law as articulated in TEA-21, but I had actually hoped for 
a little more leadership on infrastructure investment than a 
blind devotion to a flawed highway authorization act. I believe 
that, because of the mechanically derived highway numbers, this 
budget presents an enormous challenge for this Subcommittee; 
namely, how to find the resources for a more responsible level 
of highway infrastructure investment. That is by no means the 
only challenge in this request, but it is undoubtedly the most 
daunting from a budgetary resource perspective.
    What the $8\1/2\ billion cut to the highway program 
demonstrates to me is the folly of trying to set infrastructure 
investment on automatic pilot and how flawed the TEA-21 
legislation was in trying to match annual gas tax receipts to 
the annual highway infrastructure appropriation. If the goal of 
TEA-21 was to set the highway program on autopilot, then the 
RABA adjustment this year caused what aviators refer to as 
controlled flight into terrain.
    Secretary Jackson, as you begin to formulate 
reauthorization proposals for highways and transit, I hope and 
trust that you will avoid mechanical approaches to establishing 
highway obligation limitation levels. One, if the primary 
argument for linking highway gas tax receipts to highway 
spending levels was the need to provide State Departments of 
Transportation with a stable and certain level of highway 
investment, then this budget request shows how badly TEA-21 
failed.
    This request represents the largest swing in the highway 
program in history. Such a swing would not have been possible 
without the fact of accountability that comes from the TEA-21 
autopilot. To illustrate just how counterproductive this 
approach is, consider what drives the amount of receipts into 
the Highway Trust Fund, which are derived from gas and excise 
taxes. The economy drives the receipts. When the economy 
stumbles, receipts into the Highway Trust Fund decrease.
    Under the approach required by TEA-21 black box fuzzy 
logic, investment in highways and the immediate job creation 
that highway spending supports contracts as the economy slows. 
Just at the time we should be increasing highway spending for 
short- and long-term economic stimulus, the TEA-21 autopilot 
would have us cut highway spending. This is misguided, 
shortsighted, and an abrogation of our prerogatives as elected 
officials.
    I believe this committee should not, and I believe it will 
not, be bound by funding levels derived in an artificially 
constrained process void of the public policy and economic 
concerns that must influence decisions regarding responsible 
investment in highway infrastructure.
    Now, moving to other good news in the budget, I note that 
the Administration provided $521 million of additional subsidy 
for Amtrak in fiscal year 2003. Once again, I wish the 
Administration had provided some greater leadership in this 
continuing crisis. Simply requesting the same level 
appropriation as was requested for last year does little to 
extricate the country from this failed experiment in passenger 
rail service.
    I note that Chairman Murray anticipates an Amtrak hearing 
in the near future, and I will save my detailed comments and 
observations for that hearing. In short, I think it is time to 
stop ignoring reality with Amtrak and just start doing 
something that makes sense. The Administration, I believe, must 
lead on the issue of Amtrak, because, unfortunately, a majority 
of the Congress has demonstrated its inability to effectively 
address the chronic Amtrak problem for more than 20 years.
    Last year at our budget hearing, Secretary Mineta indicated 
that he anticipated spending 70 percent of his time on aviation 
matters. I suspect that his estimate turned out to be about 
right, although at the time I do not think he was referring to 
aviation security matters. The budget requests $4.8 billion for 
the Transportation Security Administration. I look forward to 
greater detail about how that money, and the $1.25 billion 
appropriated for 2002, will be used to enhance the security of 
our transportation systems.
    As critically important as the security and national 
defense issues are, I would urge you to make time for the 
Department's other four missions and programs. In particular, 
the Coast Guard's Deepwater and National Distress and Response 
System Modernization projects are two of the most expensive and 
the most challenging procurements that the Coast Guard, if not 
the Department, have ever undertaken.
    Like Deepwater, the National Distress and Response System 
Modernization project is slipping, and deserves greater 
attention from OST and OMB than it has received. I was recently 
informed that the Coast Guard will postpone the awarding of the 
Deepwater contract. This does not bode well for a procurement 
that has been considered as having a high risk schedule and 
acquisition strategy.
    We will have a hearing next week on Coast Guard programs, 
and I will go into more depth on those procurements and other 
issues at that time. I wanted to bring them to your attention 
to encourage you, Under Secretary Magaw, to look into the 
Deepwater procurement during this most recent delay, and try to 
make some sense of it from a homeland security and 
transportation security standpoint.
    I am always concerned when a program that is advertised as 
the perfect solution to one set of missions for the Coast Guard 
emerges with no modification as a new and improved perfect 
solution to a dramatically different set of missions. There is 
some soap being sold here, and it carries a $10 billion price 
tag.
    In turn, the NHTSA effort to comply with the TREAD Act 
faces some substantial challenges as it had difficulty in 
meeting the statutory deadlines. I urge you to provide the 
management oversight to get that effort on track. Every year, 
more than 40,000 Americans lose their lives on our highways, 
while less than 3,000 die in the rest of the system. 
Accordingly, whatever improvements we can make in highway 
fatality rates pay significant dividends in terms of lives 
saved.
    The Federal Government is committing more resources than 
ever to improve highway safety, and I am not convinced we are 
doing as well as we should. ``Click It or Ticket'' or similar 
seat belt mobilization campaigns, if applied on a national 
basis, should have immediate and lasting safety benefits.
    Fiscal year 2003 is an important one for reauthorization 
proposals for highways, transit, and aviation. I encourage you 
to review the things that have worked and those that have not 
before you formulate the Administration's reauthorization 
procedures. Clearly, in the aftermath of 9/11, and with the 
draconian cuts to the highway program necessitated by TEA-21, 
there is a need to substantially reassess the appropriateness 
of the lack of flexibility in our infrastructure investment 
programs.
    What I am trying to say is that you have a lot of 
challenges facing you at the Department, and you must 
constantly resist only reacting to the crisis of the moment. It 
is imperative that you keep a long-term view of all the 
missions of the Department, as well as manage the immediate 
challenges.
    I look forward to this continuing hearing, and to the other 
people's statements.
    Senator Byrd.

                  STATEMENT OF SENATOR ROBERT C. BYRD

    Senator Byrd. Chairman Shelby, thank you. Thank you for 
your service to the Nation. Thank you for your service to your 
State. Thank you for your service to the Senate, as the former 
Chairman, and now as Ranking Member. You are a valuable asset 
to the Nation. I did not get to hear all of your statement, but 
I will have an opportunity to concentrate on it later. At the 
moment, I have a statement of my own, and then I must go to the 
budget hearing which is in progress at this moment, before 
which Secretary of the Treasury, Mr. O'Neill, is appearing.
    So I, too, want to wish Secretary Mineta a speedy recovery, 
and I hope you will pass along, Mr. Jackson, to him our warm 
wishes.
    Mr. Jackson. Yes, sir, I will.
    Senator Byrd. The events of September 11 focused the minds 
of the American people on our national transportation system in 
important new ways. Our entire national aviation system was 
brought to a halt. People needed urgently to find alternative 
ways to travel. Citizens reflected on the security of our 
transportation system in ways that they had never done before. 
They reflected not only on the safety of the aviation system, 
but on other modes of travel as well.
    Our transportation network of roads, runways, and railways 
has always been central to the health of our national economy. 
Roads, runways, railways. Nothing about September 11 changed 
that. Yet as I review the President's budget request for the 
Department of Transportation for fiscal year 2003, I am greatly 
disappointed by its lack of balance.
    Hugely increased sums are requested for transportation 
security. I do not doubt that these increased sums are needed, 
and I support them, but these increases for security are more 
than offset by a dramatic $9 billion cut to our investment in 
our Nation's highway infrastructure. As such, even with all of 
the increased funds requested for transportation security, the 
overall budget for the Department of Transportation drops by 
$1.7 billion, or almost 3 percent. While our investment in 
highway construction has risen in recent years, the fact is 
that we have not yet begun to reverse the trends of 
accelerating road deterioration and worsening congestion.
    I believe that many of my colleagues in the Senate will 
agree that we should be looking at ways to move our investment 
in highways forward, not backward. Our economy is in recession. 
If there ever is an appropriate time to consider putting 
thousands of people out of work, now is not the time.
    During the Senate's consideration of the TEA-21 highway 
bill, I, along with Senator Gramm of Texas, championed an 
amendment that sought to ensure that our investment in highways 
would fully recognize the receipts coming into the highway 
account of the Highway Trust Fund. Up until that point, there 
was no recognition in either the budget, or the appropriations 
processes, of the billions of dollars that the public was 
paying into the Trust Fund, billions that were staying in the 
Trust Fund unspent, while our road conditions worsened.
    While we were successful in TEA-21 in ensuring that 
spending would keep pace with revenues, not much was said at 
the time about the fact that the highway account of the Trust 
Fund already had an unspent balance of $14.7 billion. Page 744 
of President Bush's budget now shows that the unspent balance 
has grown to $18.1 billion.
    While a portion of this balance must be reserved to pay for 
obligations already incurred, the fact is that the majority of 
this balance represents tax dollars that were paid at the gas 
pump but are not being utilized for highway construction or 
renovation. If there ever is a time to consider tapping a 
portion of this balance to keep our highway construction 
enterprise moving forward, now is the time.
    Whether we will be able to achieve that goal will depend on 
the larger budget debate that will commence shortly in the 
Budget Committee. Chairman Murray is a member of that 
committee, as am I. I hope to work with her and with other 
Members to see to it that we do not put hundreds of thousands 
of jobs at risk while our economy is attempting to pull itself 
out of recession.

                          PREPARED STATEMENTS

    Thank you, Madam Chairman, and thank you, Ranking Member 
Shelby, and thank you to the members of the subcommittee on 
both sides.
    That completes my statement.
    [The statements follow:]

              Prepared Statement of Senator Robert C. Byrd

    Thank you Madam Chairman.
    I commend you and your ranking member, Senator Shelby, for moving 
out rapidly and initiating hearings on the Administration's budget 
request for the Department of Transportation. I, too, want to wish 
Secretary Mineta a speedy recovery and I ask you, Mr. Jackson, to 
please pass along our warm wishes to the Secretary.
    The events of September 11 focused the minds of the American people 
on our national transportation system in important new ways. Our entire 
national aviation system was brought to a halt. People needed to 
urgently find alternative ways to travel. Citizens reflected on the 
security of our transportation system in ways that they never have 
before. They reflected not only on the security of our aviation system 
but on all the other modes of travel as well.
    Our transportation network of roads, runways and railways has 
always been central to the health of our national economy. Nothing 
about September 11 changed that. Yet, as I review the President's 
budget request for the Department of Transportation for fiscal year 
2003, I am greatly disappointed by its lack of balance.
    Hugely increased sums are requested for transportation security and 
I don't doubt that these increased sums are needed. However, these 
increases for security are more than offset by a dramatic $9 billion 
cut to our investment in our nation's highway infrastructure. As such, 
even with all the increased funds requested for transportation 
security, the overall budget for the Department of Transportation drops 
by $1.7 billion or almost 3 percent.
    While our investment in highway construction has risen in recent 
years, the fact is that we have not yet begun to reverse the trends of 
accelerating road deterioration and worsening congestion.
    I believe that many of my colleagues in the Senate will agree that 
we should be looking for ways to move our investment in highways 
forward, not backward. Our economy is in recession. If there ever is an 
appropriate time to consider putting hundreds of thousands of people 
out of work, now is not the time.
    During Senate consideration of the TEA-21 Highway Bill, I, along 
with Senator Gramm of Texas, championed an amendment that sought to 
ensure that our investment in highways would fully recognize the 
receipts coming in the highway account of the Highway Trust Fund. Up 
until that point, there was not recognition in either the Budget or 
Appropriations processes of the billions of dollars that the public was 
paying in the Trust Fund--billions that were staying in the Trust Fund 
unspent while our road conditions worsened.
    While we were successful in TEA-21 in ensuring that spending would 
keep pace with revenues, not much was said at the time about the fact 
the highway account of the Trust Fund already had an unspent balance of 
$14.784 billion.
    Page 744 of President Bush's budget now shows that the unspent 
balance has grown to $18.126 billion. While a portion of this balance 
must be reserved to pay for obligations already incurred, the fact is, 
the majority of this balance represents tax dollars that were paid at 
the gas pump but are not being utilized for highway construction or 
renovation. If there ever is a time to consider tapping a portion of 
this balance to keep our highway construction enterprise moving 
forward, now is the time.
    Whether we will be able to achieve that goal will depend on the 
larger budget debate that will commence shortly in the Budget 
Committee. Chairman Murray is a member of that Committee as am I. I 
hope to work with her and other members to see to it that we do not put 
hundreds of thousands of jobs at risk while our economy is attempting 
to pull itself out of recession.
    Thank you Madam Chairman.
                                 ______
                                 

                Prepared Statement of Senator Herb Kohl

    Good morning and thank you for holding this important hearing 
today. I believe that the work of this Subcommittee is essential as we 
continue to secure our transportation system post September 11. Welcome 
Under Secretary Jackson and Under Secretary Magaw. I look forward to 
your comments this morning.
    The Senate has been debating a stimulus bill to help jump start our 
economy. Many of my colleagues disagree on the best way to do this in 
the short run. But one thing is certain, long term sustained economic 
growth requires a modern transportation network that allows for people, 
goods and services to move about freely and safely.
    That is why I am disappointed that the President's budget request 
includes a 29 percent cut in much needed funding for highway 
construction. During these uncertain economic times, we cannot afford 
such a drastic cut in funding for projects that will help create jobs 
and help move people and goods safely and efficiently.
    I would like to commend you and the Department of Transportation on 
your work as it relates to the many provisions included in the Aviation 
and Transportation Security Act. I am encouraged to see that the 
President's Budget request includes $4.8 billion in total funding for 
the new Transportation Security Administration. However, I am 
frustrated by the lack of attention the department seems to be giving 
to the security of chartered aircraft and general aviation. I will 
reserve further comments on this issue until the questioning period, 
but I want to put our witnesses on notice that this is a priority for 
me.
    There can be no need more urgent than the safety of the American 
flying public. And the simple fact is that, if air travel is not safe 
and passengers do not fly, the entire airline industry is imperiled. We 
must ensure that we have sufficient resources to bring aviation 
security to an acceptable level, whether that means buying the 
necessary numbers of explosive detection machines to screen checked 
luggage, paying for the hiring and training of additional airport 
personnel to screen checked baggage, or investing in high tech security 
devices to identify suspected terrorists.
    Last Fall, when we passed the Aviation and Transportation and 
Security Act, Congress acted to fix a gaping hole in the entire 
aviation security system. While enormous efforts were being made to 
check carry-on bags after September 11, until the changes mandated by 
this legislation, almost all checked bags were still being loaded onto 
our passenger airplanes with no screening. This failure to check bags 
was creating an unacceptable security risk for thousands of passengers 
everyday and leaving our air transportation system vulnerable to 
terrorists.
    But now, as a result of this recently passed legislation, all 
checked bags must either be screened for explosives or subject to bag 
matching so that we know the person who checked the bag actually 
boarded the airplane. Most important of all is the requirement that, by 
the end of this year, all bags must be screened by explosive detection 
machines.
    But this legislation will be worthless unless we provide adequate 
funding to purchase and install the explosive detection machines. I 
will therefore expect our witnesses today to tell us how the 
Congressional mandate to install these machines and screen all checked 
baggage will be fulfilled by the end of this year.
    Thank you Madam Chairman and I look forward to a productive 
hearing.
                                 ______
                                 

            Prepared Statement of Senator Richard J. Durbin

    Chairman Murray, thank you for holding this important hearing on 
the U.S. Department of Transportation's fiscal year 2003 (fiscal year 
2003) budget. I look forward to working with you and our Subcommittee 
colleagues this year to address a number of critical transportation 
issues.
    I also want to say a word of welcome to Deputy Secretary Michael 
Jackson and new Under Secretary of Transportation for Security John 
Magaw. This Congress and this Administration are facing an 
unprecedented challenge on aviation and transportation security. We 
will be pressed to find adequate resources to help state and local 
governments deal with transportation security and fund critical 
infrastructure projects.
    I want to touch on a few issues this morning.
                                 amtrak
    On February 1, Amtrak President George Warrington asked Congress to 
provide $1.2 billion in fiscal year 2003 to ensure the continued 
nationwide operation of Amtrak. Without this influx of federal funds, 
Amtrak officials will be forced to immediately cut jobs and may have to 
eliminate long distance train service as soon as October.
    As you know, the President included $521 million for Amtrak in his 
fiscal year 2003 budget. This is the same level of funding as last year 
and represents less than half of Amtrak's request. While I believe this 
funding level is inadequate and short-sighted, it is my hope that 
Congress, and this subcommittee in particular, will take the necessary 
steps to fund fully Amtrak and preserve our only national passenger 
rail system.
    I've also been working with the Senate Commerce Committee and have 
cosponsored legislation that would reauthorize Amtrak, provide 
emergency funds for security and life safety, and further develop high-
speed passenger rail service in corridors throughout the country.
    But while we wait for action in other committees, we need to go the 
extra mile to ensure that intercity passenger rail service is preserved 
and that no jobs are lost in this critical transportation sector. We 
need this Administration as a partner in this important endeavor. 
Yesterday, I met with Federal Railroad Administrator Allan Rutter and 
expressed my opinion that unless this Administration steps forward and 
gives us a positive signal about Amtrak, then national passenger rail, 
as we know it, will come to an abrupt and premature end later this 
year.
    My home state of Illinois benefits greatly, both directly and 
indirectly, from Amtrak jobs and service. An average of 48 Amtrak 
trains run each day from 30 Illinois communities on more than 1,000 
miles of track. Ridership in the state exceeded 2.9 million during 
2000. In 1999, Amtrak employed more than 2,000 Illinois residents and 
spent $45.6 million for goods and services in the state.
                           aviation security
    I commend the Department and the new Transportation Security 
Administration (TSA) for moving quickly to organize and implement the 
aviation security legislation Congress passed last fall. However, as 
Inspector General Ken Mead points out, many of the major challenges lie 
ahead. For example, deploying and installing explosive detection 
systems (EDS) and hiring as many as 40,000 employees for screening and 
other aspects of airport and aircraft security.
    I understand the current requirements that 100 percent of checked 
baggage must been screened by EDS or an alternative method such as 
positive passenger match. That's a major improvement from the 10 
percent figure we were quoted last fall. However, EDS machines still 
play too small of a role in screening checked baggage. The 
manufacturing and deployment backlog are primarily to blame. However, 
the Inspector General has found these EDS machines to be underutilized.
    Inspector General Mead suggested that using the currently deployed 
EDS equipment to its fullest potential more than 200 bags per machine 
per hour would more than quadruple the overall percentage of EDS 
screened checked luggage. He has also recommended that current EDS 
staffing levels must be significantly increased to efficiently screen 
checked luggage. These actions would bring an added security dimension 
to commercial aviation. And I hope the new TSA takes these 
recommendations seriously.
    I also want to inquire about how TSA is working with smaller 
airports around the country. I understand that the Department has 
dispatched teams to evaluate airports and their security operations. I 
hope that the Department will work cooperatively with airport operators 
to help solve many of the security challenges that we'll face in the 
coming months and will expeditiously process their information and 
requests, such as bomb-blast analyses.
                             highway funds
    I was alarmed by the Administration's almost $9 billion cut to the 
federal highway program. According to the Illinois Department of 
Transportation, this could mean a $225-$250 million reduction for the 
State of Illinois a quarter of the State's federal highway funds. And 
as many as 10,000 Illinois jobs could be affected (American Road and 
Transportation Builders Association). As we try to alleviate traffic 
congestion, improve the environment, stimulate the economy, and provide 
increased highway access, I find it remarkable that the Department 
would slash highway funding to the states. I will stand with my 
colleagues on both the authorization and Appropriations Committees to 
correct this serious mistake.
                  chicago aviation capacity expansion
    Finally, I'd like to put a plug in for legislation that I 
introduced in the Senate, S. 1786. It would codify an historic aviation 
agreement between Illinois Governor Ryan and Chicago Mayor Daley.
    This agreement and this legislation are rapidly gaining broad-based 
support. To date, there are 18 Senate cosponsors and nearly 90 House 
cosponsors. Groups ranging from business to labor to general aviation 
to airlines to small/community airports across the Midwest support this 
historic agreement and my legislation.
    Chicago O'Hare International Airport was the world's busiest last 
year. It is also one of the country's most congested and chronically 
delayed airports. For all practical purposes, the O'Hare airfield 
hasn't been materially improved since 1971 and continues to use an 
antiquated runway layout plan. By simply reconfiguring the airport 
layout, many weather-related delays could be avoided. By replacing old 
runways with safer configurations, delays and cancellations would be 
greatly reduced, eliminating delays that often ripple through the 
entire nation.
    This agreement also moves ahead with a south suburban airport near 
Peotone. Common sense dictates that we'll need the capacity in the 
future. But just like expanding O'Hare doesn't eliminate the need for a 
third airport, building Peotone won't replace O'Hare modernization. 
Both are needed to address serious aviation capacity problems in the 
region.
    Meigs Field on Chicago's Lake Michigan shoreline would also be 
preserved under this State-City aviation agreement.
    Governor Ryan and Mayor Daley deserve great credit for ending more 
than two decades of inaction on airport modernize and expansion. But, 
in order for this agreement to become reality and for it to have long-
term benefits, it must be codified. Thus, passing S. 1786 must be a 
high priority.
    I would welcome the Department's support.
    Chairman Murray, again thank you for the opportunity to talk about 
these issues and the fiscal year 2003 Budget.
                                 ______
                                 

             Prepared Statement of Senator Patrick J. Leahy

    Madam Chairwoman, thank you for calling this hearing today. I would 
like to thank our witnesses, Deputy Secretary Jackson and Under 
Secretary Magaw, for coming before the subcommittee to discuss the 
President's transportation budget request for 2003.
    I share the President's concerns about funding necessary rail, 
port, and air security programs. But the budget blueprint he has put 
forward is really the tale of two budgets. The President has properly 
emphasized the budget to combat terrorism, but his domestic budget is 
riddled with many opportunistic cuts, motivated by ideology and special 
interests, that would hurt America's multi-faceted transportation 
system.
    For instance, the President calls for the break-up of Amtrak 
without offering a comprehensive alternative national rail 
transportation plan. He also does not restore funding to the Federal 
Highway Trust Fund, which is $8.6 billion short; a deficit that will 
leave Vermont highway projects $32.2 million in the hole next year. And 
his budget cuts direct funding for the Essential Air Service program 
that brings air service to small communities, like Rutland, Vermont. 
Without this program, air passenger service to dozens of small 
communities across the country may end.
    I look forward to reviewing the testimony from today's hearing to 
see the direction the Administration plans to take in the coming year. 
Thank you.
                                 ______
                                 

         Prepared Statement of Senator Ben Nighthorse Campbell

    Thank you Madam Chairwoman.
    I would first like to thank the Chairwoman, this Committee, and the 
Department of Transportation for providing leadership and essential 
transportation funding over the years. My state of Colorado is growing 
by leaps and bounds. The funding that has been provided by this 
Committee has made a profound impact on the development of the 
transportation infrastructure that is of utmost importance in 
sustaining a favorable economic climate and a high quality of life in 
Colorado as it continues to grow.
    I would like to point out a couple of projects that have had 
particular impact on my state. The funding for the Titan Road/State 
Highway 85 intersection greatly improved the safety in a community that 
has experienced terrible accidents and deaths at this crossing, 
including the deaths of six teenagers in 1995. Additional projects have 
enhanced the economic vitality and provide increased mobility such as 
the multi-modal T-REX project in metro Denver, which I expect will be a 
model project for the rest of the nation. This Committee has also 
provided much needed funding to begin repairs on the Broadway Bridge in 
Denver, which was constructed in the 1950's and is in such a state of 
disrepair that it has become a safety hazard for our thousands of daily 
commuters.
    With the Homeland Defense build-up in our country, we are facing a 
major fiscal challenge as we look at the priorities for fiscal year 
2003 and beyond. My constituents and the entire nation are looking to 
this Committee to provide the necessary funds to protect those who 
travel our country's skies, seas, rails, and roads. I look forward to 
working with all of you to meet this challenge and to ensure our 
nation's priorities are balanced.
    I would like to thank our distinguished guests for coming up here 
today to speak with us and I look forward to hearing their statements. 
I'm sorry that my good friend Secretary Mineta was not able to join us 
and I'm sure we all wish him a healthy and speedy recovery. I don't 
want to take up anymore of the Committee's time as I have a number of 
questions I'd like to ask at the appropriate time.

                            HIGHWAY FUNDING

    Senator Murray. Thank you very much. We will go ahead and 
move forward on questioning. Mr. Jackson, as I mentioned in my 
opening statement, OMB Director Daniels maintains that the law 
requires that DOT request cuts of more than $8\1/2\ billion in 
highway investments in 2003. As I said, if those cuts get 
enacted it will result in a loss of over 350,000 jobs.
    Your budget asks us to ignore law, and to actually change 
current law, in several areas. You ask us to ignore existing 
law and enact changes so you can eliminate communities from the 
Essential Air Service program. You ask us to ignore existing 
law and impose new, unauthorized user fees. You ask us to 
ignore existing law and divert Transit Formula Funds for the 
President's New Freedom Initiative.
    If the President is concerned about jobs, and he is willing 
to ignore existing law in all of these other areas, why is he 
requesting infrastructure investment cuts of more than $8\1/2\ 
billion?
    Mr. Jackson. Senator, the President's budget is $4.4 
billion below the TEA-21 estimated guaranteed obligation 
limitation, and that is a significant movement obviously. We 
believe, with Senator Shelby, that reauthorization of TEA-21 
should look at mechanisms to make sure that we do not have 
spikes of this magnitude in the funding for this crucial 
program. We also understand that if you look at the historical 
payout, the 2003 spending will be roughly a 3-percent cut. 
About 27 percent of the amounts in 2003 will be outlayed in 
2003, so the full effect of the reduction in the highway budget 
would not be felt in 2003.
    We believe that the discussion on reauthorization should 
address the question whether to allow DOT to smooth highway 
funding, even in a year like 2003 when the RABA adjustment 
would be negative but the cumulative RABA adjustment is 
positive. There is this significant change in the level of 
highway funding, but in order to be able to meet the 
President's core focus on homeland security and the work that 
has to be done at the Department in standing up the new 
Transportation Security Administration, we believe overall that 
the mechanism, while difficult in this year, is a defensible 
approach to take as we start into this conversation.
    Senator Murray. I would not disagree that reauthorization 
is important, but it is not going to help us in time to help 
350,000 jobs, and it is a 10-percent cut in 2004, correct?
    Mr. Jackson. Yes, ma'am.
    Senator Murray. Well, I hope we get your help, and the 
President's help in working with us as Chairman Byrd alluded 
to, to make up the shortfall. We have contracts out there, we 
have jobs, we have a lot of projects that are going to be 
really hurt if we do take this hit in this budget, so I hope we 
get the President's willingness to work with us.

                             AMTRAK FUNDING

    Let me ask you another question regarding Amtrak. In your 
budget, you requested that Amtrak funding be frozen at $521 
million, and your budget states that Amtrak is in need of 
legislative reforms. Amtrak maintains that at that level of 
funding they will go bankrupt. This is not news to you, I know. 
You sit on the Amtrak board, as Secretary Mineta does. Is the 
Administration planning to submit a bill to us to show us 
precisely what reforms you would propose that would enable 
Amtrak to continue operating at the subsidy level of $521 
million that you request?
    Mr. Jackson. Senator, Secretary Mineta believes, and I 
share this belief with great conviction, that inter-city 
passenger rail is an absolutely indispensable portion of our 
transportation network. We must have a viable inter-city rail 
system. We also understand that the system that we have is 
severely broken. There is a nuance in the President's budget, 
and I do not want us to miss it, so I will emphasize it. The 
$521 million--billion request--million dollar, excuse me. I 
really fixed the problem there, didn't I.
    Senator Murray. Thank you.
    Mr. Jackson. The $521 million request is a placeholder so 
that we can allow conversation about early reauthorization to 
take place. We anticipate engaging with the Congress in what 
has been a 30-year, thorny, difficult problem to figure out how 
to manage this issue.
    I, along with some of my colleagues from the White House 
and the Department, met with the Amtrak Reform Council this 
morning as they prepare today to release their final 
recommendations. We have met to review their thoughts on how to 
address the issues, so we know that there will be an ongoing 
dialogue.
    Senator Murray. What do you mean by a placeholder? Are you 
going to come back and ask for more?
    Mr. Jackson. We are open to the opportunity of revisiting 
the Amtrak budget mark, in light of how the reauthorization 
debate takes place.
    Senator Murray. You are going to come back before the 
subcommittee in March. At that time will you be able to 
identify precisely what costs you think can be eliminated from 
Amtrak, the cost structure, so that they can stay solvent at 
the $521 million?
    Mr. Jackson. I do not believe that $521 million is more 
than a relatively short-term funding level. That is what we 
have requested this year. Amtrak's president has stated that at 
this funding level they could not continue to operate the 
railroad with its current network, so I think our policy 
challenge is to figure out what we need, how much we can afford 
to pay, and how we are going to pay for it. We are currently 
looking at these issues in light of the financial information 
that Amtrak has made available to the public, and we have done 
an internal study at DOT of Amtrak financing.
    The Amtrak board has retained an outside consulting firm to 
help them understand the cost drivers of Amtrak's system. They 
have offered to share some of that work with the Administration 
in our efforts to try to find a longer term fix to the Amtrak 
issue. We will be working this very aggressively. I am 
personally going to spend time on this, and the Secretary is, 
too.
    Senator Murray. I look forward to our March discussion. 
Amtrak has said that they need $1.2 billion. You are saying 
they need $521 million. I think it is incumbent on the 
Administration to show us how they can remain solvent with $521 
million if they want to stay alive.

                      AIRPORT PASSENGER SCREENING

    Let me ask you one question, Mr. Magaw, before my time is 
up. On February 18, you are going to assume the existing 
private sector contracts to do this screening at our airports. 
There have been some articles in the paper and stronger rumors 
on the street that some of these companies are seeking to take 
the taxpayers to the cleaners on their way out the door. Is the 
cost of these contracts going to greatly exceed the $700 
million estimate that you provided at the end of last year?
    Mr. Magaw. We do not believe that they will exceed that 
amount at this point. We are trying to continue to negotiate 
with the contractors so that we are ready to take the current 
screening contracts over on the 17th. We want to keep it fairly 
competitive, with as many contractors as we can. We do not 
anticipate us going over that amount.
    Senator Murray. Do you have any leverage when you are 
negotiating these contracts?
    Mr. Magaw. As long as there is competition, we have some 
leverage. We are trying to take over some of the contracts as 
they exist, if we can.
    The problem with that is since most of those contracts were 
negotiated, there has been a lot of security added since 9/11. 
We are trying to do the very best job we can of being 
reasonable in terms of the expenditure.
    Senator Murray. I understand that you are not going to 
assume the contract of Argenbright. Is that related to the 
price that they were charging?
    Mr. Magaw. They have a continuing contract with the 
airline, so we are going to reimburse the airline, not 
negotiate another contract. For a short period of time in all 
of these issues, until we start getting our Federal force 
online, we are going to put a Federal person from TSA at each 
one of those airports the day before, or 2 days before, to 
watch very carefully how this takes place.
    If there are any groups not doing their job, we are going 
to replace them. We are also starting to hire the new Federal 
security directors for the airports, so while that is taking 
place and the new screeners are being trained, the contracts 
will be monitored very closely.
    Senator Murray. I know Argenbright has 40 percent of the 
security services at the Nation's airports. If you are not 
assuming their contract, are we going to have enough Federal 
employees by 18 February to fill those positions?
    Mr. Magaw. The employees within the company that are doing 
the screening are not where the problem lies. The problem lies 
mainly with the companies, in terms of being able to contract 
with them. We are going to move in and watch the people and the 
groups that are actually doing the screening. The patch on 
their shoulder is irrelevant to us, because what we are looking 
for is quality work until we get the Federal screeners trained. 
We will not have any trained Federal screeners to put in there 
on February 17.
    But we are going to have close oversight and we will be 
monitoring it. We do have a backup plan if there is a company 
that turns and walks, or a company that pulls their people out.
    Senator Murray. Do you do not expect major disruptions on 
18 February?
    Mr. Magaw. In any of our conversations, negotiations, 
whether it has been with the Deputy Secretary or myself, or the 
lawyers who are working on the contracts, those who have had 
information and worked with the airport managers are making the 
commitment, along with the airlines, to make this work during 
this changeover period, and we believe that to be the fact.
    Senator Murray. Thank you. Senator Shelby.

                        COAST GUARD CAPITAL PLAN

    Senator Shelby. Mr. Magaw, I know you have been busy on 
other things, for good reason. My concern is that the Coast 
Guard's capital program has not been reviewed or restructured 
to reflect the emerging port and water security requirements 
identified in the past 4 months. In light of the contention 
that roughly 25 percent of the Coast Guard's operations will be 
on homeland security activities, have you at this point 
reviewed the Deepwater program, or have you been briefed on the 
Coast Guard's capital plan as it relates to homeland security, 
and if not, will you?
    Mr. Magaw. I will get a more in-depth briefing. The 
Secretary knows the in-depth answer to that question.
    Mr. Jackson. Senator, I think it is obvious that the Under 
Secretary must be involved in the Coast Guard's capital plan.
    Senator Shelby. I know he has been busy as heck.
    Mr. Jackson. He has, but we will give him something else to 
do, too. I have had several recent briefings on the Coast 
Guard's progress, and I am tracking that very closely. You have 
it nailed exactly right. About 1 percent of Coast Guard's 
mission focused on homeland security prior to the 11th, and 
then we surged to about 58 percent. We are now proposing a new 
normalcy level at about 22 to 25 percent of the budget.
    We believe, and the Commandant has done an evaluation of 
this, that the fundamental platform modernization that we are 
doing will serve that new normalcy mission well, and that 
Deepwater is an essential component of making us able to meet 
the needs. There are other port security and improvement issues 
that we will take up with the Congress' help. We have $93 
million to do some port security work this year, and we are 
moving out aggressively to use that money wisely to strengthen 
work there, too.

                           AVIATION SECURITY

    Senator Shelby. Mr. Magaw, the Aviation and Transportation 
Security Act envisions the development of a data base to 
identify individuals who are suspected terrorists, and 
procedures to turn them over to law enforcement officials. I 
have read press accounts that the Department has prototype 
systems under development. I believe myself that information 
technology can be a very useful law enforcement tool to prevent 
terrorists and other criminals from ever boarding the aircraft. 
To be effective, it will be necessary to collect personal 
property information that we envision.
    Mr. Magaw, do you agree, though, that the personal 
information collected for official Government use--in other 
words, to protect the public--by Government contractors should 
not be allowed to be used for commercial purposes unless the 
individual grants his or her consent?
    Mr. Magaw. I do, sir. That is right. This has to be very 
well protected.
    Senator Shelby. Most Americans that I have talked to 
understand the need for security. We give up some things for 
security only, but not for commercial use.
    Mr. Magaw. That is right.
    Senator Shelby. And that has to be a strong proviso there.
    Mr. Magaw. That is right, yes, sir.
    Senator Shelby. Mr. Magaw, airport security--I am not 
picking on you. I do not want to upset Secretary Jackson.
    Mr. Jackson. I will get mine, I am certain, yes, sir.
    Senator Shelby. Mr. Magaw, you have indicated, I believe, 
in previous congressional testimony that it is your intention 
to have a training facility at each airport to facilitate the 
training of Transportation Security Administration personnel. 
Have you held any discussions with airport operators on the 
lease or rental agreements necessary to accommodate the TSA's 
use of space for training, screening, and other purposes at 
airport facilities?
    Mr. Magaw. We have had discussions about screening space 
and those kinds of things. As far as being able to tell them 
what kind of space we are going to need for training and our 
Airport Security Director, those needs are starting to be 
evident to us in terms of size and how much space.
    Senator Shelby. You will rent that space, will you not?
    Mr. Magaw. Absolutely.

                    REVENUE ALIGNED BUDGET AUTHORITY

    Senator Shelby. Secretary Jackson, I know you have been 
smothered by the Aviation Security Stabilization Act, but I 
would like to ask you to indulge me just a little on the 
practical and political impact of RABA--how do you say it?
    Mr. Jackson. RABA, yes, sir.
    Senator Shelby. RABA has been in the budget request since 
fiscal year 2000. First, compared to the authorized and 
guaranteed level of highway spending included in TEA-21 for the 
fiscal year 2002, the actual appropriations for highways was 
$4.6 billion higher than the authorized level, what could be 
called a $4.6 stimulus investment in highways. Unfortunately, 
neither Congress nor the Administration received the credit for 
that exceptional additional increase in highway spending.
    The corollary to the fiscal year 2002 experience is what 
your budget request for 2003 portends. Just at the time when 
everyone is trying to reassure the American public and industry 
that the economy is getting better, the budget request proposes 
an $8\1/2\ billion cut, a 26-percent decrease in overall 
highway program amount. It is hard to say anything nice about 
that request. I cannot imagine that it is a request that you 
are over enthusiastic about defending. Can you tell us why that 
is the responsible, desirable level of highway investment 
consistent with a budget theme of economic security?
    Mr. Jackson. Senator, the President's budget tries to 
balance a number of very difficult budget priorities this year. 
We have made very significant investments that reflect the 
challenges that face us in a post-9/11 environment. This was 
one of the toughest decisions that we had to accommodate in 
this budget. That is a fact. But we know that over the first 5 
years of the TEA-21 authorization period we have enjoyed quite 
a substantial addition above the guaranteed funding levels that 
were in the Act, and that the States have rightfully put this 
to good use in our highway system.
    For 2003, highway funding would be $4.4 billion below the 
intended mark. As I said, we are very much committed to working 
with the Congress during reauthorization of TEA-21 to try to 
smooth out authorized highway funding levels so that such 
swings do not occur, or that we minimize the effects of such 
swings. I think that we have a chance to look at the way 
highway funds are currently obligated and outlayed in the 
reauthorization debate, and we still have an opportunity to 
address the issue of the $4.4 billion as it is outlayed over 
multiple years.
    About 27 percent of highway funds are spent in the first 
year, around 41 percent in the next year, and then sending 
trails off over multiple years thereafter. So I think there is 
a window to take up the question, if the Congress is willing to 
work with us, on how we level out these issues. But for this 
year there are some very tough choices that had to be made in 
our budget. The Secretary and I fully support the President's 
desire to address the core objectives that he laid out in the 
State of the Union, and that our budget reflects.

                          FAA CAPITAL PROGRAM

    Senator Shelby. Senator Byrd has gone now. I wish he were 
still here, because he would be really involved with all of us 
on this issue.
    One last question. I will be careful and quick. FAA capital 
program. We all understand the need there. Would you commit 
again, Mr. Secretary, that you will have some of your able 
staff to do a ``soup-to-nuts'' review of the FAA's capital 
program?
    Mr. Jackson. I will be happy to look through all of the 
capital program expenditures and make sure we answer any 
questions you may have about them.
    Senator Murray. Senator Bond.

                UNOBLIGATED HIGHWAY TRUST FUND BALANCES

    Senator Bond. Thank you, Madam Chair, and following up on 
the questions that everybody else is talking about, yesterday 
my office was in contact with the Federal Highway 
Administration attempting to learn the actual amount of the 
unobligated funds in the Highway Trust Fund. As we look at not 
only the appropriations process but the pending legislation, it 
would be extremely helpful for us to have a ballpark figure of 
what the unobligated funds might be so we know what we are 
dealing with, with the caveat that all the figures are not 
final. Is there any figure you can give us now, or could you 
give us in a short time?
    Mr. Jackson. Senator, I will pledge to get you the best 
figures we have just as quickly as we can, and we will work 
with your office to make sure we quickly deliver good data to 
you and you get everything you need to be able to take on this 
question.
    [The information follows:]

    At the end of fiscal year 2001, the Highway Account of the Highway 
Trust Fund had unpaid obligations in excess of its cash balance. The 
cash balance in the Highway Account was $20.372 billion. Outstanding 
obligations subject to payment from the Highway Account were $39.77 
billion. In addition, there were $27.299 billion in unobligated 
authorizations that would eventually be obligated and require payments 
from the Highway Account.
    The comparable figures for the Mass Transit Account are: cash 
balance of $7.369 billion; unpaid obligations of $1.306 billion; and 
unobligated authorizations of $29 million.

    Senator Bond. Having worked on that before, we are very 
much interested in seeing if we cannot come to a good 
resolution with you and the members of this Committee and the 
EPW Committee on just how we can take care of this shortfall.

            INTEGRATION OF AMERICAN AIRLINES/TWA WORK FORCE

    I mentioned to you earlier our frequent conversations about 
the union security issues and the integration of the American 
Airlines employees and TWA employees in American Airlines. 
Given the potential disruption to the airline system, the fact 
that other unions are already using binding arbitration, and 
the fact we clearly need some kind of equitable solution to get 
beyond these contentious labor disputes, and I have laid out 
all my concerns in the past, what can the Department of 
Transportation do to help take care of these issues in a way 
that will avoid disruption and assure that all of us who fly 
the new American Airlines have the same good service we had in 
the past?
    Mr. Jackson. Senator, as you know from our conversations 
and from your conversations with Secretary Mineta we very much 
admire and respect the role that you are taking with your 
constituents at TWA in trying to find an equitable solution to 
the integration with their new colleagues from American 
Airlines.
    The disputes in the aviation industry between labor and 
management have been many and protracted, and it takes too long 
to resolve issues of equity between the parties. Our system 
does not, in my personal view, well support quick resolution of 
these crucial issues, so I believe that we would be quite 
willing to have conversations with industry, labor, and 
Congress about what could be done to help find an equitable and 
fair resolution of these types of disputes.
    They are not something over which that we have inherent 
statutory responsibility at DOT, that is the ability to go in 
and resolve the labor problems. The merger case between TWA and 
American, as you know, sir, from your work in this area, was 
approved by the Department of Justice, and we did not have a 
chance to impose conditions on the approval. So I am happy to 
continue to look at this issue with you. It is a very important 
issue.
    Senator Bond. Well, we appreciate your looking at it. We 
have many discussions, and I know, number one, it is not an 
easy issue. You may not have any explicit statutory authority. 
We have asked the National Aviation Board to look at it, and I 
appreciate your continuing to look at it, but as you continue 
to look at it, more and more employees with many years of 
seniority are being furloughed as airline traffic continues to 
be slow in rebounding, and I would hope that there may be some 
at last voluntary efforts to begin the process to encourage 
mediation essentially between the two employee groups.
    I am sure--the company itself I know wanted to see this 
solved. They have a limited role in this, according to them, 
and if you can provide some assistance and urge some amicable 
settlement, because they are all going to have to be working in 
the same airplanes and serving the airline public, I think it 
would be extremely helpful, so we will continue to work with 
you and hope that we find some way to get everybody in the same 
planes agreeing on how they should be there.

                        AVIATION LOAN GUARANTEES

    But I also asked you about Vanguard, and as I told the 
chair as we were walking along, I said, there is the cynical 
view of banks that a banker is one who lends you an umbrella 
and takes it back when it rains. Well, after September 11, we 
saw that rain was falling on airlines, and as far as I can 
tell, the ATSB has decided to give an umbrella to America West, 
but I do not know of any others, and Vanguard obviously, 
without a Federal loan guarantee, is going to be yet another 
casualty of the attacks on September 11.
    Can you help us understand the issues at hand? We 
understood that one of the problems was that they really needed 
the loan, and that kind of fits the definition of why we set up 
the loan program. Maybe you can help us determine what needs to 
be done and what conditions you feel are appropriate before 
awarding such a loan.
    Mr. Jackson. Yes, Senator. I want to say at the start that 
the issue involves the evaluation of sensitive financial 
information that has been submitted.
    Senator Bond. And I agree you cannot get into that. We are 
not going to substitute our judgment for your judgment. We just 
want your attention on it.
    Mr. Jackson. Yes, sir. Well, I can tell you, this one 
certainly has Norm Mineta's attention. It has Michael Jackson's 
attention as well. We have had a series of conversations about 
this. Vanguard has submitted two applications, and so far we 
have not found a formula that meets both our requirements and 
Vanguard's requirements under the program. But I will 
characterize for you what Senator Mineta's counsel is about 
this program.
    It is our job to try to find out how to make this program 
work. We are not sitting in a chair just waiting for people to 
throw things over the transom and say, ``Here is our 
application,'' and we say ``Yes'' or ``No.'' That is absolutely 
not our approach to this issue. We had multiple rounds with 
America West before we approved that one.
    Senator Bond. Yes. They told me it was harrowing.
    Mr. Jackson. Yes, sir, for all parties, I suspect.
    Senator Bond. Yes.
    Mr. Jackson. But I think we came out with a very fair and 
good resolution of that one. We have told this particular 
applicant that we are willing to sit down and work through what 
is acceptable and how to structure something that is consistent 
with the program requirements, and then it will be Vanguard's 
choice as to whether or not they can meet or wish to accept 
those conditions. Our obligation is to work proactively and 
aggressively. We met with them at our office at DOT to help 
them understand how to approach this issue, and we will keep 
our door open and we remain eager to work with them.
    Senator Bond. Mr. Secretary, it looks like we are going to 
have lots of phone time together here in the weeks and months 
ahead, and I appreciate your efforts. Thank you.
    Mr. Jackson. Thank you, sir.

                         HIGHWAY SAFETY PROGRAM

    Senator Murray. Thank you. Mr. Secretary, there were over 
40,000 deaths on our Nation's highways last year--that is, by 
the way, more than one World Trade Center incident per month--
and yet your budget for the National Highway Traffic Safety 
Administration has increased only four one-hundreths of a 
percent, and while you have requested this minuscule increase 
for the entire agency, your detailed budget reveals that you 
want to cut funding for impaired driving prevention by 22 
percent, cut funding for occupant protection by 14 percent, and 
cut funding for safety standards by 20 percent. How do you 
justify these reductions when automotive accidents account for 
more than 90 percent of all transportation fatalities?
    Mr. Jackson. Senator, we agree that the automotive fatality 
issue is the number one safety issue at the Department's 
National Highway Traffic Safety Administration (NHTSA), and 
Administrator Runge is working very aggressively to use our 
funds in an effective fashion. The ``Click It or Ticket'' 
program which you mentioned earlier is a good example. We 
believe that we have some significant funds to promote this 
type of highway safety work, and that we have an adequate pool 
of money to move very aggressively here.
    Senator Murray. Have you asked to continue that in 2003?
    Mr. Jackson. I am sorry, I do not know the answer to that 
line item. I will have to check on that and respond to you.
    [The information follows:]

    The President's Fiscal Year 2003 budget for NHTSA does not propose 
any funding specifically for the ``Click It or Ticket'' initiative. 
However, NHTSA is planning to amend its regulations to allow the use of 
Section 157 innovative seat belt project allocations for advertising 
campaigns such as ``Click It or Ticket,'' which was so highly 
successful in region IV during May of 2001.

    Mr. Jackson. It is something that we are pushing this year 
with the States and are very much supportive of.
    Senator Murray. Do you want the States to fund it?
    Mr. Jackson. No. The States are natural and indispensable 
partners in the effort, and we are working very closely to 
leverage that type of partnership with State and Federal 
participation.

                          HIGHWAY SAFETY GOALS

    Senator Murray. You did not send up a fiscal year 2003 
performance plan with the budget, as you have been doing for 
the last couple of years. Can you guarantee us that the 
Department is not planning to abandon or weaken any of the 
safety goals that were included in last year's performance 
plan?
    Mr. Jackson. We are undertaking a detailed look at all of 
our goals. We certainly do not intend to weaken our commitment. 
We intend to look at each one of them and to be able to report 
back to you what we plan to do, what we can do. We are going to 
set the bar high and try to resolve all those important safety 
goals.
    Senator Murray. You are really short of your goal of 86 
percent of all drivers wearing seat belts this year, and I know 
you did not request it, but the Committee last year did set 
aside $10 million for targeted efforts to boost seat belt use 
in the 2002 Appropriations Bill. Your budget terminates that 
initiative, and then cuts NHTSA's other efforts on occupant 
protection by more than 14 percent. Why should we believe that 
you take these performance goals seriously when you present 
budget proposals like this one for highway safety?
    Mr. Jackson. I assure you that we will work with you on the 
budget proposal for this year to make certain that it is being 
directed to programs that will effectively meet these 
challenges.

                      EXPLOSIVE DETECTION SYSTEMS

    Senator Murray. Mr. Magaw, the next major deadline for the 
Transportation Security Administration after you assume all of 
the screening functions on February 18, is to screen all 
baggage for explosives by the end of this year. That is going 
to be a huge undertaking that is going to require installation 
of over 2,000 explosive detection machines at the Nation's 
airports. If you are not able to meet that deadline, what will 
the reason be?
    Mr. Magaw. There are four or five barriers that we are 
making sure we overcome. It is almost like a hurdle race. If 
you knock one over, then it is going to affect the others, and 
so right now we are concentrating on the manufacturers. There 
are two certified manufacturers and a third is close to being 
certified.
    But under their normal production today, they can only 
produce about 300 machines, maybe less than that.
    Senator Murray. In what time frame?
    Mr. Magaw. In the time frame we are talking about.
    Senator Murray. By the end of this year?
    Mr. Magaw. Yes, ma'am.
    Senator Murray. 300, and the need is 2,000?
    Mr. Magaw. The need is near 2,000.
    What the Deputy Secretary and I have been doing, but the 
Deputy Secretary has worked mostly on this, is talking to the 
three companies trying to get the rights to their equipment and 
their production so that we can bring in some larger companies 
to look at the production part of it. If we can get larger 
companies to come in, and we are conferring with them now, to 
take over this production, that number can be reached. That is 
one hurdle. So we are still optimistic that that number can be 
reached.
    One of my concerns, and also the Deputy's and the 
Secretary's, is that we have got to make sure that if we did 
reach this goal with the machines we have now, is there another 
generation hanging right back there that we need to consider as 
we are moving along?
    The other hurdle is working with the airports, which we are 
doing now. How many do we believe they need, and how many do 
they believe they need? Some airports are going to need 60 or 
65 additional machines. Many of them do not have the space for 
more machines, so it is going to take some reconstruction to do 
that.
    Senator Murray. By the end of this year?
    Mr. Magaw. By the end of this year. The supporting of the 
floor also needs to be improved, because they are very heavy 
machines.
    Then the installation cost is fairly expensive, so we have 
to put a package together at each airport. That is why we are 
dedicating a temporary Federal security person for each airport 
within the next week, to start coordinating contracts, union 
negotiations, and those kinds of things.
    We believe we can still meet those requirements. The reason 
we cannot give you the bottom line figures on the TSA budget in 
either 2002 or 2003 is that we have to get through that process 
so that we know basically what each airport is going to cost 
us.
    Senator Murray. Do you think we have a reasonable chance of 
meeting that goal?
    Mr. Magaw. I think we have a reasonable chance of meeting 
that goal. As soon as we realize, and as soon as my judgment or 
the Secretary's or the Deputy's changes in any way, we will 
make sure that you are advised immediately.

                             EDS CONTRACTS

    Mr. Jackson. Senator, I would be very happy to unpack this 
very crucial question a little bit more if you want, on the 
contracting side. As John has said, we have done some work, and 
I can summarize that approach.
    We have issued a letter contract to the two firms that are 
currently certified to provide EDS machines this week. We had 
sent it to them. We had negotiations with them. Each had some 
deficiencies that they had to address prior to being able to 
get a contract with us, and we have a plan. We have retained 
MacKenzie, who has completed an evaluation of the tools that we 
can use--EDS machines, trace detection and others in 
combination with each other--to do this effectively. We are 
using a demonstration at Salt Lake City right now of trace 
detection equipment to do some explosive detection screening.
    So we have looked at the technological tools that are 
available, we have worked with the firms to give them better 
sourcing data and production data about how to manufacture more 
reliably, and we are now going to look at the second stage 
procurement in which we go out and find another firm to build 
some portion of the whole that is needed, using intellectual 
property which the firms have volunteered to provide to us.
    In addition, there is a third firm, Perk and Elmer, that is 
very close to finishing its certification cycle, and we are 
hopeful that they will successfully complete that. We have 
``baked them into the mix'' as well. We are negotiating an 
intellectual property license from each manufacturer that would 
allow us to complete the manufacture of the remaining number of 
machines that we need. We have a plan to work through an 
engineering firm that is going to be retained Nation-wide to 
help us assess installation problems, and we are looking for a 
contract to deliver, install, train, and maintain that whole 
equipment set. It is a very complex web of procurement issues, 
but we think we are proceeding systematically.
    Senator Murray. I think it is important that you keep this 
Committee informed as you move through the contract process.
    Mr. Jackson. This is absolutely vital, and we are happy to 
meet with you on a very routine basis to keep you up to speed 
on this, and it is very important.
    Senator Murray. Thank you, I look forward to your briefings 
to keep us regularly informed----
    Mr. Jackson. Great. We would be grateful to have your 
counsel and to keep you in close contact on this.
    Senator Murray. Senator Shelby.

                         COST OF EDS EQUIPMENT

    Senator Shelby. I just want to comment. In this area, you 
are talking about a lot of money.
    Mr. Jackson. Yes, sir.
    Senator Shelby. A lot of money is going to be spent, and we 
want it spent wisely, on the right thing, and as Mr. Magaw said 
earlier, competition is the best thing we have going for us in 
trying to protect the taxpayers and get the best product.
    Mr. Jackson. Yes, sir.
    Senator Shelby. I hope you will keep that in mind in this 
area, because once you get through this license process, that 
could open up more competition.
    Mr. Jackson. Yes, sir. It is frustrating to the firms that 
manufacture EDS equipment, to the executives who run the 
airport authorities, and to me, that we have not dropped on the 
table the definitive solution. Because the sums are so large, 
and the importance to the economy is so real, we are taking the 
time to make coherent decisions that will get good value from 
taxpayers' money, and we will look at the principle of 
maintaining competition as a constant source of inspiration on 
this issue.
    Senator Shelby. Mr. Magaw, the explosive detection subject. 
I note the transfer of $124 million from the FAA to TSA for 
procurement of explosive detection systems.
    Is this the total amount of EDS procurement money, or if 
not, can you tell me what the total funding for explosive 
detection systems is in this budget?
    Mr. Jackson. Senator, slightly under $300 million has been 
specifically set aside through a multiplicity of mechanisms. 
There is some money in the FAA budget and there was some 
emergency supplemental money. When you aggregate it, it comes 
to slightly under $300 million. I believe the number is $293.5 
million, and that money is allowing us to launch this initial 
phase of EDS procurement, which is producing a ramp in the 
production capabilities of the certified firms so that we can 
complete the rest of the deliverables.
    Senator Shelby. Thank you.
    Senator Murray. Senator Kohl, then Senator Specter.

                       GENERAL AVIATION SECURITY

    Senator Kohl. Thank you, Madam Chairman.
    Mr. Magaw, as part of the Aviation and Transportation 
Security Act, an amendment was incorporated into the bill at 
section 132. This section required the FAA to author a report 
to Congress on measures to improve general aviation security. 
The report concludes that it is important to develop security 
measures for general aviation that can be deployed singly or in 
appropriate combination in response to varying threat levels.
    What level of threat exists today and, based on that, in 
your opinion, what steps need to be taken to provide an 
adequate level of security for general aviation?
    Mr. Magaw. General aviation stations throughout the country 
vary quite a bit in their security efforts. TSA needs to 
develop a checklist of things that will help general aviation 
personnel tighten their security, not only of their 
installation, but also the security of their aircraft and all 
of the other things. It is one of the many things that clearly 
we need to address.
    The youngster who, regretfully, hit the building in Tampa 
should not have had access to that aircraft. We need to examine 
what kind of things we can build in that are not costly, that 
will not allow somebody other than the intended person to start 
an aircraft. Right now, at some general services locations, you 
have total freedom to walk through, and if they are busy, you 
can walk right out on the ramp, as well you know. So we intend 
to address that issue in depth, and in a few months I should 
have more specific answers for you.
    I am in the process now of hiring the highest level of 
personnel for TSA, and I want to bring somebody on board that 
has the expertise and background to help us understand the 
general aviation culture at the same time we are trying to 
apply the security.

                 AIRPORT PASSENGER SCREENING CONTRACTS

    Senator Kohl. In addition to authoring the report, section 
132 required the FAA to develop and implement a security plan 
for larger classes of chartered aircraft defined as an aircraft 
upwards of 12,500 pounds, or having about 12 seats or more. 
What can you tell us today about the development of this plan, 
and will you be ready for its implementation, which I believe 
is scheduled within 2 weeks?
    Mr. Magaw. I have not addressed that particular plan. I 
know the problem, but I have not addressed the topic, and there 
is something we are going to be doing in 2 weeks that I am not 
aware of.
    Mr. Jackson. I think the Senator may be talking about the 
2-week implementation of our takeover of the security screening 
contracts.
    Mr. Magaw. At the airports, oh. I misunderstood. I am 
sorry, sir.
    Yes, on the 17th we are prepared to take over the screening 
contracts. They will not be Federal personnel at that point, 
other than a person that we are sending to each airport to 
oversee the screening process, work with the airlines, and work 
with the contractors.
    At the same time, we are starting to hire the Federal 
security screeners to take their place, and we will be 
monitoring every location in the country very closely. As 
quickly as we can recruit and train nearly 28,000 to 30,000 
screeners, we will do so.

                       GENERAL AVIATION SECURITY

    Senator Kohl. I appreciate that. I was referring to general 
aviation, that we needed a plan for the larger general aviation 
aircraft, those with 12 seats or more.
    Mr. Jackson. We have submitted a 60-day plan that outlines 
the basic approach to general aviation. In addition, FAA has 
imposed some security directives that tighten up the security 
measures that have to be in place specifically, as you 
addressed, Senator, for aircraft 12,500 pounds or more.
    For example, aircraft operating out of a commercial airport 
have to meet the same safety rules that are in place for 
commercial flights. For those departures, we require an 
approved security director to review the security plan for 
larger aircraft. There is an inspection protocol, a manifest 
listing, and a series of FAA security directives, some of which 
are public and some of which are confidential and conveyed to 
airport security and airline operators.
    So we have done something there. I think what you are 
hearing from the Under Secretary is that all of us believe this 
is an area that we do not yet have as good an approach as we 
want to have. It is a very large system, 19,000 plus airports 
around the country, and we know that this needs more work. John 
is committed to bringing in a team of people to look at this in 
more detail.
    FAA currently has folks working on this issue. I have been 
involved with the Homeland Security Council on efforts to try 
to tighten up general aviation security. After the incident in 
Florida that the Under Secretary mentioned, we sent out a 
security directive and security notice to general aviation 
airports talking about the particular set of problems that we 
had found in that incident, and offering some counsel about how 
to strengthen security.
    So it is not an area where I would say that we feel 
comfortable that we have done everything that needs to be done. 
It is an important area that we will continue to work on and 
look at. The industry has helped us try to understand 
approaches that might be successful, and we are going to 
continue to engage on this one.
    Senator Kohl. Okay, and I thank you. I know how much stress 
you are under and how much work you have to do, so I am not 
suggesting you are not working 24 hours a day, 7 days a week on 
your problem.
    I would just comment with respect to the general aviation 
airports, I fly in and out of them occasionally, and it is 
apparent to me, as it is to you, that the level of security is 
pretty low, in some cases fairly nonexistent. The aircraft in 
those airports are as able to do mayhem as many of the aircraft 
that are in our larger airports around the country which are 
under your control, and it seems to me until you get a handle 
on that problem, it is hard to assert to the American public 
that in fact we are dealing with the problems of airplanes.
    The airplanes flying out of small airports, general 
aviation kinds of activity, are as dangerous as any other 
airplane, and I am very fearful that something terrible will 
happen and we will all be caught unawares again, and we will be 
embarrassed, humiliated, as well as terribly disappointed with 
what happens, and I think to some extent you are sitting on a 
ticking time bomb.
    Mr. Magaw. We will address that issue in depth, Senator.
    Senator Kohl. Thank you. Thank you, Madam Chairman.
    Senator Murray. Senator Specter.
    Senator Specter. Thank you, Madam Chairman.

                      EXPLOSIVE DETECTION SYSTEMS

    The budget for the Department of Transportation has always 
been important, but as we look to next year, it is even more 
important than ever. I think it ranks right up there with 
Defense, and Health, Human Services, and Education, and it is 
going to be a tough job finding enough dollars to go around for 
all of the needs which are presented here.
    Mr. Magaw, I visited the Philadelphia International Airport 
this past Monday, and there is an urgent need for these new 
explosive detection machines. I am told that the international 
airport will require 14 machines at a cost of $42 million, and 
they need to move them now, because they are having a new 
terminal that costs about $475 million, so they will not have 
to retrofit. As I hear the testimony today, about $300 million 
is available Nation-wide. How will we meet the mandate for 
these explosive detection machines to be in place by the end of 
the year, considering the tremendous need and the limitation of 
funds?
    Mr. Magaw. The funds that you see both in 2002 and 2003 
clearly are not going to cover the costs. The President has 
said that once we get the requirements analyzed and know what 
the cost is, then he is going to support this effort. I take 
that in good faith and move forward. The Philadelphia Airport, 
as well as the other airports, is very important, and we will 
have a person in there next week to start dealing with the 
airport manager and all those who know what the problems are to 
develop a plan to get that airport the machines and 
construction it needs.
    Senator Specter. Well, I am pleased to hear that, and there 
is enormous concern over airport security, and I am glad to see 
the President's commitment and your commitment to get that 
done.

                       MAGLEV AND HIGH-SPEED RAIL

    MAGLEV, I think, is going to be the wave of the future, 
something that I have been working on now in my 22nd year, 
since I got here. I thought that was really the kind of 
visionary item which we really had to have. Flying from 
Pittsburgh to Philadelphia with regularity, it is an enormous 
difficulty with the waits on the tarmac and the weather, et 
cetera. With MAGLEV, we will be able to go from Philadelphia to 
Pittsburgh in 2 hours and 7 minutes, with intermediate stops in 
Lancaster, Harrisburg, Altoona, Johnstown, and Greeensburg, and 
I am looking forward to the day when we have a MAGLEV system 
which runs from Boston to Richmond, and perhaps to Miami, and 
New York to Chicago.
    It is my hope that we will develop a real national 
constituency for MAGLEV, and there is concern from the 
westerners that the competition between Western Pennsylvania 
and Baltimore to DC has an eastern tilt, and I think they do 
have a point, but what we have to do is get the national 
constituency. There can be a line from Orange County, 
California to Las Vegas.
    We are prepared for the competition. Baltimore to 
Washington is a line I know very well. I am there all the time 
en route to and from Philadelphia. You have Metroliner and you 
have ACELA, and you have the parkways, where if you contrast 
getting from Greensburg, Pennsylvania, to the Pittsburgh 
International Airport, all you have is bottlenecks. You do not 
have any way to go.
    Governor Ridge, Senator Santorum and I convened a meeting 
in Pittsburgh, and Governor Schweiker has taken over with real 
community spirit, and a very hardworking consortium of 
steelworkers and U.S. Steel and other companies to put that 
together. It would be my hope that we could structure thinking 
about some of that on the Environment and Public Works 
Committee, where we may be able to tap into TEA-21 and figure 
out some way to get additional funding.
    I would be interested in your views, Secretary Jackson, as 
to your vision for MAGLEV, and how important do you think it is 
in looking to really increase transportation and economic 
development into the 21st Century.
    Mr. Jackson. Senator, I believe that high-speed rail and 
MAGLEV are very important things to evaluate as we think about 
the future of inter-city passenger rail. Moving along at 40 
miles an hour does not get the job done in terms of meeting the 
transportation needs of this country for the future. We are 
going to have to take up the Amtrak reauthorization, high-speed 
rail, and MAGLEV issues in concert with each other to try to 
sort out these priorities and to figure out what we need, how 
we can afford to pay for it, and what to do. So I look forward 
to working with you on those issues.
    Senator Specter. Well, I am glad to hear you mention 
Amtrak. I recall one of the first meetings I attended in 
Senator Baker's office in 1981. David Stockman, Director of 
OMB, had zeroed out Amtrak, and it is just indispensable.
    I said we would have a clog of the Baltimore Tunnel, and 
National Airport would be overrun if we did not have the line 
running from New York to Washington, and David Stockman said, 
``Well, that is a prosperous line.'' The trustee in bankruptcy 
would sell that off in no time, and I said, ``All of the 
locomotives would be rusted shut by the time the trustee in 
bankruptcy got around to it,'' but we have maintained that 
battle, and I think we are surviving, but we have to keep it 
going.

                            HIGHWAY FUNDING

    I am very much concerned about the reduction in the Federal 
Highway Administration, some $9.2 billion, because of a decline 
in the fuel tax and other trust fund receipts. Here again, we 
are looking in the Environment and Public Works Committee, 
where I also serve, at a mechanism which might be able to 
utilize the Highway Trust Fund to make up some of that 
shortfall. Do you think that is realistic, Secretary Jackson?
    Mr. Jackson. We welcome the opportunity to listen and talk 
with you as you look at these mechanisms. What I said to 
Senator Shelby earlier was that the variability in highway 
funding under the existing TEA-21 program creates a 
vulnerability for highway infrastructure. So we look forward, 
particularly in the reauthorization discussion, to developing a 
means level out these spikes in the funding.

               TRANSPORTATION PRIORITIES IN PENNSYLVANIA

    Senator Specter. In the limited time I have, I cannot go 
through all the priorities my State has, but we lean very, very 
heavily--we get support from Chairman Murray and Chairman 
Shelby, when he had been the Chairman, but as I look over the 
list here, we have a project called the SEPTA Schuykill Valley 
Metro, which ties into the Job Access and Reverse Commute 
program, which is in at $1.9 billion. It will take people from 
Center City Philadelphia, where there are no jobs, out along 
the industrial corridor as far as Reading through Montgomery 
County, and that is an enormously important program.
    Now, the Administration has put in a request for $26.3 
million for the Pittsburgh Stage II light rail, and we are 
looking at the Pittsburgh North Shore Connector, where we need 
to move people from center city Pittsburgh to the two new 
stadiums which have been constructed in Pittsburgh.
    Every time you turn around, there is an indispensable 
ingredient that comes out of the Department of Transportation 
budget, to be able to keep up with employment needs or economic 
development needs, so we have the Harrisburg Corridor One 
Project, which is a very important 30-mile regional light rail 
system to take the pressure off the highways, and there is 
enormous interest in a Scranton to New York City rail service, 
where we have gotten starter money of $1 million, and $200,000 
to see if Wilkes-Barre can connect to it, so I mention those 
items because it underscores the importance as to your 
Department and how we are going to handle the funding.

                 AIRPORT PASSENGER SCREENING CONTRACTS

    I am glad to see, Secretary Magaw, that Argenbright is not 
going to be security-company-contracted-with, as I understand 
it. Is that so?
    Mr. Magaw. You cannot answer that yes or no. Let me 
explain. We are reimbursing the airlines any security costs in 
the initial days. Argenbright will keep the contract they have 
with the airlines for the temporary future, and we will 
reimburse the airlines. We will contract with them. We are 
going to move that company out as quick as we can in terms of 
moving our Federal force in.
    Senator Specter. Well, I am glad to hear that you are 
moving them out. They were under criminal prosecution, 
probation, have violated probation out of the Philadelphia 
Federal court, so that I am glad to hear you will keep a sharp 
eye, because that is very, very important.
    Mr. Jackson. We would expect those contracts to be 
concluded in a matter of weeks after the switch-over date.
    Senator Specter. Well, give Secretary Mineta our best 
wishes for recovery, and Mr. Magaw, are you enjoying your job?
    Mr. Magaw. Very busy, and enjoying it. I am challenged by 
it, and I am delighted--most Americans after 9/11 want to 
serve, and that is the way I feel.
    Senator Specter. Well, I am glad to see you in it. I 
expected you to be confirmed on December 20. They had that 
hurry-up hearing in the Commerce Committee, and we had a little 
discussion, you and I, and I thought you were going to be 
included in wrap-up that night, so I am glad the President made 
an interim appointment. That is one interim appointment that 
has not caused any controversy. It is nice to have you.
    Mr. Magaw. And I appreciate the Senate voting on it quickly 
after you came back.
    Senator Specter. Well, we are glad to see you on that job. 
You have got a big, big job to do, and we are going to support 
you.
    Mr. Magaw. Thank you.
    Senator Specter. Thank you, Mr. Jackson and Mr. Magaw. 
Thank you, Madam Chairman.
    Senator Murray. Thank you.
    Mr. Magaw, I am confused by your answer to Senator Specter 
on the federalization of our security force. If we are just 
simply paying the airlines who are continuing those contracts, 
how does that satisfy the requirement that we are federalizing 
the security screeners?
    Mr. Magaw. Well, the contract is being reimbursed to the 
airlines, but we are having people on the scene right there, 
taking over supervision of the screening function.
    Senator Murray. So it is not federalizing the workers, it 
is just having somebody on-site overseeing.
    Mr. Magaw. Well, that is why I wanted to explain what was 
happening so there was no----
    Mr. Jackson. We are federalizing all the workers. It is a 
phased-in implementation, so Argenbright will be out of this 
process quickly. All of the third-party contractors will, by 
the 1-year statutory deadline, be gone from the system, and 
everybody will be a Federal employee.
    In fact, we intend to phase this in at a cluster of 
airports, and then at roughly 25 per week. Thereafter, we will 
have a full Federal team in place, and as John said, starting 
immediately we will have a supervisory team at each airport. At 
a larger airport they will be larger in number; in a small 
airport it could be just one.
    Senator Murray. I am confused because what you are telling 
me is you will have Federal supervisors in place, but you are 
still going to be paying the airlines, therefore the airlines 
are going to be responsible.
    Mr. Jackson. I am sorry, John. I will address the 
contracting issue.
    Here is how we are handling the switchover in the middle of 
this month. We have negotiated and are completing this week, 
so-called IDIQ--indefinite delivery, indefinite quantity, I 
think. I am acronym-limited here, but it is basically a bulk 
purchasing contract with those firms who provide security-
screening at existing locations around the country.
    In the case of Argenbright, we have decided not to sign a 
bulk purchasing contract with that firm, and we have in place a 
temporary transitional tool to allow us to be able to put 
third-party screeners in place at each of the airports that 
Argenbright currently, serves. They have about 35 airports that 
they serve, and then we will switch that over to a full Federal 
force as part of the normal implementation.
    Senator Murray. Who is paying the screeners? Is it the 
airlines, or is it the Federal Government?
    Mr. Jackson. The Federal Government pays the bulk contracts 
with everyone in the transition. They will work for us; they 
will meet new contract requirements; they will have to have our 
new screening training requirements in place; and they will 
meet the technical, educational and all other requirements of 
the statute. So we own the job.
    Senator Murray. Is that the case for Argenbright, too?
    Mr. Jackson. No, it is not, because we do not intend to 
employ Argenbright.
    Senator Murray. So in the case of Argenbright's contracts 
that you are not going to assume, will you be paying the 
airlines, and the airlines will be responsible.
    Mr. Jackson. The airlines will continue for a few weeks 
after, in some cases but not in all cases, to operate with 
Argenbright under their existing contract. So after the 17th, 
for the couple of weeks necessary, in some instances, to make a 
transition to a different firm, the airlines' existing contract 
with Argenbright will remain in place and we will supervise the 
airline. They will work for us. We will manage the contract 
through the airlines for a short period of a few weeks.
    Senator Murray. Thank you. Let me go to another rule that 
is causing a lot of distress.
    Mr. Jackson. Senator, I might just say, we are barred from 
doing business with them, and that is a decision that we agree 
with. This contracting mechanism honors the Federal debarment 
rules.
    Senator Murray. I just wanted to make sure we all 
understand what is happening.
    Mr. Jackson. Exactly.

                      AIRPORT PARKING RESTRICTIONS

    Senator Murray. Let me ask you another question that is 
causing a lot of distress at a lot of our smaller airports, and 
that is the 300-foot rule. I think you heard about this at the 
Senate Commerce Committee yesterday and said you were going to 
inject some common sense.
    The act provided that some of these airports could gain 
relief from your rule after they put forward some measures to 
you, and a number of airports have done that and have been 
denied respite. We have small airports who have no parking 
whatsoever any more because of the 300-foot rule simply 
eliminating all of their parking. We have many airports, small 
airports who have no handicap parking, and the airports in my 
State just do not see why they are burdened with this 
requirement when, you know, a suicide bomber can drive right up 
to the terminal if they want to. They just cannot park there.
    What do you mean by common sense, and how soon are our 
small airports going to see this?
    Mr. Jackson. This is an issue that has been difficult to 
grapple with, and I want to try to give you some numbers to put 
it into context.
    First of all, the smallest category of airport, category 4, 
was exempted at the outset from this rule, so we are talking 
about category X, 1, 2, and 3. Of those airports, we have 
allowed for a voluntary application for relief from the rule 
and amendments to the rule, and for tailoring the rule to each 
particular airport. Of the 168 that have been submitted, 157 
have been approved for amendments and changes to the 300-foot 
rule. We have 10 that have not been approved. We are still open 
to those 10.
    I know of one that a Member of Congress called me about 
this week. We are going back to work with the airport director 
and figure out how to put together appropriate blast zone 
protection that is meaningful for that airport.
    Here is the punch line, Senator. If one of them has a 
problem, we want to help them fix it. This is not intended to 
be an arbitrary, capricious, or unreasonable requirement. It is 
meant to protect life from people who park a bomb, walk away 
from their car, and cause a large loss of life. We have to be 
reasonable. It does not make any sense to have people parking 
in a cow pasture and walking to the airport, so we are very 
willing and eager to work with airports to try to do this in a 
reasonable fashion.
    Senator Murray. I understand it has been difficult to 
implement.
    Mr. Jackson. It is a thorny issue, and we will keep 
whacking at it.
    Senator Murray. I appreciate that.

                          NAVIGATION USER FEE

    In my region of the country, the ports are one of the 
biggest suppliers of well-paying jobs. Your budget is asking us 
to impose a new user navigation fee to be paid by ships that 
are transiting U.S. waters. With that fee, you are expecting to 
collect $165 million next year and over $300 million in 2004. 
Mr. Jackson, won't that fee only increase the likelihood that 
ships are going to call on ports in Canada and Mexico instead 
of U.S. ports?
    Mr. Jackson. We hope not and we think not, and we will come 
back to you with a precise legislative recommendation from the 
Administration so that we can give meat on the bones of this 
proposal.
    We recognize that there have been proposals submitted in 
the past for user fees to help offset various transportation 
needs that have not been accepted by the Congress and not been 
adopted. We also recognize that, following the events of 9/11, 
that the Congress very much proactively reached to include some 
very significant user fees in the aviation world. We hope that 
to meet some of the enormous costs of providing for homeland 
security in other modes, the Congress would be willing to 
engage in a dialogue with us as to whether user fees are 
appropriate. We recognize that we have to meet the needs of 
commerce and promote the efficient flow of freight and 
passengers through the country, so we will submit a proposal 
for you.
    Senator Murray. You need to know that it is highly 
competitive on the West Coast market. Any increased costs for 
ships coming into our ports will simply mean that they will 
divert to Canada and Mexico, so we have to be very careful when 
it comes to these kinds of user fees in that competitive of a 
market.

                             CARGO SECURITY

    Mr. Magaw, I think it is important when you impose a new 
security cargo regime, that you guarantee that the cargo that 
crosses the U.S. or Mexican border will be subject to the exact 
same procedures as cargo entering through the U.S. ports as 
well, otherwise we are going to deal them another competitive 
blow.

                           PIPELINE SECURITY

    On the area of pipeline security, the National Security 
Council has identified our Nation's 2.1 million miles of 
pipeline as potential targets for terrorism. An attack on 
pipelines that carry natural gas, or petroleum, or hazardous 
materials could result in a standstill at our Nation's ports 
and highways, not to mention, of course, a significant cost to 
life. Can you tell me what, if anything, RSPA has proposed in 
the budget to ensure the safety of our Nation's pipelines, and 
hazardous materials?
    Mr. Jackson. Senator, I am going to have to look at the 
budget detail on the RSPA pipeline safety, and I would be happy 
to get back to you.
    Senator Murray. Can tell me if any of the $4.8 billion in 
the TSA goes for that as well, I would appreciate that.
    Mr. Jackson. Yes, ma'am.
    [The information follows:]

    The President's Fiscal Year 2003 budget for RSPA does not propose 
any funding specifically for pipeline security. However, RSPA is using 
resources made available for pipeline safety to ensure the security of 
pipelines to the maximum extent possible. For example, RSPA is working 
with the Department of Energy and the Federal Bureau of Investigation 
to distribute security information and threat warnings to pipeline 
operators; securing critical infrastructure mapping information through 
a password protection system; working with the pipeline industry to 
assess vulnerabilities; developing and implementing protection measures 
for pipeline facilities; implementing a coordinated set of protocols 
that would be used during inspections to confirm the adequacy of 
operators' security practices at critical facilities; and, developing 
plans to improve response and recovery preparedness.
    None of the funds proposed in the fiscal year 2003 budget for the 
Transportation Security Administration would be used for pipeline 
security.

                          MOTOR CARRIER SAFETY

    Senator Murray. Mexican trucks, I know your favorite issue, 
Mr. Jackson. The Inspector General is close to completing his 
review of the implementation of your plans for opening the 
border to Mexican trucks, and we are going to hold a hearing 
with the IG and Secretary Mineta. Up to this point, can you 
tell us quickly how adequately the Federal Motor Carrier Safety 
Administration is implementing the safety requirements that we 
included in the Appropriations Bill last year?
    Mr. Jackson. Yes, ma'am. We are on track to honor and meet 
all of the requirements of the statute, and this includes the 
regulatory work which we owe the Congress and the public on 
this matter, and a plan for hiring and well-training the 
individuals who are necessary to do this inspection work. The 
week before last, the Federal Motor Carrier Safety 
Administrator, Joe Clapp, traveled to Mexico City and had an 
extensive meeting with his Mexican counterparts to review 
detailed plans. The Secretary has also reviewed a detailed 
chart of tasks and deliverables that would meet the 
requirements.
    We are not going to open the U.S.-Mexico border to provide 
operating authority to any carrier until we have done the job. 
We think we are on track to do that by early summer. I am 
actually traveling with Administrator Clapp tonight to Atlanta 
to meet with my counterparts from the Mexican Government, from 
two departments, to review the issues and to make certain that 
both Governments are working cooperatively and effectively in 
this area.
    Senator Murray. It is, my understanding that one of the 
challenges you face is adequate space at the border so that 
unsafe trucks can be put out of service. Is that the biggest 
challenge, or are there others?
    Mr. Jackson. No, I think that we have that one under 
control. We approached the GSA Administrator and asked him to 
devote some resources to help us identify some excess Federal 
space that we could surface, and they have been very helpful. 
Over the long haul it would be desirable for us to have more 
complete and permanent facilities to accomplish this mission, 
but we will, in future budgets, come back to talk to you about 
some of the more comprehensive build-out needs. To do the job 
that we have been given, we will have to have space available 
to park them. If necessary, we will have them towed back across 
the border until they get them properly fixed, and able to 
travel on our roads.
    Senator Murray. It is one of the requirements we put in the 
bill, and I want to stay in close touch with you as we work 
through this. We are going to have a hearing on it, but if you 
could let us know what you are seeing----
    Mr. Jackson. I would be happy, at whatever time is 
convenient, to make sure that you get detailed briefings on the 
implementation plan for this. I know that Administrator Clapp 
would be delighted to work with you and your staff on that one.
    Senator Murray. Very good.

                     PROPOSED BORDER CONTROL AGENCY

    Mr. Jackson, let me ask you about one of the proposals that 
we are hearing out of the Office of Homeland Security to merge 
all the Coast Guard into a new border control agency. Is that 
officially dead within the Administration, or is that still an 
active proposal?
    Mr. Jackson. It would be premature for me to speculate 
about work that is ongoing in the Administration prior to the 
President making any decision on this. I will say that it has 
been a hallmark of his instructions to all of the Departments 
and agencies, from the beginning of the post September 11 
period, to look at how we can make the border operate more 
effectively for our passengers and freight, for security and 
efficiency. It has been an ongoing topic.
    Senator Murray. Do you think it is wise to sever the Coast 
Guard from the Department of Transportation?
    Mr. Jackson. I would not speculate on those policy issues 
for you here, and I would defer to my President to allow his 
Cabinet to continue that discussion. When he makes any decision 
in that arena I would be delighted to come back and talk to you 
about it.
    Senator Murray. I will not pin you down on that.
    Mr. Jackson. Thank you. I appreciate it.

             TRANSPORTATION SECURITY ADMINISTRATION BUDGET

    Senator Murray. Mr. Magaw, when you were in my office, I 
asked whether the Transportation Security Administration would 
be providing a fully justified budget request to the Committee. 
Your Deputy, Mr. McHale, said that you would, so I was a little 
surprised to see you submit only a seven-page document to 
defend a request of $4.8 billion. When do you expect to have a 
fully justified budget submitted to this Committee?
    Mr. Magaw. I believe that we can do it, Madam Chairman, in 
60 to 90 days. The surveys at each airport are going to take 
some time, and until we get some reasonable numbers from the 
airports, we are only going to be----
    Senator Murray. 60 to 90 days is going to be hitting us 
right when we are marking up. We are going to need some time to 
review your request. I really urge you to get that to us 
quickly. I know it is a big task, but we are going to be 
marking up probably in the middle of May, and we will need some 
time to go through your request, so I urge you to get it to us 
as quickly as you can.
    Mr. Magaw. All right.
    Senator Murray. I understand you are going to need a 
supplemental appropriation?
    Mr. Magaw. We are going to need money from somewhere, and 
the President has said that the Administration will support 
this program. But I am not at liberty to talk about a 
supplemental or anything like that.
    Senator Murray. Are you asking everybody to put their 
wallets out there?
    Mr. Magaw. I know.
    Senator Murray. We only have a few places we can look.
    Mr. Magaw. I know. That is why it is so important, as you 
say, that we get some accurate figures, or reasonably accurate 
figures to you for construction costs, for installation 
charges, for the cost of machines, and for transporting them 
there.
    Senator Murray. I know the deadlines are approaching fast. 
I know we need to get out an Appropriations Bill. If there is 
going to be a Supplemental, we need to know what that is, what 
the costs are, and again, I know you are working under intense 
deadlines, but if we are going to have the funds for TSA, 
looking at the other challenges we have, we have got to get a 
handle on this quickly.
    Mr. Jackson. Senator, I can comment. We have two challenges 
as you have just identified. We have a 2002 challenge and a 
2003 challenge. On the 2003 challenge, as we flesh out the 
approach that we would take to filling in the $4.8 billion, we 
would be happy to give you an interim report so that we do not 
wait until the last minute and drop something on you. I would 
welcome the chance, as we go along.
    This is something that is unprecedented for us and for you, 
I recognize, and we do not want to create more difficulty for 
the Committee than need be in this case. So as we work our way 
through this, we want to just stay in close contact with you. 
We will tell you what we know and what we do not know, and when 
we get to a problem we do not know how to solve, we will tell 
you that, too. We will figure it out and keep in close touch.
    Senator Murray. I appreciate that.

                    TSA ASSOCIATE UNDER SECRETARIES

    Mr. Magaw, in recent briefing documents you provided to 
this Committee it was not clear whether you expected to have 
separate Associate Under Secretaries for Maritime Security, 
Rail Security, and Motor Carrier Security. Have you made a 
decision on that yet?
    Mr. Magaw. I have made an initial decision that our first 
high-ranking person will be maritime and land. I am now trying 
to recruit an outstanding individual from the trucking industry 
who will be able to come in and pay full attention to that 
industry. The same thing with the railroads. So the highest-
ranking position in the box that you have seen on the chart 
basically says maritime and land security.
    We are recruiting and looking at a couple of Coast Guard 
admirals to oversee maritime security. At the same time, we 
want to have people within that box who are from the other 
modes. It is my judgment that the box is going to split fairly 
quickly, because there is going to be a quick need for the 
other areas to be addressed in more detail. That is my 
intention, and I know that--the Deputy and I have talked about 
it--it has not been approved, but my intention is to split the 
box. Do you have this copy?
    Senator Murray. Our staff has it.
    Mr. Magaw. Okay. And so while all of maritime and land 
appears to be in one box right now, and it is, we are going to 
have representatives from every mode in that office who will 
pay attention to their specific area of expertise. They will 
not only keep the Committee advised, but also give full 
attention on their particular mode. As the aviation and other 
deadlines are moving by, we are not sitting idle in general 
aviation, and we are not sitting idle in railroad or any of the 
other modes.
    Senator Murray. We will be interested in working with you 
to do that. I am curious as to how they are going to interface 
together and who is going to be really in charge of security in 
each of the modes, and how maritime is going to work with Coast 
Guard, so we will have more conversations on these issues.

                 NATIONAL DISTRESS AND RESPONSE SYSTEM

    Let me ask you a question about the Coast Guard, Mr. 
Jackson. The IG issued a report on the Coast Guard's distress 
awareness system a week ago. Your Department has now placed 
this project on a high-risk watch list. Due to extraordinary 
cost overruns, the Coast Guard has now eliminated the 
requirement that the system be capable of pinpointing the exact 
location of distress calls. Even at the lower cost, the Coast 
Guard's projected capital needs still exceed OMB's funding 
targets by more than $300 million annually. Do you think that 
the Coast Guard has dumbed down the system's capabilities to 
the point that mariners in distress will be at risk?
    Mr. Jackson. No, I do not think that we have dumbed it 
down, nor will we. I do believe this is an important priority 
that we have not yet got our arms around in terms of the 
program being fully implemented and moving forward. It is an 
important commitment, and it is one that we will have some 
ongoing oversight conversations with you about in this area.
    Senator Murray. Of course, you know it is a high priority 
for me, so I want to make sure----
    Mr. Jackson. Good. It is a high priority for the Secretary 
as well.
    Senator Murray. The 2002 Appropriations Act does not allow 
the Deepwater procurement to go forward unless DOT and OMB 
certify in writing that adequate funding will be requested for 
the new distress system of the Deepwater program and essential 
search and rescue procurements. Is that the reason why we have 
not received the certification, due to the uncertain costs?

                          SUBCOMMITTEE RECESS

    Senator Murray. I have no further questions. This 
subcommittee stands in recess until Thursday, February 14, when 
we will take testimony on the U.S. Coast Guard.
    [Whereupon, at 12:05 p.m., Thursday, February 7, the 
subcommittee was recessed, to reconvene at 10 a.m., Thursday, 
February 14.]


 DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2003

                              ----------                              


                      THURSDAY, FEBRUARY 14, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:05 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Patty Murray (chairman) presiding.
    Present: Senators Murray, Mikulski, Shelby, and Stevens.

                      DEPARTMENT OF TRANSPORTATION

                            U.S. Coast Guard

STATEMENT OF ADMIRAL JAMES M. LOY, COMMANDANT
ACCOMPANIED BY HON. KENNETH M. MEAD, INSPECTOR GENERAL

               OPENING STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. The subcommittee will come to order. Today 
the subcommittee will hear testimony on the Coast Guard's 
budget request for fiscal year 2003. We are pleased today to be 
joined by the Department of Transportation Inspector General 
Kenneth Mead, and we also want to welcome our Coast Guard 
Commandant, Admiral James Loy.
    Today is likely to be Admiral Loy's last appearance before 
this committee, as his 4-year term comes to a close this May, 
so Admiral, on behalf of all of us on this subcommittee I want 
to thank you for your over 40 years of excellent service to 
this country.

                  FISCAL YEAR 2003 FUNDING CHALLENGES

    During our hearing with Deputy Secretary Jackson last week, 
I pointed out that the subcommittee will face extraordinary 
challenges in financing a balanced Transportation bill this 
year. The President has proposed a $9 billion cut in highway 
spending. Amtrak is near bankruptcy, and the funding 
requirements of the new Transportation Security Administration 
are expected to grow by more than 250 percent to $4.8 billion.

                          COAST GUARD FUNDING

    With this backdrop, the administration has also requested 
an increase in the Coast Guard budget of almost 20 percent. 
There is no question that the Coast Guard is in a period of 
rapid change, coming on the heels of our national tragedy. In 
some ways this period is similar to the aftermath of the EXXON-
VALDEZ tragedy in 1989. As we attempt to respond to the tragedy 
of September 11, it is clear that we must do more to protect 
our country from terrorist attacks. This is especially true 
when you reflect on how vulnerable our port communities are to 
further attack.
    At the same time, we must not allow the events of September 
11 to divert the Coast Guard away from their other core 
responsibilities that loomed so large on September 10. The 
administration has requested the largest increase in Coast 
Guard spending in history, but I think it is important for us 
to ask what we are getting if we are successful in fully 
funding the administration's request, if we are successful in 
providing this historic funding increase, the Coast Guard's 
level of increase at fisheries enforcement will barely increase 
at all over this year's level. In fact, their level of effort 
will still be well below their level of effort from 3 years 
ago. This comes at the same time when the Coast Guard has again 
failed to meet its performance goal for keeping illegal foreign 
fishing vessels out of U.S. waters.
    If we are successful in providing this historic funding 
increase, the amount of cutter hours, aircraft hours, and boat 
hours devoted to marine environmental protection will actually 
go down from the level expected for the current year. If we are 
successful in providing this historic funding increase, we will 
not see any substantial increase in the Coast Guard's level of 
effort at drug interdiction. In fact, their level of effort 
will still be 25 percent below where it was 3 years ago, and 
here again this plan is presented to us at the same time that 
the Coast Guard has failed to meet its performance goal for 
seizing illegal drugs.
    As much as I want the Coast Guard to respond fully to all 
of our homeland security needs, the fact is, massive amounts of 
funding are also being provided for this function to the 
Department of Defense, to the intelligence agencies, and to the 
Transportation Security Administration, the DOT agency that is 
supposed to be responsible for security in all transportation 
modes. We are even told the Department of Defense will soon be 
appointing its own Commander in Chief, or CINC, for Homeland 
Defense.

                    COAST GUARD TRADITIONAL MISSIONS

    One thing I do know is, we cannot depend upon the 
Department of Defense or Transportation Security Administration 
to conduct fisheries patrols. We cannot depend upon them to 
inspect oil tankers or respond to an oil spill. The Navy's 
level of effort in maritime drug interdiction is driven largely 
by whether they have ships available. And even when they do 
conduct drug patrols, they generally require Coast Guard law 
enforcement detachments on board to actually inspect and 
prosecute suspect vessels.
    The tension between Homeland Security and the Coast Guard's 
traditional missions is perhaps starkest in my area of the 
country. Puget Sound has many critical Department of Defense 
installations, and we are proud of all of them. Immediately 
after September 11, Coast Guard vessels traditionally used for 
search and rescue were diverted to establish a 24-hour security 
zone around those facilities and to escort Navy ships.
    In my home State of Washington, this shift came at a time 
of unprecedented marine casualties, where 17 recreational 
boaters were killed in boating accidents during the months of 
August and September alone. While I do not know if any of these 
deaths were linked to the reprogram of Coast Guard small boats, 
I do know that search and rescue must remain a primary and 
focused mission of the Coast Guard. It took months for those 
search and rescue boats to return to their normal stations. 
Only after I petitioned the Commander in Chief for the Pacific 
Fleet, Admiral Fargo, did the Navy expend its own efforts to 
guard its own assets.

                  COAST GUARD'S HOMELAND SECURITY ROLE

    When the President submitted his supplemental request for 
the Coast Guard, I doubled the amount of funding requested for 
Marine Safety and Security Teams so that the Puget Sound could 
have its own Coast Guard unit to prosecute this mission without 
diverting other Coast Guard units from their traditional 
missions.
    No one wants to see the needs of the Coast Guard fully met 
more than I do. When I think of the needs of the Coast Guard, I 
do not think of Washington, D.C., I think of the seamen and 
petty officers in Washington State. They deserve the best 
equipment and best training that we can give them. They also 
deserve a humane work week so they can conduct all their 
missions with excellence, not exhaustion, and so as we once 
again expend the Coast Guard's efforts in a critically 
important mission, I intend to make sure that it is not done 
entirely on the backs of the hard-working Coast Guard members 
in the field, and I also intend to make sure that the expansion 
of this mission is in balance with the continuing needs of all 
other missions, and that all the appropriate Federal agencies 
pay their fair share of the cost.
    I will turn to Senator Shelby for his opening statement.

                 STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you, Madam Chairman, and again, 
welcome, Inspector General Mead and Admiral Loy, and Admiral 
Loy for what may be, as the Chairwoman said, your final 
appearance before this subcommittee. Admiral Loy, I do not want 
to miss this opportunity to acknowledge your contributions to 
and your stewardship of the Coast Guard. You are to be 
commended for your service to the Coast Guard, Admiral, and to 
this Nation.
    While we have not always agreed on tactics, priorities, or 
the best way to accomplish the mission, we have always agreed, 
sir, on the way to accomplish, always agreed on the need to 
support the various missions of the Coast Guard, the need to 
recapitalize the Coast Guard's asset base, and to make the 
Coast Guard a meaningful and attractive career choice for young 
Americans.

                        NATIONAL DISTRESS SYSTEM

    While we have agreed on many, if not most issues facing the 
Coast Guard, we do have healthy differences on how to address 
some of those challenges. I would like to spend just a few 
minutes on some of those differences. I am concerned that the 
Coast Guard is trading away capability and coverage in the 
national distress system modernization program in order to trim 
costs after receiving contractor estimates that were three 
times Coast Guard projections.
    The promise of this modernization was the capability to 
precisely locate a boater in distress. Unfortunately, the Coast 
Guard seems willing to trade that capability away and settle 
for just knowing in what direction the distressed mariner is 
in. On top of that, the Coast Guard's own capital budget does 
not appear to fully fund even this less capable system. My 
staff tells me that this procurement appears to be underfunded 
by at least $110 million.
    If we are going to do this modernization, and I believe we 
must, Admiral, why would we buy a system that has coverage gaps 
and dumbs down capabilities? Why would we want to give up on 
that critical 911 life-saving feature when time is of the 
essence in an emergency situation? Local police and fire 
officials have had that capability since the seventies. Time 
has long passed for the Coast Guard to have this capability as 
well.
    The Inspector General's recent report on National Distress 
System modernization concludes that we should develop a firm 
plan before contract award. This is good advice, and the Coast 
Guard should not delay in developing that plan. Unfortunately, 
the National Distress System modernization system problems are 
a piece of cake compared to the Integrated Deepwater System 
procurement.

                    INTEGRATED DEEPWATER PROCUREMENT

    For 4 years this subcommittee has expressed concern about 
the risk inherent in the Coast Guard's big bang procurement 
strategy for Deepwater. We have questioned the affordability, 
the procurement risk, the lack of exit strategies, the Coast 
Guard's blind eye to changing circumstances, and the impact 
that Deepwater's funding has on other capital investments the 
Coast Guard must make to maintain its capital plan, and we are 
at this critical point just at the time when the administration 
is saying we have to do more for Homeland Security, when the 
Congress is saying we cannot neglect other missions, including 
Search and Rescue and Fisheries Enforcement, and when the 
Inspector General is saying that the National Distress System 
modernization is in danger of being underfunded.
    Madam Chairman, the Coast Guard's capital numbers do not 
add up, and it appears the Department is not reviewing and 
restructuring the capital budget to accommodate the other 
internal challenges within the AC&I budget line and the 
changing circumstances since the attacks of September 11. To 
illustrate the changing nature of the operational mission 
requirements facing the Coast Guard, I would draw your 
attention to the two charts that I have here.
    Admiral, these charts should look familiar. They came from 
a Coast Guard presentation about the nature of the threat and 
the New Normalcy. The first chart depicts the position of Coast 
Guard assets on 10 September. That pre-terrorist attack 
deployment can be characterized as being in the transitional 
zone between brown and blue water.
    The second chart depicts the redeployment of those assets a 
week later to better meet the emerging threat. That chart shows 
Coast Guard assets hugging America's coastline, deployed almost 
exclusively in the littoral zone, in brown water.
    Many of you will recall the press pictures of Coast Guard 
cutters, I believe it was a 378-foot cutter on-station on New 
York Harbor, and more recently the substantial Coast Guard 
presence in New Orleans for the Super Bowl. Both of these 
deployments were appropriate and necessary in light of the 
threat. The events of September 11, as graphically illustrated 
on the charts, dramatically changed the Coast Guard's mission 
profile. The capital budget request, as represented by 
Deepwater, does not reflect the change.
    Madam Chairman, that is not the only problem with 
Deepwater. Forget for a moment the disconnect between the 
mission profile and the budget request. From my experience on 
this subcommittee, the Department has struggled with large and 
complicated procurements. Inspector General Mead could go on 
for hours about the Boston Central Artery, the advanced 
automation system, WAS, and plenty of other procurements.
    My experience on other subcommittees leads me to believe 
that this problem is not unique to the Department of 
Transportation. The one conclusion we can draw is that the 
larger and the more complicated the procurement, the more 
certain the overruns and schedule slippages. Deepwater is 
already slipping, even though it has not delivered anything but 
studies and internal machinations, yet for the 4 year in a row 
we are being asked to appropriate a blank check, this year for 
$500 million, and being asked to trust an untried, unproven, 
and risky strategy.
    In some situations, complexity and size are unavoidable, 
but not here. Deepwater is basically four categories of 
procurements; ships, aircraft, sensors, and communications 
systems. It is almost as though someone sat around and asked 
what the most difficult and risky way to capitalize the Coast 
Guard's long-range assets would be. Here it is.
    But Madam Chairman, the problems do not end there. If you 
combine funding projections for Deepwater and the National 
Distress System modernization, they consume 80 percent of the 
capital appropriations for the next 5 years. If history is any 
guide, these programs will consume an even greater portion of 
the capital budget in the future, as their cost escalates.

                              CAPITAL PLAN

    Deepwater is already squeezing out other capital projects. 
If you take a look at the Coast Guard's 5-year capital plan, 
you see that the number of projects shrinks by more than 6 
percent this year alone. That includes the Coast Guard's family 
housing appropriation, which is not programmed for any funding 
in fiscal years 2004 and 2005. I know that that will come as a 
surprise to Secretary Mineta and to the Coast Guard enlisted 
personnel.
    The Coast Guard Magazine regularly highlights how important 
improving Coast Guard housing is for retention and quality of 
life, but this budget tells me that those issues get sacrificed 
at the altar of Deepwater.
    Now, it is hard to envision cost escalations in Deepwater 
even before a contract award, but that is what the budget 
presents. After multiple briefings characterizing Deepwater as 
a 20-year, $500-million-per-year procurement, the capital plan 
now inflates future funding.
    To my knowledge, there is no other procurement line in the 
transportation budget that gets COLA. This inflation adjustment 
effectively robs all the other capital projects of an 
additional $292 million over the next 4 years. Why, then, is 
the Coast Guard unnecessarily bundling these other four 
procurement categories and ignoring changing circumstances, the 
warning signals and the crowding out occurring in the AC&I 
budget? I wish I knew.

                               DEEPWATER

    Simply put, the procurement strategy makes little sense and 
is a black hole in the Coast Guard's capital budget. There are 
many reasons to be concerned about the Deepwater program. This 
procurement was justified by a study. The law certifies that 
the Deepwater and the National Distress System modernization 
are fully funded within the capital plan. There is a tab for 
that certification in the budget justification but no 
certification. The budget outyears have been inflated, yet we 
still do not know what we are buying. The law requires details 
on assets to be procured, but the budget justification is 
nonresponsive.
    Last year, this was a 20-year procurement. Now the Coast 
Guard says it could last as long as 30 years, yet we are being 
asked to appropriate another blank check, bringing the total to 
$890 million. The responsible thing for Congress to do is to 
withhold further funding for this program until it has been 
restructured to meet the change in mission profile, 
restructured to meet other necessary capital investment, and 
restructured to minimize the procurement risk.
    Now, in light of these complaints I know some will question 
my commitment to modernizing the Coast Guard's capital plant. 
Let me repeat what I have said for the past 4 years as chairman 
and now Ranking Member of this subcommittee: the Coast Guard 
needs to modernize or replace its aircraft, communications 
equipment, and especially its ships.
    Our goal with these procurements and the rest of the Coast 
Guard's capital budget must be to optimize the mix of tools in 
the hands of men and women of the Coast Guard. I would think 
that we would take the extra time to get it right and to 
minimize the risk to the taxpayer and the Coast Guard and the 
Department's other priorities. I stand ready to work with you, 
Madam Chairman, and with you, Admiral Loy, to that end.
    Thank you.

                    ADDITIONAL SUBMITTED STATEMENTS

    Senator Murray. The following statements were received from 
Senators Mikulski, Kohl and Durbin which will be inserted in 
the record at this point.
    [The statements follow:]

           Prepared Statement of Senator Barbara A. Mikulski

    I would like to take this opportunity to welcome Admiral Loy and 
Mr. Mead. It's a pleasure to be here with you today to discuss the 
Coast Guard's fiscal year 2003 budget request. You perform a wide array 
of missions that support our national security. I want to make sure you 
have what you need and to thank you for all that you do every day. I 
would like to offer a special thanks to Admiral Loy for his almost 40 
years of dedicated service to this country and his unfailing leadership 
of the Coast Guard since 1998.
    Our U.S. Coast Guard is one of the most efficient and effective of 
all Federal agencies, performing essential missions that address 
national safety and homeland security. The men and women of the Coast 
Guard put their lives on the line everyday to save those who suffer 
calamities at sea, to apprehend drug and contraband smugglers, to 
protect our fisheries and other marine resources, and to safeguard our 
environment from oil spills and other hazards.
    Each day the Coast Guard conducts 109 Search and Rescue missions. 
They also seize over 169 pounds of marijuana and 306 pounds of cocaine, 
while responding to 20 oil or hazardous chemical spills, in their 
normal course of action.
    And then came September 11. What happened that day was not simply 
an attack against America, it was a crime against democracy, decency 
and humanity. Immediately following the terrorists attacks, the U.S. 
Coast Guard responded quickly to the Nations's homeland security needs. 
They reprogrammed a significant number of their assets to provide port 
security. The Coast Guard's port security mission has expanded since 9/
11 from 1-2 percent of daily operations to around 50-60 percent today.
    Maritime industries contribute $742 billion annually to our 
economy. This is essential because 95 percent of America's trade moves 
over water and we would be crippled if there was an attack on our 
maritime commerce. Maritime borders of the United States include 95,000 
miles of open shoreline and 361 ports, including my home state's Port 
of Baltimore.
    The Coast Guard was there when we called, and we need to ensure 
that they have the assets to meet these new challenges. I want to 
ensure that the world's best Coast Guard is the world's best equipped 
Coast Guard. And yet, we ask them to operate a fleet of ships and 
aircraft that is one of the oldest in the world. Some of their ships 
date back to WWII and many are quickly approaching the end of their 
useful service lives. The Coast Guard's fleet is technologically 
outdated, personnel intensive, and increasingly expensive to operate 
and maintain. The Deepwater project would replace these antiquated 
systems high and medium endurance cutters and aircraft and the 
associated sensor and communications systems.
    I am absolutely committed to the U.S. Coast Guard and to Maryland's 
own Coast Guard Yard at Curtis Bay, which serves as a core logistics 
facility that helps ensure fleet readiness.
    Admiral Loy, I look forward to working with you to address the 
Coast Guard's current and future readiness needs.
                                 ______
                                 

                Prepared Statement of Senator Herb Kohl

    Thank you very much, Madam Chairwoman. Congratulations on becoming 
our new Chair of the Subcommittee. I would like to thank Admiral Loy 
and Mr. Mead for taking the time this morning to share their thoughts 
on the fiscal year 2002 Coast Guard budget request. The issues we are 
here to discuss are very important to myself and the people of 
Wisconsin. The Coast Guard plays an essential role in both safety and 
commerce, and I would like to take this opportunity to applaud the work 
they have done in Wisconsin.
    We all know that increased maritime commerce along with increased 
hostile threats to our coastline will continue to pose serious demands 
on your ability to provide the service we as Americans are all proud 
of. We all also know that it is impossible to meet those threats and 
demands of the future with a Coast Guard fleet from the past. The wear 
and tear on your personnel and equipment have accelerated, resulting in 
increased risks by having tired people operating obsolete equipment. We 
as members of this Subcommittee will work with you to make sure that 
the Coast Guard is positioned and equipped to effectively achieve your 
mission of protecting the public, the environment, and U.S. economic 
interests in our waterways and ports for the many years to come.
    I look forward to hearing from you on how the fiscal year 2002 
Budget request for the Coast Guard takes us in the direction of 
modernization and increased readiness. The Deepwater Project is an 
important component of that effort and I am interested to hear your 
comments on how you believe this project adds to your overall 
modernizing strategy.
    Again, thank you for your testimony this morning and I look forward 
to working with this Subcommittee, and with the Coast Guard to continue 
our successes of the past and prepare for future challenges both in 
Wisconsin and the rest of the country.
                                 ______
                                 

            Prepared Statement of Senator Richard J. Durbin

    Chairman Murray, thank you for holding this important hearing on 
the fiscal year 2003 U.S. Coast Guard budget. I would like to join you 
in welcoming Admiral James M. Loy, Commandant of the Coast Guard, and 
Transportation Inspector General Ken Mead.
    I would like to take just a moment to thank Admiral Loy for his 
outstanding service to our country and for his fine leadership of the 
U.S. Coast Guard. While we'll miss his presence and leadership in 
Washington, we wish him the best of luck in retirement.
    My opening statement is brief. I simply want to say thank you to 
the U.S. Coast Guard. The Coast Guard has done excellent work under 
less-than-ideal circumstances. They rushed to protect our ports and 
other critical infrastructure in the wake of September 11. And they 
have maintained their vigilance and dedication through the highest 
state of alert since World War II.
    Twice since September 11--in October and January--I have visited 
the men and women of the Coast Guard in Chicago to thank them for their 
service and to hear about the challenges they continue to face every 
day. In fact, the last time we got together it was Super Bowl Sunday, 
with a foot of snow on the ground, and chilling temperatures. But, as 
usual, the Coast Guard was doing its job and not complaining about the 
cold weather or the increases in its duties. They are true 
professionals.
    I believe the Great Lakes and the Chicago Lake Michigan shoreline 
are in good hands. I'd like to publicly acknowledge Admiral James Hull 
and the leadership of the Chicago MSO. I look forward to my continued 
work with them.
    Chairman Murray, thanks to this Subcommittee and the fiscal year 
2002 conference report, Chicago will soon see a rebuilt U.S. Coast 
Guard marine safety and research station near Navy Pier. This project 
has the potential to significantly improve public safety and law 
enforcement by rebuilding an old, unused station and by facilitating 
cooperation among local, State, and Federal marine safety authorities. 
I look forward to officially opening the station in the near future.
    Of course, one of the regional challenges remains attracting a 
full-time USCG helicopter search and rescue team in the Chicagoland 
area. There's a long history here. Up to this point, a solution has 
eluded us. But, together with the Coast Guard, City of Chicago, State 
of Illinois, and the Illinois Congressional Delegation, I'm confident 
we can come to an agreement that will improve safety and help give 
boaters and other users of southwestern Lake Michigan peace of mind.
    I would also like to put in a plug for the EJ&E railroad bridge 
near Morris, Illinois. This bridge is one of the most frequently hit in 
the country and has been identified as needing major alteration. This 
Subcommittee has provided nearly $7 million over the last 3 fiscal 
years toward the EJ&E railroad bridge's reconstruction and included 
some very specific instructions to the Coast Guard. I hope the Coast 
Guard will proceed with this important alteration project to ensure the 
Illinois River remains safe and navigable.
    I look forward to working with the U.S. Coast Guard on homeland 
security, these Illinois projects, and the Integrated Deep Water System 
program in fiscal year 2003 and beyond.
    Thank you, Chairman Murray, for scheduling today's hearing.

    Senator Murray. Thank you very much, Senator Shelby. We 
will now turn to Admiral Loy for his opening statement.

                   STATEMENT OF ADMIRAL JAMES M. LOY

    Admiral Loy. Thank you very much, Madam Chairman. Good 
morning to the distinguished members of the subcommittee. It is 
a pleasure to appear before you today to discuss the Coast 
Guard's fiscal year 2003 budget request and its effect on the 
essential daily services we provide the American public and, I 
might say, across the full range of the mission profile that 
both you and Mr. Shelby have mentioned already this morning, 
but I think my first responsibility today is to thank you, 
Madam Chairman, for your personal effort and for that of the 
committee membership and staff during the post 9/11 period when 
the Transportation Appropriation for 2002 and the fall 
supplemental was being negotiated.

                          SUPPLEMENTAL FUNDING

    I am especially pleased with the structure of the $209-
million supplemental as it reflected not only the immediate 
maritime security requirements, including paying reservists 
called to duty, but also the 1\1/2\ years of the fiscal year 
2002 National Defense Authorization Act exposure. That effort 
has enabled us to put the full capability of the Coast Guard 
into the war on terrorism. You were there when we needed you, 
and I am very grateful for that.
    Working with Secretary Mineta and the Department of 
Transportation, the Coast Guard's fiscal 2003 budget first and 
foremost represents significant increases to address our 
Homeland Security responsibilities. We are in a resource crisis 
to stand up the permanent capability to deal with our maritime 
security challenges, and this budget addresses it strongly, as 
you have suggested in your opening statement, and when the 
President said the budget being sent to the Congress has the 
largest increase in spending for Coast Guard in our Nation's 
history, our ports, waterways, and coastal security are the 
focus of that increase.
    Last year, I talked about the Coast Guard's multiyear plan 
to transform our organization by restoring our readiness and 
shaping our future to enable the Coast Guard as a 
multimissioned maritime military organization to adapt to the 
need of our Nation. We should be applauding the accomplishments 
of this organization on the occasion of 9/11. Those charts that 
Senator Shelby reflected represented the very key aspect of 
what we do best for America. We shift gears when necessary to 
go to the Nation's primary need, and we adjust accordingly in 
the aftermath of that shift that the Nation requires.
    This budget also methodically continues that strategic 
effort and also concentrates on our efforts to rebuild our 
Search and Rescue program, a clear administration and 
congressional priority and, I might add, one of my own. All 
these intentions were shocked by the future that arrived 
unannounced on September 11 of last year. The transformation 
that we had designed occurred sooner, faster, and with greater 
force than we might have anticipated, but it did not alter our 
fundamental vision, and we must continue that transformation. 
As we bolster the foundation of our service, we will 
simultaneously enhance our increased maritime homeland security 
capabilities.

                           MARITIME SECURITY

    Madam Chairman, I will make just brief comments about four 
items that I believe frame this budget. First, maritime 
security. The Coast Guard, with strong support from Secretary 
Mineta, from Governor Ridge and from the President, has 
developed five key goals which, when met, will radically 
improve the security of our Nation's ports and waterways. This 
fiscal 2003 budget will make significant strides towards those 
five goals, and they are simply to build Maritime Domain 
Awareness in our ports and waterways and the approaches to this 
Nation, to control the movement of high-interest vessels, to 
enhance our presence on our waterways, to protect critical 
infrastructure, and especially with respect to Coast Guard 
force protection, and to use outreach both at home and abroad 
to create an all-hands evolution, because it is there and only 
there that we will actually realize the greater security 
profile we need. Much of this budget focuses on accomplishing 
those goals.

                       SEARCH AND RESCUE PROGRAM

    Secondly, our search and rescue program. This committee 
focused on our SAR program last year, and I want to report back 
that I was listening very carefully. The enacted 2002 budget 
and the supplemental in the 2003 request are systematic steps 
in the 5-year plan that we have developed and that we have 
spoken with you about. We just recently offered a very 
significant review of that plan to the Inspector General's 
staff, and my feedback from Mr. Mead is that they were very 
pleased with that report.
    More importantly, clear capability improvements, 
significant head count additions, solid training investments, 
and very real equipment and technology improvements have been 
made and will continue to be made in the 2003 budget and the 
following years thereafter.

                    NATIONAL DISTRESS MODERNIZATION

    Third, the National Distress Response System Modernization 
Project. This project will modernize the capital infrastructure 
that enables effective safety and security response capability. 
Many call it our maritime 911 system, and it is that and more. 
This budget seeks $90 million to accelerate the project. As 
this committee requested, there seems to be three areas of 
concern here: (1) did we eliminate some kind of important 
capabilities in the phase 2 request for proposal which went on 
the street, (2) will there still be coverage gaps associated 
with our new system, and 3, is our adjusted standard for system 
restoration from a 6 to 24-hour standard a reasonable one in 
the wake of what might be a hurricane that goes by and topples 
towers?
    Well, we have spent an awful lot of time on these three and 
many other questions as the requirements were being modified, 
and the real RFP for phase 2 was issued just last week. I 
believe we made very solid, cost-effective decisions on each 
one of those questions. The new system is enormously important 
not only for search and rescue, but as the command and control 
system for all of our missions, including maritime security. We 
are on track to complete the system by the fourth quarter of 
2006, as directed by the Congress, and I welcome your questions 
with regard to any of those three issues.

                          INTEGRATED DEEPWATER

    Fourth and last, the Integrated Deepwater System. On his 
recent trip to Portland, Maine, President Bush said, we must 
make sure our Coast Guard has a modern fleet of vessels, and 
the Congress has helped us move in that direction. It has been 
a long and, yes, tortuous path to make sure we are doing this 
the right way. We have reached out time and time again to get 
advice and counsel from experts. We are now only a few months 
away from an award. We are on track with forward-thinking, and 
strongly applaud that acquisition strategy.
    Last year, Senator Shelby cautioned us to be meticulous, to 
be methodical, and not to rush to a decision, and we have done 
that and more. At the request of the Office of Management and 
Budget, the Acquisitions Solutions Incorporated Company 
conducted a full, independent review of the Integrated 
Deepwater System phase 2 RFP. It did delay our time line, but I 
believe it was time well-spent, because we got the 15th or 20th 
or however many times you want to count it affirmation that the 
acquisition strategy was, in fact, right on target, exactly 
what this project deserved, with the attention being spent to 
it being right on track.
    The review concluded that the project was well-conceived, 
well-developed, and well-managed. They strongly supported the 
acquisition strategy and said they felt the Integrated 
Deepwater System would become a model of performance-based 
success for others in Government to emulate in the future.
    As we speak, our team is reviewing the three proposals 
offered to the RFP. We remain ready to award in the third 
quarter of fiscal 2002. This budget supports the next step. IDS 
will provide capability across all mission areas, including 
maritime security. It is the right project whose time has come, 
and we should move forward on it aggressively immediately.
    Madam Chairman, my written statement closes with a quote 
from the President. He said, quote, I saw how the Coast Guard 
has responded after 9/11, and I know how important the Coast 
Guard is for the safety and security and the well-being of our 
American citizens, close quote. I am enormously proud of what 
every member of my service has been doing before and after 9/
11, and our great strength is our multimission capability and 
the inherent adaptability to shift focus to the Nation's 
immediate maritime needs. That is what we did on 9/11. This 
budget will underpin this capability in fiscal year 2003.

                           PREPARED STATEMENT

    Madam Chairman, I have provided to the staff a small folder 
of the copies of the slides that were provided and, if there is 
any value to them through the course of the hearing, I offer 
you those to note along the way, as we discuss these issues.
    Thank you, Madam Chairman, and I look forward to your 
questions.
    [The statement follows:]

               Prepared Statement of Admiral James M. Loy

                              introduction
    Good morning, Mr. Chairman and distinguished members of the 
Subcommittee. It is a pleasure to appear before you today to discuss 
the Coast Guard's fiscal year 2003 budget request and its impact on the 
essential daily services we provide the American public.
    Working with Secretary Mineta and the Department of Transportation, 
the Coast Guard's fiscal year 2003 budget first and foremost represents 
significant increases to address our Homeland Security 
responsibilities. When the President said, ``the budget [being sent] to 
the United States Congress [has] the largest increase in spending for 
the Coast Guard in our Nation's history'' our ports, waterways, and 
coastal security are the focus.
    Last year I talked about the Coast Guard's multi-year plan to 
transform our organization by Restoring Our Readiness and Shaping Our 
Future to enable the Coast Guard, as a multi-missioned, maritime, 
military organization, to adapt to the needs of our Nation. This budget 
also methodically continues that strategic effort and also concentrates 
on our efforts to rebuild our Search and Rescue program, a clear 
Administration and Congressional priority. All these intentions were 
changed on September 11 of last year. The transformation that we had 
designed occurred sooner, faster, and with greater force than we might 
have anticipated but it did not alter our fundamental vision--we must 
continue that transformation. As we bolster the foundation of our 
service, we'll simultaneously enhance our increased Maritime Homeland 
Security capabilities.
                     transforming our organization
    The Coast Guard achieves its flexibility and strength through its 
military discipline, multi-mission character, and civil law enforcement 
authority. This unique authority and flexibility in operations allows 
our organization to shift our resources rapidly from one priority to 
another, often in a matter of minutes.
    Our mission profile is different than planned a year ago. At that 
time, Marine Safety was allocated 14 percent of our mission portfolio 
including the Coast Guard's traditional Port Safety and Security 
efforts. In the days and weeks following the terrorist attacks, we 
dedicated over half of all Coast Guard resources to Maritime Homeland 
Security-or as we now refer to it-Ports, Waterway, and Coastal 
Security. In fiscal year 2003, our traditional Marine Safety activities 
coupled with the resources dedicated to Ports, Waterways & Coastal 
Security represent a very significant 27 percent of our Coast Guard 
resources.
    Our Maritime Transportation System (MTS) is both valuable and 
vulnerable. The MTS includes waterways, ports, intermodal connections, 
vessels and vehicles. The Maritime Transportation System moves 95 
percent of the Nation's overseas trade accounting for nearly $1 
trillion in GDP. Protecting America from terrorist threats requires 
constant vigilance across every mode of transportation: air, land and 
sea. The agencies within the Department of Transportation, including 
the U.S. Coast Guard, the Maritime Administration (MARAD), and the 
Transportation Security Administration touch all three modes of 
transportation and are cooperatively linked. The vast majority of the 
cargo handled by this system is immediately loaded onto or has just 
been unloaded from railcars and truckbeds, making the borders of the 
U.S. seaport network especially vulnerable. The Coast Guard, with 
strong support of Secretary Mineta, has developed five key goals, which 
when met will protect and ensure the safety of our Nation's waterways 
and ports, as well as maintain and increase public confidence in the 
Maritime Transportation System. In fiscal year 2003 the Coast Guard 
will make great strides in addressing these five goals:
    Build maritime domain awareness.--The United States must have an 
awareness of all vessels--with their cargo and crew along with 
associated risk profiles- that operate to and from our ports, or 
transit our coastal waters. We will complete Port Vulnerability 
Assessments for the Nation's 50 most critical ports. There are also 
approximately 300 personnel and $88 million requested to establish 
intelligence fusion centers for the collection, analysis, and sharing 
of intelligence information. The initiatives in this component of our 
have the potential to significantly reduce security risks while 
allowing better decision making and allocation of security resources.
    Ensure controlled movement of high interest vessels.--High interest 
vessels include any vessel that could be used as a weapon of mass 
destruction and vessels carrying a large number of passengers (i.e. 
Liquefied Natural Gas carriers, chemical tankers and cruise ships). 
These vessels must be identified, and possibly boarded and inspected by 
Coast Guard personnel well offshore before a possible threat could 
cause harm to our Nation's ports or people. This budget supports 160 
Sea Marshals for armed escort of High Interest Vessels and provides the 
resources to increase on-the-water patrols for all 49 Captains of the 
Port zones.
    Enhance presence and response capabilities.--Increased presence has 
great value as a deterrent and if a potential threat has been 
identified, the Coast Guard needs the capability to detect, intercept 
and interdict it, preferably on the high seas, using a layered defense 
of major cutters, patrol boats, and maritime patrol aircraft. Such 
action will effectively disrupt a terrorist's planned chain of events 
and prevent a possible catastrophic terrorist attack well before it 
threatens our shores. This budget completes building a total of 6 
Maritime Safety & Security Teams with nearly 500 active duty personnel. 
It will also add 26 more Port Security Response Boats and staffing for 
small boat stations.
    Protect critical infrastructure and enhance Coast Guard force 
protection.--The Coast Guard must take measures to ensure protection of 
our personnel, physical plant, and, consistent with the 
Administration's Critical Infrastructure Protection Program, 
information technology capabilities. The threats posed are wide and 
varied, and require considerable actions to safeguard the Coast Guard's 
people and resources. $51 million is requested for Anti-Terrorism/Force 
Protection--with specific enhancements to physical infrastructure, 
cyber-security, personal protective equipment, and firearms and 
ammunition.
    Increase domestic and international outreach.--Addressing security 
risks in the maritime environment is an ``all-hands'' affair. It will 
require partnerships and strategic relationships at home and abroad. To 
help build this security network, the Coast Guard will require robust 
security plans, including plans for commercial vessels, offshore 
structures, and waterfront facilities. These plans will address access 
control, credentialing of waterfront employees, and physical and other 
security issues. Coast Guard Captains of the Port, in concert with all 
other port stakeholders, will prepare anti-terrorism contingency plans. 
All of these plans will be exercised periodically. The Coast Guard will 
continue to work with the International Maritime Organization to align 
international activities and improve security. The budget proposes 111 
contingency response planners for worldwide seaport infrastructure 
security.
                        restoring our readiness
    We must also continue our multi-year, phased efforts to restore 
readiness as we strive to establish equilibrium to sustain our ``new 
normalcy.'' We must attend to traditional operations and perform 
appropriate training, maintenance and administrative work, while 
maintaining surge' capacity for emergency operations. We must ensure 
adequate levels of training, maintenance, and other support resources 
are in place to achieve the full measure of output from our ships, 
aircraft, and shore facilities.
    Search and Rescue (SAR).--The Coast Guard remains the sole 
government agency that has the expertise, assets, and around the clock, 
on-call readiness to conduct Search and Rescue operations in all areas 
of the maritime environment. Through education, regulation, and 
enforcement efforts, as well as SAR operations, the Coast Guard strives 
to reduce fatalities, injuries and property loss at sea. Annually, the 
Coast Guard responds to approximately 40,000 calls for assistance. In 
fiscal year 2001, the Coast Guard saved over 84 percent of all mariners 
in distress; over 4,100 lives.
    The Coast Guard has undertaken a multi-year effort to improve our 
readiness at our small boat stations where many of the search and 
rescue cases take place. We added 67 personnel for back-up safety boat 
crews and tower watches at our surf rescue stations in fiscal year 
2001. This year the Coast Guard is adding nearly 200 personnel to small 
boat stations and command centers. Additionally, we are opening a 
formal school for training Boatswain's Mates and establishing traveling 
small boat training teams, ensuring that our personnel have critical 
skills required to successfully carry out search and rescue missions. 
Personal protective clothing inventories have been enhanced to protect 
our crews from the harsh environment. This effort continues in fiscal 
year 2003 by adding another 174 personnel to our small boat stations to 
reduce the work hour requirements and enhance the retention of our 
front line personnel.
    The National Distress & Response System Modernization Project 
(NDRSMP).--In addition to adding personnel to our emergency response 
system, we are making major commitments to the capital infrastructure 
that enables effective safety and security response capability. The 
Coast Guard is underway with a major re-capitalization of the Nation's 
``Maritime 911 System.''
    The National Distress & Response System Modernization Project will 
update our 1970's technology to an integrated communications network 
that will greatly increase detection and localization of distress 
signals, eliminate known radio coverage gaps, and enhance Coast Guard 
command and control capabilities across all mission areas, including 
homeland security, on the Nation's inland and coastal waterways. This 
budget will fund the initial installation of NDRS equipment and 
networking at six of the Coast Guard's Group regions along the 
Atlantic, Gulf, and Pacific Coasts.
    Human Capital.--Our personnel remain our organization's most 
valuable resource. It is their hard work and dedication that have 
enabled the Coast Guard to adapt to evolving missions and changing 
operational environments. The Coast Guard's motto of Semper Paratus--
always ready--is more a statement of our people's mindset than of the 
capabilities of our physical assets.
    At his State of the Union address, President Bush emphasized the 
commitment of men and women in uniform to provide for our Nation's 
security and safety. He said, ``Our men and women in uniform deserve 
the best weapons, the best equipment, the best training--and they also 
deserve another pay raise.'' This budget reflects the President's 
desires.
                           shaping our future
    We must also plan the U.S. Coast Guard's future now. The ability to 
anticipate and respond to new threats, risks, demands and opportunities 
is critical to our success.
    The Integrated Deepwater System.--Of the 39 Navies throughout the 
world, the U.S. Coast Guard has one of the oldest. With great support 
from the Department of Transportation and the Administration, we're 
ready to move forward with our plans to recapitalize and upgrade our 
deepwater assets. During his recent trip to Portland, Maine, President 
Bush said we ``. . . must make sure our Coast Guard has a modern fleet 
of vessels.'' Providing capability across all mission areas, our 
Deepwater assets are vital to the layered defense and response for 
Maritime Homeland Security. Deepwater is key to ensuring the Coast 
Guard can continue to fulfill all our missions and essential in 
providing a high level of ``maritime domain awareness.'' This budget 
fully funds the first full year of $500 million for this critical 
program.
                               conclusion
    The President's fiscal year 2003 budget provides immediate 
capability for our Homeland Security responsibilities and continues to 
build upon past efforts to restore service readiness and shape the 
Coast Guard's future. The budget also demonstrates unwavering support 
for both the Deepwater project and National Distress and Response 
System Modernization Project (NDRSMP). The end result of the 
President's fiscal year 2003 budget will be a more capable Coast Guard 
that is correctly positioned for transformation into the Coast Guard of 
the 21st century.
    I close with a quote from our Commander in Chief as he reflected on 
the Coast Guard's efforts as of late. ``I saw how the Coast Guard has 
responded after 9/11 and I know how important the Coast Guard is for 
the safety and security and the well-being of our American citizens.
    This is a fine group of people, who don't get nearly as much 
appreciation from the American people as they should. And I'm here 
today [Jan 25, 2002] to say thanks, on behalf of all the citizens who 
appreciate the long hours you put in, the daring rescues you accomplish 
and the fine service you provide to our country. Oh, yes, we're on 
guard in America.''
    Protecting our ports, waterways, and coastal regions, saving 
mariners in distress, interdicting illegal migrant and seizing drugs, 
or protecting our fisheries--With this budget the Coast Guard will be 
there to answer the call. . .
    Semper Paratus

                   STATEMENT OF HON. KENNETH M. MEAD

    Senator Murray. Mr. Mead.
    Mr. Mead. Thank you, Madam Chair, Senator Mikulski, Senator 
Stevens. I want to start by saying that we have delivered to 
the Majority and Minority our report of yesterday to the 
Appropriations Committees and the Department's overall budget, 
and so you have that for the record.
    I also want to start out by saying that this is probably 
the last hearing that I will be joining jointly with the 
Commandant here, and I wanted to say on a personal note that I 
have learned a lot from Admiral Loy. The country has a lot to 
thank him for, and his leadership, and just speaking as the 
Inspector General, it is always important in our relationships 
with the agency heads that they be respectful of the 
independence of the Inspector General, be solicitous of the 
Inspector General's views, and responsive to the 
recommendations, and I feel on every one of those counts that 
Admiral Loy and the Coast Guard under his leadership should get 
five stars, and I hope he goes on to serve the country in some 
other capacity.
    Now, to the testimony. As you recall, last year at this 
time the big budget drivers were Deepwater, the Search and 
Rescue Program, and the Distress System, and to maintain the 
Coast Guard's core missions. We were not talking about beefing 
up the security mission, and so this year you have the security 
mission overlaying the Coast Guard's budget, and what I would 
like to talk about today is the Coast Guard's overall budget 
request, the Coast Guard's response to our search and rescue 
report, which outlined deficiencies, the Deepwater capability, 
the Deepwater capability replacement project.

                        NATIONAL DISTRESS SYSTEM

    That is all the Coast Guard's assets that operate 50 miles 
and out afloat and airborne, and as well as the overhaul of the 
National Distress System. That is rather like a 911 system 
where mariners in distress can call the Coast Guard and, of 
course, it is inextricably intertwined with the search and 
rescue program, so I think this is a real critical year for the 
Coast Guard. It has got to take actions to adjust its missions 
in the wake of 9/11, and it simultaneously has to serve all its 
other missions, and simultaneously embark on what is the 
largest and most expensive acquisition in its history.
    At the same time it is doing this, it has to resolve 
serious weaknesses in its Search and Rescue Program and begin 
overhauling that National Distress System. We feel that the 
Coast Guard is facing a number of big uncertainties about its 
mission requirements, how it is going to execute major 
acquisition projects, and control costs. We think the Coast 
Guard is probably at a point where they ought to invest in a 
cost accounting system, because you have a pretty big budget 
plus-up, a lot of big endeavors moving out at the same time, 
and you are going to want to know how much money is going to 
each and what we are getting for it.
    The Coast Guard's budget seeks an increase of $1.6 billion. 
That will move the budget from $5.7 billion to $7.3 billion. I 
think it is important to note, though, that really about three-
quarters of that budget increase is for retirement, pay 
entitlements such as cost of living increases, and things of 
that nature, and so you are really left with about a $500 or 
$600 million actual increase.
    The Coast Guard is striving to balance its missions for 
fiscal 2003, and it plans to dedicate between 25 and 28 percent 
of its resources to security and port safety. That is roughly 
twice what the Coast Guard was applying to those areas last 
year--that is, before 9/11--and it views the 2003 budget 
request as the initial phase of a 3-year plan to enhance its 
homeland security missions. What is not clear to us is if the 
Coast Guard intends to request additional increases in 2004 and 
2005 to support that plan.

                           SEARCH AND RESCUE

    A second point concerns the Search and Rescue Program. 
Admiral Loy is right, they have pulled together a plan that I 
think is fairly robust. My staff was very impressed with it, 
and we reported, of course, last year that the search and 
rescue program was really in need of repair. It was declining 
because it did not have enough qualified people. It did not 
have a formal training program for its staff, and the equipment 
was in a state of disrepair, so the Coast Guard has developed 
this plan.
    You provided a $14.5 billion plus-up, the budget request 
another plus-up, and I think, as you all know, the Inspector 
General has been directed to make a certification that that 
money has been used to supplement, not supplant the baseline 
expenditures that were being made in 2001 for search and 
rescue.
    You should know that the small boat stations, which are the 
folks that do the search and rescue, are also doing port 
security, and we have not been out on the audit trail since 9/
11 long enough to be able to quantify the extent to which they 
are trying to mix those missions, but we do know that the 
search and rescue people are operating--their operating tempo 
for port security has gone way up, and if you will recall the 
numbers I gave you last year on what they were performing just 
for search and rescue, you wondered how they could fit any more 
hours in the day.

              NATIONAL DISTRESS AND RESPONSE MODERNIZATION

    I would like to cover major acquisition projects. The Coast 
Guard is approaching an important crossroads in the National 
Distress and Response System Modernization and the Deepwater 
capability projects. Both projects involve multiyear contracts. 
They both have long-term funding requirements. The Coast Guard 
expects to award contracts for both projects later this year. 
The budget seeks about $590 million for those projects 
combined.
    There are some significant uncertainties in these projects 
that I think you will have resolved, or you should expect to 
have resolved later this year. For Deepwater, this is the 
second year the Congress has been asked to appropriate money 
for it without a detailed cost and schedule estimate, and that 
is attributable to the procurement strategy they are following, 
so that right now I cannot tell you exactly what assets will be 
modernized or replaced and when, and at what cost. We should be 
able to tell you that later this year, after the contractor is 
selected, which I think is in the third quarter.
    Also, last year at this time we thought that the time line 
for the Deepwater acquisition would be 15 or 20 years. Now, we 
are not sure that 15 or 20 years is solid, and it may go to 30 
years, so we would like to know more about the time line for 
that acquisition.
    In the National Distress Response System, which I said is a 
911 system for mariners in distress, I would like to use a 
chart. Actually, this is the same chart I used last year. You 
remember the little dots. The different colors on the dots just 
indicate they are intended to signify the amount of nautical 
miles that are areas off the coastline where people can call 
911 for the Coast Guard and they will not get an answer.
    I call them dead phones, or gaps, and the different colors 
indicate, as I said, in different nautical miles--for example, 
the red is 6,100 square nautical miles of gap. Where you have 
the yellow up there in Alaska you have 800 or more square 
nautical miles with lack of coverage, and the specifications 
that the Coast Guard is now seeking for the National Distress 
System will get rid of 90 percent of those dots. The problem is 
that until they select a contractor, I cannot tell you which 
dots are going to disappear.
    Also, we are concerned about the repair time. Initially, 
the specification was for a 6-hour repair time, and now the 
specification seems to have crept up to 24 hours, which seems 
like a long time to be in distress if you have to place a 911 
call, but I do want to make clear to the committee that the 
replacement of the National Distress System that the Coast 
Guard is proposing is a vast improvement over what we have now, 
but I would like to see all of those gaps or dead zones closed.

                           PREPARED STATEMENT

    And I would like to see the repair time reduced very 
substantially, and I understand if you have a hurricane you are 
probably going to need 24 hours or more to replace those 
antennas, but there are other reasons a system goes down, and I 
think for the range of reasons that a system may go down, that 
we really ought to reduce the time required to make repairs.
    I think I will just proceed to Q and A's, if that is okay.
    [The statement follows:]

                 Prepared Statement of Kenneth M. Mead

    Madam Chairwoman and Members of the Subcommittee: We appreciate the 
opportunity to discuss Coast Guard's budget and management issues. We 
have identified balancing Coast Guard's missions and budget needs in 
light of post September 11 priorities as 1 of the top 10 management 
challenges in the Department of Transportation.
    The Coast Guard is seeking a significant increase in its budget to 
be able to deal with an expanded security mission, perform its other 
major missions, and proceed with an extraordinary set of important 
major acquisitions. The budget will increase from $5.7 billion in 
fiscal year 2002 to $7.3 billion in fiscal year 2003. There are 
currently a number of uncertainties about Coast Guard mission 
requirements, how it will execute major acquisition projects, and 
control costs. Coast Guard needs an effective cost accounting system 
that meets Federal accounting standards to provide a basis for 
accurately measuring the costs of specific activities and making 
decisions about where to apply resources.
    My testimony today will address three areas.
    First, the Budget Request for 2003.--Coast Guard is seeking an 
increase of $1.6 billion for fiscal year 2003. The largest portion of 
the increase is $736 million for a required payment to Coast Guard's 
military retirement fund. Two other categories, operating expenses (up 
by $733 million) and acquisitions (up by $92 million), account for most 
of the remaining increase. The increase in Coast Guard's operating 
capacity is not as large as the increase in operating expenses makes it 
appear. About half of the operating expenses increase will pay for 
entitlements and other inflationary adjustments and not add to 
operating capacity. The other half of the increase will fund the 
operation of new assets, such as seagoing buoy tenders and coastal 
patrol boats, continue increased security operations begun after 
September 11, and fund new security operations.
    Immediately after September 11, Coast Guard devoted 58 percent of 
its resources to port safety and security, while deployment to other 
core missions fell. For fiscal year 2003, Coast Guard plans to dedicate 
27 percent of its resources to port safety and security programs. This 
is roughly twice the amount that Coast Guard planned to dedicate to 
these missions for fiscal year 2002 prior to September 11. The relative 
amount of resources Coast Guard plans to devote to drug interdiction 
and fisheries enforcement in fiscal year 2003 is expected to decrease 
from planed fiscal year 2002 levels. Coast Guard views its fiscal year 
2003 budget request as the initial phase of a 3-year plan to enhance 
its homeland security missions while still conducting other diverse 
missions that remain national priorities. It is not clear to us if 
Coast Guard intends to request additional increases in fiscal years 
2004 and 2005 to support this plan.
    Second, the Search and Rescue program.--Last year we reported that 
the readiness of the Coast Guard's small boat station search and rescue 
program was declining because it did not have sufficient numbers of 
qualified personnel, a formal training program for key staff, and 
equipment that was up to standards. Coast Guard developed a strategic 
plan to improve readiness and the Congress provided $14.5 million for 
fiscal year 2002 for added search and rescue program personnel and 
equipment. We have been directed to audit Coast Guard's use of these 
added funds and certify that the $14.5 million supplements and does not 
supplant Coast Guard's level of effort in this area in fiscal year 
2001. The fiscal year 2003 budget proposal seeks $22 million to follow 
through on Search and Rescue program enhancements such as adding crew 
members to the 47-foot motor life boats and procuring small search and 
rescue boats.
    Small boat stations are also playing a key role in port security 
activities since September 11. More than half of all station hours are 
devoted to port security, and operating tempo has increased 
significantly. Given the emphasis on security missions, it is unclear 
whether Coast Guard has implemented its plan to address the Search and 
Rescue program deficiencies we identified. As part of our audit to 
certify the use of fiscal year 2002 funds, we will determine the status 
of Coast Guard actions to address the deficiencies identified in our 
prior audit report.
    Third, Major Acquisition Projects.--The fiscal year 2003 budget 
seeks $590 million for Coast Guard's two largest acquisition projects, 
the Deepwater Capability Replacement and the National Distress and 
Response System Modernization. Both projects are critical to improving 
Coast Guard's operations, but both also have significant uncertainties 
that the Subcommittee should expect to see resolved this fiscal year.
  --Deepwater.--This is the second year that the Congress is being 
        asked to appropriate procurement funding for the Deepwater 
        project without a detailed cost and schedule estimate. If the 
        Congress appropriates the $500 million Coast Guard is seeking 
        for 2003, it will have $790 million available for the 
        procurement phase of the project. Given the acquisition 
        approach that Coast Guard is using, reliable estimates that 
        describe what assets will be modernized or replaced, at what 
        cost, when that will occur, and when funding will be required, 
        will not be available until after a contractor is selected. The 
        selection is currently scheduled for the third quarter of 
        fiscal year 2002.
      Another area of uncertainty is how long the project will take to 
        complete. Although Coast Guard originally stated this would be 
        a 20-year project, the request for proposals states that the 
        performance period for the contract could be up to 30 years. It 
        is not clear to us whether this means that (1) previously 
        planned annual funding levels will remain the same and result 
        in increased cost, or (2) the planned annual funding levels 
        will be spread out and reduce the level of funding required 
        each year.
  --National Distress and Response System (NDS).--Coast Guard has 
        increased its estimate for the NDS project--the 911 system for 
        mariners in distress--from $300 million to $580 million and it 
        is seeking $90 million in the fiscal year 2003 budget to begin 
        procurement. If the Congress appropriates the $90 million Coast 
        Guard is seeking for fiscal year 2003, it will have $125 
        million available for the procurement phase of the project.
      The current system has many deficiencies including more than 88 
        communication coverage gaps, totaling 21,490 square nautical 
        miles along the U.S. coastline where Coast Guard cannot hear 
        mariners. The revised system will provide a significant 
        improvement over the existing system.
      However, we are concerned that Coast Guard reduced or eliminated 
        capabilities in the revised system that it initially considered 
        essential. This occurred because Coast Guard reduced 
        performance specifications after contractors estimated that a 
        system meeting Coast Guard requirements would cost more than $1 
        billion. As a result of the reduced performance specifications, 
        the revised system will still contain gaps in communication 
        coverage. Because the acquisition strategy being used on NDS is 
        following the same approach as that used on Deepwater, the 
        number, size, and location of the gaps will not be known until 
        a contractor's system is selected. Also, the time allowed to 
        restore critical functions, if the system becomes unavailable, 
        has been increased from 6 to 24 hours. However, at some time in 
        the future, Coast Guard may have to upgrade the system to 
        provide some or all of the capabilities that were to be 
        provided by the $1 billion system. We have recommended that 
        Coast Guard develop an acquisition plan that includes cost and 
        schedule estimates for upgrading the system to provide these 
        capabilities.
    coast guard's budget request represents a 27.6 percent increase
    Coast Guard's fiscal year 2003 budget request seeks an increase of 
$1.6 billion or 27.6 percent over the fiscal year 2002 budget. As shown 
in the following table, most of the increase is in three categories: 
operating expenses; acquisition, construction, and improvements; and 
military retirement fund payment.

          COMPARISON OF COAST GUARD'S FISCAL YEAR 2002 BUDGET WITH ITS FISCAL YEAR 2003 BUDGET PROPOSAL
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year
                                                    Fiscal year        2003
                                                   2002 enacted     President's       Change      Percent change
                                                                      budget
----------------------------------------------------------------------------------------------------------------
Operating Expenses..............................      $3,902,679      $4,635,268        $732,589            18.8
Acquisition, Construction and Improvements               643,900         735,846          91,946            14.3
 (AC&I).........................................
Environmental Compliance and Restoration........          17,181          17,286             105             0.6
Alteration of Bridges...........................          15,466               0         -15,466          -100.0
Retired Pay.....................................         876,346  ..............  ..............  ..............
Coast Guard Military Retirement Fund............  ..............         889,000          12,654             1.4
Reserve Training................................         100,251         112,825          12,574            12.5
Research, Development, Test and Evaluation......          21,077          23,106           2,029             9.6
Oil Spill Recovery..............................          61,200          61,200               0             0.0
Boating Safety..................................          64,000          64,000               0             0.0
Gift Fund.......................................              80              80               0             0.0
                                                 ---------------------------------------------------------------
      Sub Total.................................       5,702,180       6,538,611         836,431            14.7
                                                 ===============================================================
Payment to Coast Guard Military Retirement Fund.  ..............         736,000         736,000             N/A
                                                 ---------------------------------------------------------------
      Total.....................................       5,702,180       7,274,611       1,572,431            27.6
----------------------------------------------------------------------------------------------------------------

    The increase includes approximately $736 million for payment to 
Coast Guard's military retirement fund consistent with legislation 
proposed in October 2001 by the Administration. The $736 million will 
fund the future retirement benefits of current Coast Guard uniformed 
personnel. The $889 million funding item in the above table for the 
Coast Guard Military Retirement Fund finances payments to existing 
retirees.
    Acquisition funding would increase by $92 million (14 percent) to 
$736 million. This includes $500 million for the Deepwater project, and 
$90 million for the NDS project.
    The fiscal year 2003 budget request seeks $4.6 billion for Coast 
Guard operations, a $733 million (19 percent) increase over fiscal year 
2002. About half of the increase will fund entitlements such as pay 
raises, increased health care costs, and other inflationary 
adjustments. The other half of the increase will fund the operation of 
new assets (such as seagoing buoy tenders and coastal patrol boats), 
continue increased security operations begun after September 11, and 
fund new and enhanced operations including port security. Funding for 
new security initiatives includes $48 million for marine safety and 
security team; $19 million for maritime escorts and safety patrols; $60 
million for enhanced communications, information, and investigations; 
and $37 million for force protection.
 the fiscal year 2003 budget seeks to balance current priorities with 
                    coast guard's multiple missions
    In response to the September 11 attacks, Coast Guard deployed 58 
percent of its resources to port safety and security missions. These 
resources included its fleet of rescue boats at small boat stations 
around the country. The redeployment, however, came at the expense of 
other important core missions. For example, resources deployed to drug 
interdiction fell from approximately 18 percent to 7 percent. Other 
missions such as fisheries enforcement, recreational boating safety, 
aids to navigation, and migrant interdiction were also hard hit.
    For fiscal year 2003, Coast Guard plans to use 27 percent of its 
operating expense budget for port safety and security programs. This is 
roughly twice the amount that Coast Guard planned to dedicate to these 
missions for fiscal year 2002 prior to September 11. To help fund the 
increased port safety and security program, Coast Guard will continue 
reduced levels of activity in other missions such as drug interdiction 
and fisheries enforcement. The following chart shows the resources 
projected to be used for major missions during fiscal year 2003 
compared to fiscal year 2002. Because the amount of operating funding 
is different in each year, the change reflects the difference in the 
relative amount of resources projected by mission.

        U.S. COAST GUARD MISSION PROFILE--PERCENT OF PLANNED OPERATING EXPENSES BUDGET BY MAJOR PROGRAMS
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                                            Fiscal year
                             Program                             --------------------------------     Change
                                                                       2002            2003
----------------------------------------------------------------------------------------------------------------
Programs Increased in fiscal year 2003:
    Marine Safety...............................................         ( \1\ )               5         ( \2\ )
    Ports, Waterways, and Coastal Security......................         ( \1\ )              22         ( \2\ )
    Aids to Navigation..........................................              15              17              +2
    Defense Readiness...........................................               2               3              +1
Programs Unchanged in fiscal year 2003: Search and Rescue.......              12              12               0
Programs Decreased in fiscal year 2003:
    Ice Operations..............................................               4               3              -1
    Other Law Enforcement.......................................               3               2              -1
    Migrant Interdiction........................................               5               4              -1
    Marine Environmental Protection.............................              11               8              -3
    Living Marine Resources.....................................              16              11              -5
    Drug Interdiction...........................................              18              13             -5
----------------------------------------------------------------------------------------------------------------
\1\ 14 percent combined in fiscal year 2002.
\2\ Plus 13 percent.

    The Coast Guard is in the process of balancing its enhanced port 
safety and security mission requirements with its other missions. 
According to Coast Guard, the fiscal year 2003 budget request 
represents the initial phase of a 3-year plan to address its needs. The 
Coast Guard's goal is to enhance all of its homeland security missions 
while still conducting other diverse missions that remain national 
priorities. It is not clear to us if Coast Guard intends to request 
additional increases in fiscal years 2004 and 2005 to support this 
plan.
 fiscal year 2003 budget continues efforts to address deficiencies in 
            the small boat station search and rescue program
    Coast Guard's small boat station Search and Rescue program provides 
the first line of response for mariners in distress. During fiscal year 
2000, the 188 small boat stations responded to approximately 40,000 
calls for help and saved over 3,300 lives.
    As we reported to you last year, the small boat station Search and 
Rescue (SAR) program was suffering from serious staffing, training, and 
equipment problems that go back more than 20 years. Our findings were:
  --staff shortages required personnel at 90 percent of the SAR 
        stations to work an average of 84 hours per week;
  --high attrition rates among enlisted personnel were impacting 
        experience levels at small boat stations;
  --70 percent of vacant positions at small boat stations were filled 
        with Coast Guard boot camp graduates with little or no training 
        in seamanship, piloting and navigation, small boat handling, 
        water survival, or search and rescue techniques;
  --there was no formal training for boatswain's mates, who are key SAR 
        staff and one of the largest of the Coast Guard's enlisted job 
        specialties;
  --84 percent of the standard rescue boat fleet inspected by the Coast 
        Guard in fiscal year 2000 were found to warrant a ``Not Ready 
        for Sea'' evaluation; and
  --Coast Guard had not requested funding to replace or extend the 
        useful life of its 41-foot utility boat fleet, which is 
        reaching the end of its service life.
    In response to our recommendations, Coast Guard initiated a multi-
year strategy to improve readiness at small boat stations. For example, 
during fiscal year 2002, Coast Guard added 199 billets to support 
station operations and is in the process of expanding training 
opportunities for station boatswain's mates. In its fiscal year 2002 
supplemental funding request, Coast Guard received an additional 54 
billets and funding to purchase 18 port security boats to augment 
station port security operations.
    In DOT's fiscal year 2002 Appropriations Act, Congress directed 
Coast Guard to use $14.5 million to add personnel, purchase personnel 
protection equipment, and begin the process of replacing its aging 41-
foot utility boat fleet. We have been directed to audit and certify 
that the $14.5 million supplements and does not supplant Coast Guard's 
level of effort in this area in fiscal year 2001. The fiscal year 2003 
budget proposal seeks $22 million to follow through on SAR program 
enhancements, such as adding crew members to the 47-foot motor life 
boats and procuring small search and rescue boats.
    In December 2001, the Coast Guard briefed us on its strategic plan 
for the small boat station SAR program. The plan identified actions to 
address the deficiencies found during our audit by, for example, adding 
personnel at stations to reduce the hours crew members are on duty and 
to provide administrative support to station management, freeing up 
management to train and certify crew members. Coast Guard also planned 
to increase the number of coxswains receiving advanced training, 
purchase personnel protection equipment for boat crews, and begin the 
process of designing and procuring a replacement for the 41-foot 
utility boat.
    Since September 11, the operating tempo at small boat stations more 
than doubled as they responded to support port safety and security 
efforts while maintaining a successful search and rescue capability. 
More than half of all station hours are now devoted to the port 
security mission. In addition, Coast Guard called up reservists and 
enlisted the Coast Guard auxiliary to support the port security 
mission. This mission includes: enforcing security/safety zones around 
high-risk vessels, oil/gas/chemical terminals, and power plants; 
conducting harbor patrols; providing round-the-clock force protection 
around U.S. Navy and Coast Guard vessels and facilities; escorting 
high-risk vessels in and out of ports, and transporting sea marshals 
and boarding teams to and from vessels. Given the emphasis on security, 
it is unclear whether Coast Guard has implemented its plan to address 
the SAR program deficiencies we identified. As part of our audit to 
certify the use of fiscal year 2002 funds, we will determine the status 
of Coast Guard actions to address the deficiencies identified in our 
prior audit report.
     acquisition, construction, and improvements budget provides a 
           significant funding increase for nds and deepwater
    The fiscal year 2003 budget request seeks an acquisition funding 
increase of $92 million (14 percent) to $736 million. The funding 
request includes $90 million and $500 million for the NDS and Deepwater 
projects, respectively. As proposed, the NDS and Deepwater projects 
account for 80 percent of Coast Guard's capital budget for fiscal year 
2003.
          the nds project is likely to experience cost growth
    The 30-year old National Distress System no longer supports Coast 
Guard's short-range communication needs. System deficiencies, such as 
communication coverage gaps and limited direction finding capabilities, 
complicate Coast Guard's ability to effectively and efficiently perform 
search and rescue missions. For example, at least 88 major 
communication coverage gaps exist where Coast Guard cannot hear calls 
from mariners in distress. Totaling about 21,500 square nautical miles, 
the communication coverage gaps represent 14 percent of the total NDS 
coverage area and range in size from 6 to more than 1,600 square 
nautical miles.
    Over the last 6 years, Congress appropriated $56 million for 
planning the NDS project. In the planning phase, Coast Guard and its 
technical support agent performed a significant amount of technical and 
market research and worked directly with three contractors to design a 
system that would meet Coast Guard's needs. During March 2001, each of 
the contractors submitted a cost proposal that individually exceeded $1 
billion--nearly three and a half times Coast Guard's $300 million 
estimate.
    When the contractors' cost estimates came in higher than expected, 
Coast Guard revised the system's performance specifications to lower 
the costs to an estimated $580 million. The proposed system will 
provide significant improvement over the existing system. However, 
Coast Guard eliminated or reduced capabilities in the $1 billion system 
that Coast Guard originally considered essential to address 
deficiencies in the existing system and to improve the SAR program 
efficiencies. As currently designed the proposed system:
    Contains communication coverage gaps, meaning Coast Guard will not 
be able to hear and locate all mariners in distress even when they are 
within the system's planned range of 20 nautical miles of shore. While 
it is anticipated that the gaps will not be as large or as numerous as 
the 88 gaps in the existing system, the exact size and location will 
not be known until a contractor is selected later this year.
    Cannot pinpoint the location of distressed mariners. The proposed 
system will provide only the general direction of the distress call. 
Compared to the $1 billion system, the revision has negatively impacted 
Coast Guard's original project goal to take the ``search'' out of 
search and rescue. Consequently, Coast Guard may have to perform other 
investigative procedures and conduct wide-area searches to locate 
distressed mariners.
    Restoring system outages will take longer. In the proposed system, 
the specified time allowed to restore critical system functions if they 
become unavailable has been extended from 6 hours to 24 hours and full 
system functions from 12 hours to 7 days. Coast Guard has no set 
parameters for restoring critical functions if the existing system 
becomes unavailable.
    Reduced the capability to support an increased level of operations 
during a national emergency or a natural disaster. Capabilities that 
were eliminated, such as the ability to send classified information and 
to talk with other agencies such as the Department of Defense, may be 
necessary to support some Coast Guard homeland security activities.
    While it is notable that Coast Guard has taken aggressive action to 
reduce cost estimates for NDS, Coast Guard may have to restore 
capabilities that were reduced or eliminated as the system is deployed 
to meet operational requirements. This will not only increase the cost 
of the NDS project, but will further compound Coast Guard's capital 
acquisition challenge.
    We have recommended that Coast Guard develop an acquisition plan 
for approval of the Department prior to obligating any funds 
appropriated for the procurement contract, which is anticipated to be 
awarded in the fourth quarter of fiscal year 2002. Coast Guard fully 
concurred with our recommendation. However, given our concern over the 
reduction in capabilities, we have since recommended that Coast Guard 
ensure the acquisition plan also contains cost estimates and milestones 
for adding the capabilities that were reduced or eliminated. In 
addition, we recommended that the plan should identify how Coast Guard 
intends to meet its short-range communication needs in response to its 
increased homeland security mission.
 uncertainties with the deepwater project should be resolved this year
    The Deepwater project proposes to replace or modernize 209 
aircraft, 92 vessels, and associated sensor, communications, and 
navigation systems that are approaching the end of their useful life. 
This project involves replacing or modernizing all of the Coast Guard 
assets that are critical to missions that occur 50 miles or more 
offshore, including drug interdiction, search and rescue, and migrant 
interdiction.
    This project is unusual not only because of its size, but also 
because, if all goes as planned, it concentrates the responsibility for 
project success with one contractor (called the Integrator) and 
subcontractors extending over a planned period of at least 20 years. 
Given this, the Coast Guard should expect a high level of scrutiny by 
the Department and the Congress regarding this project.
    The Congress supported the planning phase of the project by 
appropriating about $117 million. The Coast Guard plans to replace its 
Deepwater capability as an integrated system rather than a series of 
distinct procurements. For example, instead of specifying that it wants 
a medium endurance cutter or a long-range helicopter, Coast Guard 
tasked three industry teams to propose vessels and aircraft that can 
work together to meet mission needs more effectively. The planning 
process has been comprehensive and provides Coast Guard a good basis 
for identifying its needs and developing an acquisition strategy.
    The Coast Guard is rapidly approaching an important crossroads with 
respect to the Deepwater project. Although it previously planned to 
award the Integrator contract in the second quarter of fiscal year 
2002, Coast Guard has appropriately delayed the award to provide 
additional time to further analyze industry proposals. The award is 
currently scheduled for the end of the third quarter of fiscal year 
2002. The award of the integrator contract will start the Coast Guard 
moving forward on a course that is likely to be difficult and 
potentially expensive to alter once funding has been committed and 
contracts have been executed.
    Coast Guard has not yet provided a reliable cost estimate for the 
Deepwater project, but that should be resolved once the Integrator is 
selected. The selection of the contractor will mark the beginning of 
discussions and negotiations between the Coast Guard and the winning 
contractor to devise the exact system the contractor will provide. It 
is likely the final system will not be exactly what the contractor 
proposed but will combine certain aspects from all three contractors' 
proposals. Once the final system design and configuration is 
determined, Coast Guard will be able to establish a cost estimate and 
deliverable schedule.
    Coast Guard received $290 million for the Deepwater procurement in 
fiscal year 2002. If it receives the $500 million requested in fiscal 
year 2003, Coast Guard will have $790 million available for the 
procurement phase of the project. Although Coast Guard originally 
thought this would be a 20-year project, the request for proposal 
states that the performance period for the contract could be up to 30 
years. It is not clear to us whether this means that (1) previously 
planned annual funding levels will remain the same and result in 
increased cost, or (2) the planned annual funding levels will be spread 
out and reduce the level of funding required each year.
    Madam Chairman, this concludes my statement. I would be happy to 
answer any questions the Subcommittee may have.

    Senator Murray. Thank you, Admiral Loy and Mr. Mead. Before 
we begin the question period, I will allow any of our committee 
members to make opening statements. Senator Stevens.

                    STATEMENT OF SENATOR TED STEVENS

    Senator Stevens. Thank you very much. I join the Inspector 
General in congratulating Admiral Loy for his period of time as 
Commandant. I understand the time is coming close, unless he is 
drafted to stay. I do not know if the President might do that, 
but we have enjoyed working with you, Admiral, and Mr. Mead's 
comments are well-taken as far as I am concerned.
    My opening statement really is about homeland security, 
homeland defense. We have rumors up our way of substantial 
reductions in Coast Guard activities off Alaska because of the 
demands of the contiguous 48 States and the increased demands 
in terms of port security. I hope that that is not the case. We 
still have half the coastline in the United States, and if you 
look at the assets you have for half the coastline of the 
United States, they are about one-twentieth of the rest of the 
operation, even less than that.
    But my real questions, when we get to questions, will be 
about those reductions and about the role of the Coast Guard in 
this new command we are hearing about, the Northern Command, 
and whether or not you will be part of that, if you have been 
consulted. I will save those questions for the question period, 
Madam chairman, but I do think that those of us who are from 
coastal States that have such heavy reliance on the Coast 
Guard, of course we welcome the increased role of the Coast 
Guard nationally and internationally, but I would not like to 
see us be left behind in areas where the reliance on the Coast 
Guard is so heavy, particularly in terms of safety and the 
operation of vessels in the North Pacific, probably the worst 
area of operation that you have as far as I am concerned.
    But I do not know whether I can stay through the whole 
period to ask some of those questions. If I do not, I would 
like to be able to submit some questions to you to get on the 
record what we might have to review as this budget moves 
forward. I entirely support, as I said, the increased 
modernization of the Coast Guard nationally, and hope that that 
will trickle down to the area of law enforcement in the fishing 
industry as well as assisting in the protection of the 
extremely long coastline that we have as far as the difficulty 
of maintaining tight control over our border.
    You are going to have an enormous role, really, as this 
future unfolds, and I am sure that this committee is going to 
be deeply involved in it, but we would hope that we can get the 
information from you that we need to make certain that we cover 
all of your needs in these appropriations this year and 
succeeding years. I think Mr. Mead's comments about future 
years is extremely important. You do not build ships in 1 year. 
We have to have some substantial commitments here if we are 
going to proceed with allocations for an initial period of 
construction and modernization and replacement of your vessels.
    Thank you.
    Senator Murray. Thank you. Senator Mikulski.

                STATEMENT OF SENATOR BARBARA A. MIKULSKI

    Senator Mikulski. Thank you very much, Madam Chairman. I 
appreciate this courtesy. I have to leave around 11:00 for 
another hearing.
    First, Mr. Mead, I want to thank you very much for the 
excellent testimony and the background material. I think one, 
we love our Inspector Generals because they really do give us 
guidance on how to improve management, and I think the issues 
you raise in Deepwater are excellent issues, and we hope that 
the Coast Guard will address them for the committee, so we know 
we need Deepwater. We know we need the kind of accountability 
timetables and outcomes that I think you are pressing for, so 
thank you very much.
    Admiral Loy, I wanted to come here today, also, not only to 
talk about the Coast Guard's appropriation, but to talk about 
the Coast Guard and talk about you. First of all, I really want 
to thank you for just being you. You have provided leadership, 
you have provided vision, and you have provided advocacy for 
the Coast Guard while they out there doing a tremendous job, 
and the Coast Guard motto, Semper Paratus, always prepared, you 
have really been an advocate to see that they are.
    I just want to thank you for your leadership, and I know 
the men and women of the Coast Guard just will fall on a 
propeller for you, so I just want to thank you, and also for 
the Coast Guard. We in Maryland, of course, are forever 
grateful to our Coast Guard, and what they do in search and 
rescue, port security, even before September 11, and our 
environmental protection.
    Since September 11 we have watched this operations tempo 
really increase in the bay and at the port, and we know you 
cannot do this with three people and two Zodiacs, and just the 
stress on personnel and the stress on the vessels that we have 
I think shows that the funding for the Coast Guard is, indeed, 
spartan, and I use only the bay because we appreciate the 24-7 
that the Coast Guard always does even before September 11, so 
it is not like they got a new job. Their intensity of their job 
increased.
    I note that your appropriations of 7.3 includes a $700 
million request for pensions. That is great, because we need to 
be able to have good pay, good health care, and good pensions 
to be able to recruit and retain people, but Madam Chairwoman, 
I am really concerned about the Coast Guard. I mean, if they 
get close to $1 billion, but only $500 million is really for 
what they need in terms of the Coast Guard mission, and $700 
million is into a pension, I think that is really not what the 
Coast Guard needs.
    I just bring to the chairperson's attention this is roughly 
the same money we spent on EPA. EPA is worth every nickel of 
what we spend, and I know some might raise some flashing yellow 
lights about EPA, but I think the Coast Guard in my mind is a 
$10 billion operation. I do not know where we are going to get 
the money, but the Coast Guard is the vital link in homeland 
security. You are, along with INS, the protector of our 
borders.
    The INS is to protect and make sure bad people do not come 
into our country, but you have got to make sure not only bad 
people and bad things do not come into our country, and that 
bad things do not happen to our country. I do not see--no 
matter how diligent, no matter how duty-driven, no matter how 
resourceful and creative the Coast Guard is, they cannot really 
do this, and I would hope that we could in our talks with 
Governor Ridge and the President, I know we have got this for 
this year, and we have to make the best of what we can, but I 
would hope that within the next 3 years, that we really press 
the President to really give us the robust funding because of 
the competing needs of this committee.
    So you might be underfunded, but you are not undervalued, 
and I just want to be able to say that, and I am going to do 
everything I can to help the committee keep the President's 
budget and see if we cannot find ways to add to it. Knowing the 
great stresses that are in your committee and, I must say, in 
mine--mine is pretty flat-funded--do you think we could get 
some money out of Defense?
    Particularly for some of the homeland security issues. But 
thank you, and again, many, many thanks, and Godspeed, Admiral 
Loy.
    Admiral Loy. Thank you, Senator Mikulski, for your support.
    Senator Murray. Thank you, Senator.

             OPERATING TEMPO OF SEARCH AND RESCUE STATIONS

    Admiral Loy, I am going to start with you. In the 
Transportation bill for 2002 this subcommittee more than 
doubled the Coast Guard funding request to improve training and 
staffing at your overtaxed small boat stations. We were, in 
fact, responding in part to Mr. Mead's observation that 
personnel at these stations were overworked, averaging 84-hour 
work weeks.
    Mr. Mead's testimony today indicates that the operating 
tempo at these small boat stations has increased by 200 percent 
since September 11, and the added stress may undermine our 
efforts to improve training and work hours of these Coast Guard 
units. How are these units handling this 200 percent increase 
in workload?
    Admiral Loy. I would have to look at the numbers to find 
out what Ken means by the 200 percent, but let me be very clear 
that post 9/11 the port security obligations that have come 
upon the organization have added to the workload, there is 
simply no doubt about it.
    I would like to have the characterization of those stations 
be multimission Coast Guard stations, not SAR stations. It is 
not like those stations on 10 September and before were 
exclusively doing search and rescue and nothing else, so the 
multimission character of all of our stations is real, and that 
is probably worth getting on the table so that we do not go 
from zero to 100 percent kind of shifting.

                             RESERVE RECALL

    First and foremost, the reserve call-up opportunity was 
absolutely mandatory for us. The first call I had on 11 
September was to Secretary Mineta, who was already in the 
basement of the White House with the Vice President sorting out 
how they were going to get airplanes out of the air, and he 
gave me verbally over the phone the authority to call up our 
reserves and, as you know, Secretary Mineta has domestic call-
up authority, does not have to wait for the presidential call-
up associated with the mobilization, and so instantly we were 
able to get a full third of the selected reserve of the Coast 
Guard on active duty and augmenting the stations to help them 
with that OPTEMPO issue.
    The second thing is, we just shifted gears, Madam Chairman, 
in terms of what our people woke up to, a normal profile, if 
you will, on a traditional mission allocation process on 10 
September. I was able to call the Area Commanders and they in 
turn called their down-the-chain District Commanders and 
Station Commanding Officers and said, ``take a left and go to 
port security.''
    Now, we always have search and rescue as an interrupt 
demand mission that, in the event something occurs in a search 
and rescue environment, we always go there, but the first order 
of business then was to shift gears and deal with port 
security.
    Senator Murray. When Mr. Mead gave his testimony, he said 
he has not had enough people out to check and audit some of the 
conditions of the small boat stations. When he does, do you 
think he will see any improvement in training or experience or 
workload?
    Admiral Loy. Yes, ma'am. We have developed a 5-year game 
plan in which 2003 will be the 3 year to stand up these 
adjusted challenges that you offered us last year, and others 
as well; through Mr. Mead's audit. We have invested in 
staffing, we have invested in standing up training courses, we 
have invested in simple command center staffing and station 
staffing, about 200 bodies, if you will, in the 2002 budget, 
about another 200 bodies in the 2003 budget, and systematically 
we will gain that level of adequate OPTEMPO standard that we 
talked so much about last year, so he will find committed to 
the active force a combination of reservist and auxiliarist who 
unbelievably have volunteered thousands and thousands of hours 
to help those young people on active duty do what they needed 
to do across this period.

                       SMALL BOAT STATION AUDITS

    Senator Murray. Mr. Mead, what do you expect to see when 
you go out to do those audits?
    Mr. Mead. I hope to see real, substantial improvement, and 
you know, when we did our last audit we developed a lot of 
baseline data on operating hours that were devoted to search 
and rescue, and we will be able to use that baseline data to 
compare what is going on now, so what we will do and what we 
will report back to you, you have asked us to certify the extra 
money that the Congress gave the Coast Guard for this function 
was not being used to supplant, but in addition, because of the 
points that Admiral Loy raised, that there is some certain 
flexibility of the missions.
    We are going to go out and see exactly, substantively what 
is different. Has there really been core improvement in the 
hours these people are spending? Are they really getting 
trained, and are the boats they use, is the percentage of boats 
that were judged not ready--which was a substantial 
percentage--decreased?
    I think we will have--we will not have to wait till the end 
of the fiscal year to get that information to you.
    Senator Murray. I look forward to hearing from you as you 
gather that information.

              STATUS OF COAST GUARD'S TRADITIONAL MISSIONS

    Admiral Loy, I am really disturbed by the fact that even 
with this historic funding increase that has been proposed for 
the Coast Guard for next year your level of effort in the area 
of marine safety, fisheries enforcement and drug interdiction 
are expected either to stay the same or diminish even further, 
and this comes at a time when you are not achieving your 
performance goals for interdicting drugs or keeping illegal 
fishing vessels out of U.S. waters. Has the amount of 
assistance you got from the Department of Defense to conduct 
maritime drug interdiction been reduced as a result of the war 
in Afghanistan and other operations?
    Admiral Loy. To answer your last question first, Madam 
Chairman, there has been a relatively consistent contribution 
from the afloat community in the Navy with respect to on-scene 
ship days, and less so in the maritime patrol aircraft, which 
have, in fact been, if you will, almost recalled, if not State-
side for the things they are doing here, to their deployments 
overseas.
    My concern is that the changes, the things that brought DOD 
into the drug game in 1989 with the DOD authorization act, the 
requirement to fuse intelligence, the requirement to do 
detection and monitoring, to be the lead agency for detection 
and monitoring, those things have not changed appreciably in 
the 10 years that have gone by, so any kind of a loss of those 
assets in that mission will be a detraction from our ability to 
get the job done collectively.
    I also wear the hat, as you know, as the Interdiction 
Coordinator for the country, for Mr. Walters, who just sat down 
in his chair, and I must reflect concern as to the impressions 
that I have seen, little red flags, if you will, going up that 
suggest perhaps walking away from the drug mission is part of 
the game plan in the Department of Defense.
    We will watch that very carefully, and we will aggressively 
challenge the continuation of the assets we need in that field.

                       COAST GUARD'S NEW NORMALCY

    Senator Murray. Very good. Is this committee just going to 
have to accept the notion that New Normalcy for the Coast Guard 
means that we have a diminished effort in its core missions for 
marine safety and fisheries enforcement and drug interdiction?
    Admiral Loy. I think there is an opportunity, Madam 
Chairman, if I may answer a couple of questions, including 
those from Senator Stevens here, 2003 will be the first of a 3-
year game plan that will allow the Coast Guard to grow to 
provide its contribution to the New Normalcy you just 
described, and the New Normalcy is this.
    On 10 September we were spending maybe 2 percent of our 
budgeting capability on port security, focused activity. By 15 
or 18 or 19, the chart that Senator Shelby showed, we had 
committed probably 50 percent or more of our budgeted 
capability directly to port security, because we did exactly 
what his chart showed. We brought things from doing other 
mission areas.
    Now, first of all, as I said earlier, I think that should 
be seen as an enormous strength this organization brings to the 
country. When a crisis is here, we go there. We have SAR 
instincts as an organization. We surge to that 50 percent 
level, and ever since we have been backing off to find out what 
the New Normalcy is in the immediate area of port security so 
as to be quite clear as to what the degradation might be in the 
other missions of the organization.
    These pie charts, Madam Chairman, show the large orange 
section in the sort of southwest quadrant, if you will, all the 
way to the right is the devotion we feel now appropriate to 
ports, waterways, and coastal security for the 2003 budget. And 
if you go around the circle you will see, with the exception of 
constant program strength missions like search and rescue and 
aids to navigation.
    Senator Murray. I have to admit, it is a little hard to 
read from right here.
    Admiral Loy. There is a copy in your folder. You will see 
small percentage drops in counterdrug effort, in fisheries 
enforcement effort in alien migration effort, and in the other 
wedges of our mission profile, to allow us to concentrate on 
this new priority 1, if you will, for the Nation.
    Over the course of that 3-year build, we will rebuild the 
organization's strength, head count capability to not only do 
the new maritime security challenge, but to return in full 
scope to the other missions that you were referring to.
    Senator Murray. Can you explain to me why, in the first 
year of the 3-year game plan, you talked about the level of 
effort in these core missions going down?
    Admiral Loy. Because we are literally having to borrow some 
energy, if you will, from them in order to do year 1 of the New 
Normalcy, which is an almost 20 percent increase in that ports, 
waterways, and coastal security mission.

                       17TH COAST GUARD DISTRICT

    Senator Murray. Senator Stevens.
    Senator Stevens. Thank you very much. Admiral, let me first 
go to the 17th District. With the increase you are getting 
overall, is the effort in the 17th District going to be 
reduced?
    Admiral Loy. The standards that we are challenged with in 
the 17th, Senator Stevens, are pretty constant, because it is a 
search and rescue requirement as well as a fisheries 
enforcement requirement that is met by those cutters off-shore 
in the Gulf of Alaska and the Bering Sea, so pretty much for 
the Pacific Northwest I will say from Northern California to 
the north our asset deployment profile will be essentially the 
same.
    Senator Stevens. While they are going up everywhere else, 
right?
    Admiral Loy. We are able to borrow, if you will, fisheries 
enforcement capability--no, sir, they are not going up 
everywhere else, if you mean fisheries enforcement and 
counterdrug activity. The only thing that is going up, quote-
unquote, is our attention to port security as the Nation's 
number 1 responsibility.
    Senator Stevens. The 17th District is really flat, and your 
overall budget is going up 200 plus million. Will any of that 
modernization money seep into this district?
    Admiral Loy. Sir, the modernization money will seep into 
all corners of the Nation, including Alaska, of course. When 
Deepwater water comes of age, the cutters that go to Alaskan 
waters will be new, modern cutters. When the aircraft come of 
age out of Deepwater they will go not only to Alaska, but 
everywhere else in terms of increased capability around the 
Nation.
    Unless I am misunderstanding your question, sir, our 
investment in those projects, NDRSMP and Deepwater, is constant 
across the board.
    Senator Stevens. I am really talking about the operational 
level and the enforcement level and the basic level in the 
North Pacific, and what is going to happen to it. There is a 
great feeling out there, and I am hearing it from lots of 
sources, that the level of operations, the tempo of operations 
in the North Pacific is going down, and yet the effort, the 
fishing effort there is not going down.
    As a matter of fact, because of the marvelous management of 
that resource, the harvesting continues to go up every year. A 
substantial portion of our seafood is coming from the North 
Pacific now, and I do not see any reflection of that in terms 
of operations of the Coast Guard, where our operation level is 
going down.
    Admiral Loy. In the immediate wake of 9/11, as we surged 
away from those enormously important missions to meet the new 
number 1 priority of port security, clearly all around the 
Nation we borrowed cutter days and aircraft hours in order to 
make sure we were going to get the port security thing right.
    We have since--a month or two went by after 9/11--been 
gradually restoring the capability of the organization to do 
fisheries enforcement, but in the fiscal year 2003, given the 
President's request, our concentration on port security will 
require, at least, a level of effort adjustment from our other 
significant mission areas in order to concentrate on the first 
year of a building process to gather the Coast Guard's 
wherewithal to do port security at its new higher level, as 
well as return fully to the 100 percent levels of our other 
mission areas.
    The supplemental, for example, restored a budget line item 
that said, reduce the operational capability of the 
organization by 15 percent. Among other things, the 
supplemental has enabled us to go back to a 100 percent 
capability of the organization and use it around the country, 
and that has all been annualized in the President's request for 
2003.
    Senator Stevens. As I said, I do not know of an officer I 
have more confidence in than you, Admiral, but when I look at 
this budget, headquarters office is going up from $234 million 
to $371 million, headquarters managed units going up from $62 
million to $102 million. The basic functions of the system, if 
you look down each one of the districts, has an increase, 
fairly substantial increase, except for the 17th. It is flat. 
It is flat right across the board.
    Admiral Loy. Let me look at that, Senator Stevens. I owe 
you a good answer, and I do not have it with me this morning. I 
will get back to you.

                             C-130 AIRCRAFT

    Senator Stevens. We put money in for the C-130's, and 
really I think it was the 2000 supplemental. What has happened 
to that money? I noticed--is there an error in your layout that 
that is not--I am told that that 5-year capital plan does not 
show the $30.5 million that was in the capital plan for last 
year.
    Admiral Loy. Sir, with respect to the J models that were 
funded in the fiscal 2001 Military Construction bill, as I 
recall, Senator Stevens, this is where we are with that 
project. $468 million was appropriated for six of those assets. 
First and foremost, we had a contract with the Air Force in 
December of 2000 that enabled us to procure the six airframes 
that were part of that buy.
    There is about $110 million, as I recall, left from that 
Military Construction bill. We are using that to develop the 
notions associated with workforce front end analysis, Coast 
Guard requirements to the aircraft in terms of modifying it, 
interim maintenance, et cetera. We probably are short about a 
$200 million AC&I requirement in order to finish off the 
procurement of those particular airframes.
    I think as a matter of fact I and Mr. Jackson, the Deputy 
Secretary, have been trying to arrange an opportunity to sit 
down with you and Congressman Young to sort out precisely what 
we should be doing with the J contract as it relates to the 
immediate future, so we owe you a good conversation, Senator 
Stevens. We will be trying to arrange that.
    Senator Stevens. I would like to pursue that. That is 
really related to the drug enforcement effort, it sort of seems 
to me by the pie chart, sort of being softened a little bit, 
and out of necessity, I take it.
    Admiral Loy. Yes, sir. We have been trying to get back to 
chat with you and Mr. Young about it, who has sent us a piece 
of correspondence on the same issues, sir.

                COAST GUARD RECRUITING AND REINLISTMENT

    Senator Stevens. If I could ask one last question, Madam 
Chairman, what about recruitment? How is your recruitment? How 
does this compare now to last year at this time, and has it 
been impacted at all by the attacks on our Nation?
    Admiral Loy. We have been watching for a bump, sir, and we 
actually went back and did some exploration about the same kind 
of a period before and after crises that the Nation has faced 
in the past. We have not seen a patriotic bump in recruiting, 
nor have the other four services, to my knowledge, and I have 
asked my personnel human resources guy to be touching bases 
with the other services, but recruitment in general, sir, we 
are doing okay.
    I think it is the nature of the other kinds of things that 
the Coast Guard does, in addition to national security 
requirement kind of business, that attracts an awful lot of 
very terrific young Americans, so we are doing fine with 
recruitment. We are not seeing any kind of a bump.
    Senator Stevens. The flip side of that coin is 
reenlistment. How is that? Is it up or down?
    Admiral Loy. We are about even at the moment, and we are 
expecting, as a result of what this Congress and the past 
several have concentrated on in terms of pay raises and health 
care adjustments and retention--I am sorry, retirement 
adjustments, we are expecting probably about a 5 percent 
positive tick up as it relates to our retention in fiscal 2002, 
and we are watching that very carefully, Senator Stevens, 
because all of this recruiting and retention issue, I have 
always been infinitely more concerned about retention than I 
have about recruiting, and the experience drain that the last 5 
years or so of the nineties represented to all of the services 
was very, very real, but it looks like we are going to have a 
small come-back in 2002, sir.
    Senator Stevens. Would you permit me just one last 
question?
    Senator Murray. Absolutely.
    Senator Stevens. Are we allocating enough money in the 
Coast Guard for recruiting and retention, Mr. Mead?
    Mr. Mead. I think you could always argue for a little bit 
more for that, frankly. I think there are some major unsettled 
areas in the Coast Guard's budget, and that is one of them, and 
I am most concerned, though, not with the recruitment and 
retention element. I am most concerned with these two large 
acquisitions and how much they are going to end up costing, and 
what they will actually be for, what their time line is going 
to be, and what the implications of that will be on other 
missions and other activities such as in the 17th District.
    Senator Stevens. It is not just the Coast Guard. They think 
we have been pushing money at modernization and acquisition 
and, as Congress does it, I do not think we have looked down 
the line at the requirement of people to man increased number 
of vessels, planes, et cetera.
    I do not think we have really been fair with you in terms 
of anticipating the needs of the expanded Coast Guard or Air 
Force, whatever. I am worried about our reenlistment rates, 
particularly in the area of pilots, and I am worried about the 
training rates in terms of people for these new activities, 
particularly in the area of port security. We cannot continue 
to borrow. When you borrow from an area like ours, you have to 
pay it back. We need replacements in the system to do that.
    Admiral Loy. Yes, sir. Your comments are right on target. 
There are probably three specialty areas that we have been 
watching with some concerned, fixed wing pilots, naval 
engineers, and anybody with an IT kind of a background, 
especially, as I said, in the last 5 or 6 years.
    The notion that the grass was always greener in the strong 
economy of the late nineties was driving a lot of people to 
make those kinds of judgments, but I think even--you never want 
to look for a silver lining in a dark cloud, but if there is 
one with respect to with a softening of the economy, a lot of 
people are making those judgments a lot more methodically today 
and staying in the service as opposed to leaving, and we are 
going to look for that, and I think we are going to get about a 
5 percent positive tick in 2002 in our retention, sir.
    Senator Stevens. I would like to tie some of the 
educational aid money to some service and uniform as we expand 
that. We have got to look somehow at giving a little better 
push to people to sign up.
    Admiral Loy. Yes, sir. The other thing with respect to the 
Deepwater project, we have had, looking over the shoulder of 
the project designers from the very beginning, the workforce 
implications of the project, so as it relates to competencies 
and skill sets and all of that, we are very attentive to what 
we will need in the future workforce in the Coast Guard 20 
years from now, 15 years from now, 10 years from now, as we 
watch our Deepwater assets come online.
    Senator Stevens. Thank you very much. Thank you, Madam 
Chairman.

                     DEEPWATER PROCUREMENT STRATEGY

    Senator Murray. Mr. Mead, you alluded a moment ago to the 
Deepwater program, and you have done a major assessment of 
that. Prior to September 11 this program was considered to be a 
priority initiative to replace the Coast Guard's aging assets 
that operate in the deep water environment. Since September 11, 
the Deepwater program has suddenly been transformed into a 
priority for port security and homeland defense in the coastal 
environment. Do you think the Coast Guard should revisit its 
Deepwater procurement strategy in the wake of September 11?
    Mr. Mead. No, I would not revisit the strategy. They have 
been on this strategy for several years now, and what you 
really need--I think that bottom line on this is, you need to 
know how much the Deepwater project is going to cost, what it 
is going to buy and when, and how long of a time line it is 
going to operate on.
    I think the acquisition strategy of trying to get three big 
contractors to give a proposal for the contract was sound, and 
a lot of people have thought, including us, that that was 
fairly innovative. The down side is that, unlike a traditional 
acquisition, you do not know how much exactly it is going to 
cost, or what it is going to buy, until they select a 
contractor. I am really--I am nervous about the time line here, 
and when I look at the Coast Guard's capital plan and the time 
line for Deepwater, the floor on it is about $10 billion. Is 
that $10 billion going to be spread out over 15 years, 20 
years, 30 years, or is the project actually going to cost 
substantially more than that?
    If you look at the 5-year capital plan, in the years 2004 
and 2005, the capital plan allocates zero to shore facilities, 
and I expect the Coast Guard is going to probably need more 
than zero for their shore facilities during those years. Aids 
to Navigation is another, and homeland security, I do not think 
all of the cards are in on how much the Coast Guard is going to 
have to apply to that area.
    I mean, there has really been not that many months since 9/
11, and 9/11 was in many ways a case of first impression for 
the Coast Guard. The same comments apply to the National 
Distress System project, although to a lesser degree. Frankly, 
I think on some of the issues we mentioned, I think the Coast 
Guard should reflect on whether that 10 percent coverage gap 
ought to somehow be covered, and if the repair time ought to be 
decreased, that will cost money.
    Now, do we do that, do we plan for that now, or do we wait 
3 or 4 years and say, well, now we want to fix it?
    Senator Murray. Well, Admiral Loy, last year the head of 
the Deepwater program, Rear Admiral Stillman, committed to us 
that by the time we marked up the appropriations bill this year 
he would be able to tell us precisely what we would be funding, 
and his words were, line by line and dime by dime.
    It appears that you have slipped your Deepwater contract 
until the third quarter now, and as a result you are asking us 
to appropriate $500 million into a black hole, the precise 
problem that Rear Admiral Stillman said would not happen again. 
What has led to this delay in your awarding of the Deepwater 
procurement contract?
    Admiral Loy. Thank you, Madam Chairman, for asking that 
question. A number of things here. First of all, we can give 
you three versions of line by line and dime for dime today. It 
would have to be a proprietary brief so as to allow the 
competitiveness of the procurement to continue along that line, 
and so we can offer--and I think we have already spent a little 
bit of time with Mr. Rogoff--a proprietary brief that offers 
very, very good insight as to the specific assets that would be 
part of each of the proposals that are currently being scrubbed 
by our team, and then when we award the contract we will be 
able to do, line for line and dime for dime, the winner as it 
proceeds out over time.
    So the point, and I am sure what Rear Admiral Stillman 
meant to say, is that--and he is absolutely right on target--if 
the timing of the hearing season would have been attendant to 
the expectant April award that we had on schedule as he 
testified last year, or as he spoke with you last year, we 
would have been doing exactly what he explained.
    Our notion at the moment is that several things crept into 
that calendar. The first was the insistence by OMB that yet 
another independent review be undertaken, which was, in fact, 
accomplished by ASI. Secondly, I personally said I want at 
least 30 more days in the source selection scrubbing process, 
because we are facing a 20-year effort here, a multibillion 
effort for our organization, and whatever the little delay up 
front a month is, is worth it to make absolutely certain that 
we cross all the T's and dot all the I's and get it right.
    So I think there is a very easy and solid explanation for 
the delay as it relates to a post 9/11 implication. Deepwater 
is infinitely more important to us on 9/12 than it was on 9/10, 
because what it will bring to the table with respect to its 
focus on C4ISR is interoperability, is capability, is 
modernized assets now rather than later, that will, in fact, 
have everything to do with adequate maritime security and the 
return to the mission areas that both you and Senator Stevens 
and others have discussed.
    IDS was developed, interestingly enough, anticipating 
asymmetric threats. It is all about the simple mission task 
sequence we do for everything else. We surveil, detect, 
classify, identify, and prosecute. We do that in search and 
rescue, we do that in counterdrug, we do it in fish, we do that 
in maritime security, so the soundness of the strategy that was 
used to develop IDS is absolutely right on target for the post 
9/11 environment, Madam Chairman. It only strengthens the 
requirement that this program is absolutely needed now, and 
must go forward, as Senator Stevens inferred.
    Senator Murray. I am looking forward to seeing your dime-
by-dime report.
    Admiral Loy. We can arrange a proprietary brief now, ma'am, 
or if you prefer to wait until the contract is awarded.
    Senator Murray. You already have $300 million. You are 
asking for $500 million more and the mission has changed, and 
we just want to make sure we know what the money is going for.
    Admiral Loy. Absolutely.

                     NATIONAL DISTRESS SYSTEM AUDIT

    Senator Murray. Mr. Mead, you just completed an audit on 
the Coast Guard's plan to modernize the National Distress and 
Response System. You talked a little bit about that. You said 
that the Coast Guard has eliminated important, critically 
important capabilities from their proposed new system in order 
to bring the cost of the system under control.
    Admiral Loy, how do you respond to Mr. Mead's observation 
that you have dumbed-down the system and eliminated the 
capability to pinpoint the location of distressed boaters?
    Admiral Loy. I think the notion here is this. In phase 1 of 
the contract, of the project, I am sorry, it was enormously 
important for us to get the full spectrum of what 100 percent 
would cost us, and what would the capability get that we paid 
for, and at lesser levels. When last year we were testifying, 
Mr. Mead was discussing the billion-dollar-plus proposals that 
were coming back from the three contractors involved with the 
NDRSMP contract.
    We looked for and challenged each of them to show us where 
the step functions were that would offer us considerable 
savings for either less capability, what might be less 
reliability, what might be less recovery time to downed tower, 
or what might be even less coverage. We looked at those very, 
very carefully, and selected those.
    In terms of the hard specs that went out with the RFP just 
last week, that would make good cost-effective benefit-to-cost 
decisions in favor of the project. For example, with respect to 
reliability, if we pushed a .9995 insistence on reliability, as 
opposed to .995--three 9's and a 5, instead of two 9's and a 
5--we could spend an extra $100 million for the program. I did 
not think that was a smart thing to do, in a benefit-to-cost 
analytical read, and so we chose to adjust that specification 
in the RFP to not spend that $100 million.
    The same thing has to do with system restoration, the 
notion to be able to restore it in 6 hours as opposed to 24 
hours. We saved about $100 million in that, we guess, or we 
think, by shifting to the 24-hour standard. The 6 would require 
us to literally have aircraft available on alert to carry 
people to those sites to restore the towers.
    Senator Murray. Will this pose risks to mariners that are 
out there?
    Admiral Loy. I think the risk to the mariner is 
infinitesimally small compared to the value we get out of the 
system. We are now asking for--the 24-hour system, first of 
all, affords us the chance to simply have the contractor 
construct portable towers and be able to get those portable 
towers to the replacement towers in a 24-hour window.
    Senator Murray. I think it was Mr. Mead who said in his 
testimony in a hurricane it is one thing, but during other 
circumstances, can't it be done in 6 hours?
    Admiral Loy. It will be done in between 6 and 24 hours. 
This 24 hours will be the standard we insist it be done within, 
but my notion is that to adjust the taxpayer's price tag for 
this system and to eliminate as many dots as we possibly can 
off of Ken's chart, we are serving the taxpayer well by 
accepting a business standard, if you will, with respect to the 
6 and 24 issue, and the same thing then goes to the coverage 
gaps, Madam Chairman.
    We could build 300 more towers and cost another, between 
$200 and $300 million to the program, and eliminate all of the 
dots on Ken's chart. My notion again is, we should be 
selective, and we always will have the opportunity in the wake 
of the project as it comes online to test it, see exactly what 
it is and tweak it for what it is worth.
    What we should be concentrating on is the great positive 
that is going to accrue from this project, and I have a simple 
chart----
    Senator Murray. Admiral, I would agree with you, but the 
last mile is always the most expensive, and when you do not 
eliminate all the dots, I sometimes worry the most remote areas 
where distress can be the most acute will be the ones we do not 
reach.
    Admiral Loy. And we will have to make those marginal 
judgments, Madam Chairman, I could not agree with you more, but 
to build a $1 billion-plus system where you can gain 
reliability coverage and the other dimensions we sought that I 
think are perfectly adequate to the challenge, we should be as 
cost-conscious as well as performance-conscious as we are going 
to be in this project.
    Senator Murray. According to the IG audit that I saw, you 
eliminated the capability to transfer classified information as 
a part of the system.
    Admiral Loy. Absolutely not. We have the ability to 
transfer classified information, the capabilities in the system 
with respect to direction-finding multichannel communications 
capabilities. I would be happy to offer, Madam Chairman, a 
briefing for you.
    Senator Murray. The IG audit said that is true, and they 
also said you reduced your ability to talk to other fellow 
State agencies, including the DOD.
    Admiral Loy. The communications capabilities and the 
requirements in the RFP that went on the street last week 
remain intact, Madam Chairman.
    Senator Murray. Mr. Mead.
    Mr. Mead. We will stand by what we said in our report, and 
we will get together with Admiral Loy to reconcile what the 
differences are.
    Senator Murray. I look forward to hearing from both of you 
after that.
    Mr. Mead. I think we all know that if, after this system is 
up, if a mariner in distress is caught up in one of these dead 
zones, guaranteed, we will come back and say, why didn't we 
close that.
    Senator Murray. I cannot agree more, and invariably it will 
be somebody on this committee who will be representing that.
    Admiral Loy. But that will cost us another $500 million, 
and we just need to understand that.
    Senator Murray. I thought that was the central purpose of 
the replacement to make sure we covered those gaps. You know, 
we have a system out there right now. What we have is gaps. I 
thought we were eliminating the gaps.
    Admiral Loy. We are trying very hard to eliminate as many 
of the gaps as possible, yes, ma'am.
    Senator Murray. That is the committee's concern.
    Admiral Loy. To go on, I think our challenges are going to 
be less about money, Madam Chairman, and more about things like 
property acquisition in terms of where we want to put a tower. 
If we need a tower in the Everglades, if we do need a tower in 
places--one of the Congressmen from Massachusetts has reflected 
on Mr. Mead's report and wondered about property in Chatham. 
Well, if we need property in Chatham with respect to a tower, 
that will be more a hurdle for us to get over, I am convinced 
that the dollars that the Congress and the administration are 
willing to spend on this project. That is going to be, I 
think----
    Senator Murray. The problem, is that when we are asked for 
and appropriate the numbers for the NDRSMP we were told that it 
would eliminate the gaps. That is the expectation.
    Admiral Loy. Yes, ma'am, and I owe you a very, very good 
read, am I able to do that at the 100 percent level, or am I 
able to do that at the 99 percent level, and where would the 
resultant 1 percent be.
    Senator Murray. We need to know where that 1 percent would 
be. If it is on a mountain in the middle of the country, I am 
not worried.

                       CAPITAL BUDGET CONSTRAINTS

    Let me move on. Mr. Mead, in your audit, you discussed how 
the combination of the Deepwater program and the National 
Distress and Response Program runs the risk of crowding out 
other critical Coast Guard procurements, including procurements 
necessary for Search and Rescue.
    In the 2002 Appropriations Act, we prohibited the Coast 
Guard from going forward with the Deepwater Integration 
contract until the Director of OMB and the Secretary of 
Transportation certified to us in writing that Coast Guard's 
capital investment plan and OMB's budget targets fully 
incorporates the needs of the Deepwater program, the National 
Distress and Response System, and other essential Search and 
Rescue procurements. Based upon your audit, do you believe that 
the OMB Director and the Transportation Secretary can 
legitimately certify to us that they have budgeted adequate 
funding to finance all of these needs?
    Mr. Mead. Well, I am glad--it is not my responsibility, of 
course, to make that certification. That is the Coast Guard and 
the Secretary and the Director of OMB, but before I would put 
my name on the dotted line in order to certify to you that 
everything is fully funded, I would want to know how much it is 
going to cost, and what I was going to get for it, and I 
personally would have to wait until I understood which 
contractor was going to go into it, and what that contractor's 
line-by-line was, for which ship, when, and I also would want 
to know, as Admiral Loy puts it, when Deepwater will come of 
age, and the implications that is going to have for the funding 
stream.
    There are two elements of this certification, Senator, and 
one element is that the Coast Guard have in its capital plan 
funding within the OMB targets. I could say right now, yes, 
they have done that. It is within the OMB targets. It has been 
submitted with the budget of the Department.
    The other element of this is that it is fully funded, and 
that implies that I know exactly what I am going to buy and 
what I need, and I do not know that yet.
    Senator Murray. Admiral Loy, when are we going to see the 
certification occur? Will it be before we know who has the 
contract?
    Admiral Loy. Yes, ma'am. The certification, as I understand 
it, has already cleared both OMB and the Department.
    Senator Murray. So we have the certification, but as Mr. 
Mead points out, we do not know who the contractor is yet, so 
the cost could change.
    Admiral Loy. The cost parameters of the RFP on the street 
remain affixed, Madam Chairman, and it is all associated with 
the 1998 baseline, $500 million a year over the course of 
approximately 20 years.
    Now, we fully expect--and this notion of will it be 20 or 
30, that is all about, across that 20 years there is very 
likely to be variations as the Congress considers the annual 
request that is forthcoming from the administration each year, 
so if, in fact, for example, there would be a couple or $400 
million with the 1998 baseline, $400 million a year, would that 
mean that the project was a 22-year project instead of a 20-
year project? You see what I mean.
    Those variations are certainly possible as the Congress 
exercises its authority each year and as the administration 
makes its request each year, but the certification is already 
cleared, and I was actually hoping I would be able to bring it 
to you this morning, but the Director has not yet signed it 
over at OMB.
    Senator Murray. How much is assumed to be budgeted for 
other critical Search and Rescue procurements under that 
certification?
    Admiral Loy. Across multiple years? I will get you those 
numbers, Madam Chairman. I do not have the 2004 or 2005 numbers 
in my head in terms of the rest of the improvement for the SAR 
program that is the game plan for SAR. That Mr. Mead's staff 
was just briefed on the other day and found to be very 
satisfactory, but I can get you those numbers.
    Senator Murray. Well, I think what concerns me is, we are 
certifying it before we know how much it is going to cost, what 
we are going to get, and what other critical missions--not 
missions, but housing facilities, shore facilities are going to 
be crowded out as a result of that.
    Admiral Loy. Yes, ma'am, and of course CIP, as we all know, 
within the restraints associated within the mechanics of 
producing it each year, are keyed to projections and keyed to 
projections limited by, I think it is a 2.0, or 2.2 percent 
associated rise inside the OMB projections, so if you look 
backwards each and every year when our real needs had been 
adequately expressed to the Director, the request for our AC&I 
levels on those attendant years have been attendant to the 
needs of the organization, so it is not that I ignore the 
notion of what the CIP is all about, but we have to, I think, 
take it with the notion of understanding the mechanics required 
to produce it.

                     SEARCH AND RESCUE ENHANCEMENTS

    Senator Murray. Let me change topics entirely, Admiral, and 
ask you about a report the Coast Guard issued about the March 
2001 tragedy in which two Coast Guardsmen lost their lives at 
station Niagara, in the Great Lakes. That report reiterates 
many of the findings of the IG regarding the lack of adequate 
training for boat crews, and the lack of adequate equipment.
    One of the recommendations of that report is for all Coast 
Guard Search and Rescue personnel to be issued their own 
antiexposure suits. Is that recommendation fully funded in your 
fiscal year 2003 budget?
    Admiral Loy. Yes, ma'am.
    Senator Murray. It is?
    Admiral Loy. Yes, ma'am.
    Senator Murray. Another recommendation from that report is 
that the Coast Guard should rapidly pursue the National 
Distress Response System authorization project, particularly 
the asset tracking components. Has your newly configured 
National Distress Response Modernization project eliminated any 
aspect of your ability to track the whereabouts of Coast Guard 
Search and Rescue assets?
    Admiral Loy. No ma'am. Asset tracking remains a critical 
feature of the new system, and absolutely an imperative in the 
RFP. Beyond that, just because in the wake of Morning Dew 
several years ago and, of course, Niagara and any other kind of 
an incident like that, we try not to wait, if we can, so a 
couple of the features associated with the lessons that we 
learned from those experiences are already in place.
    For example, the direction finding capability, the digital 
voice recorders, I just was down, for example, at our station 
on Lake Pontchartrain in New Orleans at the beginning of the 
week, and went directly to their command and control center to 
see precisely whether or not that capability was there, and in 
fact was delighted that it was.
    So as part of the staffing increases that you have 
directed, that is a net gain for us in terms of command 
supervision and capability staffing, obviously with respect to 
boat crews and boats themselves, but the specific answer to 
your question, asset tracking, absolutely part of the 
requirements on the street.
    Senator Murray. One of the findings of the investigation 
was that, the chain of command failed to have a common 
understanding of the level of risk, or of various Search and 
Rescue missions. Do you think that is a common problem?
    Admiral Loy. We have watched that very carefully, and this 
was about several things, Madam Chairman. It was about, for 
example, should we have a national standard with respect to 
communications checks from deployed assets--in other words, 
should they check in every hour, should they check in every 15 
minutes?--and we believe there is a requirement for a national 
standard to then be--to be delegated to the local commander, or 
something higher than the national standard in areas like that.
    So we are looking with respect to check-in times, with the 
adequacy of the size of boat crews, all those things are being 
very much reviewed in the wake of not only Morning Dew but the 
Niagara as well, and I think we have a handle on the national 
standard issue.
    We then want to be able to make sure that if the Officer-
in-Charge of a station in the middle of a storm, as opposed to 
a bright, sunny day, or night as opposed to day, wants to 
challenge and raise the standards of performance for his boat 
crew and for the supervision and oversight, he has the ability 
to do that.
    Senator Murray. When we think of the need to improve Search 
and Rescue, we commonly think of permanent individual stations, 
but the finding of that investigation said Group Buffalo lacked 
an awareness of ongoing Search and Rescue Station operations. 
That is a pretty disturbing finding. How is it that your Group 
Commanders did not have an appreciation of the ongoing 
operations of their Search and Rescue Stations?
    Admiral Loy. Well, I am concerned about that as well, and 
the administrative investigation for the Niagara incident is 
just about finished. It actually parallels and tracks pretty 
closely with the mishap analysis, which is what was published 
at the end of last week.
    If the investigation reveals either on the specific case 
that this Group and its doctrine was not overseeing adequately 
the Station's performance as the stations are distributed 
around the group, we will deal with that. I think the doctrine 
that I have reviewed in our Search and Rescue Manual is sound 
with respect to the oversight responsibilities of the Group 
Commander to the stations that they actually have in their 
group.
    Senator Murray. Is this a problem that is Coast Guard-wide, 
and if so----
    Admiral Loy. Yes, ma'am. That is the issue I was concerned 
about.
    Senator Murray. Were there any initiatives in your budget 
request that will help us address that?
    Admiral Loy. The issues in the budget request that would 
help us address that would be about Group and Command Center 
staffing adequacy, again which was part of Ken's audit over the 
course of the last year, and we are inserting, if you will, 
into the Group Offices, the Command Center staffing, greater 
numbers so that we are not dealing with fatigue factors, for 
example, or we are not keeping somebody up 24 hours, when in 
fact he should be getting a good, solid night's rest.
    Mr. Mead. Madam Chair, I would just like to reiterate, we 
do think the Coast Guard has a good plan that is responsive, 
and obviously nobody counted on 9/11 coming along, and the 
clear test, of course, is going to be in its execution, but the 
plan that we were briefed on was substantive, it was solid, 
there was not a lot of puff, and I think if they go forward 
with dispatch and execute it, that you will be quite pleased.

                       NAVY SECURITY INITIATIVES

    Senator Murray. Let me ask you about your Navy support, 
Admiral. Immediately after September 11, you began discussions 
with the Navy to substantially improve the capability and 
interoperability of Coast Guard cutters for homeland defense 
that included improved weapons, communications systems centers, 
and protective equipment items that the Navy had purchased for 
the Coast Guard in the past.
    At one point I know you were hopeful of receiving $240 
million, but in the end they provided you with only $2 million. 
What does that tell you about their level of support?
    Admiral Loy. I think we have to take the bigger picture 
first, Madam Chairman. I mentioned earlier the first phone call 
I had on 9/11 was about Secretary Mineta and standing up the 
reserve arm. The second phone call I got was from Admiral 
Clark, Admiral Vern Clark, the Chief of Naval Operations, a 
very strong phone call offering to me the full support of the 
Navy as necessary.
    We have had a number of very solid meetings, and the work-
up that we are currently engaged in with respect to the 
anticipated spring supplemental has a very strong Coast Guard 
set of requirements being reflected in the Navy's request that 
will go forward.
    Senator Murray. Will that be in the Navy's request?
    Admiral Loy. Yes, ma'am. I cannot tell you what happened 
outside of the Navy and the rest of the efforts in DOD, but you 
need to be aware that at the Navy level, the Navy-Coast Guard 
level understands the thing you just mentioned about the kinds 
of things that have been funded in the past, and they take 
their responsibilities very seriously.
    Senator Murray. Some of the equipment enhancements, it 
appears to me, that are in your budget request are the same 
systems you hope the Navy would do for you 4 months ago. Are we 
going to see those requests from the Navy?
    Admiral Loy. We deconflicted, if you will, that set, that 
list.
    Senator Murray. That must be a military term.
    Admiral Loy. They are not overlapping. We do not have 
things on both lists, and so the kinds of things that we would 
be seeking from the Navy have to do with sensoring and 
interoperability, and weapons and ammunition.
    Senator Murray. So we are not going to see duplicative 
requests?
    Admiral Loy. Exactly. That is what we are guaranteeing as 
we build the spring supplemental.
    Senator Murray. Let me just make sure, did everything come 
off the Navy's list and come through your request to us, or did 
they take any of it?
    Admiral Loy. They took a good bit, yes, ma'am, in terms of 
what it is that they are going to seek on our behalf in the 
spring build.
    Senator Murray. I will be looking forward to seeing that.
    Admiral Loy. I will keep you posted precisely on the things 
on the list.
    The other thing I was going to add, Madam Chairman, is, 
Admiral Clark also made some very significant decisions that 
have been enormously helpful. For example, they were about to 
decommission the Cyclone class patrol craft. Currently, those 
13 assets are available, 13-170 foot patrol craft with full 
Navy crews are being employed by Coast Guard Commanders at 
various ports around the country, including Puget Sound, so 
that was probably a $65-million decision he made, just because 
he knew it was the right thing to do, and his personal, and 
Secretary England's personal attention to understanding how the 
Navy can supplement, complement, and help the Coast Guard in 
its responsibilities for the maritime security piece have been 
admirable.

                        PORT SECURITY CHALLENGES

    Senator Murray. Let me switch topics again, Admiral. 
Seattle and Takoma are two of the largest container ports in 
the country. They are also cities with particularly bad heroin 
problems. Some people have speculated that those two facts are 
related, that the amount of container traffic from Asia passing 
through our ports and Vancouver contribute to the drug abuse 
problems, and when we think about the need to improve port 
security, containers pose a very difficult challenge, I think 
we can all agree.
    Right now, Coast Guard and Customs are only able to 
inspect, as I understand, about 2 percent of the containers 
that are in the U.S. How is that percentage going to change as 
a result of the fiscal year 2003 budget?
    Admiral Loy. Madam Chairman, I think the whole notion of 
Maritime Domain Awareness, you might recall the five points I 
mentioned in terms of the challenge that we all have looking 
forward to a maritime security plan for the Nation. I believe 
information is the key to our insight to doing a better job 
with respect to doing a better job with container security in 
this Nation.
    As we speak, I have a delegation over in London working 
with the International Maritime Organization to take on the 
challenge of grappling with this container security issue at 
the international level. More importantly, in the United 
States, Secretary Mineta has asked MARAD and Coast Guard and 
the other interested elements--because it is a transportation 
dilemma. 6 million of these things come into our seaports, 17 
million of them come into our country, the other 11 coming 
across the Canadian border or the Mexican border on trucks or 
trains or whatever.
    So this issue I believe is, from the maritime security 
perspective, the number 1 challenge for our Nation to get our 
arms around. Whether it is in Puget Sound and a connection to 
counternarcotics, or whether it is anywhere else across the 
linear borders with Canada and Mexico, or the ports and 
waterways of our country, container security has to be dealt 
with.
    Senator Murray. How long is it going to take the IMO to 
come back with recommendations?
    Admiral Loy. I have accused them of being glacial in their 
pace of activity often, but I have a dedicated Secretary-
General's promise that we will gather from this year, by 
December of this year some constructive efforts not only with 
respect to container, but credentialing of international 
seamen.
    200,000 sailors come to the United States on commercial 
ships on an annual basis. We need security plans for vessels 
and passenger terminals and off-shore structures. There is a 
half-dozen or more very right things for us to be grappling at 
the international level to raise the standards in the classic 
notion that a rising tide will raise all boats.
    Senator Murray. Do you really think we can depend on 
nations that originate these shipments to give us the kind of 
security we want here?
    Admiral Loy. Certainly not exclusively, absolutely not. In 
fact, many of the nations of the world, as we all know, will 
find it enormously difficult to have the assets necessary, 
financial or otherwise, to make the commitments we are asking 
for.
    But the marketplace is the United States, and if, in fact, 
they choose to continue, whether it is shipowners, or 
charterers, or insurers, or anyone else, if they choose to 
continue to do business in the United States, akin to what you 
suggested earlier, ma'am, where what happened in the aftermath 
of the EXXON VALDEZ, and a decade's worth of experience of 
watching the United States set standards to which the rest of 
the world then rallied to, my guess is we will be doing the 
same thing with respect to maritime security.
    Senator Murray. If we cannot keep heroin out of containers, 
it is hard to believe we could keep other lethal products out.
    Admiral Loy. Yes, ma'am, it is a nightmare scenario that I 
wake up with every night.
    Mr. Mead. We are auditing container security this year. It 
is very interesting, one component of the audit we want to 
include is the trends in containers coming to this country, 
what the trend line looks like, so you can see what type, the 
magnitude of the problem, and also this is a big cross-modal 
issue, because it used to be that a container you put on a ship 
you could not put on a truck. You had to take stuff out and put 
it in another container. Now, you can lift it and go, and you 
can put them on trains, you can put them on trucks, and it is 
truly a cross-modal issue.
    Senator Murray. It is a huge economic impact, and so I will 
be looking forward to that.
    Admiral Loy. That is the challenge, ma'am, absolutely. we 
all understand that the economic, or our prosperity is built on 
our economic foundation, and at the same time we are trying to 
identify the small percentage of the bad guys--I do not know 
what that number is, 2 percent, 5 percent--we want to be 
identifying the good guys and actually facilitate their 
commerce through our system.
    But Hart-Rudman, the study that Senator Hart and Senator 
Rudman did, that was precisely the dichotomy, the economic, the 
balance between facilitating commerce on one hand and being 
concerned about security on the other.
    Senator Murray. It is a challenge.
    Admiral Loy. Yes, ma'am.

                    COAST GUARD'S NEW SECURITY TEAMS

    Senator Murray. Admiral, as you know, the Committee doubled 
the number of Marine Safety and Security Teams you requested in 
the 2002 supplemental. One of those teams is going to be 
located in Puget Sound, so the Coast Guard does not have to 
continue to divert its Search and Rescue assets in order to 
provide force protection for the Navy. When do you anticipate 
commissioning that new unit?
    Admiral Loy. I do not have a date for you, ma'am, but it is 
very quick. The four from the supplemental will be augmented by 
two more in the 2003 request to an initial inventory of six. 
The four sites, Puget Sound, Norfolk, LA/LB, and Houston-
Galveston, are set for the four that came from the 
supplemental. I will get you a date, and frankly, I would be 
delighted if perhaps we could gather at that date and cut a 
ribbon.
    Senator Murray. Do you anticipate sooner rather than later?
    Admiral Loy. Absolutely, yes, ma'am.
    Senator Murray. Any hint at what sooner rather than later 
means?

               COMBINING COAST GUARD WITH OTHER AGENCIES

    Admiral Loy. I will call you this afternoon, if I may.
    Senator Murray. Admiral, we read with interest about the 
debate within the Administration over whether the Coast Guard 
should be combined with the Customs Service and the INS into a 
new megaborder security agency.
    Now, I recognize this could be a difficult issue for you to 
talk about, but since this is your last hearing I wanted to 
give you an opportunity to give us your personal view on that 
question, recognizing that the Administration has not yet 
reached a position on this. What are your personal thoughts 
about the merits of combining the Coast Guard with all of those 
other agencies?
    Admiral Loy. It is a very complex question, and it is 
attendant with all kinds of porcelain that people do not like 
to see broken pieces of in terms of turf, whether it is 
Committee structures on the Hill, or organizational structures 
in the Administration.
    My thoughts at the strategic level are these. We chose to 
reorganize the Department of Defense in 1947, not 1944 or 1945. 
I think that is instructive. We waited for the crisis, World 
War II to be over, and then we reorganized the Department of 
Defense. I think good old management 101 suggests do not 
reorganize in the middle of a crisis, and do not leap to a 
notion that moving boxes around on an organizational chart is 
necessarily going to improve whatever it is you are trying to 
improve.
    A second notion, also sort of management 101, I guess, is 
that form should follow function, and that suggests to me that 
the much more important discussions to be having right now are 
the functionality discussions. If we can find areas, whether it 
is port of entry inspection services, whether it is between 
ports of entry, whether it is inclusive of the exclusive 
economic zone and the territorial sea, whether we can do--we 
have a criteria set. Can we be more efficient, can we be more 
effective, can we serve customers better, and can we enhance 
security?
    If any of those four, or some combination of those four 
criteria would be served well after a solid functionality 
review----
    Senator Murray. So are you suggesting that maybe part of 
the agency, part of some function can be----
    Admiral Loy. No, ma'am. I am looking at the service 
provided. For example, at a port of entry, if we see someone 
carrying their customs declaration form, whether it is an 
airport, or whether it is a linear border port of entry, go and 
have to show it to this person with this uniform on, or that 
person with that uniform on, and this person with this uniform 
on, if there is an efficiency process that we can gauge there, 
we should take a very strong look at doing that more 
efficiently, that function more efficiently than in the past.
    From the Coast Guard's perspective, because of the lessons 
we learned for the millionth time on 9/11, we should not be in 
the business of slicing and dicing mission areas of our 
organization. What the American taxpayer gets best from the 
Coast Guard is for a single overhead, all of those missions 
accomplished. That should be sacrosanct, as should our military 
nature, because of the discipline that it brings to what we do 
for America.
    But the other important thing to take stock of at the 
moment, Madam Chairman, is that TSA represents an enormous 
undertaking for the Secretary of Transportation. The Congress 
has seen, with the Administration, in its wisdom to provide 
that challenge to Secretary Mineta. TSA eventually will be 
about more than aviation. It will be about the maritime sector, 
it will be about the others as well. Wherever the synergies 
associated with what is trying to happen in our transportation 
security system is being served, we do not want to trade 
synergies here.
    I think at the moment that for the foreseeable future we 
belong still in transportation because of this transportation 
security issue, which is multimodal in nature, and the maritime 
piece. Secretary Mineta needs to have that well-served for him 
in the Department.
    Senator Murray. To that point, the new TSA, as you said, is 
responsible for all modes of transportation, and we are told 
that Secretary McGaw intends to appoint an Associate Under 
Secretary for Maritime Security, and we are told that DOD may 
also be appointing a new Commander in Chief for the Security of 
North America. How does that chain of command work in the Coast 
Guard function under either of those two new structures?
    Admiral Loy. With respect to TSA, I believe that because 
they already have in the Coast Guard an organization that does 
all of the line work out in the field, there will be more of a 
liaison relationship with TSA and an oversight relationship of 
Under Secretary McGaw, and serving Secretary Mineta in that 
regard. They are not having--for example, they are having to 
stand up a 40,000 person organization, or whatever the number 
is at the moment, but most of those people will be focused on 
aviation security and the wherewithal to do what we need to do 
there.
    Senator Murray. My basic question is, who is going to 
determine the posture of the Coast Guard's maritime security 
efforts? Will it be the Commandant, will it be the 
Transportation Security Administration, will it be the new CINC 
who will be making those decisions?
    Admiral Loy. I will be developing the plans and seeking 
Secretary Mineta's and the President's blessing on the maritime 
security plan.
    Senator Murray. You would be determining what those plans 
are?
    Admiral Loy. Yes, ma'am. With respect to the new CINC, it 
is important for the Committee to know that literally from day 
one, if you will, on 9/11, we have been immersed in the work 
going on at Joint Forces Command down in Norfolk and with NORAD 
in Colorado. Those two are the elements that will be the core 
around which NORTHCOM--if that is, in fact, what occurs and the 
President agrees, NORTHCOM will have the homeland security 
responsibilities that DOD will bring to the table.
    It has already been--the designwork already has the Coast 
Guard as the lead agency for the maritime sector, as supported 
by a host of others in terms of what would be brought to the 
table for that new CINC, the homeland security chief in DOD, so 
in both cases we are already integrated as the maritime sector 
lever, if you will, in terms of getting the job done.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Murray. Admiral, again, as we end this hearing, let 
me just thank you for your tremendous service to this Nation, 
and I wish you the best in your future service, wherever that 
may be. I am sorry this is going to be your last opportunity.
    Mr. Mead, obviously, fortunately for us, unfortunately for 
you, you will be back again, but we appreciate your service as 
well.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

              Questions Submitted to Admiral James M. Loy

           Questions Submitted by Senator Barbara A. Mikulski

                         vessel tracking system
    Question. What progress have you made in working with the ports to 
identify and implement some sort of vessel-tracking system?
    Answer. The Coast Guard worked directly with the port industry in 
conducting Port and Waterway Safety Assessments in 30 ports to 
determine if a Vessel Traffic Service was needed to ensure a safe and 
orderly flow of marine traffic. Although these assessments had a safety 
focus, the information gathered in this process has been applied to 
determine if some sort of vessel tracking system was needed to enhance 
port security.
    The Automatic Identification System (AIS) will be the cornerstone 
sensor for vessel tracking in ports, port approaches, offshore areas 
and inland waterways. The Coast Guard has been working with ports and 
port users to test and develop AIS before its eventual phased-in 
deployment beginning in July of 2002. The Coast Guard is also working 
with the International Maritime Organization to accelerate the 
implementation date of AIS. The accelerated implementation schedule, if 
adopted, will require foreign commercial vessels arriving in the U.S. 
to have AIS by July 2004. A plan for establishing the AIS shore side 
infrastructure is being developed. This plan will deploy AIS receiving 
stations in strategic sites to monitor commercial traffic.
    The Coast Guard's National Vessel Movement Center is an 
administrative form of vessel tracking system utilizing a system of 
pre-arrival reporting. The Coast Guard worked closely with the marine 
industry in implementing this 96-hour advance notice of arrival system 
and continues to work with vessel operators and agents in operating the 
system.
    The Coast Guard is also working with our counterparts in the 
Department of Defense and local response organizations to determine 
where vessel tracking and monitoring systems are needed to protect 
critical assets and infrastructure.
    The Coast Guard's budget request reflects our highest priority 
needs with respect to Vessel Traffic Service and Automatic 
Identification System installations.
          benefits of the integrated deepwater system project
    Question. Can you discuss the benefits of the Coast Guard's 
Deepwater Project, particularly it's role in addressing the Coast 
Guard's aging fleet of cutters and aircraft?
    Answer. The Coast Guard's current fleet of deepwater ships and 
aircraft are aging and technologically obsolete. As a result, they lack 
fundamental capabilities and technologies necessary for efficient and 
effective mission performance. These capabilities include sufficient 
cutter speed, proper sensors and night operations capability on cutters 
and aircraft, interoperability between cutters and aircraft, adequate 
communications, and access to mission critical information. The lack of 
commonality between classes of ships and aircraft classes has also 
created major logistical and supportability hurdles and increased 
training requirements.
    The Integrated Deepwater System (IDS) will reverse the erosion of 
the operational effectiveness currently being experienced due to 
obsolescence and aging of Coast Guard cutters, planes, sensors and 
communications systems. Without the IDS, replacements would not be 
available in time to prevent a dramatic drop in operational 
effectiveness.
    The Coast Guard Integrated Deepwater System Program will renovate, 
modernize or replace aging cutters and aircraft that are approaching 
their end-of service life. Rather than replace the deepwater assets on 
a one-for-one basis as done in the past utilizing the traditional 
Federal acquisition paradigm, the Integrated Deepwater System Program 
is implementing an innovative Mission-Based Performance Acquisition 
approach that describes the capabilities needed to perform Coast Guard 
missions in the deepwater environment. The assets procured through the 
Integrated Deepwater System Program will be interoperable, employ 
state-of-the market technology, and be specifically designed to provide 
the Coast Guard the capabilities needed to perform current deepwater 
missions as well as future missions.
             deepwater operational capability improvements
    Question. How will the Deepwater Project improve your operational 
capability?
    Answer. The Integrated Deepwater System Program will improve the 
Coast Guard's operational capability. The overarching goal of the 
Deepwater Program is to maximize operational effectiveness while 
minimizing total ownership costs.
    Existing legacy cutters, aircraft and C4ISR lack capabilities and 
technologies necessary for efficient and effective mission performance. 
These capabilities include sufficient cutter speed, proper sensors and 
night operations capability on cutters and aircraft, interoperability 
between cutters and aircraft, adequate communications, and access to 
mission critical information. The lack of commonality between classes 
of ships and aircraft classes results in major logistical and 
supportability hurdles, as well as increased training requirements. 
Legacy (current) ships and aircraft are aging and are technologically 
obsolete.
    As outdated technology ultimately increases operating and 
maintenance costs, it also places greater demands on the Coast Guard's 
infrastructure. System and component manufacturers cancel production 
and support for old equipment and parts, while labor costs increase. 
Cutter and aircraft operational availability decreases thus limiting 
their effectiveness.
    Interoperability is built in from the beginning by considering and 
designing deepwater assets as components of an overall Integrated 
Deepwater System. There will be improved data link capability on major 
cutters and data link capability between smaller cutters and aircraft 
Deepwater assets will be able to implement a modern network-centric 
concept of operations. Just as with Navy task forces, Deepwater assets 
will be connected via data links and will automatically be able to 
share tactical information in real time. Coast Guard Deepwater assets 
will be able to implement the Navy/Coast Guard National Fleet Policy by 
providing more capable assets for joint operations.
           benefits of deepwater system acquisition approach
    Question. Can you discuss the benefits of the systems acquisition 
approach for the Deepwater Project? Was this approach based on 
operational considerations? If so, in what ways will it make the Coast 
Guard more effective than a more traditional asset-for-asset 
replacement program?
    Answer. The ``systems of systems'' acquisition approach for the 
Deepwater Program was based on operational considerations. The Coast 
Guard's current fleet of deepwater ships, aircraft, logistics support 
systems, and C4ISR are aging and technologically obsolete.
    Rather than replace the deepwater assets on a one-for-one basis 
utilizing the traditional Federal acquisition process, the Deepwater 
Program is a performance-based acquisition to replace current 
capabilities. This performance-based acquisition differs from the 
traditional type because the Coast Guard focuses on performance 
specifications for an integrated system of assets based on operational 
capabilities needed to perform the Coast Guard's seven federally 
mandated missions. The assets procured and the upgrades to existing CG 
equipment will operate with each other, with other agencies, employ 
state-of-the market technology, and be specifically designed to provide 
the Coast Guard the capabilities needed to perform current deepwater 
missions as well as future missions.
    This type of innovation and integration would be much more 
cumbersome if attempted as separate, distinct acquisitions.
                                 ______
                                 

             Question Submitted by Senator Patrick J. Leahy

                     burlington, vermont breakwater
    Question. Last year's Transportation Appropriations Bill included 
language that was part of the Senate-passed version of the bill 
securing funds for a waterways aids to navigation project in 
Burlington, VT. The language reads: ``Within the funds provided, the 
Committee directs $250,000 to be available only for the construction 
and installation of two aids to navigation on the Burlington, Vermont 
Breakwater to replace the existing dated equipment.'' ADM Loy, after 
passage of the bill I wrote to you on January 7, 2002, seeking to work 
with you on completing this project. A copy of that letter is attached. 
Since I have yet to receive a response from you, I will take this 
opportunity to seek clarification:
    What is the status of these aids to navigation along the Burlington 
Waterfront? And what is the Coast Guard doing to follow-up on the 
Congressional directive for this project?
    Answer. The aids to navigation currently in place are appropriate 
to our navigation system and serve mariners' interests properly. The 
funds identified in the appropriations bill are adequate to replace the 
current structures with a more contemporary design however.
    In May 2002, the Coast Guard's regional office engaged the City of 
Burlington and the Maritime Heritage Museum to discuss various options 
for replacing the present structures using funds identified in the 
appropriations bill.
    Officials from the City and Museum indicated their intent was to 
receive the funding appropriated for this project as a grant, which is 
not consistent with the current appropriations language. The Coast 
Guard will do everything possible, in accordance with appropriations 
law, to meet the desires of the local constituents. The local officials 
have indicated they desire grant funding and will approach their 
legislators for appropriations language consistent with their 
objectives.
    Attached please find a copy of Admiral Collins' March 22, 2002 
letter response to you.

                 U.S. Department of Transportation,
                                          U.S. Coast Guard,
                                    Washington, DC, March 22, 2002.
Hon. Patrick Leahy,
United States Senate,
Washington, DC.
    Dear Senator Leahy: This is in response to your inquiry of January 
7, 2002, on behalf of the City of Burlington, Vermont, and the Lake 
Champlain Maritime Museum, regarding replacing breakwater lights with 
historically consistent structures.
    The Senate Mark report identified $250,000 for the Burlington 
project ``to replace existing dated equipment.'' While the current 
structures have many years of service life remaining, given your 
interest and the multi-million dollar rehabilitation of the breakwater, 
we will work with the interested parties to identify possible 
replacement structures. Replacing the present structures with 
historical wooden replicas may be problematic and dependent on the 
scope of the breakwater's rehabilitation. A substantially larger 
financial base will be required to support a historical structure. 
Since replacing the present structures with wooden replicas is beyond 
our normal scope of business due to the susceptibility of ice damage 
and the costs associated with follow-on maintenance efforts, it might 
be in everyone's best interest to investigate the usage of private aid-
to-navigation procedures to meet the community's aesthetic interests.
    Congress is actively moving the Coast Guard away from a role in 
historical structures through legislation such as the National Historic 
Lighthouse Preservation Act of 2000. Our purpose remains to help the 
maritime community manage transit risks associated with collisions and 
groundings by providing the right short-range aids-to-navigation 
signals with an economical life cycle cost to taxpayers. I am confident 
that my district officials can continue the positive discussions with 
your local constituents and develop an appropriate plan that meets 
everyone's desires and can be accomplished within the prescribed 
funding constraints.
    I hope this information assists you in responding to your 
constituent. If you have any further questions, please have your staff 
contact the Senate Liaison Office at (202) 224 2913.
            Sincerely,
                                              T.H. Collins,
                  Vice Admiral, U.S. Coast Guard Acting Commandant.

                          SUBCOMMITTEE RECESS

    Senator Murray. The subcommittee stands recessed until the 
week of February 25, when we will take testimony on highway 
safety issues.
    [Whereupon, at 12 noon, Thursday, February 14, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


 DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2003

                              ----------                              


                        THURSDAY, MARCH 21, 2002

                                       U.S. Senate,
            Subcommittee of the Committee on Appropriations
                                                    Washington, DC.
    The subcommittee met at 9:35 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Patty Murray (chairman) presiding.
    Present: Senators Murray and Shelby.

                      DEPARTMENT OF TRANSPORTATION

            Security Challenges for Transportation of Cargo

STATEMENT OF JOHN MAGAW, ADMINISTRATOR, TRANSPORTATION 
            SECURITY ADMINISTRATION
ACCOMPANIED BY:
        REAR ADMIRAL PAUL PLUTA, ASSISTANT COMMANDANT FOR MARINE SAFETY 
            AND ENVIRONMENTAL PROTECTION, U.S. STATES COAST GUARD
        JOSEPH CLAPP, ADMINISTRATOR, FEDERAL MOTOR CARRIER SAFETY 
            ADMINISTRATION
        ALLAN RUTTER, ADMINISTRATOR, FEDERAL RAILROAD ADMINISTRATION
        ELLEN ENGLEMAN, ADMINISTRATOR, RESEARCH AND SPECIAL PROGRAMS 
            ADMINISTRATION
        CAPTAIN CHRISTOPHER McMAHON, MARITIME ADMINISTRATION

               OPENING STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. The subcommittee will come to order.
    More than 6 months have passed since the tragic events of 
September 11. And since then we have been working to protect 
our country from future terrorist attacks. Just weeks after 
September 11, Congress responded by appropriating billions of 
dollars to shore up our aviation industry and to improve 
security across our aviation system.
    We passed the Aviation and Transportation Security Act, but 
it is important to remember that the act covered more than just 
aviation. It gave the new Transportation Security 
Administration responsibility for ensuring security in all 
modes of transportation. Our security system is only as strong 
as its weakest link. As we work to make aviation more secure, I 
want to make sure we are not leaving other vulnerabilities open 
to those who would threaten us.
    So today we are going to explore the state of security in 
the transportation of cargo, including hazardous materials. It 
is estimated that roughly one-third of the terrorist attacks 
that occur around the world are targeted on some aspect of 
transportation. Every day there are more than 800,000 shipments 
of hazardous material within the United States, mostly over our 
railways and highways.
    Millions of dollars worth of goods enter our seaports each 
day from thousands of destinations and rapidly find their way 
onto those highways and railways. Much of that freight is 
identified only as ``freight of all kinds.'' We know very 
little about the true identity of the shipper and we know even 
less about the true nature of the cargo. As I have looked at 
this, I have found major gaps in funding and regulations. We 
have a system that is designed to prevent accidents, but not 
designed to prevent deliberate attacks.
    This morning's subcommittee hearing will focus on the 
vulnerabilities that surround the transportation of cargo, 
especially hazardous cargo, and what is and is not being done 
to better ensure security across our entire transportation 
system. As we look at this issue, I want to point out four 
challenges we will need to consider: the economic importance of 
moving goods quickly, how our major cities and ports are 
closely connected, the role of hazardous materials, and the 
inconsistent regulations and funding across all modes of 
transportation.
    First, our cargo transportation system was designed with 
speed in mind. Many American industries have become more 
efficient and productive than their foreign counterparts by 
exploiting the benefits of just-in-time delivery. This has been 
an economic success story that no one wants to undermine.
    A second challenge is our transportation infrastructure 
itself. Historically, our largest cities have developed around 
our major rivers and rail systems. Our interstate highway 
systems were designed to connect those cities. As a result, 
hazardous cargo moves through one population center or another 
every hour of every day. Similarly, most of our major ports are 
found at the waterside of our largest cities, be it in Seattle-
Tacoma, Los Angeles-Long Beach, Newark-New York area, or 
Houston.
    Across the Nation, waterside shipping terminals sit next to 
residential communities and busy commercial districts. Keeping 
people and cargo separated is for the most part unattainable.
    A third challenge concerns hazardous materials like 
chlorine, which is used to purify drinking water. Transporting 
chlorine poses a security challenge, but we must remember that 
the American public relies on these and other hazardous 
materials in our everyday lives. We need to make sure that they 
can be transported safely.
    A fourth challenge is the Federal regulatory and 
enforcement regimes that currently govern the transportation of 
hazardous cargos. Our government policies and regulations have 
largely been designed to prevent an accidental release of 
hazardous materials. They have not been designed to protect 
against a deliberate release. Many of the agencies within the 
Department of Transportation that are now charged with 
launching new security regulations are already behind in 
publishing regulations to maintain transportation safety. We 
need to make sure that they can meet the existing safety 
challenges and the new security challenges effectively.
    Taken together, all of these challenges will require strong 
and informed leadership. Frankly I am concerned about the 
leadership we have seen so far. Many in the transportation 
industry have told me the efforts to date have been 
characterized by a lack of direction, a lack of urgency, and a 
general confusion over who is in charge.
    Our new Under Secretary of Transportation for Security, 
John Magaw, is responsible for security in all modes of 
transportation safety. However, the extraordinary challenges 
presented by the Aviation and Transportation Security Act have 
required us to focus almost entirely on aviation. As such, when 
it comes to trucking, railroads, pipelines, and our ports, the 
new security requirements have been left largely to the Federal 
Motor Carrier Safety Administration, the Federal Railroad 
Administration, the Maritime Administration, the Coast Guard, 
and the Research and Special Programs Administration. Somewhere 
in the middle of all of this the Secretary's office and the new 
Office of Homeland Security weigh in from time to time. While I 
am not an advocate of one size fits all solutions to the 
security problem, it is hard not to notice some of the glaring 
differences in the way different transportation industries are 
being handled by different parts of DOT.
    In some industries, individual companies are being asked to 
develop their own security plans and submit them for approval 
by the Federal agency. In other instances, the agencies 
themselves are developing the security plans for industry. And 
in yet another, the companies are just being asked to have a 
plan in place with no agency review. We even find 
inconsistencies in what is and is not considered classified 
information. While the number of new Federal air marshals 
sought in the President's budget is classified, the number of 
new Coast Guard sea marshals is printed for all to see in the 
Coast Guard's annual budget.
    There are even more significant inconsistencies in the 
funding levels requested in the President's budget. For 
aviation security, the President requested several billion 
dollars. For Coast Guard, the President requested historic 
funding increases. But for the Federal Railroad Administration, 
the Federal Motor Carrier Safety Administration, and the 
Research and Special Programs Administration, there are no 
major funding initiatives to deal with security in these 
transportation modes.
    For port security, Congress funded almost a hundred million 
dollars in direct grants for security improvements at our ports 
in 2002. The President, however, in his budget request, has 
requested zero dollars, zero, for port security grants.
    In the absence of clear leadership by the Administration, 
individual transportation industries have sought to stand up to 
the challenge. The major class-one freight railroads have 
sought to implement their own new security regime. So have some 
of the larger and more organized sectors of the trucking and 
chemical industries. But even they are working somewhat in the 
dark. No sooner did the railroad industry set up a new security 
regime pegged to four different security alert levels than 
Governor Ridge announced his new national system with five 
different security alert levels. Clearly, we need to improve 
our communication, so that we are all working together as 
effectively as possible. And I believe we have got to focus on 
the weakest links in the system.
    All of our efforts on transportation security will be no 
better than the effort of the least paid security guard manning 
the perimeter fence of a rail yard or a pipeline pump station. 
We have known for years about vulnerabilities in how States 
distribute commercial drivers' licenses. It should not have 
come as a surprise when it was discovered some months ago that 
known terrorists were obtaining commercial drivers' licenses 
with special endorsements to carry hazardous materials. It is 
precisely because terrorists go after the weakest link that we 
must not depend solely on voluntary measures by industry.
    I commend the industries that have stepped up to the plate 
to do the right thing, but we must remember that hazardous 
materials are carried by more than just class-one railroads and 
major trucking firms. There are over 38,000 individual trucking 
firms, many that consist of only one truck, that are authorized 
to carry hazardous materials. Those truckers do not have the 
time, the money, or the desire to review the Federal Register 
to learn what new voluntary measures are being recommended by 
DOT. That is why we need comprehensible and enforceable 
policies that will govern the behavior of each and every one of 
them. We need more than just voluntary recommendations and 
agency advisories to take greater care.
    My goal for the hearing this morning is to get answers as 
to who is in charge of these security functions. If the answer 
to that question is that no one is in charge, then I want to 
know who is going to take charge. How is our Federal Government 
going to attack the weakest links in our security system? And 
when precisely are we going to see real policies put in place 
to eliminate the vulnerability?
    I am very pleased that so many distinguished members of the 
Administration have joined us today. Our Under Secretary of 
Transportation for Security, John Magaw, was required to 
reschedule events in Europe so that he could be with us today, 
and I appreciate that. And I appreciate his flexibility and 
attention to this very important issue.
    We are also joined by administrators of the Federal 
Railroad Administration, the Federal Motor Carrier Safety 
Administration, and the Research and Special Programs 
Administration. We are also joined by the appropriate 
representatives from the Coast Guard and the Maritime 
Administration. And I thank all of you for being here for the 
hearing this morning.

                 STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you. Thank you, Madam Chairman.
    After the attack on the World Trade Center and the 
Pentagon, most of the focus in countering the threat by 
international terrorists has been on improving the security of 
our aviation system. That focus is appropriate and must 
continue. We should not, however, lose sight of the need to 
improve security in other modes of transportation. We must 
identify all of our vulnerabilities and then develop more 
practicable countermeasures to prevent an attack. Until we 
understand the full spectrum of potential threats to each mode 
of transportation, we run the risk of addressing relatively 
minor, self-contained problems with great vigor, while leaving 
potentially catastrophic threats exposed.
    While assessing the vulnerabilities at our Nation's ports 
and pipelines, highways and railways, we should remember that 
the terrorist is capable of adapting his behavior and tactics 
to circumvent heightened security measures. The department must 
be just as nimble, or terrorists will have changed their 
behavior before the department has ever changed its assumptions 
about their behavior.
    On the other hand, by adopting countermeasures to the 
greatest potential dangers and constantly reevaluating those 
procedures, we will not only be better prepared to meet the 
terrorist threat, but will also deter other criminal activity 
and reap other ancillary benefits, such as improved compliance 
with safety regulations.
    I believe that a national transportation risk assessment is 
absolutely necessary. I also believe that we must conduct 
ongoing reassessments, considering the constantly evolving 
threat. I am keenly interested in Under Secretary Magaw's 
thoughts about the need for such a comprehensive evaluation and 
any progress the Transportation Security Administration has 
made along those lines.
    Perhaps the greatest threat to the country comes from the 
use of conventional explosives in the short term and the use of 
weapons of mass destruction in the future. The fact that it is 
possible to either conceal a bomb in other goods or to use the 
material itself, such as hazardous material, as a weapon of 
mass destruction is what makes cargo an attractive target to 
those who intend to inflict maximum harm.
    During the hearing this morning, it is my hope that the 
witnesses will address several concerns I have regarding the 
security of cargo in the transportation system. Specifically, 
we must establish an inspection system that stops cargo hiding 
a bomb or weapon of mass destruction from entering the United 
States. As long as we are able to check only a fraction of 
cargo entering the United States, Federal inspection agencies 
must screen all suspicious cargo and overlay a system of random 
searches, a big challenge.
    Second, we must be mindful of the intermodal nature of 
cargo, whether shipped in containers or on pallets, and must 
use security issues from a cross-modal perspective. The 
department must adopt a comprehensive system that assures both 
the integrity of the cargo and the operators responsible for 
transporting that cargo.
    Third, we must establish, I believe, clear lines of 
responsibility. A tug of war between the modal administrations 
blurs the authority and leaves no one in charge.
    We also must balance important safety requirements with a 
new necessity to keep this dangerous cargo secure from attack. 
Madam Chairman, the enemy we face is determined to attack 
innocent Americans on our soil. They issue no demands, nor do 
they plot their escape. They simply try to inflect maximum harm 
by targeting us where we are vulnerable and by using our 
strengths against us.
    I believe the President and the Congress agree on the need 
to provide the necessary resources to secure our Nation from 
the threat of terrorism. As long as we maintain an open society 
that permits the free movement of people and cargo, however, we 
will be vulnerable to a certain extent.
    I believe we will have to accept some level of risk, 
because we should not and will not live in bunkers. But it is 
our responsibility to reduce the risk to the physical 
infrastructure to all modes of transportation. I look forward 
to hearing the witnesses.
    Senator Murray. Thank you, Senator Shelby.
    We will now hear from the Honorable John Magaw, who is 
Administrator of the Transportation Security Administration.
    Mr. Magaw. Good morning and thank you, Madam Chairman and 
Senator Shelby. I am privileged to be joined this morning by my 
counterparts from the Department of Transportation: 
Administrator Joseph Clapp of the Federal Motor Carrier Safety 
Administration; Administrator Ellen Engleman from the Research 
and Special Programs Administration; Administrator Allan Rutter 
from the Federal Railroad Administration; Captain Chris 
McMahon, representing the Maritime Administration; and Rear 
Admiral Paul Pluta, from the United States Coast Guard. Also 
present here this morning, as is a practice of ours, the senior 
members of our staff from all of the modes are here, because we 
think it is important that not only do they hear your message 
first hand, but they understand it. It helps all of us to be 
more focused, but at the same time flexible, as we address all 
modes of transportation.
    We appear before this subcommittee today to discuss the 
issue of cargo security. My oral statement this morning, Madam 
Chairman, is a short one. I ask that the full statement be 
entered into the record.
    Senator Murray. Without objection.
    Mr. Magaw. Our Nation has entered a new era of security 
awareness. Nowhere is that felt more strongly than in the field 
of transportation, and both of you have referred to that many 
times in your opening statements. Secretary Mineta and the 
people of the Department of Transportation are working 
aggressively to expand and strengthen our country's security 
across all modes of transportation, be it aviation, rail, 
surface, maritime, pipeline, and transit.
    As Senator Shelby mentioned, risk assessments are very 
important, because then it gives you the direction on which you 
can address these many, many issues and allows you to 
prioritize them as you move forward. We are working with our 
partners in State and local law enforcement, other Federal 
agencies, industry, labor, members of Congress, and the 
important staffs that they employ, as the Transportation 
Security Administration is being built, organized, and moves 
forward to address these critical transportation issues.
    With the congressionally-mandated deadlines prescribed in 
the Aviation Transportation and Security Act of 2001, you are 
very accurate to say that Transportation Security 
Administration has devoted a great deal of its time to 
aviation-related security issues. However, in the past days and 
in the months ahead, our new organization will devote 
substantial attention to an intermodal approach, including 
maritime and surface transportation-related security issues.
    I am pleased to announce that Rear Admiral Richard Bennis, 
U.S. Coast Guard, retired, will start next week as the TSA 
Associate Under Secretary for Maritime and Land Security. 
Admiral Bennis brings a wealth of security knowledge and 
experience to this job, not only from maritime security, but 
from all modes of transportation, and including cargo.
    We also have the support and the expertise of other 
operating administrators as they sit here with me today. It is 
clear in our minds that TSA has the responsibility for all the 
security that you discussed. We are working collaboratively and 
consulting with each other, and we will talk more in detail 
about that later.
    The Department of Defense Appropriations Act of Fiscal Year 
2002 appropriated $93.3 million to TSA for competitive grants, 
to enhance the facility and operational security at critical 
seaports. The broad agency announcement for a port security 
grant program has already been issued. We expect to complete 
the process and initial awards should commence in June. We are 
moving expeditiously to put this money to the best use.
    In addition, we are making great strides in addressing one 
of our most critical transportation security challenges, and 
that is cargo container security. The most pressing security 
challenges have been addressed with the existing authorities. 
Now we must design and incorporate a network of protections 
that transforms a rapid response into a sustained effort that 
permanently integrates heightened security into all operations.
    A week following the September 11 attacks, Secretary Mineta 
established the National Infrastructure Security Committee 
(NISC) to address security concerns in the surface modal 
transportation system. Since that time, the NISC has evaluated 
transportation infrastructure vulnerabilities and security 
protocols and processes.
    Six million marine containers in our Nation's ports, along 
with 11 million truck and rail containers, cross the Mexican 
and Canadian borders into America each year. In December 2001, 
the National Infrastructure Security Committee established the 
Container Working Group to recommend improvements in the secure 
movement of these containers.
    Cargo containers arriving at U.S. seaports today can be 
virtually anywhere in the heartland of America tomorrow by way 
of truck, rail, and air. Accordingly, any security measures 
must be fully integrated throughout all modes of 
transportation, as both of your statements so ably addressed.
    All of us at the Department of Transportation are looking 
forward to working with this committee and other members of the 
Senate and the House in successfully reaching and maintaining 
the new standard of transportation security that the Nation not 
only needs but deserves. We will settle for nothing less, Madam 
Chairman. And that concludes my statement.
    [The statement follows:]

                    Prepared Statement of John MaGaw

    The Department of Transportation appreciates the opportunity to 
appear before the Subcommittee on Transportation Appropriations to 
discuss the issue of cargo security. Our Nation has entered a new era 
of security awareness since September 11 and nowhere is that felt more 
strongly than in the field of transportation. Secretary Mineta is 
working aggressively to build the security foundation the country needs 
in this new era, from aviation to railways, highways, pipelines and 
waterways. The Department is working with its partners in state and 
local law enforcement, other government agencies, industry and labor 
and with the leadership and Members of the Congress.
    Thanks to your help, we are making great strides in addressing one 
of our most critical transportation security challenges, cargo 
security, but we need to do more. While the most pressing security 
challenges have been met with existing authorities, we now must work to 
build a new network of protections, one that transforms what has been a 
rapid response into a sustained effort that recognizes heightened 
security as a part of normal operations. In addition, cargo security 
depends on the users of the system, shippers and operators, and affects 
the trade corridors they use.
    The new threats and opportunities of the 21st century demand a new 
approach to border management. The United States has a 7,500-mile land 
and air border shared with Canada and Mexico and an exclusive economic 
zone encompassing 3.4 million square miles. Each year, 11.2 million 
trucks and 2.2 million rail cars cross into the United States, while 
7,500 foreign-flag ships make 51,000 calls in U.S. ports. The massive 
flow of people and goods across our borders helps drive our economy, 
but can also serve as a conduit for terrorists, weapons of mass 
destruction, illegal migrants, contraband, and other unlawful 
commodities.
    President Bush envisions a border that is grounded on two key 
principles: First, America's air, land, and sea borders must provide a 
strong defense for the American people against all external threats, 
most importantly international terrorists but also drugs, foreign 
disease, and other dangerous items.
    Second, America's border must be highly efficient, posing little or 
no obstacle to legitimate trade and travel.
    America requires a cargo management system that keeps pace with 
expanding trade while protecting the United States and its territories 
from the threats of terrorist attack, illegal immigration, illegal 
drugs, and other contraband. The border of the future must integrate 
actions abroad to screen goods and people prior to their arrival in 
sovereign U.S. territory, and inspections at the border and measures 
within the United States to ensure compliance with entry and import 
permits. Federal border control agencies must have seamless 
information-sharing systems that allow for coordinated communication 
among themselves and also the broader law enforcement and intelligence 
gathering communities. This integrated system would provide timely 
enforcement of laws and regulations. The use of advanced technology to 
track the movement of cargo and the entry and exit of individuals is 
essential to the task of managing the movement of hundreds of millions 
of individuals, conveyances, and vehicles.
    Agreements with our neighbors, major trading partners, and private 
industry will allow extensive pre-screening of low-risk traffic, 
thereby allowing limited assets to focus attention on high-risk 
traffic. Some of this work has already begun with Canada, our largest 
trading partner. On December 12, 2001, Governor Tom Ridge, Director of 
the Office of Homeland Security, and John Manley, then Canada's 
Minister of Foreign Affairs, signed the ``Smart Border Declaration'' 
with a 30-point action plan that will help speed and secure the flow of 
people and goods between the United States and Canada. The Smart Border 
Declaration recognizes that ``our current and future prosperity and 
security depend on a border that operates efficiently and effectively 
under all circumstances.'' A similar effort is currently underway with 
Mexico.
    The struggle against terrorism is a truly national struggle. 
Federal, State, and local government agencies, as well as the private 
sector must work seamlessly together. Having the right system of 
communication--content, process, and infrastructure--is critical to 
bridging the existing gaps between the Federal, State, and local 
governments, as well as the private sector. These new systems will 
greatly assist our officials at all levels to protect and defend 
against future terrorist attacks, and to effectively manage incidents 
whenever they should occur.
    To help meet these needs, the Administration has established a 
uniform national threat advisory system, announced last week by the 
Office of Homeland Security, to inform Federal agencies, State and 
local officials, as well as the private sector, of terrorist threats 
and appropriate protective actions. The President's Budget for fiscal 
year 2003 supports this effort by funding the development and 
implementation of secure information systems to streamline the 
dissemination of critical homeland security information.
    Likewise, the Department of Transportation, through the new 
Transportation Security Administration (TSA), will be making every 
effort to ensure the security of cargo, including containerized cargo, 
as it moves throughout America's intermodal transportation system. With 
its Congressionally mandated deadlines, TSA has been focusing primarily 
on aviation-related security issues. However, in the months ahead, the 
new organization will be devoting substantial attention to maritime and 
surface transportation-related security.
    Although much attention was rightfully focused on aviation 
following the September 11 attacks, the Department of Transportation 
took decisive steps to address the issue of security in all the surface 
modes of transportation as well. In addition to the U.S. Coast Guard's 
quick response to guard the security of American ports and waterways, 
Secretary Mineta established the National Infrastructure Security 
Committee (NISC). Through several direct action groups, the NISC was 
tasked with evaluating transportation infrastructure vulnerabilities, 
security protocols and processes and recommending changes to improve 
security. As part of the President's USA Freedom Corps, the Department 
is working with the Department of Justice on a ten-city pilot test of 
the Terrorist Information and Prevention System (TIPS) that will use 
transportation workers, letter carriers and others as part of a system 
for reporting suspicious terrorist activity. If the pilot tests are 
successful, the program will be expanded nationwide.
    From the direct action group process, other groups have been formed 
to tackle very specific security issues. Among these is the Container 
Working Group--established through the NISC in December. The Container 
Working group is co-chaired with the U.S. Customs Service and includes 
representatives from the Departments of Defense, Energy, Commerce, 
Justice, Agriculture, Health and Human Services (FDA) and others. The 
group has oversight from the Office of Homeland Security.
    The Container Working Group is tasked with providing 
recommendations to improve the secure movement of the six million 
marine containers that enter our nation's ports and the eleven million 
truck and rail containers that cross the Mexican and Canadian borders 
into America each year in a way that is safe and efficient. In order to 
address individual aspects of container security, four subgroups of the 
Container Working Group are studying information systems, security 
technologies, business practices, and international affairs. On the 
front lines of container security is the U.S. Customs Service, as well 
as other federal agencies. The Container Working Group is studying 
technologies and business practices that will enable Customs and others 
to prevent high-risk containers from entering the United States or to 
ensure that they are properly inspected before they pose a threat to 
the United States. Although the Customs Service utilizes a thoughtful 
risk-based selection method, preventing a container from being used as 
a weapon requires a more complex strategy, enhancing the non-intrusive 
inspection technology and information used for selection. The new 
Customs Container Security Initiative builds upon previous work with 
our international trading partners to improve container security 
throughout the world's global supply chain.
    This work is of critical importance, especially in the maritime 
arena. Approximately 95 percent of our Nation's non-NAFTA international 
trade moves by water. During a major military deployment, 90 percent of 
our military materials move through our nation's seaports. Preserving 
those assets and protecting the safety of the men and women who use 
them and the communities near them has been, and continues to be, one 
of the Administration's top priorities. To accomplish this priority, a 
new partnership must be formed. A partnership between the commercial 
maritime industry and government must take advantage of existing 
commercial security systems, information systems and technological 
innovations.
    Even with our best efforts, our current transportation system is 
groaning under capacity constraints and congestion in many ports is 
increasing. To further complicate matters, container traffic, even with 
the current economic slowdown, is predicted to double in the next 
twenty years. Improving efficiency is one of the key ways to help solve 
these capacity and congestion problems. Yet efficiency improvements 
must now be looked at through a security lens. Our transportation 
system will need to operate both efficiently and securely. These twin 
goals of efficiency and security need to be addressed simultaneously.
    In summary, the vast volume of trade and traffic through our 
nation's ports and across its borders has put immense pressure on our 
ability to enforce the nation's laws while facilitating international 
trade, even before September 11. After September 11, our challenge has 
risen to a new level. Notably cargo trade, which is critical to this 
country's economic strength, continues to move through ports with 
minimal interruption. It is no surprise that sustaining mobility will 
come at a higher cost to all of us as we harden our borders. The 
reality is that we are an open society and we cherish our freedoms. 
Ultimately, it is incumbent upon our government and our transportation 
industry partners to find the balance between appropriate security 
measures and the unimpeded movement of cargo.
                 cargo security in the maritime sector
    An analysis of our transportation system in the aftermath of the 
events of September 11, 2001 clearly laid bare the susceptibility of 
container shipments as a delivery system for an enemy's weapons. Prior 
to September 11, DOT's primary concern was the efficient movement of 
these containers through the transportation system. The advent of just-
in-time business processes and the use of the transportation system as 
a rolling inventory tied the transportation system even more integrally 
into the economic vitality of this country.
    The Department was well equipped with existing statutory authority 
to develop the immediate maritime security response our Nation has 
required. These steps have formed the core of our near-term response to 
the new maritime and port security environment, and have been based on 
current authority and existing resources.
    A number of critical steps have been taken since September 11:
    The Coast Guard has refocused resources to protect high consequence 
targets in the marine environment, including critical bridges, port 
facilities and other infrastructure.
    The Coast Guard has issued emergency regulations requiring 96-hour 
advance notices of arrival for ships arriving in U.S. ports, and we 
expect to make that regulation permanent by the summer of 2002.
    The Coast Guard Intelligence Coordination Center, working with the 
Office of Naval Intelligence, has been tracking inbound high-interest 
vessels and providing intelligence on the people, cargoes and vessels 
to operational commanders and interested agencies.
    The Coast Guard has deployed personnel as Sea Marshals and small 
boat escorts to ensure positive control of vessels containing critical 
cargoes and in sensitive areas.
    The Maritime Administration has been meeting with members of the 
maritime industry to examine and address security issues and make 
recommendations regarding legislation and policy changes.
    The Maritime Administration has heightened security at its Ready 
Reserve Force fleet sites and outport locations as well as activated 
one ship to assist in Operation Enduring Freedom.
    The Maritime Administration, Credential Direct Action Group and the 
Transportation Security Administration GO Teams are working to examine 
ways that advanced technologies, including smart card, biometrics and 
public key infrastructure can be used throughout the maritime and 
related industries in order to accurately identify employees working in 
security-sensitive areas.
    The St. Lawrence Seaway Development Corporation has been working 
closely with its Canadian counterpart and the Coast Guard to heighten 
security on the St. Lawrence River and ensure the protection of ocean 
access to our Great Lakes ports.
    In order to address the security issues surrounding the movement of 
marine cargo containers through the international, intermodal 
transportation system, the interagency Container Working Group has been 
examining ways of improving the coordination of government and business 
efforts as they relate to container security; enhancing data 
collection; improving the physical security of containers; initiating 
activities on the international front; and considering all possible 
uses of advanced technologies to improve the profiling of containers 
and to increase the physical security of containers.
    Working with other port entities, the Coast Guard is developing 
tracking mechanisms for all vessels operating in the maritime domain: 
within or transiting to U.S. ports and transiting our coastal waters. 
The heart of this maritime domain awareness program is accurate 
information, intelligence, surveillance, and reconnaissance of all 
vessels, cargo, and people extending well beyond our traditional 
maritime boundaries. Coast Guard forces will provide enhanced defenses 
for critical high-risk vessels and coastal facilities, marine and 
otherwise (e.g. nuclear power plants, oil refineries). Close 
coordination through Harbor Safety Committees, which help bring 
together the many local, State, and Federal agencies that maintain and 
protect the harbor, will ensure a well-balanced protective envelope is 
sustained at different threat levels.
    The Coast Guard has also reorganized its security programs, which 
were dispersed throughout the Office of Marine Safety, Security and 
Environmental Protection, and consolidated them under a new port 
security directorate. This includes the movement of the container 
inspection program, which was focused on the structural integrity of 
containers and the proper shipment of hazardous materials, to add a 
security element to its safety inspections. The Container Inspection 
Training Assistance Team (CITAT) was deployed to New York City 
following the attacks and assisted in inspecting numerous containers 
following the ``just in time'' training they received from the U.S. 
Army.
    The President's 2003 Budget increases funding for the Coast Guard's 
homeland security-related missions (protecting ports and coastal areas, 
as well as interdiction activities) by $282 million, to an overall 
level of $2.9 billion. After September 11, the Coast Guard's port 
security mission grew from approximately 1-2 percent of daily 
operations to between 50-60 percent during the heightened threat 
periods. Today the port security mission is about 15 percent. In 
addition, the Coast Guard has important national security missions such 
as illegal immigration and drug interdiction and port security.
    Equally important in improving port security has been the 
Department's partnering efforts with the international community. At a 
recent International Maritime Organization Assembly and intersessional 
working group meetings, the Coast Guard, as the lead agency for the 
U.S. delegation, introduced numerous security measures for 
consideration including vessel, facility and offshore platform security 
plans, early implementation of automatic identification system 
transponders for certain ships on international voyages and designation 
of and training for ship, company and facility security officers. The 
U.S. Government also introduced some preliminary container security 
measures for consideration with the promise to provide more detailed 
papers for the Maritime Safety Committee meeting in May 2002 based upon 
the recommendations of the interagency container working group and 
Customs' Container Initiative.
    Grant Program for Improvement of Port Infrastructure: The 
Department of Defense Appropriations Act for fiscal year 2002 
appropriated $93.3 million to the Transportation Security 
Administration to award competitive grants to critical national 
seaports to finance the cost of enhancing facility and operational 
security. Such grants are to be awarded based on the need for security 
assessments and enhancements as determined by the Under Secretary of 
Transportation for Security, the Administrator of the Maritime 
Administration, and the Commandant of the Coast Guard. The final grant 
approval body will be a board consisting of the Under Secretary of 
Transportation for Security, the Administrator of the Maritime 
Administration, and the Commandant of the Coast Guard, or their 
representatives. Determination of grant awards will be based on 
consideration of the most urgent needs from a homeland security 
perspective. It is anticipated that initial awards will commence in 
June 2002. Port authorities will be able to submit grant applications 
electronically through a Departmental website. A small amount of this 
money will fund ``proof of concept projects,'' focusing on critical 
seaports. Preference will also be given to ports that have already 
begun port security enhancement through some demonstrated action. We 
are moving very quickly to put this money to work.
               cargo security in the motor carrier sector
    In response to terrorist threats to the transportation system, the 
Federal Motor Carrier Safety Administration (FMCSA) initiated a program 
of onsite visits to hazardous materials carriers and businesses to 
increase their awareness of terrorist threats, to identify potential 
weaknesses in carrier security programs, and to report potentially 
serious security issues to the appropriate authorities. Since September 
26, FMCSA's credentialed field staff have completed almost 41,000 
Security Sensitivity Visits (SSVs) throughout the country, focusing on 
companies transporting hazardous materials in types and quantities that 
terrorists could use as a weapon, truck driver training schools, truck 
rental and leasing firms, chemical and petroleum facilities, hazardous 
materials shippers, and other operations that could be at risk.
    In SSVs, FMCSA personnel meet directly with top company officials 
to review security measures and identify areas for tightening 
procedures. The SSV also includes a records review to identify any 
suspicious activities by carrier employees that could affect security. 
To date, 128 referrals of suspicious activities have been forwarded to 
the FBI for follow-up. False names or false personnel information, 
suspicious inquiries or inappropriate comments, unexplained absences, 
and citizenship irregularities are among the activities that provide a 
basis for referral. Company officials are being urged to conduct 
thorough interviews when hiring new drivers and to verify U.S. 
citizenship or appropriate immigration status. In reviewing their 
security procedures, management is asked to consider who might have 
access to their facilities and storage areas and the adequacy of 
protection. Carriers are urged to know their business partners, 
vendors, service providers, and their shippers.
    FMCSA urges carriers to avoid transporting particularly hazardous 
materials near high population centers whenever possible and reinforces 
the need to strictly adhere to en route security procedures. Companies 
are informed about technical advances that can improve security and 
communication, such as satellite tracking, surveillance systems, and 
cell phones, as well as state-of-the-art locks and seals, alarms, and 
engine controls.
    In the future, FMCSA hopes to conduct operational tests of 
technologies that could enhance the security of hazardous materials 
transportation to demonstrate the potential effectiveness of these 
systems. Technologies which could be tested include systems for 
preventing unauthorized drivers from operating a vehicle, systems for 
detecting a vehicle that is off-route, systems to remotely shut-off the 
vehicle engine, and systems that allow law enforcement, shippers, and 
consignees to make positive identification of the proper truck driver.
    Enhanced communications systems provide another opportunity for 
improving security. A good communications system can help detect 
patterns of activities that when taken alone may not seem significant 
but when taken as a whole may cause concern. Security reminders and 
training should be regularly and widely provided to employees and 
should be comprehensive, covering overall company security, specific 
procedures, and the employee's personal role in security.
    The SSV Program is only one component of the agency's program to 
promote the secure transportation of hazardous materials. In the 
future, compliance reviews of hazardous materials carriers will be 
expanded to include a security component. FMCSA is also developing a 
program for periodic visits to carriers transporting certain types of 
explosives, radioactive materials, and highly toxic substances. These 
visits will be more in-depth and include an on-site inspection of 
facilities and a written report with security recommendations.
    The law enforcement community is an important partner in FMCSA's 
effort to enhance cargo security. FMCSA has developed outreach material 
and a training course to raise the awareness of law enforcement 
officers to the potential threat that commercial vehicles can pose if 
they are used as a weapon. With the Commercial Vehicle Safety Alliance 
(CVSA), the International Association of Chiefs of Police (IACP), the 
Maryland State Police, and the Virginia State Police, FMCSA developed a 
Security Awareness for Enforcement Checklist. The IACP is distributing 
500,000 of these checklists to law enforcement officers across the 
country. FMCSA also is offering a free 8-hour training course, ``Trucks 
& Terrorism,'' to law enforcement agencies.
    In another outreach effort, the Teamsters, CVSA, IACP, and the 
Maryland State Police are working with FMCSA to inform truck drivers 
about measures they can take to protect themselves from potential 
terrorist hijackers.
    Many states have either experienced instances of fraudulent 
activity within their Commercial Driver's License (CDL) programs or 
have testing and licensing practices that make them susceptible to 
fraud. Fraudulent licensing schemes come in many forms; language 
interpreters, State employees, and third party testers have all been 
involved. FMCSA is providing funding to States to reduce 
vulnerabilities in their CDL programs and is working closely with 
States and American Association of Motor Vehicle Administrators (AAMVA) 
on a special task force on identification security. We are committed to 
eliminating fraud in the CDL program and are examining the specific 
actions and resources that will be needed to accomplish this.
    FMCSA is developing new regulations to implement background checks 
for hazardous materials drivers as specified in the USA PATRIOT 
legislation. FMCSA is also considering whether additional hazardous 
materials rulemakings would enhance the security of the motor carrier 
industry.
    In addition to security in freight transportation, FMCSA is 
concerned about the vulnerability of the commercial passenger carrier 
industry to acts of violence. Today, except when crossing the border, 
passengers travel without requirements for identification, and baggage 
is not routinely screened. Yet motorcoaches travel in close proximity 
to some of the Nation's most visible and populated sites, such as 
sporting events and tourist attractions. FMCSA is working with charter 
and scheduled motorcoach operators to identify additional measures such 
as training, enhanced communications, passenger identification 
procedures, and security equipment and technologies to reduce the 
vulnerability of this vital transportation industry, which carries the 
highest volume of passengers of any mode.
    While FMCSA has placed a special emphasis on increased security 
programs, critical safety enforcement activities have continued, 
including issuance of out-of-service orders, conducting compliance 
reviews, and complaint investigation. Enforcement targeted at carriers 
exhibiting poor safety performance will continue to be a major focus 
for FMCSA.
                   cargo security in the rail sector
    The Federal Railroad Administration's (FRA) broad safety authority 
and expertise in railroad safety and operational issues give it a 
significant role to play in helping to analyze and address security 
threats as they relate to rail transportation, including intermodal 
transportation. FRA, engaged with other modes in DOT, is investigating 
the availability and applicability of technological devices for rail 
cars and intermodal vehicles that can track the car, detect attempts to 
intrude into the cargo space, and provide remotely controlled locks for 
cargo doors (for packaged freight) and valves and hoppers (for bulk 
freight). Remote locks can enhance security by remaining closed until 
released by a radio signal from a secure location. Satellite 
positioning devices could further enhance security by verifying that 
the vehicle is at its proper destination before the locks are released.
    Since September 11, FRA has been coordinating with freight, 
intercity passenger, and commuter railroads, railroad industry groups, 
railroad labor unions, and shippers of hazardous materials by railroad 
to review current security programs.
    The freight railroad industry has established task forces to study 
security threats to their physical assets, to train operations, to 
information technology systems, to high-value and dangerous cargoes, 
and to national security shipments. A classified study in draft form is 
now under review and future actions by FRA and the industry will use 
these critical action team analyses to plan enhancements to the 
increased security already in place. Similar studies are underway 
within the short-line and regional railroads and by the commuter rail 
carriers.
    Working with FRA, individual railroads have already increased 
inspections and surveillance at sensitive locations such as bridges and 
terminals.
    In the coming months, FRA will study the findings in the 
vulnerability assessments already underway. The rail transportation of 
chemicals for American and foreign industries is vital to the global 
economy and, thus, to the larger security of the United States. While 
it is impossible to eliminate the risk of terrorist attack on our 
railroad transportation infrastructure, FRA is committed to using its 
assets as efficiently as possible to improve the already superb record 
of rail transportation safety. FRA has begun the steps to establish an 
on-going dialogue with America's chemical shippers to coordinate rail 
security efforts among shippers and carriers. Finally, FRA will examine 
the progress that can be made on three fronts: First, by enhancing the 
ability of rail carriers and the Federal government to track known 
risks such as shipments of highly volatile or poisonous hazardous 
materials. Second, by improving the ability of the railroads and of law 
enforcement to detect undeclared dangerous cargoes. Third, by working 
with the safety and security community to reinforce the training given 
to Federal safety and enforcement personnel so that they can detect 
suspicious parameters and more easily identify a security threat.
    Working with the Research and Special Programs Administration, the 
Department has prepared legislation (introduced as S. 1669) that 
includes such security enhancements as allowing Federal inspectors to 
remove a shipment of dangerous goods from transportation if an imminent 
safety hazard exists.
       hazardous materials in transportation and pipeline systems
    A number of actions to ensure the security of hazardous materials 
in transportation and pipeline systems have been undertaken by the 
Research and Special Programs Administration (RSPA) and plans for 
longer-term actions to enhance both hazardous materials transportation 
security, as well as pipeline security, are underway.
    Steps Taken to Ensure Hazardous Materials Transportation Safety: 
RSPA issued emergency exemptions to New York City, Arlington County, 
and the States of New York and Virginia. The exemptions provided relief 
from requirements of the Hazardous Materials Regulations (HMR) to 
facilitate clean up and disposal of hazardous materials, including 
hazardous waste, at the World Trade Center and Pentagon sites.
    In addition, RSPA issued an emergency exemption to the Federal 
Emergency Management Agency (FEMA). The FEMA exemption provided relief 
from the requirements of the HMR to allow the transportation of various 
types of hazardous materials to support recovery and relief efforts to, 
from, and within the disaster areas of New York City and Virginia.
    RSPA worked closely with the Federal, State, and local authorities, 
including the Centers for Disease Control and Prevention (CDC), the 
U.S. Postal Service (USPS), and the Environmental Protection Agency, to 
respond to the anthrax emergencies in Florida, New York, New Jersey, 
and Washington, DC. With CDC, RSPA provided advice and assistance to 
USPS on appropriate procedures for transporting anthrax-contaminated 
mail and developed written guidance on how to transport anthrax-
contaminated material for decontamination and disposal. In addition, 
RSPA issued several emergency exemptions to facilitate clean up and 
disposal of anthrax-contaminated material at sites in Florida, New 
York, New Jersey, and Washington, D.C. These exemptions required 
development of a new packaging protocol for shipment of anthrax-
contaminated objects such as mail, office equipment, carpeting, and 
furniture.
    Since September 11, three security advisories have been issued 
warning that transportation security can no longer be treated as a 
secondary or tertiary issue and asking shippers and transporters to 
review and strengthen security measures, particularly for high-hazard 
materials. The most recent security advisory, issued on January 18, 
2002, asked the hazardous materials transportation community to be 
especially vigilant during the Super Bowl in New Orleans and the 
Olympics in Salt Lake City. The advisory suggested that shippers and 
transporters implement heightened security measures and considers 
altering routes to avoid populated areas where practicable.
    RSPA is developing a security template for the Risk Management 
Self-Evaluation Framework (RMSEF). RMSEF is a tool to assist 
regulators, shippers, carriers, and emergency response personnel for 
examining their operations, and considering how they assess and manage 
risk. The security template illustrates how risk management methodology 
can be used to identify points in the transportation process where 
security procedures should be enhanced within the context of an overall 
risk management strategy.
    RSPA is also developing a Hazardous Materials Transportation 
Security Awareness Training Module directed at law enforcement, 
industry, and the hazmat community. The training module will be web-
based, posted on the HMS website, and presented at multimodal seminars, 
and outreach efforts will be stepped up at the local level.
    RSPA created a Hazardous Materials Direct Action Group (Hazmat DAG) 
that met with representatives of the hazardous materials industry, 
emergency response community, and State governments to discuss 
transportation security issues in the wake of the September 11 attacks 
and continuing terrorist threats. Participants addressed recently 
implemented security measures; identified gaps in current security 
arrangements; discussed specific areas of concern and worst-case 
scenarios; recommended government actions to augment industry security 
programs; and suggested policy, legislative, and regulatory changes 
that could enhance the overall security of hazardous materials during 
transportation.
    RSPA also created an internal DOT Intermodal Hazardous Materials 
Transportation Security Task Force, which assessed attack or sabotage 
vulnerabilities, evaluated existing security measures, and identified 
potential ways to reduce vulnerabilities. The reports of the Hazmat DAG 
and the Intermodal Task Force provide a sound basis for moving forward 
to enhance hazardous materials transportation security.
    On February 14, RSPA published a notice in the Federal Register 
advising hazardous materials shippers and carriers of voluntary 
measures to enhance the security of hazardous materials shipments 
during transportation. The notice is based largely on what we learned 
through the Hazmat DAG and the Security Task Force and addresses 
personnel, facility, and en route security issues, and includes contact 
points for obtaining additional, more detailed information.
    The hazardous materials industry already has voluntarily adopted a 
number of measures to enhance the security of hazardous materials 
shipments and is committed to do whatever it takes to assure that 
hazardous materials can continue to be transported safely and securely. 
Shippers and carriers have implemented a wide spectrum of actions to 
enhance security awareness and improve security for both fixed 
facilities and in-transit shipments. Individual companies and industry 
associations are conducting threat assessments, identifying targets of 
opportunity and areas of vulnerability, and taking concrete actions to 
reduce threat possibilities and increase security. Many are working 
closely with Federal, State, and local law enforcement and security 
personnel, including the U.S. Coast Guard, the FBI, the DOT Office of 
Security and Intelligence, and the U.S. Customs Service. Certain 
shippers and carriers are upgrading security in and around plant sites, 
conducting more stringent background checks on plant employees and 
motor carrier drivers, and adjusting routes to avoid populated areas 
where feasible. Increasingly, some carriers will only handle hazardous 
materials shipments from approved shippers. Many are improving the ways 
they identify and track hazardous materials shipments.
    Steps Taken to Ensure Pipeline Security: In addition to work on 
hazardous materials transportation, RSPA is addressing security issues 
for pipelines through its Office of Pipeline Safety. The security of 
the pipeline system is of strategic importance due to the large volumes 
of materials transported by pipeline and their critical importance to 
the National economy as well as defense. The events of September 11 
provided us a unique understanding of the state of security 
preparedness within the pipeline industry--and RSPA discovered there is 
work to be done. To ensure that pipelines are secure to the maximum 
extent possible, RSPA is now taking a number of measures. Additionally, 
within the pipeline safety program, RSPA is cooperating with the new 
Transportation Security Administration, to ensure RSPA provides a 
unified approach to meeting transportation security challenges.
    On September 11, RSPA responded immediately to security concerns 
for the Nation's pipeline systems by making over 1,000 telephone calls 
jointly with its State partners to pipeline operators, to assess the 
security at pipeline facilities and to monitor events. In recent 
months, RSPA streamlined this communication process, in coordination 
with the Department of Energy (DOE) and the Federal Bureau of 
Investigation, and incorporated it into its daily operations for 
distribution of security information and threat warnings.
    RSPA is securing its own information systems. One action on 
securing information concerns the National Pipeline Mapping System, 
accessed by a website. To reduce the opportunity for misuse, RSPA 
limited accessibility to the website by installing a password 
protection system. RSPA is also processing security clearances for key 
federal, state and industry security personnel, and conducting 
conference calls every two to three weeks with all the pipeline safety 
agencies to review recent developments, toward the goal of providing a 
seamless Federal and State oversight program of pipeline security.
    Reauthorization: However, all of RSPA's efforts on security for 
both hazardous materials transportation and pipelines may be undermined 
if these two programs are not reauthorized. Toward this goal, the 
Administration submitted a proposal for reauthorization of the 
Hazardous Materials Transportation Safety program, which was introduced 
by Senator Hollings and Senator McCain on November 8, 2001. The 
proposal includes a number of provisions to clarify and strengthen 
RSPA's authority to address hazardous materials security issues.
    Although current law does not preclude the Department from 
preventing intentional misuse or release of hazardous materials in 
transportation, RSPA's program is primarily focused on preventing 
unintentional releases. Therefore RSPA is seeking clarification and 
strengthening of the Department's authority to address hazardous 
materials transportation security and supports Congressional efforts in 
this area. The result will be a comprehensive hazardous materials 
safety program that addresses a broad spectrum of possible threats to 
public safety.
                               conclusion
    The Department of Transportation is glad to have had the 
opportunity today to discuss the steps we are taking as we build a new 
operational baseline for cargo security in America. Like any network, 
the cargo transportation system is in a constant state of growth and 
change. The system we create must therefore be one that is capable of 
evolving over time, and where the expectation of that evolution is 
clearly established. Finally, the system must fully recognize the 
intermodal nature of transportation. Cargo that is unloaded from a ship 
today in a seaport will move quickly to other modes of transportation. 
There is no better example than the cargo container--a phenomenon that 
has been successful precisely because it is fundamentally intermodal--a 
cargo container arriving at a U.S. seaport today can be virtually 
anywhere in the heartland of America via truck and/or rail tomorrow. 
Accordingly, security measures must be fully integrated throughout all 
of the modes of transportation.
    I know that the witnesses will be able to expand on our efforts and 
that all of us at DOT are looking forward to working with the 
leadership and members of the House and the Senate in successfully 
building the new standard the nation requires.

                HAZARDOUS MATERIALS DIRECT ACTION GROUP

    Senator Murray. Thank you very much, Mr. Magaw.
    Mr. Magaw, your testimony states that Ms. Engleman's 
agency, the Research and Special Programs Administration, 
created a hazardous material direct action group. According to 
the testimony you gave us, that group identified gaps in 
current security arrangements, discussed specific areas of 
concern and worst case scenarios, recommended government 
actions to augment industry security programs, and suggested 
policy, legislative, and regulatory changes. I understand these 
recommendations include some very far reaching actions. Ms. 
Engleman, maybe you could tell us precisely when you submitted 
those recommendations to the Secretary's office.
    Ms. Engleman. Thank you, Madam Chairman. This intermodal 
working group is a very active group. We set it up within about 
10 days or less following the September 11 event. We gave them 
a stringent 30-day requirement to come back with a set of 
recommendations. The recommendations did indeed address all the 
areas that you said. The group consisted of a total DOT team. 
We had Coast Guard, we had highways, we had motor carriers, we 
had rail, we had ourselves, and then we also reached out 
internally to general counsel and other areas within the 
Department of Transportation. We submitted that to the National 
Infrastructure Security Committee and added that, in addition 
to the other 10 or 15 direct action groups that were working at 
that very time. We are implementing many of those 
recommendations. We are still working on that entire set of 
goals.
    Senator Murray. When did you actually send the 
recommendations to the Secretary's office?
    Ms. Engleman. I do not have the specific date, ma'am. I 
believe it--I know it was in November, but I don't have the 
specific day that we submitted it to the Secretary.
    Senator Murray. Well, Mr. Magaw, when can we actually 
expect these recommendations to be acted on?
    Mr. Magaw. Well, I will today make an inquiry with the 
Secretary's office to see what the status of those are and will 
get back to you with that answer.
    [The information follows:]

    Two notices were published in the Federal Register in response to 
recommendations from the Hazardous Materials Direct Action Group. On 
February 14, 2002, the Research and Special Programs released 
``Advisory Notice: Enhancing the Security of Hazardous Materials in 
Transportation'' and on May 2, 2002, released ``Hazardous Materials: 
Security Requirements for Offerors and Transporters of Hazardous 
Materials'' for comment. The Department will continue to act on 
recommendations from these reports through additional regulatory 
actions and non-regulatory actions such as initiating hazardous 
materials security focused outreach and training.

                     HAZARDOUS MATERIALS RULEMAKING

    Senator Murray. We have not seen any regulations at this 
point.
    Ms. Engleman. Madam Chairman, we have a rulemaking on one 
of those significant regulations, that is working to 
continually review and consolidate these issues. We also have 
had a variety of other actions that we've done on security 
alerts, inspection teams, working with industry, and a variety 
of direct action groups, as previously mentioned. We also have 
issued announcements. We do have what we call a risk management 
self-evaluation framework which is up and on the Web. But I'd 
like to share with you that that is not a mere guideline. This 
document is pretty comprehensive. I would submit that it is not 
just an evaluation tool, but actually a consulting tool.
    Senator Murray. It is my understanding that everything so 
far has been voluntary or advisory. There have been no 
regulations issued at this point.
    Ms. Engleman. That's correct, ma'am. As you know, we have 
to go through the administrative rulemaking procedures. That 
does take time. After you go through the notice of proposed 
rulemaking, there's at least a 60-day period, and then 
obviously rulemaking can take up to a year. However, we don't 
want to wait for the administrative bureaucracy to delay 
action, and so we've gone to industry, the actual people 
involved, to help them to start the process now. And we also 
have our own actions to work with.
    Senator Murray. What is your target date for when we are 
going to see regulations?
    Ms. Engleman. Ma'am, it's not a single target date. This is 
literally a daily activity, a weekly activity. We don't have an 
end goal as in ``we will finish everything within x days,'' 
because this will never stop. This will be an ongoing activity 
to continually review, continually update, continually 
outreach, continually train, and continually attempt to secure 
the needs of the Nation.

                 TRANSPORTATION OF HAZARDOUS MATERIALS

    Senator Murray. We know that every day there are over 
800,000 shipments of hazardous materials. And we all know what 
the tragic consequences would be if a tank car carrying one of 
these lethal, hazardous materials were to spill or explode in a 
densely populated area. Mr. Clapp, Mr. Rutter, if you could 
tell us how realistic it is to think we could actually reroute 
some of these dangerous hazardous materials so as to avoid 
major metropolitan areas. Mr. Clapp.
    Mr. Clapp. Thank you, Madam Chairperson. We of course have 
existing routing regulations in place that, as you point out in 
your statement, were designed with safety in mind, as opposed 
to security. However, for this particular issue I think the two 
go hand in hand. You would want to route hazmat by the safest 
route, whether it's a security issue or an accidental release 
that we're dealing with.
    We know that there has been a considerable increase in 
activity by State and local jurisdictions with respect to 
establishing hazardous materials routing. Those are done 
according to existing Federal standards that are a part of our 
regulations.
    Senator Murray. Are you considering mandating the most 
hazardous materials be rerouted to avoid densely populated 
areas?
    Mr. Clapp. We already have regulations in place which 
govern the choice of routes for hazard material shipments. 
First of all, there is a general regulation which applies to 
the carriers' selection of routes, because some routes, of 
course, are not designated as such. State and local government 
and Indian tribes have the right to establish routes in their 
areas of jurisdiction according to these standards.
    Senator Murray. So basically you are relying on the local 
rules and regulations and are not looking at anything from the 
Federal level?
    Mr. Clapp. No. We already have regulations in the Federal 
Register that require the driver to select a route which is 
most appropriate from the standpoint of safety for the 
hazardous materials transportation that he is performing at 
that time. The routing requirements reflect the consequences of 
an accidental release.
    Senator Murray. Do you think the current security threats 
that we now have should make us think about having some more 
restrictions or stronger restrictions at this time than what we 
currently have?
    Mr. Clapp. The answer is yes. We are developing a 
rulemaking with respect to certain particular types of 
hazardous materials such as explosives. It frankly comes out of 
the task force that Administrator Engleman was discussing. With 
respect to the extension of additional security regulations 
that include routing for certain high-consequence hazardous 
commodities. We are in the process of developing an Advance 
Notice of Proposed Rulemaking to go out on that now.
    Senator Murray. Mr. Rutter, for your agency?
    Mr. Rutter. Part of how we're approaching how to deal with 
the transportation of those hazardous materials depends on two 
issues. One is, in considering the possibilities of routing 
around metropolitan areas, that we have to be concerned about 
the infrastructure in place. Many times major class one routes 
between cities that are maintained to the highest standards are 
those that are the most heavily trafficked and by their nature 
go to and through major cities. If we were to take actions to 
require those goods to move around those cities, we may be 
using rail lines that are maintained to a lower level of 
capacity or safety.
    The other thing to consider is that routing decisions in 
many cases are dependent on who's generating the chemicals and 
who's using the chemicals. In many cases, those generators and 
users are located in metropolitan areas.
    One of the things that you had mentioned in your statement 
having to do with the use and manufacture of chlorine, for 
instance, is a matter of making sure that the people who use 
those chemicals can have access to it. Most water treatment 
facilities are in major metropolitan areas. And if we take 
actions to restrict the movement of those chemicals, we may 
endanger the intended uses of them, such as for water treatment 
facilities. So we're trying to balance the needs of those who 
need to use those chemicals and to make sure that the 
transportation of them is as safe as possible.

                     HAZARDOUS MATERIALS SHIPMENTS

    Senator Murray. Let me ask one more question. Then I am 
going to run and vote and come right back.
    There has been a lot of speculation as to whether some of 
the more deadly hazardous materials could be transported in a 
form that is either less concentrated or perhaps less lethal. 
Ms. Engleman, let me ask you. Have you explored this idea with 
the chemical and hazmat industries to see if there is a way to 
transport some of these shipments in a less deadly form?
    Ms. Engleman. Yes, ma'am. We're looking at all aspects of 
the shipment: container designs, container equipment, the 
actual product itself. All of this is on the table to discuss.
    Senator Murray. Have you made any formal recommendations to 
the Secretary in terms of this?
    Ms. Engleman. Not to my knowledge, ma'am.
    Senator Murray. There have been no recommendations 
submitted on hazardous material, any recommendations 
whatsoever? I mean, we are 6 months, 7 months away from 
September 11, and we have not had any recommendations to the 
Secretary on any of this?
    Ms. Engleman. No, ma'am. Perhaps I misunderstood your 
question. I thought you were relating directly to specifics as 
far as individual products.
    Senator Murray. We should be looking at some ways to have 
safer transport of some of these hazardous chemicals. I know 
you have been looking at some things. But you have not made any 
recommendations specifically, even though we are 7 months after 
September 11?
    Ms. Engleman. Ma'am, we've made a variety of 
recommendations covering the entire gamut of hazmat material, 
everything from the actual product to its containment, shipping 
process, delivery, labeling, and packaging, the entire product. 
So when you ask about the recommendations, yes, ma'am, we've 
put together an entire package, including regulation review, 
interagency support and organization, and coordination. Please 
note, much of what we do to provide safe shipment of hazardous 
materials, and have done fairly successfully, also addresses 
many of the security concerns. That which is safe often is 
secure.
    So sometimes we don't have to have a security overlay, if 
you will, to still ensure the safe shipment. We can address it 
through our safety regulations, which are already in place. 
This is part of our review to determine if we needed to add 
additional security overlay, because as you correctly stated in 
your opening comments, prior to 9/11, we focused on safety and 
the accident versus security and the incident. So we have gone 
very precisely through to determine if any additional work 
needs to be done to provide security that would make a 
difference. In the majority of much of what we do, though, 
safety is enough. If they are safe, they are secure.
    Senator Murray. I have a number of additional questions in 
this area. Senator Shelby is going to be back in just a minute. 
As soon as he gets back, he will start his questioning, but I 
am going to recess for just a few minutes while we go and vote.

                    IDENTIFYING HAZARDOUS MATERIALS

    Senator Murray. The hearing is back in order.
    Let me just say while I am directing these questions to 
individuals, I want to emphasize that other witnesses really 
should chime in when appropriate. All these issues have impacts 
in all the modes that we have represented here this morning. I 
really do want you to feel free to comment and add comments as 
you feel are necessary.
    I will continue with questions until Senator Shelby gets 
back and then allow him to move forward.

                      BALANCE SAFETY AND SECURITY

    Ms. Engleman, let me go back to you again. Every day there 
are 800,000 shipments of hazardous materials moving on our 
highways, on our railways, and our seaways, all of which are 
required to be marked with placards to identify the type of 
hazard that is inherent in the cargo, such as poisonous gas or 
an explosive. In addition to the placards, some of the most 
dangerous shipments require additional markings. For example, 
highway shipments of chlorine require that tank trucks are 
marked in white four-inch block letters, the word ``chlorine'' 
on the side of the truck. The fact of these markings are to 
warn people to stay away and to allow emergency response 
personnel to properly respond to spills and leaks. The problem 
here lies in the fact that at the same time we are achieving 
our safety goals, we are also drawing potentially unwelcome 
attention to shipments that could potentially be used as a 
weapon of mass destruction.
    Ms. Engleman, what are you doing to balance the safety and 
security issues that seem to be at odds here?
    Ms. Engleman. Thank you, Madam Chairman. You are absolutely 
correct that it is a balance of issues that we're trying to 
address. We're very sensitive to the concerns that placards may 
indeed help identify hazmat material shipments as a target, if 
you will, of opportunity for terrorists or criminals. But we 
have to weigh the additional security risk against the 
demonstrated safety benefits of placarding, for the emergency 
responders, for anyone on the accident site, for anyone who 
would be involved in trying to support recovery efforts. And so 
to protect firefighters, policemen, emergency personnel, rapid 
identification of the hazmat material is absolutely critical.
    We also believe that a sophisticated terrorist will not 
rely on our placarding system to identify the vehicles or the 
container or the shipment, in order to do harm, if you will, 
with the product. So, as such, removing the placards and 
removing hazardous communication markings could truly place our 
firefighters and policemen, ambulance technicians, and other 
emergency responders at risk and increase their vulnerability 
at an accident site.
    Senator Murray. Is there any technology available to switch 
to a more nondescript method of identifying hazardous cargos 
that also meets the needs of the emergency response community?
    Ms. Engleman. We are reviewing a variety of possible 
technologies that could assist us in this, everything from 
advanced sensor reading or tracking devices, and we are 
reviewing the possibility of utilizing this to support our 
efforts. So this is something that's on the table. But the main 
consideration that we have right now is if there is an 
accident, because we hope sincerely that accidents will remain 
our concern, rather than incidents.
    The majority of the time that we will need to be on site 
will be a safety issue, an accident, and we don't want to deter 
from the ability of first responders to be on site or to cost 
them time.

                         PAYING FOR TECHNOLOGY

    Senator Murray. Who should pay for that new technology? 
Should it be us, the Government, or the industry?
    Ms. Engleman. Usually, when you invest in technology--I 
actually come from an R&D background--I think that it's 
something that you have to consider the cost versus the 
economic benefit to the industry. We need to look at what's 
going to be the best way to achieve that through a cost/benefit 
analysis.
    Senator Murray. Beyond that, though, is this something we 
should be thinking about in terms of our budgeting? Should the 
Government be responsible for paying that, or are we going to 
require industry to do it?
    Ms. Engleman. I can't answer definitively at this time. 
However, if you look at past practices on these issues, no 
matter where they are, whether they're safety, security, or 
other issues, we have a whole breadth of responses. Sometimes 
the Government pays 100 percent; sometimes it's industry; 
sometimes it's a 50-50 split. It's based on the cost/benefit 
and what's the best way to achieve the goal and not be onerous 
to either party.
    Senator Murray. Mr. Clapp or Mr. Rutter, do either one of 
you want to respond to this issue? Mr. Clapp.
    Mr. Clapp. We have discussed this internally, and I believe 
Administrator Engleman's views are entirely consistent with our 
own.
    Mr. Magaw. Madam Chairman, can I just make a comment here?
    Senator Murray. Yes.

                     DRIVER AWARENESS AND SECURITY

    Mr. Magaw. You know, the other thing that we want to 
address very quickly also is the driver of these vehicles.
    Training them in terms of what to look for, most of the 
time. When you will use something like this to do harm, you 
will case it. You will find out where they are parking it. You 
will find out when they are leaving terminals, and when they 
are coming back to terminals. Drivers who are on the highway 
can look for things that a tailing vehicle or an observation 
vehicle would give away, that there is some kind of planning 
going on or in fact an act about to occur.
    So more driver awareness, more driver security is needed. 
How secure are we in terms of that particular driver? Could a 
sleeper cell or a terrorist group come on board and actually be 
drivers of these vehicles? So we are going to look at that area 
very closely also.
    Senator Murray. Will we be seeing some recommendations on 
this?
    Mr. Magaw. Well, it is one of the items that we have 
identified and we are going to look at. I can't imagine that we 
wouldn't have some very good suggestions coming out of this.
    Senator Murray. Mr. Rutter, do you want to comment?
    Mr. Rutter. Well, Senator, one of the, I guess, ongoing 
success stories that had of predated 9/11 was the efforts of 
both kinds of modes of transportation, in the industry itself, 
working with local emergency planning committees and with first 
responders. One of the programs that is in use now is called, 
``Operation Respond'' and provides those with the need to 
know--the first responders information about the consist--down 
to ``This is what that car is,'' ``This is what it's 
carrying,'' ``Here's how it's manufactured,'' ``Here's the 
chemical information about that commodity.''
    There are in existence some technological approaches that 
provide first responders some of that information. But the key 
is how do you help those first responders visibly know what's 
on those trains--what's on a train or what's in a truck? And so 
the technology has to be based on the ability of a first 
responder to gain information about that particular shipment.
    There may be possibilities of doing away with the placard, 
but, you know, who wants to go marching up to the car to wave 
some sort of AEI indicator? We're trying to find ways of 
building on what's already in place, that relationship between 
the shippers, the carriers, and the first responders, to find 
additional ways of enhancing the capabilities of those systems.

                EXEMPTION OF CERTAIN HAZARDOUS MATERIALS

    Senator Murray. Ms. Engleman, let me go back to you. I 
understand that there are regulations that have been in place 
since 1990 that exempt smaller quantities of certain hazardous 
materials from having to be registered or placarded. In 
addition, I am told your agency exempts the intrastate transfer 
of ammonium nitrate in quantities far larger than Timothy 
McVeigh used to blow up the Murrah Building in Oklahoma City. 
Given the new level of concern regarding terrorist attacks, 
should your agency not review whether these hazardous materials 
should be exempted from your regulations or whether the 
threshold should be lowered even further?
    Ms. Engleman. Senator, part of the challenge, of course, 
will be record keeping for any type of registration and 
tracking of such. We don't want to impose any severe burdens 
especially on small businesses. As you are aware, there are 
over 40,000 small businesses that act as our shippers, if not 
more.
    Senator Murray. So we have not moved because we are worried 
about regulating industry?
    Ms. Engleman. We should always be concerned about over-
regulating industry, ma'am, to ensure that we have economic 
prosperity balanced with----
    Senator Murray. Should the concern be regulation or should 
the concern be security, in light of what we now know about 
terrorist activity?
    Ms. Engleman. I believe we have to balance both regulatory 
and security concerns.
    Senator Murray. Which way do you tip?
    Ms. Engleman. I believe we have to balance both regulation 
and security concerns and the need for economic prosperity.
    Senator Murray. Mr. Magaw, do you want to comment?
    Mr. Magaw. Well, I think that we have to be careful of the 
bottom line of the business person in this country. I would 
lean towards the security side, but would ask also that 
Congress help fund that side.
    Senator Murray. Mr. Clapp or Ms. Engleman, shouldn't we be 
concerned about the fact that your agency exempts potential 
explosives such as ammonium nitrate from many regulations? Mr. 
Clapp.
    Mr. Clapp. Well, we do not exempt potential explosives. I 
think your statement was to the effect that some States permit 
the intrastate transportation of ammonium nitrate----
    Senator Murray. Intra, right.
    Mr. Clapp [continuing]. In larger quantities than they are 
allowed under the Federal regulations. Prior to October 11, 
1998 we did not have preemption authority over intrastate 
regulations, although our grant program, in fact, specifically 
requires the States' regulations to be in concert with our own.
    I think it is definitely worthy of consideration. If there 
are instances where some States do permit larger quantities of 
ammonium nitrate to be shipped intrastate than are permitted 
under Federal regulation, then yes, we should look at that.

                     HAZARD MATERIALS ACTION GROUP

    Senator Murray. Ms. Engleman, how did your hazmat direct 
action group address the issues in your recommendations to the 
Secretary?
    Ms. Engleman. First of all, we put together an intermodal 
hazmat group, which was the 30-day group which I mentioned 
earlier. That consisted of all modes within the Department of 
Transportation, as well as legal staff. We provided the formal 
documentation, which I do need to clarify, and state that we 
are implementing many of these.
    I don't want to mislead you, to say that we're waiting just 
for regulations. Much of what we're doing was internal 
coordination, communication, and security advisories. We 
actually have put out a product every month since the event, 
whether they be specific security notices, advisories, or 
interviews, or working with the major associations, as well as 
individual companies, and other agencies. We provided the 
formal notebook and plan to the National Infrastructure 
Security Committee, which the Department established under 
Secretary Mineta's leadership. We additionally added what we 
call the direct action groups.
    The direct action groups broke down all the major issues 
into topic area, as well as specific issues. Each of those 
direct action groups also added to our body of knowledge. We 
provided all of these information materials and recommendations 
to the modes and to the Secretary; interdepartmentally we are 
implementing much of what we had discussed, because much of 
that we can do without requiring regulations.
    Senator Murray. Senator Shelby.

                        NATIONAL RISK ASSESSMENT

    Senator Shelby. Thank you, Madam Chairman.
    In my opening statement, I stated my belief that it is 
essential for the Department to develop a national risk 
assessment of the entire transportation system. This would form 
the basis of a plan to make the system more secure and should 
provide a method to address the greatest risks immediately.
    Mr. Magaw, has TSA begun this process? Also I would be 
interested in hearing how this effort is coordinated with the 
Office of the Secretary and various modal administrations, if 
you care to comment.
    Mr. Magaw. The Office of Homeland Security, which we have 
interfaced very closely with and will continue, is doing 
assessments right now. What we want to do is fit into it as 
part of the national plan. We believe that you have to have a 
risk assessment. It has to be a national risk assessment in 
order to coordinate all the kind of things that you are 
concerned about.
    What we are doing now is--at TSA--is we are hiring 
personnel. I have told the administrators, ``We need to hire 
personnel who have law enforcement background, but people who 
also have trucking background or railroad background.'' So I am 
working with them to hire the proper staff, after which then we 
can move forward and coordinate and work with other entities to 
make sure that we have a national plan and that we develop our 
priorities and our budgets and our strategic plan based on 
that.

                        TRANSPORTATION SECURITY

    Senator Shelby. Mr. Magaw. And I'll direct this question to 
all of you on the panel. Aside from aviation, what do you 
perceive to be the most immediate and serious transportation 
security issue? And what immediate actions or steps are you 
pursuing or should the Department be pursuing to mitigate the 
risk while a more comprehensive risk assessment is being 
undertaken by the TSA? You have immediate problems; you have 
got long range problems. Mr. Magaw, you want to lead that off?
    Mr. Magaw. Yes, sir. When any terrorist group plans to 
attack, it is an area that is or an area that will make the 
most impact--and we could see that clearly on September 11. My 
concern is that as we are paying more attention to aviation. 
Funds are being appropriated for security surveys and 
protections. The issue that you are sitting here about this 
morning, cargo and transportation of goods, is my immediate 
concern--in terms of where loopholes might be. The cargo area 
and the baggage area are places that they would try to find 
weaknesses. In fact, we find that there are elements of the 
terrorist groups that are canvassing airports and 
transportation systems.
    The other area that concerns me is rail. If you look at 
Union Station here in D.C., without me being overly specific 
about it, you will be able to see why my concern is here also.
    Senator Shelby. What about the other panelists? Do you have 
any other comments on it, Mr. Rutter?
    Mr. Rutter. Well, within a week after September 11, the 
most immediate concern I had was making sure that we did 
conduct that kind of risk assessment. Unlike other modes, the 
railroad infrastructure is privately owned instead of publicly 
funded. They were in a position to know more about their 
systems. They had the ability to apply some very significant 
resources toward doing that level of assessment. And we 
directed them and have been cooperating with them as they have 
done that. That product at the industry level has been 
completed as of December, and the FRA has engaged a consultant 
to test the results of that vulnerability assessment and 
mitigation measures that are necessary, to make sure that not 
only the carriers' economic interests are being balanced, but 
that the public interest is being protected.
    As we do that, we're also conducting outreach to shippers, 
chemical manufacturers, and labor, at the same time.
    Immediate steps we also took before we waited for those 
projects to begin are--I guess I'd point out two. The carriers 
themselves have ratcheted back on the transparency of 
information about their operations. As those of you who are 
familiar with STB efforts on shipper concerns, one of the 
things shippers have been asking for is, ``Where's my stuff? I 
want to be able to know where my goods are.'' And so railroads 
have, over the past couple of years, done very well at creating 
Web-based information systems on, ``Here's where your stuff is 
exactly. It's in this town right here.''
    The problem was, up until September 11, those were fairly 
open to just about anybody. And what the carriers have done, 
working with those shippers, is to put on more control of who 
has access to that kind of information. And it's not as widely 
distributed as it was.
    The other thing that's been done is to take advantage of 
the employees that are out there on the railroad system itself. 
Generally over 200,000 people are in a position to see what's 
happening, and to know who's supposed to be on their properties 
and who's not. And the carriers working with those labor groups 
have done a very good job of helping to train those employees 
to know what to look for, know who to report that to, and to be 
able to pass that information to railroad police forces, who 
are given interstate law enforcement capabilities. They are 
licensed and commissioned officers and have the ability to so 
something with that information. So we've controlled the amount 
of transparency to those who would use that information against 
us. And we've taken advantage of leveraging the abilities and 
the capabilities of the employees out there to keep their eyes 
and ears open.

                     TRANSPORTATION VULNERABILITIES

    Mr. McMahon. Mr. Senator, as the Under Secretary indicated 
and some of the administrators mentioned, a week following the 
September attacks Secretary Mineta established the National 
Infrastructure Security Committee to deal specifically with the 
security issues in the surface transportation field. 
Administrator Engleman and others have mentioned that. And that 
included maritime, hazmat, pipelines, surface transportation, 
which is highway and motor carriers, rail, and transit. And 
that included people from industry, hundreds of people, over 
hundreds of hours of meetings throughout the fall, and many 
recommendations. But from that, one of the clear problems or 
challenges was containers--sea containers, trucks, and rail 
containers coming across borders.
    So in December, the Department established an Interagency 
Container Working Group, which is co-chaired and includes 
participants from industry and from other Federal agencies, 
including not only Transportation and Treasury, but Defense, 
Agriculture, Justice, Commerce, Health and Human Services and 
again, many people from the private sector.
    The four subgroups in our container working group have 
included information technology, security technologies, 
business practices, and international affairs. And we submitted 
an initial report to the Office of Homeland Security on 
February 1. So the Department is taking the issue of container 
security, which we hear quite a bit about in the press, 
extremely seriously.
    Senator Shelby. Mr. Clapp, do you have any comments on 
this?
    Mr. Clapp. Yes, Senator. Your question had to do with 
vulnerabilities.
    Senator Shelby. That is right.
    Mr. Clapp. And it seems to me that----
    Senator Shelby. What are you doing immediately and then 
long term?
    Mr. Clapp. Well, unlike my friend Allan at the railroads, 
we have somewhat the opposite circumstance----
    Senator Shelby. You do.
    Mr. Clapp [continuing]. In motor carriers. We have hundreds 
of thousands of motor carriers in this country. We are a free 
and open society and an entrepreneurial-based society. As both 
of you recognized in your statements, the efficiency, speed, 
and reliability of transportation have been uppermost in our 
minds and indeed in our performance of our transportation 
systems. So one has to regard that as a vulnerability.
    The way we have tried to approach that in my particular 
agency is to go out and have face-to-face meetings with over 
40,000 carriers of hazardous materials that we would identify 
as being of relatively high consequence. And we have sat down 
with the officials of those carriers. We have reviewed their 
security programs, or the lack thereof, within their programs. 
We have reviewed a series of recommendations suited to their 
particular kind of circumstance, for a security planning, 
implementation, training and vigilance. We have also reviewed 
the driver rosters of those carriers.
    We are just about concluded with the first round. As of 
March 31, we have about 400 or so to go and we have made 128 
referrals to the FBI of potentially suspicious people, 
activities, applicants or other things of that nature. We have 
already seen the benefit of having done these visits, in that 
we have seen evidence of where the carriers have acted upon 
this information. They have reported when they saw suspicious 
activities, as Mr. Magaw referred to earlier. If somebody seems 
to be following the truck or is taking an unusual interest in 
it; it seems to us that was the most rational approach to this 
very open system that we have. We have to help the carriers 
adjust to the new normalcy; things will never be like they 
were, and vigilance is the price of freedom.
    Senator Shelby. Admiral.

                         MARITIME VULNERABILITY

    Admiral Pluta. Thank you, Senator Shelby, Madam Chairman. 
As you know, we consider the maritime mode of transportation 
very valuable to our country, as over 90 percent of the imports 
and exports into our country come through the maritime mode. 
It's also most vulnerable.
    As we went through the Seaport Security Study that was 
conducted several years back, in addition to our response and 
our prevention activities that we undertook in the Coast Guard 
after 9/11, we set aside five basic goals for maritime 
security. In a very methodical way, and with a lot of outreach 
and consultation, we figured that the best investment would be 
made in awareness. And so Maritime Domain Awareness is very 
important to us, knowing what's coming our way, not only cargo, 
but people, ships, and also the ports from which they came.
    Our second goal was to control and pay attention to the 
movement of high interest vessels, which gets into hazardous 
material, cruise ships, and other environments; they could be 
used as weapons or as targets.
    Our third goal is increasing Coast Guard presence, both as 
a deterrent to somebody who wants to do something untoward and 
also to provide better response, as in our new Maritime Safety 
and Security Teams that will be coming out this summer.
    Our fourth goal is critical infrastructure protection of 
our country. There are thousands of pieces of critical 
infrastructure that we need to protect that are either at the 
water's edge or on the water. And finally domestic and 
international outreach, because the solution to a U.S. attack 
has to be a global solution, not just a domestic solution.
    Since 9/11, we undertook a very rapid rulemaking to require 
a 96-hour advance notice of arrival if someone is sending a 
ship to our country. Formerly, it was limited to some ships and 
was a 24-hour advance notice of arrival. We moved that out to 
give us more time to process the ships, the names of the crew 
members, the names of the passengers, and the cargo and such. 
We also established an 800 number at our National Response 
Center for people to call in suspicious acts and that's been 
used quite frequently by people who see things that don't look 
right on the waterways of our country and in our ports.
    We also have been working with a commercial carrier to 
develop a means of ship alerting, a silent alarm similar to 
what aircraft pilots might have to squawk a code if they're 
being hijacked. We have a device that one of the companies 
worked with us on to send a silent alarm on a ship back to our 
national response center to alert them that something is 
happening on board.
    In addition, our captains of the ports have broad statutory 
authorities and responsibilities and, not waiting for 
regulations, have used the vehicles of the captain of the port 
orders, security zones, and safety zones, to implement 
additional security requirements, and have established port 
security committees in the ports of our country so that all the 
stakeholders could get together and figure out how to improve 
security without being told what to do.
    At the same time, we're using a vehicle that we have, 
called a navigation and vessel inspection circular, to go out 
with interim guidelines on things such as port facility 
security, vessel security, and such, so that everybody who is 
desperately in need of an answer to ``what do I do?'' will have 
some guidance from us on what to do on a temporary basis. We'll 
follow that up with a notice of proposed rulemaking later this 
year, which would go to final rule with the timing of the 
Administrative Procedures Act in--next year in 2003.
    On the international front, because this won't just take a 
domestic solution, Admiral Loy and I went to IMO and made a 
strong presentation to get their attention focused on maritime 
security last November at the assembly meeting, and we got 
overwhelming support in an assembly resolution to accelerate 
IMO's activities. I headed the U.S. delegation to the very well 
attended inter-sessional work group on maritime security, in 
February, where we started the process of coming up with 
international standards for vessel security plans, facilities 
security plans, port vulnerability assessments and all the 14 
different maritime security concepts that we imbedded in our 
U.S. paper.
    We'll follow up with a meeting in May at the Maritime 
Security Council of IMO to conclude our work of the Maritime 
Security Work Group, and a diplomatic conference is set for 
December to put those requirements into effect on an 
international basis, all of which, in my opinion, compared to 
other IMO work I've done, is light speed time for IMO. They've 
been very responsive, and the countries have been very 
responsive to our needs.
    So that's, in effect, in a nutshell, Senator, what we've 
done. And I don't care to go any further unless you care to 
pursue any of those.
    Senator Shelby. Ms. Engleman, do you have any comments?
    Ms. Engleman. Yes. I'll try to keep mine brief, sir.
    Senator Shelby. Okay.

                         PIPELINE VULNERABILITY

    Ms. Engleman. In addition to all the internal work that we 
did, I would be remiss if I did not additionally share with 
you, that we've gone through worst case scenarios, best case 
scenarios, and vulnerability assessments for both hazardous 
material as well as our pipelines. I know Senator Murray is 
specifically interested in that.
    On the day of the event, we made over 1,000 individual 
calls to pipeline owner/operators, personal calls, to ensure 
that they understood the security necessities that we had to 
immediately address. For pipelines, we have done vulnerability 
assessments, working closely with industry on a one-on-one 
basis literally with the individual operator, not just with the 
associations or the like. We have biweekly telephone 
conversations, meetings coordinating security needs and 
addressing them. Each of the major owner/operators have put 
together individual security plans and have brought them to our 
attention. We are reviewing them and working with them to 
improve them.
    On the hazardous materials side, we've had workshops 
identifying best practices. We've printed brochures, produced 
videos, and put out CDs. We've had over half a dozen multimodal 
seminars throughout the Nation, with over 300 shippers in 
attendance at each. We will continue to have this outreach.
    In January, we put together a whole plan of action. And 
yes, it is voluntary. But if you look at the details of the 
security plans that we have put together, we have provided how-
to books, if you will, that are either low cost or free--
they're on our Web site--to all hazardous materials shippers. 
That was in January. In February, in the Federal Register, 
again we have specifically put in a security plan, personnel 
security, facilities security, and en-route security.
    If you look at the very specific items, you will see that 
we are addressing security in a total fashion.
    So in addition to the advisories, and addition to the 
internal review, we are putting a product into the system at 
the one-on-one level, to ensure that people know how to do what 
they need to do to add security to their already in-place 
safety practices.
    Senator Shelby. Thank you.

                          SHIPPER INFORMATION

    Mr. Magaw. There has been a lot of concern also, Senator, 
that only 2 to 4 percent of the containers are checked at 
ports. To try to check a much larger number than that would 
require a huge in number of people. What everyone here, both 
nationally and internationally, has been working on is to try 
to have better quality information about the shipper. If you 
have better quality information about the shipper and the 
contents that are being shipped, some of the things apply that 
each of them have mentioned. Then your 2 to 4 percent really is 
not a bad figure, because you would only be examining those 
which caused you to have suspicion, based on the information 
that, for instance, Admiral Pluta gave. They will know very 
quickly about that international cargo by the various means 
that they have, very high quality information. Therefore, 
Customs probably only has to look at a very small percentage, 
those that will jump out to them as being risky.

                  300-FOOT PERIMETER RULE AT AIRPORTS

    Senator Shelby. The 300-foot perimeter rule--the airport 
security bill provided for a process whereby airports could 
gain relief from rules prohibiting parking within 300 feet of 
airport terminals after consulting with local law enforcement 
and after adequate safeguards had been put in place. This issue 
was raised in an earlier hearing, and Secretary Jackson's 
response would lead us to believe that the Department had a 
fairly standard process for reviewing airport applications for 
relief.
    It has been brought to our attention since then that 
airports across the country are still waiting for the TSA to 
comprehensively review this issue and consider individual 
applications for relief.
    Mr. Magaw, is Transportation Security Administration still 
working on a case-by-case basis with airports that have been 
denied relief to this point? And can you give us some sense of 
when you will have developed an economically viable 300-foot 
rule approach for the Nation's airports?
    Mr. Magaw. What we are doing is looking at each airport, 
because each of them are different, Senator. We have most of 
those resolved now. I think there are only five or six----
    Senator Shelby. Okay.
    Mr. Magaw [continuing]. Out there that haven't been 
relieved because 300 feet for some of them is in somebody 
else's yard or a field. So that is important to us, and we are 
addressing it, sir.

                   EXPLOSIVES TRACE DETECTION SYSTEM

    Senator Shelby. Trace detection equipment is very 
important, is it not? I note that one airport is using trace 
detection equipment as their primary explosive detection 
regime. Should we interpret this to mean that the Department is 
open to an explosive detection system regime that does not rely 
exclusively or even primarily on certified EDS equipment? 
Should we interpret this to mean that explosive detection and 
baggage security should be a multilayered and varied system? In 
other words, how do we read this?
    Mr. Magaw. Yes, it should be multilayered. My concern is 
that 10 months from now we will reach the goal that the law has 
asked us to reach, and lo and behold, we will have technology 
that is going out of existence or that there is some better 
technology on the market. So we are looking at everything.
    Right now there is no one item, no one technology that 
covers all of our concerns and the concerns that you have. So 
we are trying to figure out what two technologies together or 
three technologies together would meet the needs for the kind 
of risks that that particular airport has and also what the 
airport is able to put in.
    For instance, Dulles Airport. To put the proper number of 
Explosive Detective Systems (EDS) machines in there to screen 
all the bags would totally fill their lobby. So what is a 
practical way of doing this? We're trying to do the best job we 
can at that.
    Each one of the technologies has a deficiency. There hasn't 
been a lot of money in the past years put into research in this 
area.
    I believe that with the entrepreneurs out there, and more 
money going into research, that 2 or 3 years from now we will 
have a much different technology in terms of size and in terms 
of error free than we have now. So we are trying to watch all 
of those as we move forward and mix and match them as best we 
can.
    For instance, EDS takes much less personnel than does the 
trace detection. Each one of them has their deficiencies, and 
we would be happy to talk to you in private about them.

                      EXPLOSIVES DETECTION SYSTEMS

    Senator Shelby. Speaking of EDS, the Department of 
Transportation Inspector General Ken Mead has indicated that 
the airport site preparation cost required for installation of 
EDS machines may be almost as costly as the machines 
themselves. How does TSA propose to handle the construction 
cost at airports associated with installation of EDS machines? 
Of course, we have got a December 31 date.
    Mr. Magaw. Right now the general plan, Senator, is to 
install a machine in the lobby we will go up to $175,000, which 
is more than what is needed to install it. If, let us say, we 
are putting three machines into an airport and two of them cost 
$125,000 each, we will provide the other $50,000 if the airport 
wants to and it looks feasible, to put an in-line system behind 
the counter or something like that, which costs a little more. 
But we are going to try to stay at the $175,000 for each 
machine, whether that involves moving walls or whatever it 
might involve. So that is where we are working right now.
    Senator Shelby. Thank you, Madam Chairman.

                           THREAT CONDITIONS

    Senator Murray. Thank you, Senator Shelby.
    A few weeks ago, Governor Ridge announced the establishment 
of a Homeland Security Advisory System, setting up five threat 
conditions. Each condition sets in motion protective measures 
designed to reduce the vulnerability to security threats and 
increase the response capability. Prior to Governor Ridge's 
announcement, the railroad industry set up its own four-tier 
alert plan.
    Mr. Magaw and Mr. Rutter, how does the railroad industry's 
plan fit or not fit with the threat plan designed by Homeland 
Security?
    Mr. Magaw. The Homeland Security program, as it was put 
together, involved virtually all of the Federal agencies. It 
was reached through a lot of discussion, primarily with the 
intelligence units, because intelligence is where we hope to be 
able to offset some of the weaknesses that we feel we have in 
some of our transportation modes. I believe the Homeland 
Security one will work very, very well as a national one across 
the country. But maybe Administrator Rutter could comment on 
the railroad one.
    Mr. Rutter. One of the things, certainly, that we're 
expecting to get out of our own internal third-party assessment 
of the railroad risk analysis and vulnerability assessment is a 
judgment on how we can take what has been identified as a plan 
for the railroads to do, and mesh it with what Homeland 
Security has pointed out.
    It's my impression, although we'll certainly wait for that 
product to be prepared, that our approach on rail security ties 
into what Homeland Security has provided, because those varying 
levels on the one hand depend on response, but the main thing 
that it gives us is: how do we get the intelligence information 
in the first place?
    So we'll be looking to adjust those plans to take into 
consideration what Homeland Security has already provided.

                    COMMUNICATIONS BETWEEN AGENCIES

    Senator Murray. I understand the decision to move from one 
threat level to another is currently being communicated to the 
various transportation industries through the Secretary's 
Office of Intelligence and Security. And I have heard 
complaints that the Office of Intelligence and Security is not 
getting sufficient input from the FBI to determine whether the 
heightened security levels are necessary. Is that true?
    Mr. Magaw. Madam Chairman, that is not true. Our 
intelligence unit not only interfaces very closely with the 
FBI, but we have personnel there and they may from time to time 
have personnel in our shops. What we want to do is to make sure 
that in our structure we have an Associate Under Secretary 
position for intelligence. It is one position below my 
position. That is how important we believe it is.
    We are searching now for a person who has international 
intelligence experience that will be recognized as equal and 
capable of being involved at every level, whether it be at the 
White House, in Condoleezza Rice's intelligence part or whether 
it is at the CIA or the FBI. Right now Transportation Security 
Administration intelligence is involved in all of those 
committees.
    Senator Murray. Will TSA be taking this over at some point?
    Mr. Magaw. TSA already has it. That was part of the 
changeover from FAA, the intelligence part of it. It is now 
mingled very closely with all the other intelligence units. So 
our Associate Under Secretary for Intelligence and Security is 
going to have intelligence for all of Transportation and will 
be very closely intermingled with Homeland Defense, CIA, NSA, 
FBI. So you will not find cracks there.
    Senator Murray. Mr. Clapp, how you intend to make this 
alert plan relevant and applicable to the independent owner-
operators with hazmat endorsements?
    Mr. Clapp. Well, we look a whole lot more like the general 
population. I don't have a direct line to every owner-operator, 
but we do have existing lines of communication with the 
industry, both at the State level and at the Federal level and 
with all kinds of organizations that represent drivers, as well 
as where drivers congregate in their companies.
    Senator Murray. Yes, Captain.

          TRANSPORTATION INFORMATION OPERATIONS CENTER (TIOC)

    Mr. McMahon. Madam Chairman, I wanted to mention that one 
of the efforts at the Department is to set up what will be 
called a Transportation Information Operations Center, or TIOC. 
And the purpose of the TIOC is to be able to deal with not only 
security information, but other relevant information, to push 
it out from the Department to the industry and from the 
industry back to the Department and then to share information 
with Federal agencies.
    So in the case of motor carriers, through their 
associations and perhaps even through the Teamsters Union or 
something like that, our TIOC is envisioned to have the ability 
to communicate a security alert, to an association, to some 
group that can then disseminate it further. So we are working 
on ways to effectively do that. And our interim TIOC will be on 
line 24/7 April 1. And we're in the process of constructing a 
full center which should be completed by the end of the summer.

                              SMART BORDER

    Senator Murray. Mr. Magaw, in your formal opening 
statement, you discussed the Administration's new Smart Border 
declaration. That is an initiative designed to expedite the 
travel of cargo across the United States-Canadian border. I am 
concerned about cargo that is destined to the United States, 
that will be sent to Canadian ports instead of United States 
ports, because the security requirements will be more lax. Can 
you assure this subcommittee that containers coming into the 
United States via Canada and containers entering U.S. ports 
will be subject to the exact same security requirements?
    Mr. Magaw. I will just comment and then have Admiral Pluta 
talk about it for a moment. Clearly any program that TSA puts 
together will be put together with fairness to all. I 
understand the importance of the Mexican border and the 
Canadian border and the countries we deal with. But if the 
admiral would discuss it.
    Admiral Pluta. Yes, sir, I'd be happy to. Madam Chairman.
    Senator Murray. Admiral.
    Admiral Pluta. We have for a long time been collaborating 
with Canada. And during last May's visit to the IMO, I signed a 
MOU with both Canada and Mexico on port security. In 
preparation for our IMO meeting, we had a video teleconference 
with the Canadian delegation as well, to make sure that we were 
in sync, so that we wouldn't have the disparity of having 
people compete on the basis of security. And this is exactly 
why we're going to IMO, to have an international standard so 
that everybody has the same basic level of security in the 
maritime mode, so that mode of international transportation 
won't be something upon which somebody can compare security. It 
will all be the same. That's the approach that we're talking, 
Madam Chairman.
    Senator Murray. Will containers entering U.S. ports be more 
likely to be inspected by the Customs Service or Coast Guard 
than containers coming through Canada, entering through Canada?
    Admiral Pluta. I'm sorry. I didn't catch your question, 
Madam Chairman.

                          CONTAINER INSPECTION

    Senator Murray. Will containers that are coming into U.S. 
ports be more likely to be inspected than containers coming 
across the Canadian border?
    Admiral Pluta. In the scenario that we're trying to work 
with Canada, we would both subject containers to the same level 
of inspection. In fact, Madam Chairman, there was a DOT 
delegation that Admiral Loy was a member of that set up a 20-
point program of cooperation with interborder type issues, 
security issues, with Canada. And I think the objective of this 
program is to avoid exactly what you're talking about, Madam 
Chairman.
    Senator Murray. Will the ratio of U.S. Customs officers to 
containers be the same for U.S. ports and Canadian ports?
    Admiral Pluta. I can't answer that question, Madam 
Chairman, for Customs. Maybe Mr. Magaw could help me out here.
    Mr. Magaw. No. I think we'd have to ask Customs that 
question.
    [The information follows:]

    The U.S. Customs Service anticipates that the ratio of inspectors 
to containers in Canadian ports will be higher than the ratio of 
inspectors to containers in U.S. Ports. In Canada, Canada Customs and 
U.S. Customs rely upon a manual review of paper manifests. This is the 
result of several factors including the fact that the percentage of 
carriers that transmit manifests electronically is lower in Canada than 
in the U.S. Since the U.S. system is highly automated, U.S. Customs 
expects that fewer inspectors will be needed in U.S. ports.
    The number of inspectors conducting targeting operations in the 
U.S. and Canada currently differs. At this point, there is one Canadian 
Customs inspector located in Tacoma/Seattle, Washington and one in 
Newark, New Jersey. U.S. Customs has staffed both Montreal and 
Vancouver with three inspectors, while Halifax is staffed with two 
inspectors. These staffing levels may change as the program evolves.

                           CONTAINER SECURITY

    Senator Murray. Captain.
    Mr. McMahon. Madam Chairman, just one point on that, and I 
think it was brought up earlier as far as container security. 
The best way we can ensure container security, whether a 
container is coming from Canada, Mexico, or through our ocean 
ports, is information and to know what, in fact, is in that 
container and who shipped it. And that knowledge, that feeling 
of security, is not contingent on whether it's coming into a 
U.S. port or a Canadian port. We're just as interested in 
transhipped containers coming through Canada, and perhaps in 
some cases more so, for these same reasons.
    So that's one of the efforts of our container working 
group, working with Customs and other agencies, to ensure that 
information is as accurate as possible.
    Senator Murray. Admiral.
    Admiral Pluta. Madam Chairman, I was just informed that 
Canadians and the U.S. Customs Service have an exchange 
program. We have just exchanged three customs officers from the 
United States to work in Canada as well as those coming over 
here in an exchange program, to try to sort out those things 
and make sure that we're dealing with the cargo issues in the 
same manner.
    Senator Murray. Very good.
    Admiral Pluta. Thank you, Madam Chairman.

                ADVANCED NOTICE OF ARRIVAL REQUIREMENTS

    Senator Murray. Admiral Pluta, the Coast Guard recently 
changed the advance notice of arrival requirements from a 24-
hour advance notice of arrival to a 96-hour time period. At the 
same time, you are requiring ships to send a list of all their 
crew members so they can be checked against national security 
screening lists. That requires the screening of over 9,000 
names a day.
    Earlier this week it was reported that the screening 
process is so cumbersome that oftentimes the ships have come 
and gone before the screening confirmations have gotten back to 
the Coast Guard. It was also reported that there is very little 
the Coast Guard can do when they are given fictitious names of 
crew members.
    Admiral, why does it take so long for the Coast Guard to 
screen these names?
    Admiral Pluta. Madam Chairman, first please let me say that 
we do look at the crew members and we focus on high interest 
vessels first and other vessels later. The reason that it's 
taking so long is because we don't have that information 
submitted to us electronically. In order for us to get this 
rulemaking on the street expeditiously, we were limited by 
procedure to not making radical changes. And making a change 
from a paper submission to an electronic submission was more 
than we were permitted to do. So we're including that 
electronic submission in our final rule, and we're working with 
the U.S. Customs Service and their APIS System, the Automatic 
Personnel Identification System, to use their system to 
electronically vet people.
    Senator Murray. When can we expect that to happen?
    Admiral Pluta. In June the regulation can become final, and 
I can't answer beyond that, Madam Chairman.
    Senator Murray. Okay.
    Admiral Pluta. But we are working with the industry. In 
fact, we already have a working agreement with the 
International Council of Cruise Lines, who voluntarily use the 
APIS System for the most part to get people to submit 
electronically. And there seems to be a very warm reception to 
that whole idea. I think we're going to get voluntary 
compliance before the Administrative Procedures Act.
    Senator Murray. What do you plan to do about fictitious 
names?
    Admiral Pluta. The Credentialing Direct Action Group and 
the IMO initiative to get background checks for seafarers and 
identification for seafarers is going to resolve this problem 
hopefully over time. We can't deal with fictitious information 
right now. We have to accept it at face value. But the 
initiative that we went forward with at the IMO was to 
establish a central identification database for all mariners 
from all countries.
    The issue of background checks for mariners is very 
contentious at the IMO. But we are working between the IMO and 
the International Labor Organization to get a standard for all 
seafarers to be identifiable before they come into our country. 
And we are working with INS, who is also a member of our 
delegation, to make sure that that identification would be 
equivalent to a passport kind of identification level, so that 
we would be more conscious of everybody who is coming our way, 
Madam Chairman.

           RISK OF FOREIGN VESSELS ENTERING THE UNITED STATES

    Senator Murray. Admiral, with the vast majority of vessels 
entering the United States being foreign flagged and operated 
by foreign crews, it is only natural that you have looked for 
international support to ensure that these vessels do not 
present an unusual risk to our national security. One goal you 
announced in this area is to accelerate the requirement for 
every ship to have an automated information system or a 
transponder by 2004. Without those transponders, as the case is 
today, we effectively do not know what ships are in our waters. 
How likely is it that you will achieve unanimous consensus for 
this requirement at the International Maritime Organization 
meeting in December of this year?
    Admiral Pluta. Madam Chairman, I'll be better able to 
answer that question in May, but I feel very optimistic about 
that. We suggested to the IMO that it accelerate this 
requirement. It's an existing requirement that had a 
preexisting time frame that ran through 2008. And we suggested 
that they accelerate it through 2004. After a lot of 
discussion, the language that came out of the inter-sessional 
work group was that this equipment would be installed at the 
first special survey after the first of July of 2004, but no 
later than December 31, 2004. And that seemed to be the 
consensus opinion, although there were several countries that 
offered other alternatives that would string it out for some 
classes of vessels a little bit further.
    Senator Murray. You are hoping to get International 
Support. But if you do not get international support to 
accelerate this at your next meeting, do you think it is time 
we put in place a requirement as a port state and mandate that 
any ship that enters our water has a transponder, so we at 
least know what ships are operating in our waters?
    Admiral Pluta. Madam Chairman, I think if we don't succeed 
at the IMO in getting that time frame, then that's our only 
alternative.

              PORT OF ORIGIN CONTAINER EXAMINATION PROGRAM

    Senator Murray. Admiral, a second goal of your 
international outreach included seeking support for a port of 
origin container examination program, where containers would be 
inspected at their point of origin, so that when they finally 
arrive here in the United States we will have some level of 
comfort that the contents of the container are as they were 
advertised on their cargo manifest. In reality, how smart do 
you really think it would be for us to rely on security 
screening procedures that are put in place by countries like 
Malaysia or Indonesia or the Philippines?
    Admiral Pluta. Madam Chairman, if we establish an 
international standard, and if we have an auditing system of 
trusted agents that can be vetted to vet the cargo themselves, 
if we have a good working relationship between the IMO, the 
World Customs Organization, our own Customs Service and our 
larger bilateral partners, you have to trust to a degree, but 
you have to check as well. And I think that has to be part of 
it. But we're building those blocks at the IMO from the ground 
up. Establish what is the minimum standard, first, and then we 
can hold people to it through port state control provisions and 
check with either the Customs Service or other overseas trusted 
agents. In that case, I would be willing to trust what's coming 
in our direction, Madam Chairman.
    Senator Murray. In a lot of the Asian ports there are 
independent barge operators that transfer as few as four 
containers at a time. How do we ensure the security of 
operations with facilities like that?
    Admiral Pluta. Madam Chairman, we have to apply the same 
standard regardless of the volume. I think it's up to the 
Administration in the case of Singapore, China, or Hong Kong to 
make sure that the same standard is applied to all operators. 
And that would be a condition of a container being permitted to 
be loaded on a ship bound for the United States, Madam 
Chairman.

                         NATURAL GAS PIPELINES

    Senator Murray. Thank you very much.
    Ms. Engleman, let me go back to you. Earlier this year your 
agency put out a proposed rule which would prevent natural gas 
pipelines from being installed near hospitals, schools, daycare 
facilities, and other facilities having persons who are 
disabled. The natural gas industry has been lobbying against 
that proposed rule. And given the security threat proposed by 
natural gas pipelines, do you think it is responsible for the 
gas industry to try and weaken that proposal?
    Ms. Engleman. I believe that we have to look at all aspects 
of security, as well as safety, when we look at the natural gas 
rule. As you are aware, that is step one of our integrity 
management program for gas. We will soon follow the notice of 
proposed rulemaking with the actual program. And that program 
will incorporate the elements of locations. It will go beyond 
just population and concerns for the high----
    Senator Murray. Will RSPA weaken its proposal in that area?
    Ms. Engleman. We're in the rulemaking process now, ma'am. 
We're looking at all aspects of the comments that are coming 
back from industry. That's part of the general procedure. 
However, we do continue to have a focus on safety and security 
as our primary decision maker.

                     ADMINISTRATIVE PROCEDURES ACT

    Senator Murray. Mr. Magaw, the issue of the Administrative 
Procedures Act has come up several times this morning. Do you 
believe that we should waive the Administrative Procedures Act 
in the case of transportation security regulations?
    Mr. Magaw. Well, certainly if we have particular 
circumstances, events, or discoveries as we move forward that 
need immediate action, I would think that we ought to have that 
authority, but we ought to make sure that we use it very 
cautiously.
    Senator Murray. Okay.
    Mr. Magaw. Some of those authorities are in the new 
Aviation Transportation Securities Act. I don't intend to use 
them unless I have to use them, but the ones that are there, 
allow me to make airline industry regulations, but it has to be 
very carefully monitored by Congress so that it is not misused. 
I guarantee we will not misuse it.
    Senator Murray. What about for other modes?
    Mr. Magaw. I would think it would be valuable for other 
modes with close observation of Congress.

                           AVIATION SECURITY

    Senator Murray. Let me move on. Mr. Magaw, while this 
hearing really is about cargo security, I did want to take a 
minute to ask you a couple of questions about aviation 
security. We are told that we may be receiving the 
Administration's supplemental funding request for the current 
year perhaps even today. Do you expect that the amount of 
funding requested for your agency in the supplemental will be 
sufficient to enable you to fully meet your deadlines for 
federalizing the screening functions and testing all checked 
bags for explosives by the end of this year?
    Mr. Magaw. The figure that we are working with now, which 
we would hope the President will authorize, would allow us to 
do what you just said, meet the requirements of the baggage and 
the screening and the training and the hiring of the screeners.
    Senator Murray. You are hoping?
    Mr. Magaw. No. I believe that the amount that's in there 
now is $4.3 billion. If that comes forward to you at $4.3 
billion, we will be able to meet the requirements with that.
    Senator Murray. Without causing undue delay for passengers?
    Mr. Magaw. Without causing undue delay for passengers. It 
will not allow us to do some of the perimeter airport security 
that we had planned. It will not allow us to do as much in 
cargo as we planned. But it will allow us to get started in the 
cargo area. It will allow us to continue moving forward in 
2003.
    Senator Murray. So I can assume that it will not have 
enough to cover a lot of the issues that we have discussed this 
morning?
    Mr. Magaw. No. It will have money in there for most of 
those issues. In fact, it has money in there for 200 personnel 
to hire as cargo inspectors and cargo supervisors. So it will 
get us started in that area.

                      EXPLOSIVE DETECTION SYSTEMS

    Senator Murray. By the end of this year you are required to 
have new explosive detection systems installed in every airport 
across the country for the purpose of screening all of our 
checked baggage. This is a huge undertaking that is going to 
take a lot of cooperation between your agency and all the 
airports. I have had a number of airports talking to me in the 
last few weeks, who really feel that they are being kept in the 
dark by the agency and want to know what is going to happen to 
their facilities within the next few months. Do you think your 
staff at the TSA knows how and where best to install explosives 
systems, more than the airports?
    Mr. Magaw. Oh, absolutely not. I can understand, Madam 
Chairman, their concern. Two months ago, this organization was 
a white piece of paper and me. We now have Federal personnel in 
each of the airports, but they are not the new Federal security 
directors. I can understand that the managers of airports, the 
operators of airports, and the airlines themselves, are 
concerned. The message that we want to send is that every 
airport is different. You are the masters of your airport. We 
are going to come in there and coordinate with you. The only 
thing that they would have problems with us is if they want to 
build let us say, lanes to bring groups through that are more 
than what they would need for that airport.
    We have a pilot program right now at Baltimore-Washington 
International. Those lines went from an hour and a half to 18 
minutes. The other day they were 12 minutes. Now that was by 
building one more lane, but putting all the kinds of practices 
in place that we could figure out with the people at the 
airport. It was all done with the leadership at the airport.
    For instance, simple things like instead of taking all of 
your things out of your pocket and putting it in the plastic 
container as you stand there at the x-ray machines at the same 
time you are trying to put your carry-on baggage through, it is 
done back in the line. So when you walk up there, there is no 
dropping of things. You already had a chance to check, so that 
there are less delays because you put more in that box as you 
come up through there, because you think about it. Therefore 
you don't trip the machine as often. There is not that dropping 
and picking up and mad scramble.
    The other thing is in terms of wanding. If you trip the 
machine, you step off to the side where you are wanded, and 
able to watch your own valuables, so that there are not 
complaints of missing it. The wanding, then, takes place as the 
machine is still functioning, bringing passengers through.
    So that blueprint, although it can't fit exactly in every 
airport, the lessons learned there will fit. We are going to 
give those lessons learned to the airports. But the airport 
people are sitting there, knowing all this is coming, and 
asking ``how does it affect me?'' What I am trying to do is 
talk to each one of them. We have a conference call every two 
weeks to talk about their particular concerns. They have places 
to call each day to try to work their concerns out. But once we 
get those Federal security directors at each airport, those 
concerns will go away.

                  HIRING OF FEDERAL SECURITY MANAGERS

    Senator Murray. You have only hired a handful of these 
Federal security managers. When do you expect to have those in 
place?
    Mr. Magaw. The eight that we already have hired are 
developing the plans and being trained right now. There is 
another group of ten that the Secretary has approved. There is 
another group of 15 or 20 that the Secretary will approve in 
the next few days. After that, we are going to be rolling them 
out at about 25 to 30 a week. And so it will take us through 
the summer.
    Senator Murray. It will take us through the summer?
    Mr. Magaw. I believe before they are at all the airports. 
Now at the 81 airports, they will probably be there within the 
next 6 weeks. But in terms of all 429, it will take us probably 
through the summer. There is Federal presence on board now. The 
interim Federal security director is at every airport.
    The problem they have is that they were pulled from their 
assignments and put out there. We are trying to make sure we 
give them directions as we go along, so that they will be 
working with the airport people, taking their ideas, putting 
the plans together as they see it. The airports really have to 
make the plan. All we are going to do is just say, ``yes, it 
makes sense,'' and ``let's do it.''
    Senator Murray. I know you are a proud veteran of the 
Secret Service, and I have a lot of respect for the work of the 
Secret Service, but I wonder why so many of your new appointees 
at TSA come from the Secret Service. How many of your new 
senior managers are veterans of the Secret Service?
    Mr. Magaw. Of the eight airport directors that were just 
selected, four of them have a Secret Service background. One 
has ATF background also. On my staff--this is going to be an 
estimate, because I can't run all of them through my head right 
now--we have about 35 that we have hired at headquarters. 
Probably 8 or 10 of those have a Secret Service background.
    Senator Murray. Are you making a sufficient effort to bring 
in transportation specialists at the staff?
    Mr. Magaw. Yes, we are. We want to have a balance between 
those who have law enforcement background and those who have 
industry background. So as we have been talking with the modal 
administrators, and as we are talking to the Secretary in 
developing our staff, we want to make sure that in the land 
travel area, we have people from the trucking industry. In 
fact, there's a woman here today that has 40 years' experience 
in airline experience, from running----
    Senator Murray. Do you have anybody who is a security 
director for a transportation company on staff?
    Mr. Magaw. Yes. He's coming on board, in fact, next week. 
He also has a law enforcement background, but he has been in 
the trucking business 4 years now. As Mr. Clapp and I were 
talking during the break, we need to find somebody who has a 
history in liquid transportation. So we are balancing it. While 
I want to make sure that we are looking at security issues, I 
want to make sure that we have a balance, both in the airports 
and in the headquarters staff.

                      EXPLOSIVES DETECTION SYSTEMS

    Senator Murray. I want to ask you about the procurement of 
explosives detection systems. I know Senator Shelby asked you a 
bit too, but I am getting pretty worried. We have 9 months and 
9 days left to install a sufficient number of explosive 
detection systems around the country to meet the deadline of 
screening all checked baggage. As I understand it, you have 
only contracted for a few hundred new explosive systems. I am 
told there will be several thousand that will be needed. Do you 
still think it is possible to meet this deadline?
    Mr. Magaw. Not only possible, but I feel more comfortable 
about it than I did, 3 or 4 weeks ago. Let me tell you why.
    The problem is not putting the machine together, because it 
is basically bending steel. The problem is making sure that you 
get all the components, everything from the CAT scan to those 
kinds of things. Over 300 of those orders have gone out.
    There are other manufacturers stepping up now that are 
saying, ``We can produce some of those parts that make it.''
    There also are a number of companies stepping up, saying, 
``If we have the components, we can turn these machines out.''
    The problem we wanted to make sure that we dealt fairly 
with was with the companies that are already in the market and 
certified, that their rights were not violated. They have 
signed agreements that allow us now to have a major company set 
up an entire warehouse to just run these machines very quickly 
through as the component parts come in. So two companies that 
are certified are going to be making the maximum number that 
they can make. They are both gearing up to make more than what 
they thought they could. The shortfall will come from the big 
manufacturing unit. I am convinced we will reach that goal.
    Senator Murray. Do you believe will we have those machines 
installed at all the airports by the end of the year, or are we 
going to be looking at alternative means to do this?
    Mr. Magaw. If you have an airport that can only handle so 
many of the EDS machines and there is no way to reconstruct 
that in time to put all EDS machines in there, then the 
alternative means that we would be looking at is the ETD 
machine; that is the swipe type machine. Much smaller, but it 
takes more people to do it.
    So what we are trying to do is look at each airport, what 
is feasible at each airport, and then what plan do we go about 
it. But by the deadline, we will be examining baggage through 
one of those two technical systems, or both of them in tandem.

                            CUSTOMER SERVICE

    Senator Murray. Mr. Magaw, you have spoken in the past 
regarding the importance of good customer service when it comes 
to the way the TSA treats air passengers. Secretary Mineta has 
publicly called for a wait time of no more than 10 minutes for 
passengers to get through the screening process. Has the TSA 
taken Secretary Mineta's 10-minute standard as a hard and fast 
customer service standard for the future?
    Mr. Magaw. We have taken that as a goal. We are working for 
that at every airport. Some of those airports, in order to do 
that, will take some restructuring of exit and entry lanes. So 
it may take us a while to get there. But that is our goal. In 
fact, our vision statement, our mission statement, and our 
values list all the kind of things that you are talking about 
in terms of not only top-flight security, but quality customer 
service. That is in our training of our new first screeners 
being trained this week and next. The first group is coming 
through. And that's an essential part of the training. First 
class security, but also first class customer courtesy and 
respect and service.

                          SUBCOMMITTEE RECESS

    Senator Murray. Well, thank you very much to all of our 
witnesses today for taking time on this important hearing. This 
subcommittee will now stand recessed until Thursday, April 4, 
when the subcommittee will take testimony on port security in 
Washington State.
    [Whereupon, at 11:37 a.m., Thursday, March 21, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


 DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2003

                              ----------                              


                        TUESDAY, APRIL 16, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:35 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Patty Murray (chairman) presiding.
    Present: Senators Murray, Kohl, Durbin, Shelby, Bennett, 
Campbell, and Stevens.

                      DEPARTMENT OF TRANSPORTATION

                    Federal Aviation Administration

STATEMENT OF HON. JANE F. GARVEY, ADMINISTRATOR

               OPENING STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. The subcommittee will come to order.
    Already this year, this subcommittee has had three hearings 
on the topic of transportation and security. It was my hope 
that our hearing today could focus solely on the issues of 
aviation safety and capacity. Those were the two critical 
aviation issues this subcommittee was most focused on prior to 
September 11. And now, even with all the concerns we face in 
the area of aviation security, I still believe that we must pay 
more attention to them.
    Before September 11, air traffic was growing at a rapid 
rate, as was our economy. We were celebrating an historically 
long period without a major domestic airline disaster, even 
while air traffic was reaching historic highs. The events of 
September 11 did much to depress air traffic, and then on 
November 12, American Airlines flight 587 plunged into Rockaway 
Beach, Queens, the result of a clear safety failure.
    Today, we are starting to see air traffic return in some 
markets to pre-September 11 levels. Our aviation industry and 
our national commercial aviation enterprise is trying to get 
back to normal, even as we all worry that the next terrorist 
attack may be right around the corner.
    We are beginning to see the fruits of certain FAA 
investments to improve the efficiency of our aviation system. 
We have finally begun installing ground proximity radars to 
prevent runway incursions, and I was pleased to host our 
witness, Administrator Garvey, in Seattle 2 weeks ago for such 
an event.
    We have installed new technologies in some of our busiest 
control towers to keep airplanes moving during the summer storm 
season. At the same time, we continue to see either performance 
or cost problems with some of the most important FAA 
procurements on the horizon: performance problems with the new 
ASR-11 radars, which are expected to replace the aging analog 
radars at airports; cost overruns associated with the STARS 
program, which will provide new, desperately needed displays 
and computer equipment for air traffic controllers; and 
diminishing expectations of what the WAAS program can provide, 
a program designed to move the aviation industry into the era 
of satellite navigation.
    While it would be valuable and instructive to focus on just 
these issues alone, I am finding that, as I wade into the 
details of the Administration's aviation budget, it is 
impossible to ignore the issues surrounding the financing of 
aviation security. Notwithstanding the fact that this 
subcommittee fully funded the FAA's Operations budget request 
last year and granted several hundred million dollars more for 
emerging security needs, the FAA is currently contemplating a 
number of austerity measures for the current year due to the 
lack of available funds. These austerity measures include a 
hiring freeze on all air traffic employees that are not air 
traffic controllers or maintenance technicians, delaying the 
hiring of new air traffic controllers, reducing the maintenance 
on redundant safety systems, and reducing training for air 
traffic controllers.
    On top of those challenges, the FAA has had to urgently 
invest $100 million in order to better protect its own air 
traffic control facilities against a potential terrorist 
threat. At least in this case, the Administration has asked us 
to provide the FAA with an extra $100 million, but it has done 
so in a most misguided manner. Rather than ask for an emergency 
appropriation similar to the $4.4 billion in additional funding 
that has been requested for the Transportation Security 
Administration, the Administration is asking that this $100 
million be diverted from funds already appropriated for capital 
investments in the FAA's Facilities and Equipment program, and 
the Airport Improvement Program. This proposal comes at a time 
when the FAA is already required to divert funds away from its 
capital needs.
    In order to continue the operations of the Essential Air 
Service (AES) Program, Administrator Garvey must divert $50 
million from existing capital programs. There is also roughly 
$25 million that needs to be rescinded as a result of 
Congressional action. And finally, there is an additional $38 
million that must be found to keep the STARS program on 
schedule, because of cost overruns that have burdened that 
program.
    So, I do not see the wisdom in cutting capital investments 
further to pay for the protection of FAA facilities. We should 
appropriate these emergency security funds in the same way that 
we fund the urgent needs of the Transportation Security 
Administration.
    As I review the Administration's plans to implement the 
Transportation Security Act, it is clear that there will be a 
continuing tension between the needs for safety and the need 
for security. The Transportation Security Act allows funds 
appropriated to the Airport Improvement Program (AIP), our 
priority grant program for airport safety and capacity 
enhancements, to be used for security-related expenditures for 
2002 only.
    The hope, at the time the Security Act was written, was to 
help the airports cover a portion of their costs associated 
with hiring additional law enforcement personnel and other 
security expenditures. I am now concerned by indications that 
the Administration is looking to use the entire AIP program, 
all $3.3 billion, as a funding source for the installation of 
new explosive detection systems. While I support the investment 
in security, I do not think it is wise to suspend an entire 
year of Federal investment in projects designed to help our 
industry grow and ensure the safety of the flying public.
    While the Administration's supplemental budget request for 
an additional $4.4 billion for the TSA was submitted to the 
Congress almost a month ago, they still have been unwilling to 
brief this subcommittee on the details of their plans to 
purchase and install explosive detection machines. Those 
machines will be needed to comply with the requirement to 
screen all checked bags by the end of this year.
    But the Nation's airports, like this subcommittee, cannot 
get any straight answers out of the Administration as to how 
this requirement is going to be met. Clearly, the 
Administration is struggling internally to determine how or 
whether it will implement the letter of the Security Act, the 
spirit of the Security Act, or its own unique interpretation of 
the Security Act.
    I, for one, do not believe that we can afford to take a 
full year hiatus from investing in critical safety and capacity 
projects at our Nation's airports. We should not divert every 
dollar of airport grant funding for security expenditures. If 
we allow this to happen, we will once again find ourselves 
struggling to handle a growing number of delays and congestion 
at our Nation's airports. Those security expenditures need to 
be paid for and should not be done at the cost of safety and 
capacity projects. With that, I recognize the subcommittee's 
ranking member, Senator Shelby.

                 STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you, Madam Chairman.
    Now that responsibility for the security of the aviation 
system has shifted to the Transportation Security 
Administration, the FAA must focus on being prepared for the 
return in demand for air travel.
    The current decline in air traffic presents the FAA with an 
opportunity, I believe, to get ahead of future demand by 
developing a strategic plan for addressing capacity constraints 
and modifying the modernization effort to accelerate 
development of the acquisition programs with the greatest 
potential.
    At the same time, we must remain ever mindful of the need 
to constrain operational costs and enhance the efficiency of 
air traffic services delivery. Ultimately, our efficiency in 
modernizing the National Airspace System, and providing air 
traffic control services, translates into making air travel 
more affordable for all Americans and making our economy that 
much more competitive. Clearly, if the FAA continues along its 
present, inefficient course, when the traffic returns, so will 
the delays.
    But, Madam Chairman, it is difficult and unwise to discuss 
aviation safety or capacity issues without addressing aviation 
security. While I appreciate the difficulty of creating and 
staffing a new agency from scratch, there is no excuse for 
making decisions from behind a closed door or for perceiving 
that the formulation and disposition of security-related 
matters are exempt from accountability.
    Time and time again, information from TSA has not been 
forthcoming and affected stakeholders have not had 
opportunities to present their cases before decisions are made.
    One of the most immediate issues involves the funding 
source to pay for the implementation of new security 
requirements, including in particular the installation of the 
explosive detection systems. I have been told that until this 
and other security-related costs can be determined, the FAA 
will not issue any AIP grants and is holding the funds in 
abeyance. That is like saying that we are not going to pay for 
cholesterol-reducing drugs because we are saving all of our 
money for open-heart surgery.
    I believe that the Department must pursue the critical 
security improvements and requirements, while keeping important 
capacity and safety projects on track. The construction season 
in some States will begin soon, and unless the funding 
suspension is lifted, several multi-year projects will be in 
jeopardy.
    The FAA's acquisition programs, on the other hand, seem to 
be continuing virtually unaffected by the terrorist attacks of 
September 11. This is short-sighted, I believe. Instead of 
ignoring changing circumstances, even those brought about by 
tragedy, the FAA must, I believe, revalidate the need for 
various acquisition programs within the context of new security 
procedures and security requirements.
    This is a call to look at programs like WAAS to confirm 
that the programmatic solutions the FAA is pursuing are still 
the right solutions. We really, really should be constantly 
revalidating our modernization program and asking the FAA and 
industry if there are better, safer, and more efficient ways of 
meeting our modernization and security goals.
    I also continue to be concerned, Madam Chairman, that cost 
increases, schedule delays, and reduced capabilities are the 
norm with FAA's acquisition programs, not the exception. 
Furthermore, I am concerned that the FAA is abusing its 
procurement flexibility.
    At my request, the Inspector General conducted a rigorous 
analysis of competition in air traffic control contracts, and 
determined that the FAA awarded six of nine large contracts, 
valued at more than $1.25 billion, on a non-competitive basis. 
The intent of procurement flexibility was to overcome the 
barriers that can delay an acquisition program from benefitting 
the flying public and save taxpayer money along the way. 
Instead, it appears that the flexibility is being used for 
convenience of program managers. Madam Chairman, procurement 
flexibility was granted in order to accelerate modernization, 
not to trample on the legitimate expectations of fairness 
engendered by competition. When the FAA does just that, and 
then does not realize any efficiency in program delivery or 
cost savings, we are getting the worst of all worlds.
    Madam Chairman, fiscal year 2003 will be, in many ways, a 
pivotal year for the FAA. The AIR-21 authorization act expires, 
as does the labor agreement with the air traffic controllers 
union. In anticipation of the reauthorization process, it is my 
hope that the supporters of fire walls, whether in the Congress 
or from groups that claim to benefit by them, will make an 
honest determination of their value and understand their 
limitations.
    As I have stated before, special budgetary protection 
effectively establishes a funding ceiling, not just a funding 
floor, and minimizes our ability to make adjustments due to 
changing circumstances, such as new security requirements. 
Furthermore, programs with special budgetary protection become 
a source for funding noncapital priorities, and that is why the 
funding for the Essential Air Service Program is being 
requested in AIP, which is one of the so-called protected 
accounts.
    Finally, I want to join you, Madam Chairman, in commending 
FAA Administrator Jane Garvey for her dedication and her 
leadership over the past 5 years. While the job certainly has 
its rewards, it certainly has its challenges, and perhaps more 
challenges than rewards.
    As this may be your last appearance as FAA Administrator 
before this subcommittee, Madam Administrator, I would like to 
get your candid advice for your successor, a sense of what you 
think you did right, a sense of what things you might have done 
differently. Perhaps you could make some comments along those 
lines in your opening remarks.
    Madam Administrator, I believe your sense of service was 
evident by your decision to continue in your position at the 
FAA through the end of the term, despite the change of 
administrations.
    I believe it was just as important that you remained in 
your position to provide stability to an organization that was 
rocked by the terrorist attacks of September 11. The FAA is one 
of those places in government where leadership at the top, 
sustained over a period of time, is necessary before real 
change can be implemented.
    You have provided that leadership and we are seeing some 
progress now because of some of your initiatives, including 
Free Flight, Safe Flight, and capacity benchmarks. I commend 
you for that. Thank you.
    [The statement follows:]

            Prepared Statement of Senator Richard C. Shelby

    U.S. Senator Richard C. Shelby (R-AL), Ranking Member of the Senate 
Transportation Appropriations Subcommittee, today commented on aviation 
safety and capacity issues:
    Now that responsibility for the security of the aviation system has 
shifted to the Transportation Security Administration, the FAA must 
focus on being prepared for the return in demand for air travel.
    The current decline in air traffic presents the FAA with an 
opportunity to get ahead of future demand by developing a strategic 
plan for addressing capacity constraints and modifying the 
modernization effort to accelerate development of the acquisition 
programs with the greatest potential.
    At the same time, we must remain ever mindful of the need to 
constrain operational costs and enhance the efficiency of air traffic 
services delivery. Ultimately, our efficiency in modernizing the 
National Airspace System and providing air traffic control services 
translates into making air travel more affordable for all Americans and 
making our economy that much more competitive.
    Clearly, if the FAA continues along its present, inefficient 
course, when the traffic returns, so will delays.
    But, it is difficult and unwise to discuss aviation safety or 
capacity issues without addressing aviation security. While I 
appreciate the difficulty of creating and staffing a new agency from 
scratch, that is no excuse for making decisions from behind a closed 
door or for perceiving that the formulation and disposition of 
security-related matters are exempt from accountability.
    Time and time again, information from TSA has not been forthcoming 
and affected stakeholders have not had opportunities to present their 
cases before decisions are made.
    One of the most immediate issues involves the funding source to pay 
for the implementation of new security requirements, including in 
particular the installation of the explosive detection systems. I have 
been told that until this and other security-related costs can be 
determined, the FAA will not issue any AIP grants and is holding the 
funds in abeyance. That's like saying we're not going to pay for 
cholesterol reducing drugs because we're saving all our money for open-
heart surgery.
    I believe that the Department must pursue the critical security 
improvements and requirements while keeping important capacity and 
safety projects on track. The construction season in some states will 
begin soon and unless the funding suspension is lifted, several multi-
year projects will be in jeopardy.
    The FAA's acquisition programs, on the other hand, seem to be 
continuing virtually unaffected by the terrorist attacks of September 
11. This is short-sighted. Instead of ignoring changing circumstances, 
even those brought about by tragedy, the FAA must revalidate the need 
for various acquisition programs within the context of new security 
procedures and security requirements.
    This is a call to look at programs like WAAS to confirm that the 
programmatic solutions the FAA is pursuing are still the right 
solutions. We really should be constantly revalidating our 
modernization program and asking the FAA and industry if there are 
better, safer, and more cost efficient ways of meeting our 
modernization and security goals.
    I also continue to be concerned that cost increases, schedule 
delays, and reduced capabilities are the norm with FAA's acquisition 
programs, not the exception. Furthermore, I am concerned that the FAA 
is abusing its procurement flexibility.
    At my request, the Inspector General conducted a rigorous analysis 
of competition in air traffic control contracts, and determined that 
the FAA awarded six of nine large contracts, valued at more than $1.25 
billion, on a non-competitive basis.
    The intent of procurement flexibility was to overcome the barriers 
that can delay an acquisition program from benefitting the flying 
public and save taxpayer money along the way; instead, it appears that 
the flexibility is being used for the convenience of program managers. 
Procurement flexibility was granted in order to accelerate 
modernization, not to trample on the legitimate expectations of 
fairness engendered by competition. When the FAA does just that and 
then doesn't realize any efficiency in program delivery or cost 
savings, we are getting the worst of all worlds.
    Fiscal year 2003 will be in many ways a pivotal year for the FAA. 
The AIR-21 authorization act expires, as does the labor agreement with 
the air traffic controllers union. In anticipation of the 
reauthorization process, it is my hope that the supporters of 
firewalls--whether in the Congress or from groups that claim to benefit 
by them--will make an honest determination of their value and 
understand their limitations.
    As I have stated before, special budgetary protection effectively 
establishes a funding ceiling, not just a funding floor, and minimizes 
our ability to make adjustments due to changing circumstances, such as 
new security requirements.
    Furthermore, programs with special budgetary protection become a 
source for funding non-capital priorities, and that is why the funding 
for the Essential Air Service program is being requested in AIP, which 
is one of the so called protected accounts.
    Finally, I want to join Chairman Murray in commending FAA 
Administrator Jane Garvey for her dedication and leadership over the 
past five years. While the job certainly has its rewards, it certainly 
has its challenges--and perhaps more challenges than rewards.
    As this may be your last appearance as FAA Administrator before 
this subcommittee, Madam Administrator, I would like to get your candid 
advice for your successor, a sense of what you think you did right, and 
a sense of what things you might have done differently. Perhaps you 
could make some comments along those lines during your opening remarks. 
I believe your sense of service was evident by your decision to 
continue in your position at the FAA through the end of the term, 
despite the change of administrations.
    I believe it was just as important that you remained in your 
position to provide stability to an organization that was rocked by the 
terrorist attacks of September 11. The FAA is one of those places in 
government where leadership at the top sustained over a period of time 
is necessary before real change can be implemented.
    You have provided that leadership and we are seeing some progress 
now because of some of your initiatives, including Free Flight, Safe 
Flight, and capacity benchmarks.

    Senator Murray. Senator Campbell.

              STATEMENT OF SENATOR BEN NIGHTHORSE CAMPBELL

    Senator Campbell. Thank you, Madam Chairman.
    I would like to join my colleagues, Jane, in congratulating 
you on 5 years at the head of the FAA. Who could have ever 
anticipated the tragedy that we all faced after 9/11?
    I believe all three of us came on this committee about the 
same time in the last few years. Mostly what this committee did 
was listen to passenger complaints, on flight delays, 
cancellations, things of that nature, and the lack of available 
information pertaining to those problems.
    Certainly, that has all changed. And while those problems 
may continue, our focus certainly has switched to security 
procedures. And the tragic events of 9/11 were, in my view, 
were terrible and it forced us to put some things in place that 
I am not sure that we have yet found the balance between common 
sense and necessity to protect the public.
    Before 9/11, 4-inch knives were allowed on planes and 
security screening was pretty lax, untrained personnel, 
sometimes people could not speak English, security features on 
the planes were weak. The cockpit doors, for example, were 
easily breached. And I realize that many steps have been taken 
to correct that, because I fly home every weekend, as Senator 
Murray does too.
    Our country's economy is dependent on travel and the 
mobility of commerce. Additionally, the people of the United 
States deserve to move about in a safe manner. So sky marshals, 
improvement in selection and training of airport employees, and 
improvement in security procedures, all of those things, I 
think, are a terrific step.
    I guess my big problem is that there is such inconsistency 
out there still at the airports. Some airports I go through, 
they make me take my shoes off; others, they do not. It seems 
to me they ought to have some kind of a mechanism so that if I 
wear Western boots and if there is something in there that 
rings, they ought to all know it, not just some of them. But I 
think the last couple of weeks has really brought into focus 
some of the inconsistencies.
    This little thing here, you know, you have seen it. It is a 
fingernail clipper. I had two of them in my pocket when I came 
through Dulles on the way to Denver last week; two of these 
little things. And they made me take them out, everything metal 
you take out. I took them out. And this person that was doing 
the inspecting looked at this and he said, ``Open that up.'' 
And so I did. And you can see, it is a little file, about an 
inch long. There very common. You can buy them in any 
drugstore.
    And this man said, ``You cannot get on there with that.'' 
And I said, ``Well, break it off.'' And he said, ``Well, I 
cannot do that. You will have to break it off yourself.'' I 
said, ``Okay.'' So I broke the thing off.
    And he said, ``Okay. That is fine. Now, you can take it on 
there.'' He did not say a thing about the other one. So I got 
on with one with a broken little file, and one without a broken 
little file. When I came back from Colorado this way this year, 
I forgot the one with the broken file, and I just happened to 
have the one in my pocket with the file, and nobody said 
anything.
    While I was on the plane, Madam Chairman, I was doing some 
writing of notes, and I dropped my pen, this pen. And while I 
was fumbling around, I could not see where it fell under the 
seat, and I was groping for the thing. I stuck it in my hand, 
which leads to another interesting question. I mean, holy 
smoke, could that be a weapon if somebody was inclined to? 
Maybe it could.
    But I guess I bring these simple little case studies to 
your attention, because there does not seem to be consistency 
yet about what we can take on, what we cannot, and if it is 
going to be the same in all airports. And you might try to 
address that.
    I have a couple of questions I would like to ask the 
Administrator as we get along.
    Thank you.
    Senator Murray. Senator Reid has submitted a statement and 
asked that it be printed in the record.
    [The statement follows:]
                Prepared Statement of Senator Harry Reid
    Madam Chairman, let me begin by saying how pleased and honored I am 
to serve on this prestigious committee entrusted with appropriations to 
meet the nation's transportation needs.
    Madam Chairman, it may be prudent to request the DOTIG to return to 
the Subcommittee and update his latest findings on STARS. Given his 
concerns about the risk in the schedule and costs requires we obtain 
more information before committing scarce 2003 funding to continue what 
appears to be a terribly troubled program. Now is the time to address 
these issues before our Air Traffic Control system becomes completely 
outdated and unsafe.
    Mrs. Garvey, the STARS program is critical to the FAA's ongoing 
efforts to modernize the air traffic control system. Yet as I 
understand it, STARS is now $700 million over budget, 4 years behind 
schedule and no full STARS workstations are yet deployed. We've been 
hearing for years from the FAA that STARS has ``turned the corner''. 
Unfortunately, this doesn't seem to be the case. The DOT IG has warned 
Congress on several recent occasions about STARS' schedule and costs 
risks. The IG also noted that the FAA has not been able to produce a 
deployment schedule and cost estimate for the 99 sites to be installed 
after 2004. And the number of ``critical'' trouble reports arising from 
the STARS software testing has increased over the last 6 months. All 
this is occurring at a time when the war on terrorism and increased 
homeland security funding is constraining FAA's funding.
    In closing, I want to pledge my support to Federal Aviation 
Administrator Garvey. Finding the right balance between present needs 
and future musts for our nation's Air Traffic Control system is indeed 
a challenging task. As a senior member of this subcommittee, I'm 
committed to providing the necessary support and funding for the 
aviation transportation infrastructure of this great nation.

                      INTRODUCTION OF JANE GARVEY

    Senator Murray. Thank you very much.
    With that, we will turn it over to the Honorable Jane 
Garvey, Administrator of the Federal Aviation Administration.

                          FAA OPENING REMARKS

    Ms. Garvey. Well, thank you very much, and good morning. I 
very much appreciate Chairman Murray, Senator Shelby, and 
Senator Campbell being here this morning, and the opportunity 
to present the FAA's budget request for 2003.
    And I very much appreciate the kind words that all of you 
have expressed to me this morning. But even more importantly, I 
do appreciate and recognize that any success we have had in the 
last 5 years has really been due to the leadership that has 
been provided by this committee. Certainly, the smooth 
transition to Y2K, modernizing the air traffic control system, 
the improvements in safety, are due in large part to the 
support that we have received from your leadership and from 
this committee, and I am very much appreciative of that.
    I would like to briefly, if I could, address four issues. 
And Senator Shelby, I think it ties in to some of the comments 
you made about what are the issues that are important, what 
will the new Administrator need to focus on, as well. These are 
areas that I believe are reflected in the President's budget, 
but there are certainly issues that I will remain focused on 
between now and August.

                           TRANSITION TO TSA

    Since the events of September 11, our focus, and I think 
rightly so, has been to restore the security of the national 
air transportation system. I have certainly been working very 
closely with Secretary Mineta, with Deputy Secretary Jackson, 
and Under Secretary John Magaw to ensure a smooth transition to 
the new Transportation Security Administration (TSA). That will 
remain a high priority for us.
    While most of these issues are now with Transportation 
Security; and while Transportation Security is focused on many 
modes of transportation, we will work very closely with the 
Administration to ensure a smooth transition.
    But I also am very mindful of the comments that you all 
have made, which is that while we must view everything through 
the prism of September 11, we really cannot and should not lose 
sight of some very important aviation initiatives. And that is 
critical and important as well.

                       OPERATIONAL EVOLUTION PLAN

    And, again, I think if you look at the President's budget, 
it does reflect a strong commitment to the safety and 
efficiency programs within the FAA. It calls for a continuation 
of the Operational Evolution Plan; that is critical for us.
    You may remember that about a year ago, we were in this 
room discussing the Operational Evolution Plan, and it really 
represents a 10-year commitment, not just from the FAA, but 
from the airports and airlines as well, to increase capacity by 
about 30 percent.
    Again, with enormous support from this committee, we have 
begun to see some very strong benefits from that. You remember 
last year, we talked about seven choke point areas and the 
efforts we were going to take, the 21 initiatives. Those 
initiatives will all be finished by June. We have opened new 
sectors. We have put technology in place. All of that has 
resulted in a reduction in delays by about 20 percent. We saw 
those numbers before September 11 last summer, and we are still 
seeing those numbers as we move forward.
    Last December, we opened a new runway in Detroit. That is 
included in the Operational Evolution Plan. We promised this 
committee we would do that; we did. It increased capacity at 
that airport by about 20 percent. As you have noted, we have 
met every milestone and every deadline with Free Flight/Phase 
One. I think that program is a success for us. So, certainly 
staying the course on the Operational Evolution Plan, 
recognizing that demand will come back, we know the numbers are 
down now, but clearly within the next 12 to 24 months, we will 
see demand back in full force.

                                 SAFETY

    I expect we will see some hub areas this summer where we 
definitely will see some increase in travel, and we may even 
see some of the delays that we want to avoid. With respect to 
safety, the President's budget reflects a strong commitment to 
the safety programs. Again with the help of this committee, we 
are making progress in our runway safety program. The annual 
rate of runway incursions declined overall in 2001. What is 
even more significant is the reduction in the most severe 
runway incursions, the ones that present the greatest risk.
    Certainly, we are not declaring success in this area. We 
know we have more to do, but we think the trend is heading in 
the right direction. Our Air Transportation Oversight System, 
ATOS, is, in our view, another very significant safety program.
    The Inspector General took a snapshot in time a year ago on 
this program and made some recommendations. They are very 
consistent with the recommendations that we ourselves have 
developed in cooperation with our own inspectors. They focused 
on two principal areas. The first area was really to 
incorporate and integrate our data. We have done that. The data 
was fully integrated in January of this past year. The second 
was to restructure the training programs for the inspectors. We 
have done that and about 92 percent of the inspectors have been 
retrained. All of them will be retrained before the end of the 
year.
    I think if you asked the Inspector General, if you talk 
with Nick Sabatini, they will say ``This is the right approach, 
and it affords the opportunity to re-target our resources where 
we see the greatest problem.'' So I think that is a program 
that needs to stay on target and to stay very focused.

                             FAA MANAGEMENT

    Finally, Senator Murray, you and members of this committee 
have consistently expressed interest in the management of the 
FAA. Through your leadership, I think this committee has 
challenged us to use more corporate tools to better manage our 
own resources.
    And I am very proud to say that the FAA received an 
unqualified clean audit on our financial statements for 2001. 
That was a phone call I enjoyed receiving from the Inspector 
General.
    We are continuing our initiatives to fully implement our 
cost and performance accounting measures. We have a cost 
accounting system that is in place for the entire air traffic 
organization that represents 70 percent of the agency. Cost 
accounting will be fully in place by the end of this year, but 
we are already using it as a management tool to control our 
costs and to understand our costs much better. It is a very 
effective tool we believe in doing just as you have suggested, 
which is controlling the operational costs that we have for the 
agency.
    So, four areas of focus for me between now and August, and 
I think probably for the next Administrator as well, and that 
is transition to the TSA, the Operational Evolution Plan, the 
safety program, and the management improvements. And in each 
one of those areas, I think we have made significant progress 
over the last 5 years. I think there is still a great deal that 
can be done, but I am very proud of the progress that we have 
made to date.

                               FINANCING

    Finally, I would like to take just a moment to comment on 
this, on the FAA's 2002 budget. The agency, as you have 
suggested, Madam Chairman, is facing a shortfall of about $200 
million in its air traffic operating budget. That is due, as 
you have suggested, to higher security costs of almost $90 
million at our manned facilities, and to other unbudgeted costs 
we are facing.
    Although we were able to offset some of the shortfalls with 
cuts in existing programs, we were not able to offset the full 
amount. Therefore, the President's supplemental request 
includes a provision that will allow the FAA to transfer $100 
million, as you have said, from our capital accounts to cover 
these unexpected security costs. We certainly would ask, once 
again, for the committee's consideration of this request as you 
debate the supplemental budget; and we certainly appreciate 
that consideration.
    And finally as I mentioned, this will probably be my last, 
in fact, this will be my last appearance before this committee, 
before the Appropriations Committee. And just a personal note, 
it has been an extraordinary 5 years. I will say, once again, 
that I probably cannot adequately express the tremendous 
appreciation I feel to this committee, the sense of gratitude 
that I have for both for the personal support and the support 
that you have given to the agency; and also my deep admiration 
for the men and women of the FAA, the inspectors, the 
controllers, and the support staff, who make hundreds of 
decisions on a daily basis that really affect the air traffic 
system of this country and I think make it the greatest in the 
world. It has been an honor to serve and really a pleasure to 
be here this morning before you. Thank you.
    [The statement follows:]

               Prepared Statement of Hon. Jane F. Garvey

    Chairman Murray, Senator Shelby, Members of the Subcommittee: Thank 
you for the opportunity to appear before you this morning to discuss 
the Federal Aviation Administration (FAA) and our budget request for 
fiscal year 2003.
    Last year, I spoke with you about our sense of urgency about 
expanding the capacity of our nation's aviation system. At that time, 
we faced a crisis of congestion, delays, and too many aircraft for too 
few runways. Americans were frustrated with airline travel.
    This year, those concerns pale in comparison with the challenges 
our nation now faces. Our current crisis is far graver--its impact on 
aviation far more acute.
    This morning I want to discuss the significant developments and 
challenges that are before the FAA. We are working to ensure a 
successful transition of security operations and research to the 
Transportation Security Administration (TSA). We are continuing our 
efforts to provide a safe and efficient National Airspace System (NAS), 
and we must address the unfinished business from last year regarding 
capacity. While air traffic is still below the levels seen before 
September 11, we are beginning to see growth return to pre-September 11 
levels. We must use this time to make needed investments in 
infrastructure.
    To meet these critical objectives, the President's proposed fiscal 
year 2003 budget provides capital funding for the FAA consistent with 
the levels contained in the Aviation Investment and Reform Act for the 
21st Century (AIR-21). Airport grants are funded at $3.4 billion; 
capital modernization programs are funded at $3.0 billion; and, FAA 
operations are funded at $7.5 billion.
    I appreciate the efforts that you and the members of this 
subcommittee have undertaken to fund the FAA's budget requests. Fully 
enacting the President's budget request will permit the FAA to respond 
and recover from the events of September 11, make necessary 
improvements in the NAS and at the FAA, and improve operational safety 
and efficiency throughout the entire commercial aviation system.
    With the horrors of the September 11 attacks not far behind us, we 
must draw from the same courage that Americans have demonstrated during 
the last few months to proceed in this new era of aviation security, 
led by TSA.
    At the outset, I would like to commend Congress for their 
bipartisan efforts that created the Aviation and Transportation 
Security Act (ATSA). ATSA authorizes TSA to perform security screening 
responsibilities that once belonged to air carriers and security 
oversight functions that until recently were performed by the FAA. TSA 
took over the screening of passengers and property and oversight 
responsibilities on February 17, 2002. We at the FAA are committed to 
maintain the highest level of dedication to aviation security through 
the transition of these functions to the TSA.
                     maintaining our safety record
    The United States has a remarkable safety record. We know that as 
strong as our safety record is, we can make it better. We also know 
that with the growing demand we must make it better. That is exactly 
what we are doing. I want to take a moment to discuss three important 
safety initiatives we currently have underway: our Safer Skies 
initiative, the Air Transportation Oversight System (ATOS), and our 
runway safety program.
    Reducing the fatal accident rate for aviation is our primary goal 
at the FAA. To accomplish this goal, the FAA has joined in partnership 
with the aviation community to establish Safer Skies--a focused agenda 
to make the skies even safer.
    What we do in aviation is ``risk management.'' Risk must be 
identified, analyzed, evaluated, and controlled. It must be reduced 
with a disciplined and targeted approach. I am pleased to report to the 
subcommittee we are making clear progress.
    Safer Skies consists of three teams with similar goals to improve 
aviation safety. The Commercial Aviation Safety Team (CAST), the 
General Aviation Joint Steering Committee (JSC), and the Partners in 
Cabin Safety (PICS).
  --CAST is well on its way toward implementing safety interventions 
        for commercial accidents. CAST has been implementing strategies 
        to address Flight Into Terrain, Approach and Landing, and 
        Uncontained Engine Failures. Government and industry CAST 
        participants continue to develop intervention strategies for 
        runway incursions, loss of control, and turbulence. Weather 
        will be the next area for analysis.
  --As part of Safer Skies, the General Aviation JSC aims to eliminate 
        the equivalent of an entire year's worth of accidents by 2007. 
        This committee is focusing on the two leading causes of general 
        aviation accidents: Controlled Flight into Terrain and Weather. 
        Intervention strategies differ from those being implemented for 
        commercial aviation due to the unique general aviation 
        operating environment. Other areas still to analyze include 
        Loss of Control and Survivability.
  --PICS was chartered to bring the passenger into the cabin safety 
        equation by providing information to the public regarding cabin 
        safety issues in the following areas: Passenger Seat Belt 
        Discipline, Carry-on Baggage, and Passenger Interference with 
        Crew Members. FAA has developed a Cabin Safety web site to 
        provide guidance and educational material to the airlines and 
        general public.
    Another risk management tool used by the FAA is the way in which we 
inspect the nation's airlines. It is designed to identify safety trends 
in order to spot and correct problems at their root cause before an 
accident occurs.
    The program, called the Air Transportation Oversight System (ATOS), 
is now in place for the nation's 10 largest airlines--which handle 95 
percent of U.S. passengers--and will ultimately include all U.S. 
airlines.
    FAA inspectors look at an airline as a whole, to see how the many 
elements of its operations--from aircraft to pilots to maintenance 
facilities to flight dispatch--interact to meet Federal standards. By 
collecting and analyzing data on the many airline systems, FAA 
inspectors are better able to target areas for improvement. Congress, 
the General Accounting Office, the National Transportation Safety 
Board, and the airlines agree with our approach.
    ATOS already has yielded benefits: It has enabled us to create a 
targeted, more effective surveillance plan. ATOS is a significant shift 
in the way we oversee airlines and in the way our inspectors operate. 
Our goals are to assure that safety standards are met and to get ahead 
of issues that could potentially lead to the next accident.
    One of the most important FAA safety initiatives is our effort to 
reduce runway incursions. I am pleased to inform the subcommittee that 
both the actual number and the rate of runway incursions declined in 
2001 from their 2000 level. While this is a positive step, much remains 
to be done to continue this trend.
    The President's budget provides an increase of $5 million to 
strengthen our runway safety program. These funds will be primarily 
used to implement site-specific solutions at airports that sustain the 
highest number of runway incursions.
    Technological solutions are continuing to be implemented through 
the Airport Movement Area Safety System (AMASS) and the Airport Surface 
Detection Equipment (ASDE-X). The President's fiscal year 2003 budget 
request provides $21.7 million for AMASS and $87.8 million for ASDE-X. 
Twenty-seven of the 34 AMASS sites are scheduled for commissioning by 
September 30. Factory Acceptance Testing for ASDE-X is scheduled to be 
completed by August. We will continue to evaluate and assess low-cost 
technologies for potential deployment to non-ASDE and ASDE-X airports.
    In addition, the FAA is continuing to work to enhance pilot and 
controller communication, provide additional training and education 
opportunities for pilots and airport vehicle operators, and improve 
operational procedures at our most congested airports.
                          preparing for growth
    Even with the events of September 11, we must plan for aviation 
growth.
    Some priorities shifted after September 11, which caused the FAA to 
update the Operational Evolution Plan (OEP). Even with recent events, 
the OEP is fundamentally the same--a near 30 percent increase in 
capacity by 2010. The OEP is our plan to ensure that Government is 
doing everything that it can do; while at the same time have a 
comprehensive plan that lays out realistic expectations. These 
expectations are based on who has the ability to do what and when.
    Let me highlight our progress on near-term OEP initiatives. These 
initiatives are the heart of the FAA's ability to manage the NAS and 
provide for future growth.
  --Tactical, real-time approach to managing delays and demand around 
        weather and other issues is now a year-round approach. It is 
        standard operating procedure and how we do business. We are 
        using this collaborative, tactical approach every day of the 
        year. We are developing new tools and capabilities that better 
        define airspace constraints and support corrective actions.
  --Reduced separation (RNAV) ``Area Navigation'' routes in the Gulf of 
        Mexico were successfully implemented last year, allowing for a 
        greater flow of aircraft in this area. They have been a large 
        success with estimated annual savings to operators of about $22 
        million dollars. We are implementing RNAV routes around the 
        nation and are on schedule to meet OEP milestones.
  --We have made major progress on chokepoints. Ten new sectors opened 
        last year. One sector opened this year at the Cleveland Center. 
        Four radar positions opened at the Philadelphia and New York 
        TRACONS in late December. We will finish the chokepoints 
        initiative this June with four more enroute sectors in the 
        Cleveland and New York Centers.
  --We opened a new 10,000-foot runway at Detroit Metro on December 11. 
        We have runways planned for completion in calendar year (CY) 
        2003 in Denver, Miami, Orlando and Houston. Minneapolis is 
        under construction and scheduled for completion in CY 2004.
  --We are accelerating the User Request Evaluation Tool (URET). This 
        Free Flight Phase I tool allows for more direct routes, 
        increased arrival capacities, and a more predictable flight 
        experience for the passenger.
    I am pleased to report that Kansas City, Cleveland, Memphis, 
Indianapolis, and Chicago Centers are now operational with URET. 
Atlanta and Washington Centers will rapidly follow in the URET 
schedule.
    I visited the Kansas City and Cleveland Centers in late February. 
Controllers at both sites are pleased about this tool for its increased 
productivity, ability to allow time for controllers to focus on 
important tasks, as well as the conflict probe ability.
    URET at Atlanta and Washington Centers will mark a very important 
milestone for us. Achieving operational capabilities at both Centers 
will complete the commitment the FAA made with and to the aviation 
community 4 years ago to deliver on Free Flight Phase I. We did what we 
said we were going to do and when we promised. What was critical and 
essential to the success of Free Flight Phase I was holding the 
consensus, following the plan, communicating with the community, and 
the commitment by all to get this done.
                     a more business-like approach
    I also want to take this opportunity to update the subcommittee on 
our management efforts and reforms.
    First, I want to inform the subcommittee that the FAA received an 
unqualified, or ``clean,'' audit opinion on its fiscal year 2001 
Consolidated Financial Statements, which shows how the agency is 
spending its funds. Improvements we have made in the property 
accounting system were the major step in achieving the improved rating. 
By receiving an unqualified opinion, Congress can be assured that the 
FAA's resources are appropriately accounted for and our financial 
condition is being accurately reported.
    Second, the FAA is moving toward the creation of an Air Traffic 
Organization (ATO) and the hiring of a Chief Operating Officer (COO).
    The ATO will be a performance based air traffic services 
organization. It will commit to clear objectives, specific measurable 
goals, customer service standards, and targets for improved 
performance. It is designed to make certain that our air traffic 
services, from acquisition to delivery to operation, are highly 
responsive to user needs and more accountable for performance. A Chief 
Operating Officer will lead the ATO.
    In addition, the FAA is fully committed to finishing our cost and 
performance initiatives, which include cost accounting and labor 
distribution reporting (LDR). Our cost accounting system is well 
underway, currently tracking over 70 percent of our cost on a monthly 
basis. All FAA lines of business will have cost accounting in place by 
November of this year to coincide with the implementation of the FAA's 
new accounting system, DELPHI.
    Our LDR initiative will improve the cost information provided to 
the cost accounting system and FAA managers to better understand our 
largest cost element--our labor. We are currently collecting labor data 
from six FAA organizations, and this activity will be implemented 
across the FAA by the end of this fiscal year.
    In conclusion, I want to take a moment to once again thank 
Congress, and especially this subcommittee, for its support of the FAA. 
The President's fiscal year 2003 budget is the last budget that I 
present to this subcommittee as my 5-year term will end this coming 
August. I have enjoyed the working relationship that I have with you, 
Senator Murray, and the members of the subcommittee.
    I would be pleased to answer any questions you may have.

    Senator Murray. Thank you very much, Ms. Garvey.
    We have been joined by Senator Stevens. Would you like to 
give an opening statement before we do our questions?

                    STATEMENT OF SENATOR TED STEVENS

    Senator Stevens. No. I just, Madam Chairman, dropped by 
because I know what Ms. Garvey just said is the case, and this 
is probably her last appearance, and I wanted to stop by and 
thank her for her consideration of so many issues that affect 
my State and aviation in general. You have done a wonderful job 
and really can take with you a legacy of not only understanding 
the system, but cooperating with Congress and with everyone 
concerned to improve our air traffic system and improve its 
safety. I think I just join all concerned, I think, in thanking 
you for so much that you have done, and particularly for your 
personal visits to Alaska. We will welcome you back without 
regard to where you are working, Jane.
    Ms. Garvey. Thank you very much.
    Senator Stevens. Thank you very much.
    Ms. Garvey. Thank you, Senator.
    Senator Murray. Senator Kohl, would you like to make an 
opening statement before we turn to questions?
    Senator Kohl. No. I do not have any questions.
    Senator Murray. Very good.

               SECURITY OF AIR TRAFFIC CONTROL FACILITIES

    Ms. Garvey, as I mentioned in my opening statement 
following September 11, you were required to rapidly spend $100 
million to better secure your air traffic control facilities 
against terrorist attacks. And I understand that, separate from 
that $100 million expense, you were required to absorb another 
$100 million in unanticipated costs.
    Do you have any continuing concerns regarding the adequacy 
of security around your air traffic control facilities?
    Ms. Garvey. Senator, I think that is an issue you always 
have to keep focused on. We are certainly working very closely 
with our air traffic controllers. We have done threat 
assessments. We are in close communication, obviously, with 
intelligence; with the FBI, in particular. So, it is something 
we are constantly looking at.
    I think we have taken all the right steps, but I think as 
we move forward and we learn more, we will have to continue to 
look at that. I think in some cases, some of the steps we took 
immediately after September 11, we have been able to step back 
from, again working with the controllers. In some cases the 
armed guards are being replaced by fences. Those are the kinds 
of steps and those are the kinds of issues we continue to look 
at.

                     UNANTICIPATED OPERATIONS COSTS

    Senator Murray. What other unanticipated expenditures have 
you experienced this year that resulted in that $200 million 
shortfall?
    Ms. Garvey. Well, there are certainly issues around 
communication and some additional program issues that we had 
not anticipated. I continue to work and as the Deputy does, as 
well, with our Chief Information Officer (CIO), to continue to 
look at even some of the protection of the air traffic 
infrastructure; not just the facilities themselves, but also 
the air traffic control system itself. So, again, we have 
budgeted that. We found ways to cover it, but it will continue 
to be a concern as we move forward.
    Senator Murray. What will be the impact of your plans to 
slow the hiring of new air traffic controllers and reduce the 
training expenditures for air traffic controller?
    Ms. Garvey. I think those are two areas that I am 
particularly disappointed in. Those are steps that you do not 
like to take. When we have the work that I talked about, choke 
points for example, just to give one illustration, we have 
opened a number of new sectors. That has meant some additional 
responsibilities for controllers. And they have taken that on 
and they have really done it very, very well; but clearly, it 
is an additional workload, in some cases. Wanting to make sure 
that we could provide the kind of staffing that we have wanted 
to, we have made a commitment to that. It is difficult to have 
to hold back for a while on that. That is not something you 
like to do as prepare for the future.
    Certainly, training is another area that I have concerns 
about. We have got a lot of work going on to reduce and 
operational errors, and we are beginning to see a decrease in 
errors of about 4 percent. We are taking some right steps, but 
a cornerstone of that is additional training for the 
controllers, and I am particularly concerned that some of that 
training may have to be held back as we meet that shortfall.
    Senator Murray. Will those slowdowns still be necessary if 
we provide the $100 million supplemental that the 
Administration requested?
    Ms. Garvey. We will be able to reinstate all of those, or 
if not all, nearly all of those training programs and, again 
begin to hire. I think the key is, of course, when a 
supplemental is passed within the fiscal year.

                  IMPACT OF SHORTFALL ON SAFETY ISSUES

    Senator Murray. Do you have any safety concerns, regarding 
your initiatives, to reduce the contract maintenance of air 
traffic control systems and service redundance systems?
    Ms. Garvey. Madam Chairman, we have been very, very careful 
as we look at these issues that we are not affecting critical 
safety issues, and so clearly if we would not take those steps. 
One of the hallmarks of the American aviation system is the 
redundancies that we are able to build in.
    So, while I think we can live without some of the 
redundancies, you certainly do not want to remove too many, nor 
do you want to see that in a longstanding way. So we have been 
very careful to protect the most critical ones. I think, again, 
that is the kind of issue we have to constantly evaluate and 
guard against.

                FUNDING SOURCE FOR SUPPLEMENTAL REQUEST

    Senator Murray. The Administration's budget request for the 
2002 supplemental seeks language allowing you to divert funds 
from your investments in air traffic control systems in the 
Facilities and Equipment account, and the AIP account, to cover 
part of your operations shortfall. Why was it determined that 
FAA must eat its security expenditures out of its own hide, 
when the Administration is simultaneously requesting $4.4 
billion for new security requirements through the TSA?
    Ms. Garvey. Those are always difficult decisions. I think 
from the FAA's perspective, we put forward a request for $100 
million. We are certainly pleased that the Secretary's office, 
OMB, and the Administration supports and recognizes the needs 
we have. I know that the Secretary's office struggled and tried 
very hard to certainly stay within the spending line. And this 
really was the determination. But clearly the fact is the $100 
million is a recognized need. We are pleased with that.
    Senator Murray. Is it fair to assume that that budget 
proposal did not originate in the FAA?
    Ms. Garvey. We put forward the request for $100 million. 
That is, we did do that.

                   SUMMER TRAFFIC AND OVERTIME COSTS

    Senator Murray. Summer is going to be upon us very soon; 
actually today out here. But hopefully, hopefully the traffic 
spike that always accompanies the summer travel season will be, 
as well. Do you currently have enough money in your operations 
budget to cover the customary amount of overtime that you 
generally use during the summer travel season?
    Ms. Garvey. I think without the supplemental, that will be 
a concern as we move forward. We are going to have to watch 
that very carefully. I think you are absolutely right. We are 
starting to see that travel come back. We expect that this 
summer some of our busy hubs will once again be very busy, so 
it does put an additional strain on the Ops budget.
    Certainly with the supplemental, we will work very hard 
with you all to make sure that that money is there, and the 
resources are there.

                     USE OF AIP FOR SECURITY COSTS

    Senator Murray. The Transportation Security Act allows 
airports to use AIP funds for security-related expenditures for 
2002 only. Funding for this program, which totals $3.3 billion 
in 2002, is primarily intended for investments, of course, in 
airport capacity and safety improvements. Can you shed any 
light on how much of the $3.3 billion appropriated for 2002 is 
likely to be used for the cost of installing explosive 
detection systems?
    Ms. Garvey. Madam Chairman, as you indicated in your 
comments, some of this is still being discussed within the 
Administration. And let me answer it, if I could, in two ways.
    One is, if you look historically at how much out of AIP 
went towards security, it was generally about 2 to 3 percent, 
if you look at the historical commitment. It was essentially 
for things like fences or access cards and so forth, very much 
within the guidelines. With Congress's help this year, much 
more flexibility was given to the airports, which I think they 
are very grateful for. The $175 million that Congress 
appropriated, again, was a very big help.
    We are right now, at the Secretary's request, pulling 
together all of the costs that have been incurred by the 
airports. We should be getting that this week. The very early 
estimates I saw was that it might be about 12 percent of the 
$3.3 billion, but again we need to get a much clearer sense of 
that.
    We are just getting those numbers. When we get that in, 
which, again, will be this week, we will be sitting down with 
TSA to really take a look at both the concerns that they have 
from a security point of view, and certainly working with the 
Secretary and the Deputy Secretary to make the policy 
determination.
    Senator Murray. Will the airports be required, by the FAA 
or by TSA, to use a portion of their AIP entitlement funds to 
cover the cost of installing explosive detection systems?
    Ms. Garvey. At this point, that policy call has not yet 
been made. I think the first step was really to understand what 
the costs would be, to really understand the magnitude of the 
problem. I expect that determination will be made fairly 
quickly. I am hearing, and I am sure you are as well, from 
airports that are concerned, as you indicated, with 
construction seasons and so forth; so I think there certainly 
is an urgency to this issue.
    Senator Murray. What factors will determine how much of the 
AIP program will be diverted for the installation of these, and 
can you tell us when the Administration is making the decision?
    Ms. Garvey. I am sure that the Secretary will want to make 
this decision or come to grips with this very quickly. Our 
responsibility in the short term is to get these numbers to 
them. We said we would get it to them by the end of this week, 
and we will certainly do that.
    I think one of the factors, certainly, will be 
understanding the magnitude of the problem: Are we really 
talking about something that is enormous in scope? Are we 
talking about something that if we take part of it from AIP, we 
could still make it work?
    I think part of our responsibility will be to also present 
to both the Secretary and TSA an understanding of just what the 
capacity needs are out there. We have got a very good handle on 
that.

                  USE OF AIP FOR SECURITY EXPENDITURES

    Senator Murray. Well, let me just ask you for your personal 
opinion on whether you think it would be wise for Congress, 
with the competing requirements between safety and security, 
whether we should change the law again and allow the AIP funds 
to be used for security expenditures instead of safety and 
capacity projects?
    Ms. Garvey. For the challenges that we are facing, and 
again I have not seen the final numbers, but I think for the 
challenges we are facing, more flexibility is probably 
something that I would certainly want to see considered. I 
would like to see that considered for a bit more time as we 
move forward. But, again, having said that the capacity issues 
are still very real as well. It is going to be a very tough 
balance, but this is an extraordinary time, and I think we are 
going to have to face some very, very tough issues.
    Senator Murray. Thank you. Senator Shelby.

                     USE OF AIP FOR SECURITY COSTS

    Senator Shelby. Thank you. Ms. Garvey, I am concerned that 
TSA is not budgeting the cost of installing EDS machines at our 
airports and is reviewing the AIP solely as a funding source to 
implement security-related requirements, which according to the 
I.G. could exceed $2 billion. Other estimates even run higher. 
Do you have any comments on that?
    Ms. Garvey. Senator, I think the points that you all made 
in your opening comments are exactly ones certainly that I 
share and I believe the Secretary does as well.
    The capacity issues are very real; and while we do have 
certainly some very real issues around security, and looking 
for a little more flexibility may be appropriate for the next 
year or so, we still cannot lose sight of the capacity issues. 
Somehow finding a balance, it may be a little bit more on 
security than we have ever had before, is going to be very 
important.

               EN ROUTE AUTOMATION MODERNIZATION PROGRAM

    Senator Shelby. The FAA's en route automation modernization 
program, what do you call it? ERAM? It is critical to keeping 
the national air space system operating and meeting the 
anticipated demand for air travel. This acquisition program, as 
you well know, is in the early stages, but already there is 
concern that this software-intensive effort has the potential 
for significant cost growth and schedule delay. It is a high-
risk program, and costs could easily reach $1.5 billion, we 
have been told.
    What is your strategy for moving forward and ensuring 
competition here? And what will be the criteria for selecting 
the prime contractor?
    Ms. Garvey. Well, as you may remember, Senator, we did at 
one point move forward on a sole source, but it was challenged 
and we are in a competitive process right now.
    Senator Shelby. Real competition is good, if it is real 
competition.
    Ms. Garvey. Yes. Yes. I agree with you, Senator. There has 
been a protest that was filed. However, the two firms that are 
involved are engaged in mediation, and those talks are 
literally underway now. Some were held last week, additional 
talks, I believe, are being held this week. So I am hopeful 
that the mediation process will result in something that allows 
us to move ahead so that competition is protected but still we 
are able to move ahead. I think that is critical and important.

                       ENVIRONMENTAL STREAMLINING

    Senator Shelby. Has the FAA basically slipped environmental 
streamlining to the back burner?
    Ms. Garvey. Actually, the answer to that is no. Although I 
will tell you that I probably personally have not focused on it 
as much as I did last year, I am delighted to say that we have 
got a pretty dedicated staff that----
    Senator Shelby. I think you have focused on security in the 
last few months, which is great.
    Ms. Garvey. That is right. That is right. Thank you. But 
the airports office, Lynn Pickard, who actually works on this 
very carefully and has worked long and hard on it, had to 
continue discussions with the President's Council on 
Environmental Quality (CEQ) and came up with a whole series of 
categorical exemptions that could be included. And CEQ has been 
very helpful. We have a lot of work underway there, work with 
CEQ. And I think that has been helpful. The dedicated teams 
that we have had in place for particular airports have 
continued with their work; and, again, it is not shortchanging 
the environment, but actually streamlining it to some degree. 
Finally, we have asked for some additional lawyers in our 
budget for next year, who will help us with the environmental 
work.
    Senator Shelby. To move the process.
    Ms. Garvey. To move the process. The legal issues, 
sometimes, are the most troublesome as you move forward.

                       TIME TO CONSTRUCT RUNWAYS

    Senator Shelby. Does it have to take approximately 12 years 
to build runways, something like that?
    Ms. Garvey. In some cases----
    Senator Shelby. The total process.
    Ms. Garvey. In some cases, that is correct. And certainly 
if you begin from the very early stage of when the local 
decisions are debated through, even before it gets to the 
Federal level, that is absolutely true.
    I think the area where we still need to work, and one area 
that I suggest for another administrator, is coordination at 
the Federal level among all the Federal agencies. In some 
cases, I think we could probably do more work in that area.
    Senator Shelby. But if you are going to increase capacity 
and it takes 12 years, you are going to have further delays 
here and there; are you not?
    Ms. Garvey. That is exactly why the dedicated teams, those 
teams that we put in place, particularly for some of those 
runways where it affects the system, where there is a rippling 
effect.

                              COST CONTROL

    Senator Shelby. What steps has the FAA taken under your 
leadership to ensure that current costs and schedule parameters 
will be maintained? We are all interested in costs. You know, 
this is an appropriations committee.
    Ms. Garvey. Absolutely, Senator. As you should be. And I 
certainly understand that.
    First of all, I think the cost accounting really has been 
and will continue to be a terrific tool for the FAA. Having a 
cost accounting system in place where you can really drill down 
and understand what your costs are and you can compare why is 
it more expensive, for example, for communication lines to be 
running in Chicago than it is in Atlanta, so that you can 
really drill it down facility by facility and being able to 
look at your costs. That is one way we can really control 
costs.
    If you look at some contracts that we have put in place, we 
have included a fixed cost. Sometimes that works, sometimes it 
does not. But in the cases where it does work, I think it has 
the potential to save some money. We have included in some 
cases some incentives for contractors to finish earlier, which 
in the long run saves us money.
    Senator Shelby. It works, does it not?
    Ms. Garvey. It does work, absolutely. There are a number of 
steps we have put in place, both internally and with our own 
contractors. Again, more needs to be done, but we have made 
some enormous progress in that area.

               TECHNOLOGY FOR OCEANIC AIR TRAFFIC CONTROL

    Senator Shelby. The Inspector General recently weighed in 
on the FAA's latest effort, that is advanced technologies in 
oceanic procedures, expressing a concern that the software 
development continues to be a major risk.
    What are you doing in that area to maintain the costs?
    Ms. Garvey. Senator, the Inspector General talked about the 
FAA taking a very close look and monitoring that very 
carefully. We are doing that. We have a very aggressive and a 
very good program manager in that particular program who is 
doing exactly that. That contract has a fixed cost associated 
with it, so there is a real incentive for the contractor to 
stay within certain parameters. We are very much on top of that 
particular contract.

            WIDE AREA AUGMENTATION SYSTEM (WAAS) AND ASR-11

    Senator Shelby. A couple of other things as I sum up here. 
What about the WAAS signal? Where are we there, and where are 
we going, you know? I have expressed my reservations about the 
cost growth here, and the reduced capability of the program.
    The second thing I would like for you to touch on is the 
Air Force has certified the ASR-11 radar. The FAA is still 
testing it. I have been told that the FAA will make a decision 
to certify the radar on or about the 1st of May, which is a 
couple of weeks away. Can you give us any sense of how these 
tests are going?
    Ms. Garvey. Let me start with the ASR-11, and then I will 
go to WAAS. There have been some concerns raised about how well 
the ASR-11 will perform in an operational setting.
    Senator Shelby. Yes.
    Ms. Garvey. We did some developmental work and testing in 
the last couple of months, and I have not seen the final 
results. It was actually finished, I believe, at the beginning 
of April. My understanding is the results were pretty positive, 
that they were overall good. We now move into more of an 
operational testing with the controllers. I do not want to 
prejudge that, but it sounds like this is heading in the right 
direction. We have to look at that analysis more carefully, but 
at least the reports that I have gotten have been promising.
    On WAAS, we have made some terrific progress in the last 6 
months. About a month ago, we had a pretty significant 
breakthrough that was reported, I believe, at least in The 
Washington Post. It may have been reported more widely than 
that. In some of the developmental work that we were doing, we 
had a breakthrough that was going to allow us to use the 
precision approaches in about 5,000 small and mid-sized 
airports. That was very, very good news.
    Some of the concerns that we had a year ago and that the 
contractor had as well have been surmounted. We believe this 
breakthrough of about a month ago, will save about 2 years of 
developmental work. And that will, in turn, of course, save 
some money. We are still focused on the integrity, the safety 
integrity piece, but the progress is moving in that area. I see 
no difficulty in meeting that commissioning date of December, 
2003.
    Senator Shelby. Thank you, Madam Chairman.
    Senator Murray. Thank you, Senator Shelby. We will go back 
and forth, from side to side, so I will turn to Senator Kohl 
next after him.
    Senator Kohl. Thank you, Madam Chairman. And, Administrator 
Garvey, welcome.
    Ms. Garvey. Thank you, Senator.

                    SECURITY FOR CHARTERED AIRCRAFT

    Senator Kohl. The Transportation Security Act includes a 
provision to strengthen security requirements for chartered 
aircraft. The new security program for chartered aircraft 
larger than 18 seats is being developed at the Transportation 
Security Administration. However, major gaps in the security 
system still exist. It is a fact that today, even with all of 
the progress we have made when it comes to security for 
commercial airline travel, an individual can still charter a 
747 and bring his friends on board without any screening of 
those individuals or their luggage. They could just walk on the 
plane and use it as a weapon similar to what occurred on 
September 11.
    What assurances can you give us that another terrorist 
attack will not come from a charter jet? If passengers and 
their luggage for these charter jets are not prescreened, as 
they are not, then how can we be assured that another large jet 
will not be hijacked and used as a weapon?
    Ms. Garvey. Senator, and I know this has been a real issue, 
both for you, and I would say, several members of Congress have 
raised this as an issue as well. And I know it is one that TSA 
is very, very focused on. I know in speaking with Under 
Secretary Magaw, they are focused on so many issues within the 
legislation of trying to meet the deadlines and so forth, but 
this issue of chartered aircraft is one that I know they are 
very focused on. And I will certainly bring that message to him 
of your concern around this issue.
    Senator Kohl. Well, let me----
    Ms. Garvey. But these will have to be worked through with 
the Under Secretary.
    Senator Kohl. And I appreciate that, I know how much how 
much you are genuinely concerned, but passing it on to TSA and 
suggesting that they are working on it, and they will come up 
with something as soon as possible is, somehow, something I 
would like to hope that we could get beyond here today.
    I mean, I asked just a simple question. And until they come 
up with a better procedure, why should we not have a system 
instituted immediately that would at least require that 
passengers getting on chartered aircraft are wanded down?
    Ms. Garvey. Yes.
    Senator Kohl. You know, with the thing that they do when 
you go to an airport? Sometimes they just have these hand-held 
devices that they wand people, and at least hand-check their 
baggage. I mean, I do not understand the bureaucracy that is 
involved; that could be done today. And I would like to hope or 
suggest to you that you have a conversation with Mr. Magaw, who 
I know and is a very fine person, and at least respond to that 
request that we are making. Because it is now, you know, 6 
months or 7 months since September 11.
    Ms. Garvey. Yes.
    Senator Kohl. And really, chartered aircraft have no more 
security, large chartered aircraft have no more security today 
than they had before September 11, which was and is none. Is 
that a reasonable request?
    Ms. Garvey. Oh, absolutely, Senator. And I will do that.
    Senator Kohl. Could I hope that within the next day or two, 
you and I could have a telephone conversation and----
    Ms. Garvey. Absolutely, yes, Senator.
    Senator Kohl. I think that would be great.
    Ms. Garvey. Thank you.

                          FLIGHT 587 ACCIDENT

    Senator Kohl. I think that would be very significant.
    One other comment I would like to make to you. On November 
of 2001, New York City, still reeling from the September 11 
attacks, as you know, suffered another blow with the crash of 
Flight 587. And while the investigation results are not yet 
conclusive, many people believe that this tragedy may have been 
prevented with technology that exists today and continues to be 
developed. Under FAA regulations, aircraft inspections are 
often spaced, as you know, too infrequently. And they allow 
airlines to design for cost savings, oftentimes over safety.
    In addition to insufficient procedures for the inspection 
of composite components within aircraft, it is quite possible 
that the people who died on Flight 587 died as the result of 
failure of the aircraft's composite tail fins. It is my 
understanding that current technologies are being developed 
that could have very possibly prevented such a failure, as well 
as several other close calls that we have had.
    One such technology is the idea of a Structural Health 
Monitoring system called SHM. SHM systems would be implemented 
in an aircraft to continuously monitor the critical structural 
components using surface penetrating methods. This would enable 
the operator to discover damage that could potentially lead to 
failure, damage that may have been overlooked between scheduled 
intervals.
    Is the FAA doing anything, or what is the FAA doing to 
encourage research in this area to prevent similar failures in 
the future?
    Ms. Garvey. Senator, I can certainly tell you that we are 
doing a great deal of research on both composites and a whole 
host of issues, again, with a lot of help from this Committee, 
from wiring to flammable materials, et cetera. So, if you get 
an opportunity to ever visit the Technical Center in Atlantic 
City, it is really quite extraordinary. I think it is about the 
best in the world, with the technologies that are being 
explored.
    I am not particularly familiar with this technology that 
you have mentioned, but I certainly will find out about it, and 
will be able to talk with you about it when we talk over the 
next couple of days. I will certainly find out about it.
    Just one note, though, about that particular accident.

                  NATIONAL TRANSPORTATION SAFETY BOARD

    We are working hand-in-glove with the National 
Transportation Safety Board (NTSB). I have talked with the 
chairwoman several times. We have done some additional 
inspections of the tail to make sure that we are not seeing 
difficulties in other aircraft as well. So, there is a 
tremendous amount of discussion and work going on at the 
technical level, all the way up the line between the NTSB and 
the FAA, and we are very focused on it together. While we do 
not know yet what the cause is, I think people are working very 
hard and taking all the appropriate steps. But I will find out 
about this technology in particular, and it may be that some 
folks at the Tech Center are already working on it. I will find 
out about it.
    Senator Kohl. All right. Thank you very much. I thank you, 
Madam Chairman.
    Senator Murray. Thank you, Senator Kohl. Thank you, Senator 
Campbell, for your patience. You have been here since the 
beginning of the hearing. I appreciate it.

                     FIXED BASED OPERATIONS (FBOS)

    Senator Campbell. Thank you, Madam Chairman. I have about a 
half dozen questions. Unfortunately, I have got a 11:30 
conflict, so I would like to submit those in writing, if I 
could, and just make a couple of comments before I have to run. 
One was related to what Senator Kohl was mentioning about 
private aircraft. In my other life, I am an instrument-rated 
pilot, and I used to fly a lot. And I can tell you that the 
biggest weakness in our whole safety link is in the Fixed Based 
Operations (FBOs). Not that there is anything wrong with the 
Fixed Based Operations (FBOs), but literally anybody can go out 
on a flight line to get on a private plane.
    And some of them have huge lifting capabilities, as you 
might guess. There are some pretty big private aircraft out 
there, with almost no consideration of security at all, that I 
can see, in a lot of the smaller communities.
    In addition to that, most of those private planes, some big 
ones, they buy their fuel from the FBOs. And the trucks are 
parked right there. They fill them and they park them right 
beside the hangars where they are fueling, sometimes with 
thousands of gallons on board and on those trucks too, which 
seemed to me that is another really weak place, too.
    And I do not know what the FAA is doing about it, but I 
know I just live a few miles from one where I used to fly out a 
lot. And it just seems to me there is a real need there in 
dealing with private aircraft, too.

                        CERTIFICATION OF ASR-11

    A second point: Senator Shelby mentioned the ASR-11. I know 
that Senator Stevens and Senator Murray both have some airports 
that we are waiting for that ASR-11, as I did in Eagle County. 
Colorado has been waiting a number of years for an upgraded 
instrument landing system. And it was mentioned that that ASR-
11 has been certified by the Air Force, but not by the FAA. As 
I understood you to say it, it is kind of on the way. You are, 
it is pretty close now; is that correct?
    Ms. Garvey. We are working on that, and I need to double-
check on the Air Force.
    Senator Campbell. All right.
    Ms. Garvey. I am not sure that they have actually; I think 
we are doing it together.
    [The information follows:]

    The Air Force is currently in the testing phase and expects to 
certify the ASR-11 in the August-September 2002 time frame.

    Senator Campbell. Well, I just mention that, because Eagle 
County is used by the Air Force regularly. They have a 
helicopter training unit there, and they use it as one of the 
flight training places in their system, too. It seems to me if 
it is good enough for the Air Force, it ought to be good enough 
for civilian traffic, too.

           SCHEDULED PASSENGER SERVICE AT CENTENNIAL AIRPORT

    And lastly, Madam Chairman, in 1996, Congress amended the 
national aviation statutes to improve local control over 
community airfields. That mandate means that small aircraft and 
small airports, such as Centennial which is south of Denver, 
could not be forced to handle airline service of 30 or more 
passenger seats. That was 1996, before you even took your 
present position. But it is my understanding after 6 years, the 
FAA still has not written the rules to implement the law. So 
Centennial Airport, and I imagine a lot of other ones like it, 
has lost more than $7 million in Federal funding since 1998 
alone for not complying with these now outdated rules that call 
for an accepted schedule passenger service.
    I mentioned this to you before we had our meeting and 
Administrator Garvey has agreed to come to Colorado to meet 
with officials of Centennial Airport about this particular 
question; but I did want to also put that on the record that it 
is a big concern to us in Colorado. And I apologize for having 
to run, and I will submit my questions in writing. Thank you.
    Ms. Garvey. We will just have to do that before August, 
Senator.
    Senator Campbell. How about next week? We will. We will do 
it before August.
    Ms. Garvey. Thank you.
    Senator Campbell. Thank you. Thank you, Madam Chairman.
    Senator Murray. Thank you, Senator Campbell.

                    VIOLATION OF RESTRICTED AIRSPACE

    On April 1st, a Frontier Airlines aircraft violated 
restricted air space by flying over the White House, the 
Washington Monument, and the National Observatory. And earlier 
in the day, that same crew was diverted to Dulles after failing 
to produce the password necessary to land at Reagan National 
Airport. Given all the restrictions that are in place around 
the air space around Washington, how is it possible that this 
crew could so blatantly violate them?
    Ms. Garvey. Senator, I could not agree more, that just 
should not have happened. And as you may know, Madam Chairman, 
the crew was grounded and retrained. We have had extensive 
discussions with Frontier about some additional training, so I 
do not expect that will happen again. We have taken the steps 
necessary, and quite frankly, I do not think it should have 
happened even the first time.
    Senator Murray. What can you tell us about the frequency of 
these kinds of violations?
    Ms. Garvey. I would like to get more accurate numbers for 
the record. I think we have certainly had some incidents, 
though I do not want to suggest that it is widespread. Every 
time we do have an incident, there is either retraining or an 
appropriate action taken. Sometimes it is a very minor matter 
of moving into the restricted areas, and other times it is 
something that we believe is more serious, more blatant.
    Senator Murray. Do you think it is common, a common problem 
for crews not to know these rules?
    Ms. Garvey. I would not say it is a common problem, but I 
would like to get you, if I could for the record, a more exact 
number.
    [The information follows:]

    The number of airspace violations concerning Prohibited Area 56 (P-
56) is not a common occurrence. Below is the total number of operations 
at Reagan National Airport (DCA) and the number of airspace violations 
for P56 from 1998 to present:

------------------------------------------------------------------------
                                             Number of       Number of
                  Year                      operations      violations
------------------------------------------------------------------------
1998....................................         313,938              24
1999....................................         334,768              20
2000....................................         342,790              17
2001....................................         270,145              14
2002 \1\................................          47,602               4
------------------------------------------------------------------------
\1\ Current data as of May 10, 2002.

               AIR TRANSPORTATION OVERSIGHT SYSTEM (ATOS)

    Senator Murray. Last week, the Inspector General released 
his report on the Air Transportation Oversight System, ATOS. 
The report applauded the goals of ATOS, which is to identify 
systemic safety risks in air carrier operations, utilizing data 
that is collected by your inspector work force.
    However, the report points out a number of areas where ATOS 
has fallen woefully short. For example, the I.G.'s report 
stated that your inspectors are not adequately trained, your 
data analysis is lacking, and you need to do a better job of 
following up when deficiencies are identified.
    How difficult has it been to get inspectors to shift from 
the traditional methods of inspections to using ATOS?
    Ms. Garvey. Madam Chairman, I do not think it is ever easy 
when you are talking about really a cultural shift in an 
agency, and you are changing from one system that people have 
grown up with professionally to another. It is always a 
challenging observation, but I would make two comments.
    One is that the recommendations that the I.G. came out with 
were exactly what our own inspectors told us, as well. So there 
is no argument with the recommendations that were made. And, in 
fact, even in the midst of the I.G. report, which was about a 
year and a half ago, we had begun to implement those 
recommendations. The data is now integrated. We have the 
analysts on board to do it. We are in the process of retraining 
our inspectors under a program that the inspectors designed 
with us.
    That will be completed by the end of this year, but I think 
that is going to be a constant issue for us, because it really 
is changing the way we are doing business. But what I am 
encouraged by, the comments from the inspectors and from the 
I.G. are consistent, and from our own managers, in saying this 
is the approach we should be taking, this is the direction we 
should be going. That part is the most encouraging.
    Senator Murray. ATOS currently only covers 10 air carriers. 
When do you expect the rest to be covered?
    Ms. Garvey. We are in transition right now. We are 
beginning to work with the other carriers. I had a long 
conversation with the Inspector General about this last week, 
on the one hand, you want to push ahead and on the other you 
want to make sure that you have got the program solidly 
grounded. So we are moving ahead to the other airlines, but 
also being mindful of the fact that we still have some work to 
do even with the fundamental program that we have. We are in a 
transition to the new program with the other carriers, that is, 
beginning to discuss with them both what the safety systems 
need to look like, what kind of training they need to begin 
preparing for. So we have begun those conversations already. I 
would like to get back to you with a time line on that.
    Senator Murray. All right.
    Ms. Garvey. I want to factor in some of the Inspector 
General's comments as well.
    [The information follows:]

    It is important to note that currently the non-ATOS air carriers 
are in a transition program called the Surveillance and Evaluation 
Program that introduces system safety and ATOS tools in a phased-in, 
systematic, modular process. Flight Standards plans to have all of the 
remaining 14 CFR 121 air carriers (approximately 140 air carriers) 
phased-in under the ATOS system by September 30, 2004.

                       HIRING OF SAFETY STAFFING

    Senator Murray. Very good. Ms. Garvey, this subcommittee 
provided a total of $15.8 million over and above your requests 
last year to increase the number of safety inspectors and 
aircraft certification personnel. Specifically, the purpose of 
these funds was to get the inspector work force up to the level 
that was identified as necessary in the 90-day review study 
that followed the Valu-Jet crash. What progress has been made 
in getting these new inspectors on board and how many of them 
have you brought on board to date?
    Ms. Garvey. The progress to date, is slower than I would 
have liked. September 11, really has thrown a number of issues 
off. But in fact, talking with our AVR staff yesterday, the 
numbers will be on board by the end of the year. So we will 
meet that commitment. We are grateful for that support. We 
recognize the necessity of having those inspectors in place, so 
we will have it completed by the end of the year, but it is a 
little slower than I would like.
    Senator Murray. Can you assure us that these positions will 
not be delayed as a result of the shortfall in your operations 
budget?
    Ms. Garvey. We are committed to getting those done, 
absolutely, because of the safety implications.
    Senator Murray. Given the training deficiencies that the 
I.G. identified, can you assure us that these new inspectors 
will be fully trained for their responsibilities?
    Ms. Garvey. Madam Chairman, they will be fully trained; and 
again, the program that we have restructured with the help of 
our inspectors will be the basis of that training.
    Senator Murray. Does your fiscal year 2003 budget continue 
the funding for these new positions?
    Ms. Garvey. I would have to go back and look at that.
    Yes, it does. I am sorry.
    Senator Murray. Can you give me a schedule for filling 
those?
    Ms. Garvey. Yes, we will.
    [The information follows:]

    The funding added by Congress was to restore staffing levels in 
Regulation and Certification to the fiscal year 1998 levels. In order 
to reach the fiscal year 2002 staffing level of 3,327, the monthly 
hiring schedule, which covers new positions and backfilling for 
attrition, is:

April.............................................................    +3
May...............................................................   +18
June..............................................................   +31
July..............................................................   +36
August............................................................   +32
September.........................................................   +13
                                                                  ______
    Total.........................................................   133

          FAA ASSISTANCE TO AIRLINES WITH FINANCIAL DIFFICULTY

    Senator Murray. The experience of Eastern Airlines taught 
us that airlines in financial difficulty are sometimes tempted 
to cut corners when it comes to necessary maintenance and 
complying with safety regulations. Given the fact that we have 
a great many airlines in financial difficulty, many more than 
we had a year ago, should your inspection systems be better 
targeted on the carriers that are struggling?
    Ms. Garvey. Absolutely, that is an issue that we do 
inherently focus on. In other words, if an airline is in 
trouble, either financially or is having union difficulties, 
our inspectors will spend a little bit more time with those 
particular carriers. And that is certainly the case; that is 
the case now.
    I also think that some of the voluntary disclosure 
programs, both the Aviation Safety Action Plan (ASAP) and the 
Flight Operations Quality Assurance (FOQA) program, which again 
we got a lot of support from Congress on, is also helpful, 
because we often hear from some of the people within those 
airlines when they think there are difficulties or areas that 
we need to focus on. So, we are paying particular attention to 
that, but you are absolutely right. Focusing and encouraging 
our inspectors to spend more time with carriers that may be 
experiencing some difficulty is important.
    Senator Murray. Okay. Have you seen any evidence that there 
are any air carriers that are cutting corners right now?
    Ms. Garvey. I have not, Madam Chairman. I have not seen any 
evidence of that. And I will ask again when I get back today. 
But I have not seen any evidence. It is clearly an issue that 
our inspectors are aware of and are focused on.
    [The information follows:]

    The FAA has established procedures to work with air carriers 
experiencing problems. During these conditions, the FAA may initiate 
additional surveillance to ensure that the carrier is continuing to 
operate safely. The Certificate Holding District Offices (CHDO's), in 
coordination with their regional offices, develop and execute 
surveillance plans to provide additional oversight of key air carrier 
functions. Such plans could provide for increasing the number and type 
of inspections performed on the air carrier's training and maintenance 
programs, increasing the number on en route inspections performed by 
inspectors and increasing surveillance by geographic inspectors. As 
surveillance and inspections are conducted weekly reporting is analyzed 
in order to retarget inspections as appropriate. Specific guidance for 
these processes is provided in inspector handbooks (FAA Order 8400.10--
Operations: FAA Order 8300.10--Airworthiness).

        STANDARD TERMINAL AUTOMATION REPLACEMENT SYSTEM (STARS)

    Senator Murray. Okay. Ever since the multi-billion dollar 
debacle known as the AAS program was terminated, your air 
traffic control facilities have been waiting for long overdue 
technology upgrades. One of those upgrades, the STARS system, 
is finally nearing the stage of being deployed in air traffic 
control towers around the country several years later than 
originally anticipated. But despite assurance of improved cost 
controls from some of your managers, you are now proposing to 
reprogram almost $38 million from other FAA procurements in 
order to keep your installation schedule for this year. Given 
the program's history so far, why should we be confident that 
the program will continue to stay on schedule?
    Ms. Garvey. Madam Chairman, we have not missed a deadline 
on STARS in the last year and a half. And I think that the 
difficulties that we experienced in the early days are behind 
us.
    The date that we are all very focused on is November, which 
is Philadelphia. We are going to make that. In fact, I intend 
to come back for that. I have told the Inspector General that I 
will come back to that ribbon-cutting with him, as well.
    Senator Murray. Why do we have a $38 million cost overrun?
    Ms. Garvey. The $38 million, which is the reprogramming 
that we have discussed a little bit with the staff is due to a 
couple of factors. One is there was more site preparation with 
some of the sites. There were more site difficulties. We also 
accelerated Philadelphia, which was not our intent when we 
first put the program together, but because of compelling 
issues, we have accelerated Philadelphia, so there is money 
associated with that, as well. Those are the really two 
principal reasons for the cost increases. November is it. We 
went to early display configuration earlier than expected in 
both Memphis and in Bradley; much earlier, 6 weeks earlier in 
one case. So I expect we will meet that date of November.
    Senator Murray. Well, I appreciate the optimism. But since 
STARS is dependent on the ASR-11 digital radar, which has its 
own technical problems, do you have any contingency plans in 
case we have any further delays?
    Ms. Garvey. Right. We do, Madam Chairman. First of all, I 
am encouraged by the testing that was done in March that really 
indicates it looks pretty good. There may be, and again, I do 
not want to be overly optimistic on the ASR-11. But in any 
case, ASR-11 becomes an issue, in about 2005 in terms of the 
STARS waterfall. There are contingency plans that are being 
developed if the ASR-11 proves not to work out. But we do have 
contingency plans that are in place. And, again, that would 
impact the waterfall towards the end, not in the beginning.
    Senator Murray. Thank you very much.
    Senator Durbin.

                     BALANCING SAFETY AND SECURITY

    Senator Durbin. Thanks, Madam Chairman. Administrator 
Garvey, thank you for being here today and thank you for your 
service.
    Ms. Garvey. Thank you, Senator.
    Senator Durbin. You have faced extraordinary challenges, 
not to mention September 11 and all of the other things 
attendant to it, and you have met each of those challenges so 
well. I really am glad to count you as a friend.
    Ms. Garvey. Thank you.
    Senator Durbin. And I am happy to have worked with you over 
the 5 years that you served as Administrator under two 
different presidents.
    I would like to ask you, before I go into a specific 
question which you can probably anticipate, I would like to ask 
you if you would reflect on a couple of things for this 
Committee and those who are following this hearing. I would 
like to divide it into safety and security. Safety being the 
ordinary operations of our aircraft across America, Security 
addressing the issues that have been raised since September 11.
    As you are about to move on and reflect on what you have 
learned and try to look ahead, what would you say to us in 
Congress? What are the things that we should be mindful of when 
it comes to challenges to maintain and improve the safety of 
our air service? If there are one or two things that you think 
we might overlook, and we should not?
    Ms. Garvey. To some degree, I think some of the discussion 
a little bit earlier points to one of the challenges: how can 
we provide for the greatest levels of security without 
sacrificing and without losing sight of some of the very 
critical safety programs? So I think, for Congress and for the 
Administration, the enormous challenge of providing the right 
kind of balance, which means being strategic and tactical to 
some degree in resource dedication.
    It will mean for TSA and for Congress and for the 
Administration choosing the right technologies. You cannot do 
all the technologies, but what are the right technologies that 
will give us the kind of seamless system that we need. So, I 
think finding that right balance between some of the security 
priorities as well as some of the very, very critical safety 
priorities.

                        DECISIONS ON TECHNOLOGY

    Senator Durbin. But you think it comes down to technology. 
That really is most important?
    Ms. Garvey. I think that is going to be certainly a key for 
TSA. And is it bio-metrics, is it EDS machines, is it, you 
know, better access for employees, access codes and so forth? I 
think that is really where the challenge is going to be. What 
are the right strategic and tactical decisions around 
technology? Because you simply cannot do it all, and how do you 
sort through that?
    Senator Durbin. There is so much linkage here. I just left 
a hearing that I chaired upstairs on the integrity of drivers' 
licenses and State I.D. cards, which is a State issue. We have 
some legislation we are considering, which would try to 
establish some national standards, but issued by States.
    That is the key to entry into airports, into our economy, 
and there is such linkage. If that is not done well, if 
identification is falsified at the start, then all of the other 
precautions that follow are meaningless.
    So, there is such linkage there. And I think that would 
apply, certainly, to the security side of it.

            PENDING LEGISLATION ON CHICAGO'S O'HARE AIRPORT

    About 5 or 6 years ago, someone from the FAA anonymously, 
in a Newsweek article, said that the greatest single thing that 
could be done to improve aviation across America is to do 
something about O'Hare.
    That was said anonymously. And it might have been before 
you came on board, but we are trying to focus on that now. I 
thank you and the FAA for at least working with us every step 
of the way to review what we have been doing, a historic 
agreement between our Governor and the Mayor of the City of 
Chicago, trying to finally take 40-year old runways and make 
them more modern and safer.
    I do not know if you have personally seen it, but your 
staff has been reviewing the legislation. I want to ask you to 
comment on specifics. Let me ask this question: Have you seen 
anything in the proposals that have been brought to the FAA, 
which suggests that there would be any circumventing of the 
authority of the FAA to make the final decisions on safety and 
the environment and all of your other responsibilities under 
law?
    Ms. Garvey. Senator, I have not seen the final language 
yet, but I understand our staffs are working very closely, and 
they have not brought anything to my attention that would give 
me that kind of concern. I know there were issues in the 
beginning, but I think we worked very well together. I continue 
to think of what you all in Chicago and Illinois were able to 
accomplish as a model for all of us, because it was 
extraordinarily difficult and with very strong feelings on both 
sides, but with a lot of help from Members of Congress, the 
issue was finally brokered. And that was very important. I am 
going to be talking in one of my favorite States later this 
week, and it is certainly a good model.
    Senator Durbin. Well, thank you. And I might add that we 
were happy to receive, just a day or so ago, the Airline Pilots 
Association endorsement of this legislation, as well.
    Ms. Garvey. Great.
    Senator Durbin. Administrator Garvey, thank you for your 
service to our country and to the FAA, and wish you the very 
best and hope we can work together in the future.
    Ms. Garvey. Thank you. Thank you very much, Senator.
    Senator Durbin. Thank you, Madam Chair.
    Senator Murray. Thank you, Senator Durbin.
    Senator Bennett.

                       REMARKS BY SENATOR BENNETT

    Senator Bennett. Thank you very much. Administrator Garvey, 
I join with my colleagues in thanking you for your service. You 
are getting close to the end of your 5-year appointment and, as 
you know, I have some personal experience with FAA 
administrators, having served in the Department and it is not 
the easiest assignment in the Department.
    As a matter of fact, it has become the graveyard of a 
number of careers. And the fact that you have handled yourself 
with such competence and such aplomb through this 5-year period 
that you have served two presidents of two different parties 
with equal diligence, you deserve our congratulations and our 
thanks and our best wishes for whatever it is you decide to do.
    Ms. Garvey. Thank you, Senator.
    Senator Bennett. I think rather than being the graveyard of 
a career, I am hoping this will be a launching pad for you for 
wherever you go on to.
    Ms. Garvey. Thank you very much.

                   FAA'S PERFORMANCE AT THE OLYMPICS

    Senator Bennett. I also want to thank you for the FAA's 
superb performance during the Olympics. The Olympics, it is 
hard for us to remember now, but a time of some concern prior, 
where after September 11 there were some serious voices raised 
that they should be cancelled, that we would not be able to 
keep them safe. If we did keep them safe, we could not keep 
them accessible. If we cracked down on security, nobody would 
come. Everybody would be afraid, so on. And the challenges of 
getting hundreds of thousands of people in and out of Salt Lake 
City on a continual churning basis with the appropriate 
concerns for security were enormous. And the FAA rose to those 
challenges and handled them extremely well. And we are very 
grateful to you for that.

                      ST. GEORGE REGIONAL AIRPORT

    While I am expressing gratitude, I want to thank you also 
for your efforts and concerns with the development of a new 
regional airport in St. George. St. George, Utah, is one of the 
fastest growing parts of the State. Its growth is hampered only 
by the fact that its airport cannot handle jets above a certain 
size. And you cannot extend the runway, because it is on the 
edge of a cliff. And you are going to have to put a whole new 
airport down in the valley, where you have got enough space for 
a modern runway.
    And we are grateful to the FAA for working with us on that, 
which leads me to my suggestion. I understand Senator Campbell 
has asked you to come to Colorado, and while you are there, if 
you could slip down to St. George and take a look at that, we 
would welcome you there and appreciate whatever attention you 
could give to that.
    Ms. Garvey. It sounds like a wonderful trip.
    Senator Bennett. Well, I will warn you that you better do 
it sooner rather than later, because St. George gets to 110/115 
degrees in the summertime. Its growth is significantly larger 
in the wintertime. Somebody refers to St. George as Utah's Palm 
Springs.
    Ms. Garvey. Yes.

                        RADAR FOR SALT LAKE CITY

    Senator Bennett. And the population grows by tens of 
thousands every winter.
    Let us go back to the Olympics just very briefly and a 
subject that we have discussed before. That is radar coverage 
for the Salt Lake Airport, particularly with airplanes coming 
from the south. During the Olympics, there was a temporary 
radar system installed, and we continue to be anxious to see to 
it that becomes somehow, because the growth in the area is only 
going to continue. It is a major hub for Delta Airlines. And 
with the growth along the Wasatch front, the population of Utah 
will double within the next 30 to 40 years.
    We understand that ASR-9 radar units are no longer 
available and that ASR-11s continue to be hampered by 
technology problems, so we have been approached by the 
manufacturer of what he hopes will be an ASR-12 and wonder if 
we can get in conversations with you and finally get this 
somewhat difficult problem resolved. As I say, it worked very 
well in the Olympics to have that additional radar down there.
    Ms. Garvey. Yes.
    Senator Bennett. It was installed as temporary. I told them 
to pour as much concrete as they possibly could around it, so 
that it could never get taken away, but that is maybe not good 
public policy.
    I simply raise it with you in the hope that we can have 
continuing conversations with your agency about getting that 
problem under some control.
    Ms. Garvey. We certainly will, Senator. And we will follow 
up at the staff level to make sure we continue those 
discussions.
    Senator Bennett. Thank you again.
    Ms. Garvey. Thank you. Thank you very much for your kind 
comments.
    Senator Bennett. My congratulations are very sincere and 
heartfelt, because of my own experience with how difficult a 
challenge you really had in these last 5 years.
    Ms. Garvey. Thank you. Thanks, Senator.
    Senator Murray. Thank you, Senator Bennett.

               COMMERCIAL AIRPLANE CERTIFICATION PROCESS

    Last month, the FAA released the results of a study that 
focused on the commercial airplane certification process. One 
of the major findings of this study is that the FAA airlines 
and aircraft manufacturers have not adequately communicated 
important safety information within and among their 
organizations.
    What are you doing both in the short term and the long term 
to correct that situation?
    Ms. Garvey. Senator, that was, I thought, a very good 
report, and good steps, both from the FAA and the 
manufacturers, to really sit down and say, ``Look, what can we 
do better in this particular area?''
    Quite honestly, we saw some difficulties within our own 
shop. We did not feel our own Certification side of the house 
was speaking as much to the Flight Standard, sharing 
information in a timely way. So we started there. That is 
really our first emphasis.
    Nick Sabatini, as the Associate Administrator for 
Regulation and Certification (AVR), has done an extraordinary 
job. He comes out of Flight Standards. He is very, very close 
to John Hickey, who is the head of the Certification shop. They 
have worked very well together.
    Jim Ballough, the new head of Flight Standards, is working 
very closely with John Hickey. Some of those issues that we 
have had internally in the past have been dealt with very well.
    There are a whole series of recommendations; and currently 
both John Hickey and others within the AVR organization are 
laying out action plans with the industry to implement the 
recommendations. We have had an opportunity to brief the NTSB 
and got a pretty positive response.
    We will have an action plan that we would like to share 
with you in very short order, but the immediate issue was to 
deal with our own internal communication.
    Senator Murray. That is----
    Ms. Garvey. We have made some good, you know, good progress 
there.
    [The information follows:]

    A plan to address the findings and recommendations for improving 
communications is being drafted. The plan is in final coordination with 
the Government/Industry Oversight Board. We do not have an estimated 
date when the Board coordination will be completed. The plan, when 
completed, will be provided to the Committee.

    Senator Murray. Yes; that has been done.

                        COMPETITIVE PROCUREMENT

    Following up on an issue that was raised by Senator Shelby, 
last year, your agency was severely chastised by the court for 
trying to sole source the new En Route Automation Modernization 
or ERAM program to Lockheed-Martin.
    The Raytheon Company succeeded in requiring that the 
program be competed. Now, that you have published your 
specifications for the competition, Raytheon is taking you to 
court, alleging that the specifications are deliberately 
drafted so that Lockheed wins the competition.
    Are you confident of your ability to award an ERAM contract 
this year?
    Ms. Garvey. I am confident, Madam Chairman. And 
particularly because the two companies are in mediation right 
now, as I mentioned. While I do not know the details of them, I 
understand that they were very productive discussions last 
week. We clearly do not agree with the protest that was filed; 
but in any case, if you can resolve the issues through 
mediation, you are always better off from any kind of 
protracted court dilemma. Those discussions that took place 
last week are continuing this week, and I am still very hopeful 
that that will result in something that may even move up what 
we thought was going to be an award by the summer. There may 
even be a way to move that up sooner. So, we are interested in 
following the mediation process very carefully.
    Senator Murray. Could that lawsuit actually extend the 
program out another year?
    Ms. Garvey. I think there is always the potential for that. 
I am not expecting that, and, again, I think we are on pretty 
solid ground. But my first preference would be to see mediation 
succeed.
    Senator Murray. In the emergency supplemental chapter in 
last year's Defense Appropriations Bill, I included $50 million 
that you did not request for proof of concept demonstrations on 
new aviation security technologies.
    Within that amount, not less than $25 million must be for a 
demonstration project that incorporates a global satellite-
based communications system and other technologies that are 
described in the conference report. I was really disappointed 
to learn that none of these funds for this initiative have been 
obligated to date.
    Can you update me on the status of that initiative?
    Ms. Garvey. I can, Senator. We are going to competitive 
bidding on this, in part because some other companies have 
raised some issues about it. We think we can go to put out a 
Request for Proposal (RFP) next month, in early May, and we 
have to allow a certain amount of time for people to get the 
proposals back. But we would like to be able to make a decision 
before I leave in August. And again, I will revisit the time 
line today with our folks and make sure that we are all 
comfortable that we are moving it as quickly as we possibly 
can.
    Senator Murray. The conference report that accompanied that 
appropriation mandated that these demonstrations leverage 
significant industry cost-sharing efforts. It is my 
understanding that Boeing is prepared to put up a significant 
amount of matching funds for this initiative. Do you know of 
any other vendor that is prepared to put up hard cash to match 
the $25 million initiative?
    Ms. Garvey. I do know that Boeing, as you have indicated, 
has suggested a pretty significant amount.
    The other proposal that was put forward, I am not sure what 
the amount is, but that certainly will be a factor and a part 
of the criteria as we move forward.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Murray. Well, Administrator Garvey, you have sat 
through another long hearing this morning. It is likely the 
last hearing that you will be before this committee. Let me 
just, again, thank you for your tremendous service to this 
country. You are the longest-serving Administrator in the 
agency's history. And I would not want to end this hearing 
without thanking you for the tremendous job you have done in 
very, very trying circumstances. You have been accessible. Your 
integrity is unmatched and your commitment to public service, 
really, is admirable. So let me end this hearing by, again, 
thanking you for the tremendous job you have done, and to wish 
you the very best in your future.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

             Questions Submitted by Senator Robert C. Byrd

                  senate directive on personnel reform
    Question. In the Manager's Report for 2002 Transportation 
Appropriations, language was included expressing the Committee's 
concern over your agency's failure to implement a labor agreement with 
AFSCME. Chairman Murray stated that she expected your agency to 
implement the agreement immediately since it was affecting productivity 
and morale. Despite the Committee directive, you did not implement the 
agreement. Then the conferees on the Transportation Appropriations 
Conference Report directed you to report to both the House and Senate 
by January 15, 2002 on how you had implemented that agreement or your 
plans to implement our earlier directive.
    Your response was received by January 15, but was not responsive to 
the conferees clear language. Instead of reporting on how you had 
implemented the agreement or your plans to implement the agreement you 
reported on the status of negotiations. It is my understanding that 
since your chief negotiator had signed off on the agreement that 
negotiations were over. The only thing left to do is to implement the 
agreement. I ask that a copy of your January 15 response be included in 
the record.
    Answer.
    [The letter follows:]
                      Department of Transportation,
                           Federal Aviation Administration,
                                  Washington, DC, January 18, 2002.
Hon. Patty Murray,
Chairwoman, Subcommittee on Transportation, Committee on 
        Appropriations,
U.S. Senate, Washington, DC.
    Dear Madam Chair: This letter is in response to language contained 
in the Conference Report (House Report 107-308) accompanying the final 
version of H.R. 2299, the Department of Transportation Fiscal Year 2002 
Appropriations Act. The Federal Aviation Administration (FAA) was 
requested to submit to the Appropriations Committees by January 15, 
2002, a report on how the agency plans to implement committee report 
language contained in Senate Report 107-38 regarding personnel reform.
    The Senate report stated the following:

    Personnel Reform.--In April 1996, at the request of the Department 
of Transportation and the Federal Aviation Administration, Congress 
directed the FAA to develop its own personnel and compensation systems 
to give the agency more flexibility in hiring, training, compensating 
and retaining a highly technical and experienced work force. Under 
congressional mandate and in consultation with experts in personnel 
management, FAA commenced negotiating with its employees. Four employee 
groups have completed negotiations with FAA thus far. Three of these 
negotiated agreements, two with the National Air Traffic Controllers 
Association and one with the Professional Airways Systems Specialists, 
were implemented immediately upon ratification by the employees. The 
fourth agreement, between the American Federation of State, County, and 
Municipal Employees and the FAA, covering employees in FAA's 
headquarters, was ratified in late February 2001 but has not been 
implemented by the agency. The Committee is concerned that the failure 
to implement this contract has resulted in lost opportunities to obtain 
important productivity gains and a deterioration in the relationship 
between the agency and its employees. The Committee expects the agency 
to implement the ratified agreement immediately so that improved 
productivity can be achieved and employee morale can be improved.

    I would like to take this opportunity to report to the Committees 
the status of negotiations between the American Federation of State, 
County and Municipal Employees, Council 26 (AFSCME) and the FAA on the 
parties' first labor agreement covering four bargaining units in FAA 
headquarters.
    Negotiations between AFSCME and the FAA began in July of 2000. The 
work rules (non-pay issues) were completed rapidly and the parties 
began addressing pay issues in September 2000. From the opening session 
through the conclusion of discussions with AFSCME, the FAA made clear 
that a final agreement would be conditioned on the Office of Management 
and Budget (OMB) concurrence. OMB declined to concur with the tentative 
agreement that was reached in early February of 2001.
    Because the condition of OMB concurrence was not met, the FAA's 
position is that a final agreement was not reached and that the parties 
must return to the bargaining table. AFSCME rejected the FAA's initial 
offer to return to the bargaining table. AFSCME's position is that FAA 
must execute the tentative agreement.
    In March 2001, AFSCME filed an unfair labor practice (ULP) charge 
against the FAA with the Federal Labor Relations Authority (FLRA), and 
the matter is currently in litigation. Before the hearing on the ULP 
commenced, the FAA met with AFSCME representatives and offered to 
resolve the dispute based on earlier agreements with other unions. The 
parties were ultimately unable to reach a resolution and the parties 
participated in an FLRA hearing on the ULP complaint earlier last 
month. We remain ready to resume negotiations with assistance from the 
Federal Mediation and Conciliation Service, if necessary.
    The FAA has made efforts to settle this dispute. The FAA has 
offered, on several occasions, to return to the bargaining table and 
resume negotiations. AFSCME has rejected a resumption of negotiations.
    I will continue to keep the Committees informed as events warrant.
    Identical letters have been sent to Chairwoman Murray, Senator 
Shelby, and Chairman Rogers.
            Sincerely,
                                            Jane F. Garvey,
                                                     Administrator.

    Question. I have spoken with AFSCME's leaders and they testified 
under oath in an Unfair Labor Practice trial, that they did not 
acquiesce or agree to allow OMB to have power over the agreement. I 
request that a document from that trial in which OMB clearly states 
that FAA had the final authority to implement the agreement, be 
included in the record.
    Answer. At this time, OMB produced a number of documents relating 
to the negotiations. Several of these documents were staff drafts of 
correspondence. It is not clear from your request whether these are the 
documents to which you are referring, but we have provided them for 
your review.
    [The draft follows:]
                                [draft]
Hon. Peter T. King,
U.S. House of Representatives,
Washington, D.C. 20015-3203.
    Dear Representative King: Thank you for your letter of June 6, 
2001, concerning the Federal Aviation Administration (FAA) and its 
consultations with the Office of Management and Budget (OMB) regarding 
a proposed collective bargaining agreement between the FAA and its 
employees.
    We appreciate your interest in the matter of the proposed 
collective bargaining agreement. As you may be aware, this matter is 
presently in litigation before the Federal Labor Relations Authority, 
in a case brought against the FAA by the union representing its 
employees. In the Matter of: Department of Transportation, Federal 
Aviation Administration (Respondent) and American Federation of State, 
County & Municipal Employees, Council 26 (Charting Party/Union), Case 
WA-CA-01-0386. Due to this pending litigation, and at the 
Transportation Department's request, I have forwarded your letter to 
Secretary of Transportation Mineta, so that the Department can respond 
to you directly about the proposed collective bargaining agreement.
    Thank you again for your letter.
            Sincerely,

    Question. I also request that a letter to Secretary Mineta from 
Senator Stevens and myself on this subject be included in the record.
    Answer.
    [The letter follows:]
                                       U.S. Senate,
                               Committee on Appropriations,
                                Washington, D.C., October 10, 2001.
Hon. Norman Y. Mineta,
Secretary of Transportation, Department of Transportation,
Washington, DC 20503.
    Dear Mr. Secretary: We are writing to express our concern over the 
status of the collective bargaining agreement reached between the 
American Federation of State, County and Municipal Employees (AFSCME) 
and the Federal Aviation Administration (FAA). It is our understanding 
that this contract has yet to be implemented.
    In 1995, Congress mandated in the fiscal year 1996 Department of 
Transportation Appropriations (Public Law 104-50) that FAA develop a 
new personnel system in ``consultation'' with its employees. The FAA 
wanted an agency and workforce that was better able to meet the demands 
of the 21st Century. The FAA requested total flexibility in personnel 
reform so that they could be competitive with private sector 
organizations and corporations in compensation and hiring.
    Subsequently, Congress directed the FAA to ``bargain'' with the 
exclusive bargaining representative of the employees certified under 
section 7111 of Title 5, United States Code in the development of the 
new personnel system.
    It is our understanding that AFSCME and the FAA initiated 
bargaining in June of 2000 over the new personnel system pursuant to 
the congressional mandates cited above. AFSCME and the FAA came to 
agreement in January 2001.
    After negotiations were successfully completed, the FAA informed 
AFSCME that the Office of Management and Budget recommended that it not 
implement the agreement. To date, the FAA negotiated four contracts as 
a result of the congressionally mandated personnel reform and the FAA 
has implemented three of these contracts. It appears unreasonable to 
single-out this one last contract that is neither more nor less 
generous than the other contracts. The FAA negotiated and agreed to the 
terms of the contract, and the FAA has the independent legal authority 
to implement this contract. But, to date, this contract remains 
unimplemented and dedicated employees affected by this delay are 
understandably demoralized.
    Following the catastrophic events on September 11, the Headquarters 
employees represented by AFSCME performed with extraordinary 
professionalism, dedication and competency during the attacks on our 
Nation. In fact, they still staff the Emergency Response Command 
Centers set up to respond to the emergency and are continuing to work 
on new safety and security measures as well as developing a ``new'' air 
traffic control system.
    We are seriously concerned about the morale of the employees caught 
in this standoff, and we would like to see this matter resolved 
expeditiously. We ask for your assistance in bringing closure to this 
matter.
            Sincerely yours,
                                            Robert C. Byrd,
                             Chairman, Committee on Appropriations.
                                               Ted Stevens,
                       Ranking Member, Committee on Appropriations.

    Question. In light of the above information, I would like to have 
your comments concerning your agency's continuing failure to implement 
this binding labor agreement.
    Answer. From the opening session through the conclusion of 
discussions with AFSCME, the FAA made clear that a final agreement 
would be conditioned on the Office of Management and Budget (OMB) 
concurrence. OMB declined to concur with the tentative agreement that 
was reached in early February 2001. Because the condition of OMB 
concurrence was not met, the FAA's position is that a final agreement 
was not reached and that the parties must return to the bargaining 
table. The issue of whether a final agreement was reached is the issue 
now before the Administrative Law Judge.
                                 ______
                                 

           Questions Submitted by Senator Barbara A. Mikulski

             airport approaches over montgomery county, md
    Question. After September 11, the FAA changed the landing 
procedures for planes landing from the north at Ronald Reagan 
Washington National Airport (DCA). It is my understanding that all 
aircraft approaching the airport from this route are forced to travel 
at low altitudes over densely populated areas of Montgomery County. Has 
the FAA examined the safety risks associated with this flight path?
    Answer. Revised procedures to address security concerns were 
implemented in response to the tragic events of September 11, 2001. In 
addition, published instrument approach procedures were used on a 
regular basis to ensure aircraft maintained a straight and steady 
course to the airport. Between March 23, 2002 and April 27, 2002 the 
Federal Aviation Administration, working with the Department of 
Defense, the Office of Homeland Security, and the United States Secret 
Service, continued its efforts to return operations at DCA to the 
previously established noise abatement procedures. On April 27, 2002, 
after an agreement was reached among all parties, aircraft arrivals and 
departures at DCA began operating again under the long-standing noise 
abatement procedures that were in effect prior to September 11. These 
procedures are for visual flight rules and provide for the aircraft to 
fly over either the Potomac or Anacostia Rivers.
    The noise abatement procedures for aircraft flying to DCA from the 
north are provided when the cloud ceiling is 3,500 feet above ground 
level or greater, and the visibility is 3 statute miles or greater. 
Otherwise, the aircrafts fly the instrument approach procedures that 
were in effect prior to September 11. These procedures provide required 
minimum altitudes, below which the airplanes are not to fly, in order 
to safely fly to the airport during inclement weather.
                noise abatement in montgomery county, md
    Question. What is the FAA doing to address noise abatement issues 
in Montgomery County?
    Answer. In order to address noise abatement issues in Montgomery 
County, the FAA on April 27, 2002, re-instituted the long-standing 
noise abatement procedures that were in effect for arrivals to and 
departures from Ronald Reagan Washington National Airport (DCA) that 
were in effect prior to September, 11, 2001.
    These noise abatement procedures can only be used during good 
weather conditions because the pilot must be able to see the ground in 
order to stay over the rivers. During inclement weather conditions all 
aircraft must follow the instrument approach or departure procedures 
that were in place prior to September 11, 2001. The procedures we are 
using today are exactly the same as the procedures we followed prior to 
September 11, 2001.
                       primary long-range radars
    Question. I understand that the FAA has a mix of more than 100 
aging primary long-range radars, utilizing technology that dates back 
to the 1950's. Given the FAA's November 2001 decision to retain these 
primary long-range radars, what actions have you taken to ensure their 
sustainment?
    Answer. The FAA is currently performing upgrades to the 
infrastructure at long-range radar facilities that will ensure the 
continued operation of these facilities. The agency has also initiated, 
jointly with the Department of Defense, studies to examine the 
operability, reliability, and maintainability of the existing inventory 
of long-range, primary radars in the en route environment. These 
studies will reveal the nature and extent of any modifications that may 
be required.
    Question. The FAA maintains more than 125 primary long-range radars 
for safe air traffic control and provides the DOD with data from these 
radars for Homeland Defense purposes. It's my understanding that while 
these radars provide excellent coverage around the perimeter of the 
United States, there may be coverage gaps in the interior of the 
country.
    How does the FAA plan to support the DOD's Homeland Defense 
surveillance requirements for non-cooperative aircraft?
    Answer. The FAA will continue to provide surveillance information 
to the Department of Defense and U.S. Customs Service from existing 
assets, as well as establish additional data connections as requested, 
in order to support these agencies' need to identify and track non-
cooperative aircraft.
    In addition, FAA is participating in the Airspace Management and 
Protection Work Group established by the Office of Homeland Security. 
This multi-agency workgroup that is currently developing a national 
surveillance plan that provides a common airspace picture and enables 
the exchange of surveillance data among air surveillance stakeholders.
    Question. Does the FAA plan include the deployment of additional 
FAA primary long-range radars?
    Answer. No. However, the agency is working collaboratively with the 
Department of Defense, U.S. Customs Service, and other users to 
identify their surveillance needs and assess the viability of 
fulfilling their needs with existing FAA assets.
        standard terminal automation replacement system (stars)
    Question. It has been brought to my attention that the STARS 
program has suffered serious setbacks resulting in substantial cost 
overruns and delays. Please describe the oversight you are applying to 
the current STARS testing.
    Answer. The program has met all major milestones since the 1999 
restructuring, including the start of operations at our key sites of El 
Paso, Texas, and Syracuse, New York, with both our Early Display 
Configuration and the initial version of Full STARS. The program is 
also on track for the start of operations with the national baseline 
version of Full STARS in Philadelphia in November 2002.
    There is a significant amount of oversight in place today. The 
STARS team provides senior FAA leadership with biweekly updates on all 
aspects of the STARS program, including ongoing testing. Since 1999, 
the STARS team also briefs the aviation authorization subcommittees in 
the House and Senate on a regular basis. Additionally, the Department 
of Transportation Inspector General continuously provides oversight and 
explaining concerns to the FAA, Congress, and the media.
    Question. Have you made any changes to the STARS software delivery 
schedule? Please describe these schedule changes.
    Answer. No significant changes were made to the schedule since the 
STARS program was restructured in 1999, and since the addition of a 
modified software version for Philadelphia in 2000.
    All software delivery milestones were met and the system is on 
track to begin nationwide deployment when we commence operations at 
Philadelphia in November 2002.
    Question. Have you encountered any testing problems which may 
result in future scheduling delays?
    Answer. No. Testing of the national software baseline is on track 
and going as planned. We don't expect any delays.
    In the normal testing process, the team identifies ``program 
trouble reports'' (PTRs) which they fix. We are now in the second of 
three phases of operational testing of the national software baseline. 
The number of PTRs will go up as testing progresses, and will then go 
down between each phase as the critical ones are fixed.
    Question. Please quantify the cost-overruns associated with the 
STARS program as reported by the DOT-IG.
    Answer. STARS has a past history of escalating costs, due largely 
to human factor changes made in the late 1990s. The original STARS 
contract was awarded to Raytheon in 1996 with an estimated cost of 
$940.2 million. In 1999, FAA and Raytheon restructured the contract to 
deploy STARS in various phases and to address human factor issues. This 
increased the cost estimate to $1.4 billion ($273 million for human 
factor changes).
    The present cost baseline for STARS is $1.33 billion. This takes 
the program completely through the development phase and through 
replacement of the most ``critical risk-to-service'' facilities. 
Although a cost estimate of $1.69 billion exists for the full 
production phase (verses the $1.4 billion baseline of 1999), the agency 
has not sought approval of that estimate, as it is exploring various 
means to reduce out-year costs.
    The cost estimate ($1.69 billion) that the DOT-IG used for the 
STARS program projects an increase of roughly $285 million. Most of 
that amount, $220 million, would be due to increased production and 
deployment costs.
    The other $65 million is due to increased development costs. The 
increase in development costs was primarily due to the creation of an 
additional software baseline for national deployment. That baseline 
required us to procure additional hardware, contract for additional 
work from our prime contractor, and conduct additional development and 
testing, while maintaining the approved schedule.
    The estimate for the increase in production costs is primarily due 
to increased adaptation activities, establishment of deployment teams, 
an increase in spares requirements, product warranties, unbudgeted 
prime contractor support after initial operations, unbudgeted Early 
Display Capability (EDC) to Full Service (FS), and unbudgeted 
replacement for Sony display tubes.
                                 ______
                                 

               Questions Submitted by Senator Harry Reid

  standard terminal automation replacement system (stars) deployment 
                                schedule
    Question. Please provide a detailed deployment schedule and cost 
estimate for the installation of the entire system, not just through 
2004.
    Answer. The present cost baseline for STARS is $1.33 billion. This 
takes the program completely through the development phase and through 
replacement of the most ``critical risk-to-service'' facilities. 
Although a cost estimate of $1.69 billion exists for the full 
production phase, the agency has not sought approval of that estimate, 
as it is exploring various means to reduce out-year costs.
    STARS will go operational in the following cities in:
    Fiscal year 2003.--Philadelphia, PA; Portland, OR; Miami, FL; 
Milwaukee, WI; San Antonio, TX; Raleigh, NC.
    Fiscal year 2004.--Tucson, AZ; Kansas City, MO; Nashville, TN; 
Roswell, NM; Port Columbus, OH; Moses Lake, WA; Boston, MA; Charlotte, 
NC; Rochester, NY; Oklahoma City, OK; Tulsa, OK; Seattle/Tacoma, WA; 
Santa Barbara, CA; Dayton, OH; Salt Lake City, UT; Cincinnati, OH; 
Buffalo, NY; Indianapolis, IN; Daytona Beach, FL.
    Fiscal year 2005.--Little Rock, AK; Norfolk, VA; Pittsburgh, PA; 
New Orleans, LA; Orlando, FL; Shreveport, LA; Cedar Rapids, IA; 
Pensacola, FL; Houston, TX; Atlantic City, NJ; Grand Rapids, MI; 
Portland, ME; Toledo, OH; Pasco, WA; Madison, WI; Jacksonville, FL; 
Akron, OH; Wichita, KS; Phoenix, AZ.
    Fiscal year 2006.--Lubbock, TX; Harrisburg, PA; Bangor, ME; Austin, 
TX; Fort Wayne, IN; Eugene, OR; Lansing, MI; Tampa, FL; Lafayette, LA; 
Boise, ID; Savannah, GA; Erie, PA; Lincoln, NE; Burlington, VT; West 
Palm Beach, FL; Rome, GA; Flint, MI; Greensboro, NC; Springfield, MO; 
Palm Springs, CA; Waco, TX; Rochester, MN; Charleston, SC; Roanoke, VA; 
Aspen, CO; Reno, NV; Huntsville, AL; Rockford, IL; Montgomery, AL; 
Muskegon, MI; Knoxville, TN; Peoria, IL.
    Fiscal year 2007.--Springfield, IL; Baton Rouge, LA; Fayetteville, 
NC; Fort Smith, AR; Fort Myers, FL; Colorado Springs, CO; Gulfport, MS; 
Billings, MT; Green Bay, WI; Kingsport, TN; Fresno, CA; Columbia, SC; 
Greer, SC; Fargo, ND; Abilene, TX; Lexington, KY; Allentown Bethlehem/
Easton, PA; Sioux City, IA; Youngstown, OH; Cape Cod, MA; Charleston, 
WV; Augusta, GA; Corpus Christi, TX; Kalamazoo, MI; Elmira, NY; 
Saginaw, MI; Great Falls, MT; Mobile, AL; Champaign, IL; Wilkes-Barre, 
PA; Spokane, WA; Midland, TX; Wilmington, NC; Hilo, HI; Duluth, MN.
    Fiscal year 2008.--Asheville, NC; Casper, WY; Myrtle Beach, SC; 
Evansville, IN; Monroe, LA; Florence, SC; Amarillo, TX; Bakersfield, 
CA; South Bend, IN; Waterloo, IA; Reading, PA; Jackson, MS; Sioux 
Falls, SD; Lake Charles, LA; Huntington, WV; Terre Haute, IN; 
Tallahassee, FL; Chattanooga, TN; Louisville, KY; Mansfield, OH; 
Binghampton, NY; Moline, IL; Longview, TX; Bismark, ND; Clarksburg, WV; 
Meridian, MO.
    Fiscal year 2009.--Pueblo Memorial, CO.
    Question. Please describe your contingency plan if STARS cannot be 
deployed according to the current schedule. What are the costs involved 
and what would it take to trigger the plan?
    Answer. If STARS were not deployed according to schedule, the 
contingency would be to continue operations with the existing 
automation system until STARS is deployed to that site. The added cost 
to the agency would be an increase in the maintenance costs of the 
existing system. Not all of the sites have the same existing system, 
however. Some sites have an ``ARTS IIIA'' system, some have an ``ARTS 
IIE'' system and some have an ``ARTS IIIE'' system.
    The ARTS IIIA sites are the first to be replaced. The last IIIA 
site is Tampa, which is scheduled to be replaced in the middle of 2005. 
Should the STARS deployment schedule slip prior to Tampa, ARTS IIIA 
maintenance would be required for a longer duration than was otherwise 
planned. The cost would be directly related to the number of sites 
slipped as well as the length of time slipped. Maintaining all of the 
ARTS IIIA sites currently costs approximately $5 million a year. This 
cost begins to go down in fiscal year 2004, and eventually phases out 
as STARS replaces the ARTS IIIA's.
    After the ARTS IIIA's are replaced by STARS, the ARTS IIE and ARTS 
IIIE sites will be replaced thru 2008 (although a few IIE and IIIE 
sites are planned for replacement prior to 2005). If there was a delay 
in STARS deployment at this point, additional ARTS IIE and ARTS IIIE 
maintenance dollars would be needed. The ARTS IIIE's cost approximately 
$5 million a year to maintain. The ARTS IIE's cost approximately $2 
million a year to maintain. Again, the total amount needed would be 
directly related to the number of sites delayed as well as the length 
of time.
    In addition to maintenance costs, there would also be the cost to 
refurbish old equipment to meet operational needs if STARS is delayed. 
The average cost to refurbish old equipment per year is $972,840 for 
ARTS IIIA's, $585,420 for ARTS IIE's, and $392,150 for ARTS IIIE's.
    Question. According to the IG's office, the FAA never justified its 
rejection of Common ARTS as a substitute for STARS, particularly since 
it is operational at 140 FAA sites, including six of the busiest 
terminal facilities. The IG points out that Common ARTS already 
provides the functionality that STARS proposes to provide when it is 
deployed. Would you support an independent evaluation of Common ARTS' 
and STARS' functionality, cost, and schedule risk?
    Answer. The FAA has done several analyses of alternatives to meet 
automation requirements, starting with the competition in 1996 when 
Raytheon was awarded the STARS contract over the other bidders, 
including Lockheed Martin.
    Starting in October of 1999, and more recently in March of 2002, 
the team conducted economic analyses of the STARS program before senior 
FAA management and received approval to continue moving forward with 
the program.
    Results consistently indicate the economic feasibility of 
continuing the STARS program versus pursuing an alternative. There are 
also intangible benefits to STARS that are not readily quantifiable, 
including higher levels of information security and more data for 
controllers (such as latitude and longitude readouts, minimum 
separation indicators and additional data block fields).
    Common ARTS and STARS are very comparable in terms of what they 
provide in the near-term. STARS has features that ARTS does not have, 
and vice-versa. However, many of the computer-human interfaces that 
were added to STARS in 1999 are not available in Common ARTS, 
particularly in their color displays. Additionally, STARS has the 
capability to support a more complex national airspace system and to 
expand with future growth in traffic.
    Despite all of the steps that have been taken, the FAA would 
support any additional independent evaluation of this matter.
                                 ______
                                 

                Question Submitted by Senator Herb Kohl

standard terminal automation replacement system (stars) at philadelphia 
                                airport
    Question. I am pleased to learn that Philadelphia Airport will 
begin operation of the STARS radar system in November 2002. I also 
appreciate your efforts to address the radar problems experienced by 
Philadelphia in March 2000 and your willingness to work with my office 
and the air traffic controllers in Philadelphia to expedite the 
installation of the new STARS system. Some concerns have been brought 
to my attention that software testing for the new system has 
experienced problems and may result in installation delays. I would 
appreciate your providing me with an update on the testing currently 
underway and whether we can still expect the system to be operational 
this November.
    Answer. Testing of the national software baseline is on track and 
going as planned. We don't expect any delays.
    The STARS software for Philadelphia (the national baseline) is 
currently in the second of three phases of operational testing at the 
FAA Technical Center in New Jersey. After these phases are complete, 
on-site testing will begin at El Paso in August and at Philadelphia in 
September.
    As part of the normal testing process, the team identifies 
``program trouble reports'' (PTRs), which they fix. The number of PTRs 
will go up as testing progresses, and will then go down in between each 
phase as they fix the critical ones.
    Philadelphia's success in November depends on the integration of 
several factors, including new ASR-11 digital radars, STARS, and the 
construction of a new room for controllers. The FAA has been holding 
bi-weekly meetings at Philadelphia with all the stakeholders to 
integrate these factors, and all are on track for operations to begin 
in November 2002.
                                 ______
                                 

         Question Submitted by Senator Ben Nighthorse Campbell

                  emergency information dissemination
    Question. In the hours following the attacks on the Pentagon and 
the World Trade Center, it was clear that the lines of communication 
between everyone involved in air travel--the FAA, Federal authorities, 
airlines, and customers--was severely deficient, if not to say 
completely inadequate. What steps have been taken to improve this so 
that information moves quickly and accurately from the air traffic 
controllers to the airlines to the passengers, and most importantly, to 
the appropriate agencies in the event of another emergency?
    Answer. The Federal Aviation Administration (FAA) has initiated and 
implemented many actions over the last year to improve the lines of 
communications for the users of the National Airspace System regarding 
airport and flight status information. Many steps have been taken to 
provide timely and accurate information to passengers through the 
Internet, a CNN Airport Network ticker, CNN Airport Network public 
service announcements, and through meetings with airlines and airport 
officials. For example, the FAA established a real-time wireless 
notification system targeted for travelers on the go. Users can 
subscribe to receive delay notification to wireless devices such as 
cell phones, Palm Pilot type devices, and pagers at no cost to the 
traveling consumer. Additionally, the FAA redesigned the 
www.fly.faa.gov website to be more user friendly and, in an effort to 
share information with outside organizations, the website has a section 
which allows external organizations to automatically retrieve the data. 
Some organizations currently using the information include CNN and USA 
Today.
    The FAA, in concert with the Department of Defense (DOD), NORAD, 
and other Federal agencies has in place policies, procedures, and 
communications infrastructure to monitor aircraft for suspicious 
activity and deviation from authorized flight. Awareness, refinement, 
and training on these policies and procedures, since September 11, 
2001, are ongoing. A system is in place for interagency, DOD, and law 
enforcement information sharing to facilitate each organization's 
requirements. Additionally, the FAA is currently working with the 
Office of Homeland Security and other agencies to meet interagency 
requirements for enhanced ground/ground communications and surveillance 
availability. Certain current and planned technologies are considered 
Security Sensitive Information (SSI) and are prohibited from 
dissemination.
    Additionally, the Office of Homeland Security has developed the 
Homeland Security Advisory System (HSAS) to improve coordination and 
communication among all levels of government and the American public. 
The processes and information technology systems to communicate Threat 
Conditions and threat information to Federal, State, and local 
governments, and the private sector are an integral part of the HSAS.

                         CONCLUSION OF HEARINGS

    Ms. Garvey. Thank you very much, Madam Chairman. Thank you.
    Senator Murray. This hearing is recessed.
    [Whereupon, at 12:04 p.m., Tuesday, April 16, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


 DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2003

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    [Clerk's note.--The following testimonies were received by 
the Subcommittee on Transportation and Related Agencies for 
inclusion in the record. The submitted materials relate to the 
fiscal year 2003 budget request.
    The subcommittee requested that public witnesses provide 
written testimony because, given the Senate schedule and the 
number of subcommittee hearings with Department witnesses, 
there was not enough time to schedule hearings for 
nondepartmental witnesses.]

      Prepared Statement of the American Passenger Rail Coalition

    Chairman Murray and Members of the Subcommittee on Transportation 
Appropriations, thank you for the opportunity to provide testimony on 
fiscal year 2003 appropriations for the national Amtrak system and to 
advance development of high-speed rail in designated corridors around 
the country. My name is Harriet Parcells and I am the Executive 
Director of the American Passenger Rail Coalition, an association of 
the nation's railroad equipment suppliers and rail businesses.
    This is a critical time for the Federal Government to provide 
strong support for the nation's intercity passenger rail system, 
Amtrak. The American Passenger Rail Coalition (APRC) urges Congress to 
fully fund Amtrak's budget request to Congress of $1.2 billion in 
fiscal year 2003. This is the level of funding that Amtrak needs to 
ensure the railroad has sufficient funds to continue operating the 
current national passenger system over the next fiscal year. APRC also 
asks Congress to continue strong funding in fiscal year 2003 of the 
Federal Railroad Administration's high-speed rail R&D programs and 
funding to advance development of designated high-speed rail corridors.
    The national Amtrak system serves over 500 cities and rural 
communities. The rail system provides clean, safe, affordable and 
energy-efficient mobility for millions of Americans each year. In 
metropolitan corridors, rail offers an efficient, cost-effective 
alternative to congested highways and airways. For small cities and 
communities, rail is an essential link to other regions of the country 
and supports economic development. As we saw in the days and weeks 
following the terrorist attacks of September 11, our national intercity 
passenger rail system enhances national security. In the days following 
the attacks, when service was shut down nationwide, Amtrak trains 
continued to roll carrying thousands of individuals and families safely 
to their destinations. The trains kept the country mobile and 
productive. The attacks highlighted the vulnerability of the U.S. 
transportation system's overdependence on a single mode of transport 
and the value of providing citizens with mobility choices, including 
the choice of intercity passenger trains.
Rail Ridership Remains Strong
    Despite a weakened economy and decreased travel and tourism over 
the past six months, Amtrak ridership in the first half of the fiscal 
year (October 2001-March 2002) rose 1.3 percent over the prior year. 
The gains in rail ridership come on top of 5 years of steady rail 
ridership and revenue growth. Amtrak ridership rose 19 percent from 
1996-2001 and revenues rose 40 percent. The continued upward trend in 
rail ridership contrasts with a 17 percent decline in domestic airline 
travel from October 2001-February 2002, according to the Air Transport 
Association.
    Ridership on the high-speed Acela Express and Metroliner services 
in the Northeast Corridor between Washington D.C., New York City and 
Boston experienced particularly strong growth, up 32 percent in the 
October 2001-March 2002 period compared to 1 year ago. Customer demand 
for sleeping cars on Amtrak's long distance trains is also strong--
ridership is up 7 percent, ticket revenues up 19 percent in March 2002 
vs. March 2001. Ridership on the Cascades service in the Pacific 
Northwest rose 5 percent in the first half of the fiscal year compared 
to the same period a year ago, continuing a strong trend in ridership 
growth since 1993 on this rail corridor. Ridership on the Pacific 
Surfliner rose 7 percent and ridership on the Cardinal service through 
West Virginia jumped 28 percent.
      years of federal underinvestment shortchange passenger rail
    Years of Federal Government underinvestment in intercity passenger 
rail have shortchanged the nation's intercity passenger rail system. 
For decades, the government invested, and continues to invest, billions 
of dollars to build and improve highway and airport infrastructure and 
technology, but neglected and undercapitalized its intercity passenger 
rail system, Amtrak. In fiscal year 2001, Federal funding for highways 
was on the order of $33 billion, for aviation, about $13 billion and 
for Amtrak, only $521 million (an additional $105 million was provided 
separately for life safety improvements in the New York City tunnels 
and for security enhancements on the national system). Amtrak is 
expected to be operationally self-sufficient, yet competing modes are 
not. The Federal Government established trust funds for highways and 
aviation to provide a secure stream of funding to meet their capital 
and operational needs. Yet, no dedicated funding has been established 
for intercity passenger rail despite the compelling logic for doing so.
    The U.S. government invests less than 1 percent of transportation 
spending each year in intercity passenger rail. Other industrialized 
nations have a much more balanced approach to transportation investment 
and dedicate significant percentages of their transportation budgets to 
improve passenger rail service. Germany and France invest over 20 
percent of total transportation capital funding in rail; Great Britain, 
17.6 percent.
  states are looking for a strong federal partner in rail investments
    States are making substantial investments to improve intercity 
passenger rail service to assure future economic productivity and 
mobility for their regions and their citizens. As with other modes of 
transport, however, the States need a Federal partner to share the 
investment costs. Since 1993, the States of Washington and Oregon, 
along with Amtrak, Burlington Northern and other partners, have 
invested nearly $500 million in improvements to the Pacific Northwest 
Corridor. The return on the investment has been dramatic: rail 
ridership has increased over 300 percent since 1993 and the improved 
passenger rail service has diverted over 6.5 million miles of traffic 
from regional highways and prevented more than 151 tons of pollutants, 
according to Washington State DOT.
    Gridlocked freeways throughout the State of California, along with 
concerns about the environment and quality of life, have brought a 
large commitment by the State to improve intercity passenger rail 
service. Since 1990, California has invested $1.6 billion in rail 
capital improvements to upgrade track, buy new passenger rail equipment 
and for other capital needs. Last year, California spent $63 million to 
operate 50 State-supported passenger trains in regions throughout the 
State--the San Joaquin Valley, Sacramento, the San Francisco Bay Area 
and Southern California. Rail ridership has responded, growing steadily 
with the improvements and increased frequencies.
        benefits of passenger rail service to rural communities
    The need for intercity passenger rail service in congested 
metropolitan corridors is clear to most policymakers. What appears to 
be less appreciated is the value intercity passenger rail service 
provides to small cities and communities across the country. Yet, 
intercity passenger rail service is vital to the economic health of 
hundreds of America's rural communities and the mobility of their 
citizens. Citizens of rural communities like Rugby and Devil's Lake, 
North Dakota and Wolf Point, East Glacier and Whitefish, Montana depend 
on Amtrak's Empire Builder train as a safe, essential means of 
intercity travel, especially in winter when highway travel can be 
precarious or impossible. For residents of these and other rural 
communities, air travel is neither a convenient nor affordable travel 
option. The long-distance trains are important to the economic health 
of rural communities. The trains bring tourists to the region, who come 
to fish, hike, ski and enjoy the region in other ways. Their spending 
on food, hotels and recreation is essential to the economies of the 
States and communities.
                rail contributes to other national goals
    Travel by trains is energy-efficient, consuming 38 percent less 
energy (btu) per passenger mile than travel by commercial airlines. 
Transportation is the only sector of the U.S. economy that consumes 
much more oil today than it did 20 years ago. U.S. dependence on 
imported oil has been rising and since 1997, exceeds 50 percent of our 
daily domestic oil consumption. Two-thirds of the petroleum is used in 
transportation, mostly to fuel a growing fleet of cars and trucks. 
Investments in energy-efficient passenger trains are a sensible way to 
help reduce the vulnerability created by the country's growing and 
costly reliance on imported oil. Lower energy consumption translates 
into benefits to air quality. Investments in intercity passenger rail 
help reduce harmful air pollutants and contribute to State and 
community efforts to achieve healthy air quality.
    At a time when the national security and economic benefits of the 
nation's intercity passenger rail system are clear, when States are 
appealing to the Federal Government to partner with them on investments 
to improve rail service and when rail ridership is rising, it is 
senseless that Amtrak is being forced to consider eliminating service 
on the majority of its passenger rail network. Yet, the nation's 
passenger rail system has reached this critical juncture.
    APRC urges Congress to appropriate $1.2 billion for Amtrak in 
fiscal year 2003 to ensure that Amtrak is able to continue to operate 
the current national system and to appropriate funding for FRA's high-
speed rail R&D program and to advance development of designated high-
speed rail corridors. Investments to improve intercity passenger rail 
service and develop high-speed rail in key corridors are wise 
investments that yield substantial returns for the nation, States and 
communities.
    Thank you Chairman Murray and Members of the Subcommittee for the 
opportunity to provide this testimony on our nation's intercity 
passenger rail system and for the strong support this Subcommittee has 
demonstrated for intercity passenger rail over the years.
                                 ______
                                 

  Prepared Statement of the American Public Transportation Association

                              introduction
    The American Public Transportation Association (APTA) appreciates 
the opportunity to submit testimony on the fiscal year 2003 Department 
of Transportation and Related Agencies Appropriations bill.
    APTA's 1,400 public and private member organizations serve the 
public by providing safe, efficient, and economical public 
transportation service, and by working to ensure that those services 
and products support national energy, environmental, community, and 
economic goals. APTA member organizations include transit systems and 
commuter railroads; design, construction, and finance firms; product 
and service providers; academic institutions; and state associations 
and departments of transportation. More than ninety percent of the 
people who use public transportation in the U.S. and Canada are served 
by APTA member systems.
Public Transportation and TEA 21
    During the past five years, increased appropriations for the 
federal transit program, authorized under the Transportation Equity Act 
for the 21st Century (TEA 21), have been critical in assisting the 
public transportation industry address mobility issues around the 
country. We appreciate what the legislation, and its annual funding 
through the appropriations process, has meant for our industry. Public 
transportation ridership is growing, the demand for new transit 
projects and extensions continues, and Americans are including public 
transportation as an option in planning their daily activities. Freedom 
of mobility is critical to the spirit of America, and public 
transportation is an important component of that mobility. Therefore, 
APTA urges the Subcommittee in its fiscal year 2003 Transportation 
Appropriations bill to fund the federal transit program at the full 
$8.2 billion level authorized in TEA 21.
            public transportation ridership at record levels
    More and more people are choosing public transportation every day, 
and the numbers speak for themselves. Thanks in part to Congress' 
investment in the federal transit program, public transportation is 
experiencing a renaissance. Americans used public transportation a 
record 9.5 billion times in 2001, and transit ridership has grown 23 
percent since 1995, according to preliminary ridership figures. This 
represents the highest level in more than 40 years. Over the last six 
years, transit use has grown faster than the population (4.5 percent), 
highway use (11.8 percent), and domestic air travel (12 percent). In 
2000, ridership was up in all modes and in all parts of the country. In 
the light rail category, Denver (41 percent), San Jose (34 percent), 
and New Jersey Transit (38 percent) experienced tremendous ridership 
success. New light rail service in Salt Lake City is exceeding 
estimates and was a big success during the recent Olympic Games. The 
commuter rail operations in Dallas (39 percent) and in Northern 
Virginia (20 percent) have had continued success. Heavy rail ridership 
increased by more than 7 percent in New York City, Washington, D.C., 
and Philadelphia, and it rose by nearly 4 percent in Chicago and by 
almost 13 percent in San Francisco. Bus ridership was up in large 
cities like Washington, D.C. (8.4 percent) and New York City (6.7 
percent), as well as in cities across the country like Lexington, KY 
(5.7 percent) and Birmingham, AL (5.7 percent). Although the 2001 
transit ridership numbers will not be finalized until later in April, 
preliminary indications are that, despite the economic downturn, 
transit ridership continued its upward climb with 2 percent growth over 
2000 levels.
Demand Soaring in all Modes and in all Communities
    The consistent, annual ridership growth in public transportation 
sends the message loud and clear: people are leaving their cars at home 
and using transit to meet their mobility needs. As new systems open 
doors and existing systems expand their service, demand is exceeding 
the speed at which new service can be funded and implemented. Now more 
than ever, growing congestion is causing people to seek alternative 
forms of transportation to commute to work, complete errands, make 
health care visits, and to get to and from sports and entertainment 
events. Therefore, it is of the utmost importance that we sustain the 
national commitment to an integrated transportation system by 
adequately investing in transit.
           investment in public transportation shows results
    Recent transit ridership increases are a direct result of the 
increased annual investment in the federal transit program. TEA 21 
authorized $41 billion for public transportation, and guaranteed $36 
billion, a significant increase over previous funding levels. This 
funding increase benefited transit systems in both urban and rural 
areas. In 2002, the rural program is funded at $223.4 million, a 95 
percent increase over the 1997 funding of $115 million. This compares 
with a 65 percent increase in the overall growth of the federal transit 
program over the same period. One of the keys to this growth has been 
the transit funding guarantee provision, which has been instrumental in 
insuring that transit funding has increased on a consistent, annual 
timetable.
    The increased transit and highway investments under TEA 21 have 
been put to work wisely and expeditiously on an array of transportation 
projects and improvements. Nearly 200 new or expanded rail or bus or 
rapid transit projects were authorized for 88 areas in more than 40 
states. TEA 21 investments have enriched the lives of Americans by 
giving them mobility and the freedom to do what they want and need to 
do, and created real success stories. To capture some of these success 
stories, APTA and the American Association of State Highway and 
Transportation Officials jointly published a report on TEA 21, ``Money 
at Work.'' We would be pleased to make copies available for the 
Subcommittee.
Transit Plays Key Role in National Emergencies
    Perhaps one of the best illustrations of the benefits of the 
investment in the transit program was the role that transit played 
during the September 11, 2001, terrorist attacks. On September 11, 
citizens in New York and Washington relied on public transportation to 
evacuate from the urban core. In New York, hundreds of thousands of 
citizens were evacuated quickly and without injury. Here in Washington, 
the Washington Metropolitan Area Transit Authority proved its value in 
running the equivalent of two rush hours back-to-back and moving 
thousands of citizens out of harms way. This same story was true all 
across the country as transit systems helped evacuate citizens from 
shut down airports and center cities. We have published a report in 
this regard, ``America Under Threat: Transit Responds to Terrorism,'' 
that we would be pleased to share with the Subcommittee.
      increased public transit infrastructure investment is needed
    As noted, Madam Chairman, public transportation delivers 
significant benefits and transit ridership is up. Even though highway 
and transit investment has increased, transportation experts agree that 
our annual capital investments still fail to keep pace with the 
increasing needs for public transportation. Transit industry needs, 
from all sources, for capital, planning, and research will average $42 
billion per year, between fiscal year 2004 through fiscal year 2009, 
according to a recent APTA Transit Needs Synthesis Report. The report 
summarizes existing needs estimates from APTA, the Federal Transit 
Administration, and the Community Transportation Association of 
America. While the $42 billion estimate reflects potential investments 
in an unconstrained environment, it identifies the demand for new rail 
starts, buses and related facilities, rail modernization, core capacity 
improvements, preventive maintenance, paratransit, and other needs.
    Additional reports addressing transit needs are expected in the 
next several months, including the Department of Transportation (DOT) 
Conditions and Performance Report, which will detail the investments 
needed for maintenance and improvement of the nation's highways and 
transit systems. The American Association of State Highway and 
Transportation Officials' (AASHTO) ``Bottom Line'' Report will also 
assess both highway and transit needs. APTA has been working with the 
Transit Cooperative Research Program (TCRP) to support the efforts of 
both DOT and AASHTO.
    If current trends continue, over the next 15 years alone, highway 
travel is expected to increase by 40 percent and transit use by 60 
percent. In order to accommodate such growth, it is critical to 
maximize the federal investment in all forms of surface transportation, 
including public transportation.
Infrastructure in Critical Need of Repair
    Overworked bus and rail fleets paired with rapidly increasing 
ridership have taken their toll over the years, and recent assessments 
of the nation's infrastructure are disconcerting. The American Society 
of Civil Engineers (ASCE) released its 2001 Report Card for America's 
Infrastructure last March, and the news for transit was not good in 
terms of the state of the transit infrastructure. The report card gave 
transit a ``C-'' in 2001, down from its ``C'' in the prior report card 
in 1998. The ASCE cited the DOT 1999 Status of the Nation's Highways, 
Bridges, and Transit report, in which DOT recommends an annual 
investment of $17 billion in order to improve both conditions and 
performance of transit. Most importantly, the ASCE urges the full 
funding of TEA 21 at its authorized level, $8.2 billion for fiscal year 
2003.
    In addition, the National League of Cities report entitled ``Six 
Critical Threats to Our Cities: Keys to Unlocking America's Future'' 
lists the areas most in need of attention in order to reinforce 
America's prosperity. Among the hazards is the nation's aging 
infrastructure, and the NLC calls for the modernization of the 
transportation infrastructure in order to build the quality of life 
that families and businesses want and expect.
Voters Demanding More Transit
    It's no wonder that so many American cities have recently voted to 
start or expand light rail, commuter rail, or bus service in their 
communities. Just recently, on March 5, in a California statewide 
election, voters overwhelmingly approved Proposition 42, requiring that 
all state gasoline tax revenue be devoted to transportation beginning 
in 2008. Under the provision, 20 percent of the gas sales tax funds 
will be used for public transportation. Voters have supported recent 
transit initiatives in Pierce County, Washington; Salt Lake City, Utah; 
Seattle, Washington; Toledo, Ohio; Providence, Rhode Island; King 
County, Washington, Houston, Texas, Glendale, Arizona, and in Portage 
County, Ohio, among others.
    The nation's mayors also recognize the growing demand for public 
transit. In February, at a meeting of more than 300 mayors from across 
the country, a survey was released that showed that 80 percent of 
respondents agreed that the idea of investment in light rail can reduce 
congestion by presenting a viable alternative to driving.
                    administration's budget proposal
    Madam Chairman, while we are pleased that the Administration's 
fiscal year 2003 Budget proposes to honor the TEA 21 funding guarantees 
for public transportation, needs studies indicate a clear and growing 
need for investment in transit infrastructure. Thus, we urge you to 
fund the fiscal year 2003 program at the highest possible level.
New Freedoms Initiative
    The Administration's fiscal year 2003 budget request includes a New 
Freedoms Initiative, designed to help Americans with disabilities by 
increasing access to employment and daily community life. The program 
would include $100 million for grants for alternative methods to 
promote access to transportation, and $45 million for a pilot program 
to promote innovative transportation solutions for people with 
disabilities. While APTA supports the Administration's New Freedoms 
Initiative, it recommends that it be financed with TEA 21 fiscal year 
2003 funds authorized to be appropriated over the guaranteed amounts.
Federal Match for New Starts
    The Bush Administration budget also proposes that, starting in 
2004, the federal match under the new fixed guideway and extensions 
program be reduced from its current 80 percent to 50 percent. While we 
recognize the significant and growing demand for New Start funding and 
the interest in allocating it carefully, we are concerned about the 
larger transportation policy issue of a level playing field for all 
federal surface transportation funds. If highway funds continue to be 
available at an 80 percent federal match, and new start transit funds 
are available at 50 percent, it would seem that federal policy contains 
a built in bias discouraging local decision makers from making 
independent transportation decisions strictly on the basis of local 
needs, criteria, and the best solution to local transportation 
problems. Rather than revising federal shares in an attempt to spread 
the resource, we urge Congress to grow the program to accommodate the 
clear demand for federal investments in our nation's surface 
transportation infrastructure.
Increased Funds are Required to Maintain ADA Compliance Standards
    Since the enactment of the Americans with Disabilities Act in 1990, 
transit agencies have made significant progress in the effort to ensure 
that all forms of public transportation are accessible to people with 
disabilities. According to an APTA survey of 300 transit agencies, 
there were approximately 25,000 U.S. transit buses in 1993 that were 
not wheelchair accessible. In 2000, that number was less than 11,000. 
Similarly, commuter rail operators reduced the number of non-accessible 
rail cars by more than half over the same time period. However, as the 
population ages, the need for demand response and paratransit service 
will continue to rise. Public investment for these services and further 
on-vehicle lift, ramp, and station improvements must keep pace for 
transit to meet mobility demands. In fact, the demand for paratransit 
services in particular is growing and the resulting costs are rising 
significantly.
    As ridership across the nation's small and large communities 
continues to flourish, transit agencies struggle financially to meet 
the demand for additional service for disabled and elderly passengers. 
Such services are already frequently operating at capacity. We applaud 
the Administration's recognition--as demonstrated in its New Freedoms 
Initiative--that people with disabilities are well served by expanded 
mobility.
Job Access and Reverse Commute Program
    In addition, APTA reaffirms the Federal Transit Administration's 
(FTA) assessment that the Job Access and Reverse Commute Program should 
be funded at the fully authorized level of $150 million as provided in 
TEA 21. These programs not only get people to jobs otherwise 
unavailable to them, but they provide America's employers with access 
to the services of thousands of new employees. We commend FTA on its 
outreach efforts to date, and urge it to continue efforts to streamline 
the program administratively and focus on increased program 
coordination at the federal, state, and local levels.
Transit Security & Fiscal Year 2002 Supplemental Request
    Madam Chairman, as we conclude our views on the fiscal year 2003 
Transportation Appropriations bill, we also want to take this 
opportunity to comment on the recent submission by the Administration 
of its Emergency fiscal year 2002 Supplemental Appropriations Request. 
We mention in our testimony that transit played an important role 
during the terrorist attacks in New York and Washington last year. We 
should also note that transit agencies across the nation have made 
significant investments in security-related capital in recent months. 
As the Subcommittee develops a fiscal year 2002 Supplemental 
Appropriations bill, we urge you to consider the investments in 
security enhancements made by public transportation systems around the 
country.
                               conclusion
    Madam Chairman, public transportation ridership is at its highest 
point in decades, and transit systems in our largest cities and small 
communities are doing their best to keep up with growing demand. We are 
pleased with the sharp increases in ridership, but it is taking its 
toll, and funds are needed to maintain and upgrade existing systems. We 
urge Congress to help lead the ongoing renaissance of public 
transportation and to support its many benefits, in communities of all 
sizes. Help us get the job done! Public transportation delivers an 
enormous return on the federal investment--it can provide freedom of 
mobility and a transportation choice for all Americans. We urge the 
Subcommittee to fund the fiscal year 2003 federal transit program at 
the $8.2 billion authorized level.
    APTA appreciates the opportunity to submit testimony on the 
development of the fiscal year 2003 Transportation Appropriations Act. 
We would be pleased to provide additional information to assist you in 
your deliberations.
                                 ______
                                 

               Prepared Statement of Chatham Area Transit

    Mr. Chairman, thank you for this opportunity to submit a statement 
for the Outside Witness Hearing Record. This statement presents 
critical needs of CAT for fiscal year 2003. I would like to thank 
Senators Max Cleland and Zell Miller for their support of this 
statement and CAT's needs for fiscal year 2003.
    The request includes $8,000,000 for Bus and Bus Facilities and 
Equipment and $1,000,000 for Job Access and Reverse Commute purposes.
    The Chatham Area Transit (CAT) request is $8,000,000, comprised of 
four components: (1) The purchase of 36 replacement buses, all of which 
have between 600,000 and 900,000 miles, far above their designed 
service life of 500,000 miles, (2) Operations facility renovations, (3) 
Design costs for bus passenger facilities needed in the east and south 
sides of Savannah, and (4) Purchase of equipment to support ferry and 
trolley operations.
Bus Replacement
    The bus replacement component will involve new vehicles that will 
be ADA compliant. The vehicles that currently need replacement are not 
ADA compliant.
    CAT's annual increase in ridership exceeds the national average for 
transit ridership growth. CAT is serving a growing community that is 
increasingly reliant on public transit for its transportation needs. 
The growth in tourists using CAT has also placed new demands on the 
system's aging resources.
Facility Renovation
    The current facility needs a new roof and replacement concrete pads 
in the parking areas. The constant bus traffic and their associated 
weight have caused severe damage to the CAT maintenance and 
administrative facility.
Ferry and Trolley Operations
    CAT has assumed responsibility for trolley and ferry operations in 
the CAT service area. Equipment for these two operations will be needed 
to serve CAT's ridership and services.
    CAT also requests $1 million within the Job Access/Reverse Commute 
category. Continuation of this important program will permit CAT to 
meet current transit route schedules and transit needs.
    Thank you for this opportunity to present CAT's needs for fiscal 
year 2003.
                                 ______
                                 

          Prepared Statement of the City of Newark, New Jersey

    The City of Newark respectfully submits the following for your 
consideration:
  --The Newark Penn Station Platform Extension and Inter-modal Access 
        Enhancement Project, for which the City requests 4 million from 
        the Bus and Bus Facilities program; and
  --the Newark-Elizabeth Rail Link, a $60 million request, included in 
        the Administration's Budget, as a New Starts Rail initiative.
    Chairman Murray and members of the Subcommittee, on behalf of the 
City of Newark, thank you for giving me the opportunity to present 
testimony to you on behalf of projects under your jurisdiction which 
are very important to the people of Newark, New Jersey and the 
surrounding region. The support of this Committee has been critical in 
the past, and we wholeheartedly thank you for your aid to projects that 
have truly impacted on the people of Newark and our economy. Newark's 
transportation infrastructure needs are vital to enabling us to 
maintain our position as a regional center for commerce, government and 
entertainment.
                       newark-elizabeth rail link
    Newark is a City with vast potential, and there is a renewed 
vitality and sense of optimism in Newark. As the physical crossroads of 
the Northeast Corridor, the future economic viability of Newark is 
inextricably dependent upon the continued modernization and expansion 
of our intermodal transportation system. Improvements to our roadway 
network, our rail system, and our port and airport facilities directly 
translate into jobs and economic prosperity for our City, State and 
Region.
    The construction of major new facilities, including the 4 year old 
New Jersey Performing Arts Center, our 2 year old minor league baseball 
stadium, and the Joseph G. Minish Passaic Riverfront Park and Historic 
Area--on which the Army Corps of Engineers is ready to begin its second 
phase of construction--are all related to the proximity and 
effectiveness of our transportation network. The renovation and 
repopulation of older office buildings, and construction of new ones, 
is occurring in large part due to the ease of access for commuters. 
Your help on transportation funding has improved access to not only the 
downtown business, arts and entertainment district, but also the 
rapidly growing Newark Airport/Port Newark complex. The success of 
University Heights, where four institutions of higher learning provide 
educational opportunities to over 50,000 commuter students per day, is 
also directly related to the ease of access to the highway system.
    We are working to further capitalize on the existing transportation 
infrastructure by connecting current and proposed facilities with the 
Newark Elizabeth Rail Link. The first segment of the Newark Elizabeth 
Rail Link (NERL) is now under construction, thanks to your previous 
support. The first operable segment of the NERL will provide the 
missing link between downtown Newark's two train and bus transportation 
nodes. It will be a 0.94 mile connection between the Broad Street 
Station, where trains from the western suburbs enter the City, and 
Newark Penn Station, on the Northeast corridor line and the central hub 
for New Jersey Transit trains and buses. There will be three new 
stations on this segment--Broad Street Station, Washington Park/
Riverfront Stadium, and N.J. Performing Arts Center/Center Street--
which connect sites mentioned above, as well as our renowned Newark 
Museum and Newark Public Library, that are crucial to Newark's economic 
and cultural growth. The line then will enter a portal where it will 
connect with the existing City Subway tunnel to access Penn Station, 
which I will discuss further in a moment. At full build-out, the NERL 
is planned to be an 8.8 mile, fifteen station light rail transit line 
linking downtown Newark with Newark International Airport and the City 
of Elizabeth.
    The NERL is an important and central component of our overall 
transportation plan. We are proud that a full funding agreement for 
this first operable segment of the Newark Elizabeth Rail Link was 
signed last summer, and the Administration has included funding for it 
in its budget. I respectfully ask this Committee to add its support for 
the $60 Million budget request for this vital connection.
     newark penn station platform extension and inter-modal access 
                          enhancement project
    A central feature of the downtown/riverfront area is the presence 
of AMTRAK facilities at Newark Penn Station. This station is the last 
northbound stop on the Northeast Corridor before New York City, and 
provides rail and bus linkages to the rest of New Jersey, and the 
region beyond. New Jersey Transit is doing an admirable job of 
renovating and modernizing the facility to accommodate increases in 
demand at the station, but the portion of the overall rail 
infrastructure that is owned and operated by AMTRAK is in great need of 
attention. The renovation and upgrading of AMTRAK property to better 
serve the City of Newark, its residents and visitors is a key factor in 
the City's economic development and transportation initiatives.
    Newark Sports and Entertainment and the City of Newark are 
enthusiastic about continuing the effective federal partnership they 
have developed in support of the platform extension project at Penn 
Station. These platform extensions will enable passengers to exit the 
rail facility without having to navigate through passageways to exit 
through the station itself. This improvement will enable the connection 
of a pedestrian walkway to a planned economic development project, the 
new downtown sports and entertainment complex. With this extension, an 
old abandoned railroad bridge will be transformed into a productive 
pedestrian corridor, linking passengers to a recently planned inter-
modal transportation facility that will be housed adjacent to the new 
sports facility. The project will help to revitalize the southern 
portion of Broad Street--which is Newark's main commercial corridor--
just as other transportation projects have facilitated the renaissance 
of the upper Broad Street area. The entire cost of the platform 
extension at Penn Station is $35 million, and the amount requested for 
this appropriation totals $4 million. This project meets all of the 
requirements for the Transportation Appropriations bill, and will serve 
as a model for other cities in desperate need of urban revitalization.
    The assistance of this committee in funding these projects is 
vital. The Newark Elizabeth Rail Link and the Penn Station improvements 
are critical links in Newark's transportation network, and your support 
for them is crucial to our continued economic development. Your 
attention and consideration of the needs of Newark, New Jersey are 
deeply appreciated, and I thank you in advance for any assistance your 
subcommittee may provide.
                                 ______
                                 

 Prepared Statement of the Coalition of Northeastern Governors (CONEG)

    As the Subcommittee begins the fiscal year 2003 transportation 
appropriations process, the Coalition of Northeastern Governors (CONEG) 
is pleased to share with the Subcommittee testimony for the record on 
the fiscal year 2003 U.S. Department of Transportation appropriations. 
The CONEG Governors commend the Subcommittee for its past support of 
funding for the Nation's highway, transit and rail systems. We also 
urge the subcommittee to continue the important Federal partnership 
role in strengthening the Nation's passenger and freight rail systems 
through continued investment in rail safety and capital investment in 
intercity passenger rail and other critical projects. Continued Federal 
investment in transportation research and development is also an 
essential element of public and private efforts to enhance the safety 
and capacity of the Nation's transportation system.
    An integrated, safe and fully funded national surface 
transportation system is a critical underpinning to the productivity of 
our economy, the well being of our communities, and the quality of life 
of our people. Within this system, the Northeast has unique 
transportation needs and challenges. For example, it is the most 
densely populated area in the Nation and has the Nation's oldest 
transportation infrastructure. In addition, the region's transportation 
infrastructure is among the most heavily used, and is exposed to the 
largest variation in seasonal changes in the country.
    First, the Governors urge the Subcommittee to fund the highway and 
transit programs at least at the levels authorized in the 
Transportation Equity Act for the 21st Century (TEA-21) and, ideally, 
to fund the highway program at the fiscal year 2002 funding level. This 
level of funding is critical for the Federal-State partnership to 
achieve improved conditions, performance and safety of the region's and 
the Nation's highways and bridges.
    Second, the Governors strongly urge the subcommittee to provide a 
level of funding for intercity passenger rail which ensures that safe, 
reliable service is provided across the Nation without interruption as 
the Congress and Administration address the future of intercity 
passenger rail. The need for substantial Federal investment in 
intercity passenger rail is independent of the outcome of the current 
policy debate on the shape and future of Amtrak. The USDOT Inspector 
General has noted that over $1 billion in capital funds is needed 
annually just to sustain the current intercity passenger rail system, 
regardless of who operates that system. The States are already major 
investors in the current intercity passenger rail system, with the 
Northeast and Mid-Atlantic States already investing approximately $2.5 
billion in intercity passenger rail infrastructure since 1991.
    Intercity passenger rail is an indispensable part of our Nation's 
transportation system, particularly in the Northeast and Mid-Atlantic 
region. This has become more clear since the events of September 11 
when rail provided a much needed redundancy to the Nation's 
transportation system. A degradation or sudden disruption in safe, 
reliable intercity service, whether through reduction in essential 
maintenance, devastating service cuts, or bankruptcy by Amtrak, would 
jeopardize the future opportunity of passenger rail service across the 
Nation. In the Northeast, it would add enormous pressures on the 
region's already over-burdened highway and airport capacity. The 
Federal Government must continue to be a strong consistent funding 
partner of intercity passenger rail, just as it has for the other modes 
of transportation that promote the efficient movement of people and 
goods.
    Third, the Governors support efforts to improve the security of our 
Nation's transportation infrastructure, including fully funding the 
President's request for the newly created Transportation Security 
Agency to provide security for the Nation's transportation 
infrastructure, particularly the Nation's airports.
    Fourth, the Governors urge the Subcommittee to continue funding for 
investments in Intelligent Transportation Systems (ITS). The densely 
populated Atlantic Coast region relies heavily on ITS to improve 
operations every day on both highways and transit. However, in the wake 
of September 11, the region's ITS systems, including those provided by 
TRANSCOM and the I-95 Corridor Coalition, played a critical role in 
both the emergency management and recovery phases of the operation. 
These organizations, funded through the Federal ITS program, supported 
and helped coordinate the movement of convoys of military personnel and 
emergency service agencies in the hours immediately following the 
event. They also helped support the recovery effort as the 
transportation system was systematically brought back on line.
    Fifth, safety on the Nation's highways, transit and rail systems 
remains a priority of the Governors. We are specifically concerned 
about the safety of the aging rail tunnels along the Northeast 
Corridor, and urge the Subcommittee to fund life safety improvements 
for the Baltimore and New York tunnels. In addition, the Governors 
support full funding for the Railway-Highway Crossing Hazard 
Elimination Program. As part of the Federal-State partnership to 
correct hazardous conditions on the Nation's highways, investments in 
highway-rail crossings can reduce injuries and death from accidents 
even as they allow higher train speeds and increased reliability.
    Sixth, the Governors support the President's funding request of $20 
million for the Surface Transportation Board, and urge the Subcommittee 
to fund the Federal Railroad Administration at current levels.
    Seventh, the Governors support continued Federal investment in 
transportation research and development programs, particularly the 
Federal Railroad's Next Generation High Speed Rail program. This 
program enhances safety and helps stimulate the development of new 
technologies which will benefit improved intercity rail service across 
the Nation.
    The Governors also support funding to ensure that the U.S. Coast 
Guard can maintain the readiness of its fleet to carry out ice-breaking 
and related maritime safety responsibilities, in addition to its law-
enforcement operations. The Northeast is highly dependent on waterborne 
shipments of distillate to meet winter heating oil, diesel fuel, and 
other petroleum product needs. Therefore, the Coast Guard's ice-
breaking operations are a critical link when severe winter weather 
threatens a complex and fragile delivery system. Without additional 
resources, an aging fleet of icebreakers and deferred maintenance place 
additional stress on this essential logistics system.
    The CONEG Governors thank Chairman Rogers, Ranking Member Sabo and 
the entire Subcommittee for the opportunity to present this testimony, 
and appreciate your consideration of these requests.
                                 ______
                                 

    Prepared Statement of the Illinois Department of Transportation

    Madam Chairwoman and Members of the Subcommittee, we appreciate the 
opportunity to submit testimony concerning fiscal year 2003 U.S. 
Department of Transportation (U.S. DOT) appropriations on behalf of the 
Illinois Department of Transportation (IDOT) to the Senate 
Appropriations Subcommittee on Transportation and Related Agencies. We 
thank Subcommittee Chairwoman Murray and the members of the 
Subcommittee for their past support for a strong Federal transportation 
program and for taking into consideration Illinois' unique needs. Our 
recommendations for overall funding priorities and our requests for 
transportation funding for projects of special interest to Illinois are 
described below.
                            highway funding
    Illinois has an extensive highway system to serve the diverse needs 
for passenger and freight travel within and through the State. There 
are over 288,000 lane miles of public highway that carries over 102 
million vehicle miles of travel annually. IDOT urges the Subcommittee 
to set the fiscal year 2003 obligation limitation for highway and 
highway safety programs at the fiscal year 2002 level of $31.8 billion. 
Unless action is taken, the fiscal year 2003 $4.4 billion reduction in 
Revenue Aligned Budget Authority (RABA) will lead to an obligation 
level of $23.2 billion. This would result in a reduction of $8.6 
billion in national funding to States for fiscal year 2003 from the 
fiscal year 2002 enacted level, a 27 percent drop. Given that the 
country is in the midst of an economic recession, it would be 
counterproductive to drastically cut highway funding that produces 
valuable jobs. We estimate that the drop in Federal highway funding 
would result in an employment loss of more than 5,660 direct 
construction-related jobs in Illinois. Therefore, Congress needs to 
fully restore the $8.6 billion Federal highway funding cut. We believe 
this can be accomplished by using a portion of the current balance in 
the Highway Account of the Highway Trust Fund. We also urge that the 
restored funds be distributed to the States in the same way highway 
funds are currently allocated. We appreciate the support of the 
Subcommittee and the full Appropriations Committee for the provision 
adopted in the House Budget Resolution to at least offset the fiscal 
year 2003 RABA reduction.
    IDOT Requests the Following Earmarks For Highway Construction 
Projects:
  --Stevenson Expressway reconstruction in Chicago.--IDOT requests an 
        earmark of $30 million to assist in financing the final stage 
        of the $567 million Stevenson Expressway reconstruction 
        project. IDOT believes that this earmark is warranted because 
        of the extraordinary cost of this project and because the 
        Stevenson Expressway is of national and international 
        importance in the movement of people and freight. A special 
        earmark of $30 million from the Discretionary Interstate 
        Maintenance program or from another discretionary highway 
        funding category will aid in finishing this costly project.
  --Wacker Drive reconstruction in Chicago.--IDOT and the city of 
        Chicago jointly request an earmark of $39 million to assist in 
        financing the estimated $210 million cost to reconstruct Wacker 
        Drive from Michigan Avenue to Randolph Street, located in 
        downtown Chicago. IDOT and the city believe that this earmark 
        is warranted because of the extraordinary cost of the project 
        and because Wacker Drive is critically important to the city's 
        transportation system. A special earmark of $39 million from 
        the Discretionary Bridge program or from another discretionary 
        highway funding category will aid in financing this costly 
        project.
  --Intelligent Transportation Systems (ITS) projects.--IDOT requests 
        an fiscal year 2003 earmark of $10 million in ITS Deployment 
        funds for key projects in the Chicago and other metropolitan 
        areas in Illinois to enhance system operations and for various 
        locations around the State for security, commercial vehicle 
        operations, work zone safety and weather/roadway condition 
        information. The list of projects is shown in Attachment 1. 
        IDOT believes that this earmark is warranted because it will 
        aid in implementing vitally needed projects that enhance the 
        effectiveness and efficiency of the transportation system and 
        improve mobility, safety and security for all highway users.
    If the Subcommittee again earmarks funds from the National Corridor 
Planning and Development (NCPD) and Transportation and Community and 
System Preservation programs in fiscal year 2003, IDOT requests funding 
for the projects listed below. We suggest that these projects be funded 
from the NCPD program but defer to the Subcommittee's judgement:
  --US 30 in Will County (Williams Street to Illinois 43).--IDOT 
        requests an earmark of $2.7 million for engineering and land 
        acquisition on US 30 from Williams Street in New Lenox to 
        Illinois 43 (Harlem Avenue). US 30 in this section of central 
        Will County carries large amounts of traffic and is designated 
        as a Strategic Regional Arterial. The segment connects the city 
        of Joliet on the west and existing four-lane pavement on the 
        east. The US 30 corridor is quickly developing, and the roadway 
        needs to be expanded. Initial engineering for design and 
        environmental assessment is currently under way with completion 
        anticipated in fall 2002.
  --US 45 in Lake County (Illinois 137 to Washington Street).--IDOT 
        requests an earmark of $13.9 million to add lanes on US 45 from 
        Illinois 137 (Buckley Road) to Washington Street in Grayslake. 
        US 45 is a major north-south arterial route in central Lake 
        County that carries large amounts of traffic. The first $6 
        million of the requested funding would be used for additional 
        lanes for 1.7 miles to extend four lanes northward from IL 137 
        to IL 120 (Belvidere Road). The remaining $7.9 million of the 
        requested funding would be used for additional lanes for 1.5 
        miles to extend four lanes northward from IL 120 to Washington 
        Street.
  --Fox River Bridge Crossing in Kane County.--IDOT requests an earmark 
        of $2.5 million for land acquisition for the Stearns Road Fox 
        River bridge crossing in South Elgin, Kane County. Federal 
        funding is requested for land acquisition for a proposed Fox 
        River Bridge Crossing within the Chicago Central and Pacific/
        Stearns Road Corridor in South Elgin. Phase I engineering for 
        design, location and environmental studies is under way for the 
        project, with completion estimated next fall. The 
        Transportation Equity Act for the 21st Century (TEA-21) 
        provided $9.6 million in High Priority Project funding for the 
        proposed Fox River bridge crossings; however, the minimum cost 
        for any of the proposed bridges, including required roadway 
        work, is at least $60 million.
  --Illinois 5 in Rock Island.--IDOT requests an earmark of $5 million 
        for improvements to Illinois 5 in Rock Island. The requested 
        Federal funding for improvements on IL 5 from 24th Street to 
        38th Street in Rock Island will complete the four-laning 
        improvement on IL 5 through Rock Island and Moline and will 
        complement the new West Rock River Bridge project.
  --Illinois 6 Extension to Chillicothe.--IDOT requests an earmark of 
        $1.2 million to expand the Illinois 29 corridor study north of 
        Peoria. Illinois is about to undertake preliminary engineering 
        on a long-term project to expand IL 29 to four lanes from north 
        of Chillicothe to I-180. The requested Federal funds will 
        expand the limits of the corridor study to also include the 
        extension of IL 6 to connect to the proposed four-lane IL 29 
        north of Chillicothe.
  --Allen Road in Peoria.--IDOT requests an earmark of $2 million to 
        widen Allen Road in Peoria. Federal funding for this project 
        will widen Allen Road (old IL 174) to five lanes for one-half 
        mile from Pioneer Parkway to Townline Road in Peoria. This 
        widened segment will connect to five-lane roadway both north 
        and south of the segment.
  --US 67 in Schuyler County.--IDOT requests an earmark of $2.5 million 
        for Phase II Engineering for US 67. The requested Federal 
        earmark will fund Phase II engineering (preparation of contract 
        plans) for the improvement of US 67 from north of Rushville to 
        north of Illinois 101 in Schuyler County. Construction for this 
        segment of US 67 is estimated at $56 million.
  --Illinois 29 from Berry to Edinburg.--IDOT requests an earmark of 
        $1.2 million for Preliminary Engineering for IL 29 between 
        Berry and Edinburg, Illinois. Illinois intends to construct a 
        four-lane highway for 19 miles on Illinois 29 between Rochester 
        and Taylorville. A new four-lane highway will better handle 
        traffic and improve safety. The State has committed $40 million 
        for engineering and construction of 12 miles of the new 
        highway. The $1.2 million earmark would fund Phase II 
        engineering to prepare contract plans for the remaining 7-mile 
        segment.
    There will likely be other project earmarks that are requested by 
Illinois local governments and IDOT will support them as well.
                    transit major capital investment
Bus and Bus Facilities
    IDOT, the Illinois Public Transportation Association and the 
Regional Transportation Authority (RTA) (which oversees the planning 
and financing of transit in the six-county northeastern Illinois area) 
jointly request an earmark of $28 million in fiscal year 2003 Section 
5309 bus capital funds for Illinois. This joint request is a 
demonstration of our mutual interest in securing funding for essential 
bus capital needs throughout the State. A project list supporting this 
statewide request is shown in Attachment 2.
    The request will provide $8.2 million for downstate Illinois 
transit systems for the purchase of 72 buses and paratransit vehicles 
to replace overage vehicles and to comply with Federal mandates under 
the Americans with Disabilities Act. All of the vehicles scheduled for 
replacement are at or well beyond their design life. The request will 
also provide $12.2 million to undertake engineering, land acquisition 
or construction for nine support facilities that will enhance efficient 
operation of transit services.
    In northeastern Illinois, $7.6 million will be used to purchase 64 
heavy-duty buses and paratransit vehicles for Pace, RTA's suburban bus 
operator.
    Illinois transit systems need discretionary bus capital funds since 
regular formula funding is inadequate to meet all bus capital needs. 
IDOT believes that Illinois' needs justify a much larger amount of 
funds than the State has received in recent years. Illinois receives 7 
percent of the needs-based urbanized area formula funds but has 
received less than 2 percent of bus capital funds over the last several 
years. RTA ranks third in the nation in bus passenger trips, yet 
Illinois' share of bus capital has been far below shares received by 
other States with much less bus transit use.
New Systems and Extensions--Metra Commuter Rail
    IDOT supports Metra's (the commuter rail operating agency serving 
the six-county northeastern Illinois region) request for an earmark of 
$59.7 million in New Starts funding for continued work on three 
projects: the North Central Service, the Union Pacific West Line and 
the SouthWest Service. These improvements are in areas where 
significant population and development increases have already happened 
and are projected to continue well into the 21st Century. The projects 
will improve and extend commuter rail service which will in turn reduce 
highway congestion and contribute to attaining clean air objectives. 
Metra received $54.4 million in fiscal year 2002 for the three 
projects, and U.S. DOT executed Full Funding Grant Agreements (FFGA) in 
November 2001 totaling $319 million in New Starts funds.
New Systems and Extensions--Chicago Transit Authority (CTA)
    IDOT supports the CTA's request for an earmark totaling $90.4 
million in New Starts funding--$57.6 million to assist in 
rehabilitating the Douglas Branch of the Blue Line and $32.8 million to 
assist in upgrading the Brown Line. In fiscal year 2002, CTA received 
$32.4 million in Federal funds for construction of the Blue Line and $3 
million to continue engineering for the Brown Line.
    The funding requested for rehabilitating the Douglas Branch of the 
Blue Line would continue construction to completely rehabilitate or 
replace track, structure and ancillary systems to restore this 6-mile 
branch of the Blue Line to an acceptable level of service and to ensure 
its viability for the next 30 to 40 years. The CTA is seeking at least 
$57.6 million in New Starts funds for fiscal year 2003. A FFGA for $320 
million in Federal funds was executed in January 2001 for the project.
    The funding requested for upgrading the Brown Line would begin 
construction to extend station platforms to handle longer trains that 
are needed to serve the increasing demand along this line. Lengthening 
all platforms to handle longer, 8-car trains; straightening tight S-
curves that slow operations and selected yard improvements will 
increase capacity by 25 to 30 percent. The CTA is seeking at least 
$32.8 million in New Starts funds for fiscal year 2003. TEA-21 
authorized final design and construction of the Brown Line (Ravenswood) 
project, and the fiscal year 2001 U.S. DOT Appropriations bill made 
available $565.6 million for FFGAs for this and the Blue Line project 
described above. A FFGA for the Brown Line is expected by Summer 2002.
New Systems and Extensions--MetroLink
    IDOT supports the Bi-State Development Agency's (the bus and light 
rail service operating agency for the St. Louis region) request for an 
earmark of $60.45 million in fiscal year 2003 New Starts funding for 
extending the MetroLink light rail system in St. Clair County, 
Illinois. This funding would extend the line from Southwestern Illinois 
College to Scott Air Force Base (as contemplated in the existing FFGA). 
This amount includes funds ($450,000) required by the Federal Transit 
Administration for Project Management Oversight. The Bi-State 
Development Agency expects to execute a $60 million amendment to the 
existing FFGA for additional funding for the St. Clair County 
extension. The MetroLink system serves the St. Louis region in both 
Illinois and Missouri. MetroLink service has been a tremendous success 
and ridership has far exceeded projections.
                         transit formula grants
    IDOT urges the Subcommittee to set appropriations for formula 
grants programs at the guaranteed levels set in TEA-21. IDOT also 
supports using general funds to fund transit programs beyond the TEA-21 
guaranteed levels.
Section 5307 Urbanized Area Funds
    The Section 5307 formula grants program for urbanized areas 
provides vital capital and operating assistance for public 
transportation. In Illinois, these formula funds are distributed to 18 
urbanized areas which provide approximately 600 million passenger trips 
a year. Strong Federal funding support for transit service in urbanized 
areas is necessary to enable transit to continue the vital role it 
plays in providing urban transportation service.
Section 5311 Rural and Small Urban Formula Funds
    The Section 5311 program plays a vital role in meeting mobility 
needs in Illinois' small cities and rural areas. Adequate Federal 
funding assistance for this program is very important to transit 
systems in Illinois. The needs in these areas are growing, yet their 
local revenue sources continue to be very limited. In Illinois, such 
systems operate in 50 counties and 6 small cities, carrying 
approximately 2.75 million passengers annually.
                    next generation high-speed rail
    IDOT urges the Subcommittee to earmark at least $8 million of the 
Next Generation High-Speed Rail appropriation for Federal Railroad 
Administration (FRA) funding to expand a positive train control (PTC) 
system in Illinois. The North American Joint Positive Train Control 
Project currently under way in Illinois is intended to demonstrate a 
PTC system and develop rail industry standards for such control that 
could be used by all railroads. It is jointly sponsored and financed by 
the American Association of Railroads, FRA and IDOT. The PTC system 
installation from Springfield to Dwight, Illinois is nearly complete, 
and testing is scheduled for summer 2002 with a goal of FRA approval by 
the end of 2002. After completing testing, IDOT intends to extend PTC 
from Springfield southward to St. Louis. Illinois is in the process of 
utilizing $70 million of State funds for development of high-speed rail 
in the Chicago-St. Louis corridor.
    IDOT urges an appropriation of $15 million for the Railway-Highway 
Crossing Hazard Elimination in High-Speed Rail Corridors program 
authorized in TEA-21 and an earmark of $6 million for a rail-highway 
grade separation in the Chicago-St. Louis high-speed rail corridor at 
Pontoon Road in Granite City. Section 1103(c) of TEA-21 authorized $15 
million per year in general funds for this program. The Chicago-St. 
Louis corridor is one of the designated corridors under this program, 
and the State is working to minimize railway-highway crossing conflicts 
as part of efforts to implement high-speed rail service.
    IDOT urges the Subcommittee to earmark $2.5 million for upgrading 
at-grade warning systems from dual gates to quad gates on public 
crossings and to dual gates on private crossings in the Chicago-St. 
Louis high-speed rail corridor. Section 1103(c) of TEA-21 sets aside 
$5.25 million of Surface Transportation Program funds each year for the 
Railway-Highway Crossing Hazard Elimination in High-Speed Rail 
Corridors program. The Chicago-St. Louis high-speed rail corridor is 
one of the designated corridors. The $2.5 million would cover 50 
percent of the department's share of upgrading 54 public at-grade 
crossings in the Springfield-St. Louis segment from dual gates, or in 
some cases only crossbucks, to quad gates. The funding would also 
assist in providing dual gates for 20 private at-grade crossings where 
there is no active warning system and would assist in closing crossings 
where possible.
                          amtrak appropriation
    IDOT supports Amtrak's request for $1.2 billion in general funds, 
the amount that Amtrak estimates will be needed to maintain existing 
nationwide operations. IDOT urges Congress to provide funds to continue 
current service until it develops a new national rail passenger policy 
and a clear plan for any changes to existing services as part of the 
congressional reauthorization of Amtrak. Chicago is a hub for Amtrak 
intercity service, and Amtrak operates 50 trains throughout Illinois as 
part of the nation's passenger rail system, serving approximately 3 
million passengers annually. Of the total, Illinois subsidizes 18 
State-sponsored trains which provide service in four corridors from 
Chicago to Milwaukee, Quincy, St. Louis and Carbondale. Amtrak service 
in key travel corridors is an important component of Illinois' 
multimodal transportation network and continued Federal capital and 
operating support is needed. As noted above, Illinois is in the process 
of utilizing $70 million of State funds for development of high-speed 
rail in the Chicago-St. Louis Corridor and is looking to use those 
funds to leverage Federal and private funds. The North American Joint 
Positive Train Control project is under way in the corridor, and 
Illinois intends to implement high-speed rail service over a portion of 
the corridor in the near future. Illinois also has an additional $20 
million for improving passenger service throughout the State through 
track and station improvements.
           airport improvement program obligation limitation
    IDOT supports a fiscal year 2003 Airport Improvement Program (AIP) 
obligation limitation at the $3.4 billion authorization level set in 
Aviation Investment and Reform Act for the 21st Century. The AIP 
program provides Federal funding support for airport preservation and 
improvements needed at general aviation and commercial airports. A 
total of 704 million passengers were enplaned at U.S. airports in 2000. 
While the events of September 11, 2001 sent shock waves throughout the 
aviation industry, passenger enplanements are expected to continue 
growing and reach one billion annually within the next decade. U.S. DOT 
Inspector General Kenneth Mead recently noted that passenger 
enplanements are expected to return to the pre-September 11 levels 
within 18 to 24 months. Airports must continue to make improvements to 
safely and efficiently serve existing traffic and this rapidly growing 
demand. Airports also have to make modifications to terminal areas for 
security purposes.
    Adequate AIP funding is especially important for general aviation, 
reliever, commercial service and small primary airports. While most 
primary airports have been able to raise substantial amounts of funding 
with Passenger Facility Charges, smaller airports are very dependent on 
the Federal AIP program.
    This concludes my testimony. I understand the difficulty you face 
trying to provide needed increases in transportation funding. However, 
an adequate and well-maintained transportation system is critical to 
the nation's economic prosperity and future growth. Your ongoing 
recognition of that and your support for the nation's transportation 
needs are much appreciated. Again, thank you for the opportunity to 
discuss Illinois' Federal transportation funding concerns.
  Attachment 1.--Illinois Fiscal Year 2003 Intelligent Transportation 
                   Systems Deployment Earmark Request
    Illinois requests an earmark of $10 million in fiscal year 2003 
Intelligent Transportation Systems (ITS) Deployment funds to assist in 
funding priority projects listed below. These projects make use of 
Intelligent Transportation Systems to enhance the operations, 
performance, safety, and security of travel on the Illinois highway 
system.
Gateway System Safety and Security Integration--($1.6 million Federal)
    Add interface with Public Safety Access Points (PSAPs, the 911 call 
processing and emergency services dispatch centers) to create an 
integrated transportation and emergency services ``infostructure'' in 
Cook, DuPage, Kane, Lake, McHenry and Will counties in northeastern 
Illinois. The Illinois Gateway Hub of the Gary-Chicago-Milwaukee (GCM) 
ITS Priority Corridor Gateway Traveler Information System is 
operational as the collection and distribution hub for the sharing of 
real-time video, traffic, congestion, incident, construction and system 
condition data. Integration with the 911 centers will significantly 
link transportation operators and emergency service agencies to enhance 
security. This project also supports completion of the GCM Corridor 
fiber optic communications backbone linking critical facilities in 
northeastern Illinois and linking the Central Gateway, Illinois 
Gateway, Indiana Gateway and Wisconsin Gateway hubs to coordinate 
operations and emergency response plans in the major metropolitan 
centers of the three-State corridor.
Surveillance Systems at Illinois Major River Crossings--($2.0 million 
        Federal)
    Develop and deploy monitoring, detection, communications and 
information systems at critical infrastructure crossings on the 
Mississippi, Illinois and other rivers in Illinois. Priority river 
crossings serving Interstate highway routes have been identified in 
East Saint Louis, Rock Island/Moline, Rockford and other areas. 
Surveillance and communication technologies including video and 
detection would be deployed as appropriate based on an assessment of 
the threat and the security priority of the bridge. The project would 
include real-time communications links to Illinois Department of 
Transportation (IDOT) District and Central Office facilities and the 
GCM Corridor facility. Bridge security systems data would also be 
linked to traveler information systems including on-route Variable 
Message Signs and other media.
Traffic Management and Control Centers--($2.4 million Federal)
    Enhance the operation of traffic management and software systems in 
St. Louis Metro East and Peoria, Illinois. Traffic Operations Centers 
including surveillance, detection, control and traveler information 
systems have been or are being deployed in both metropolitan areas to 
improve traffic flow, incident management, emergency response and 
system security. These systems will be designed with capability for 
statewide integration with the IDOT Operations Center at IDOT 
headquarters in Springfield through the Gateway System or similar 
software licensed to the department. Additional deployments are 
targeted in metropolitan areas where regional and project architectures 
are being developed, including Rockford and Quad Cities.
Illinois Commercial Vehicle Information Systems and Networks--($280,000 
        Federal)
    Deploy key components of the Commercial Vehicle Information Systems 
and Networks (CVISN) Level 1 system in Illinois. This deployment would 
support the new Commercial Vehicle Operations Electronic One-Stop 
Shopping Business Plan coordinated by the Illinois Commerce Commission 
and the statewide deployment of PrePass electronic screening and Weigh-
in-Motion systems at all weigh and inspection stations on Interstate 
highways in Illinois recently completed by IDOT. This project includes 
development and deployment of Commercial Vehicle Information Exchange 
Window, International Fuel Tax Agreement, International Registration 
Plan and electronic screening PrePass Clearinghouse Data Exchange 
functionality, and development and deployment of electronic screening 
on-line access. These capabilities will enhance documentation, 
monitoring and enforcement of commercial vehicle regulations to support 
increased safety and security of heavy truck shipments to, from and 
through Illinois.
Chicago-Kennedy Expressway Closed Circuit TeleVision System--($570,000 
        Federal)
    Deploy a high resolution Closed Circuit TeleVision (CCTV) 
surveillance system along the Kennedy Expressway between the Chicago 
Loop and O'Hare International Airport to expand the existing limited 
system. Includes expansion of the existing communications 
infrastructure to control the Pan-Tilt-Zoom video cameras and to share 
video with operating and emergency service agencies for enhanced 
security and incident response capabilities along this vital 
transportation corridor.
Statewide Weather/Roadway Condition Reporting System--($500,000 
        Federal)
    Deploy the FORETELL/CARS weather and construction information 
system statewide. FORETELL/CARS would be integrated through IDOT's 
Central Office Bureau of Operations and includes advanced weather 
reporting, highway condition and incident reporting systems. FORETELL/
CARS provides an operational highway management and traveler 
information system to serve rural and small to mid-sized urbanized 
areas throughout Illinois. The project would install video surveillance 
cameras at up to six Roadway Weather Information System stations 
throughout Illinois. Existing communications would be used to permit 
monitoring of the cameras at the IDOT Operations Center in Springfield.
Bridge Control Automation System--Joliet, Illinois--($750,000 Federal)
    Automate and consolidate the six localized, motorized bridge 
controls in Joliet. Automation provides coordinated bridge operations. 
This project includes control modernization, expanded video 
surveillance of the bridges, wireless communications for control data 
and alarms, remote reporting and traveler information systems for 
improved security of these critical links.
Virtual Weigh Station for Commercial Vehicle Enforcement/Security--
        ($150,000 Federal)
    Deploy one virtual weigh station or over-weight vehicle enforcement 
commercial vehicle/heavy truck security screening. One high-priority 
location would be selected for prototype deployment. Virtual weigh 
stations use weigh-in-motion sensors, Automated Vehicle Location, 
Computer Aided Dispatch and communications technology to complement 
permanent weigh stations on Interstate highways to more effectively 
enforce weight restrictions and/or hazardous material regulations by 
screening passing vehicles with minimum disruption.
Expand/Upgrade IDOT District 1 Variable Message Signs--($750,000 
        Federal)
    Deploy new and replacement Variable Message Signs (VMS) in Cook, 
DuPage, Kane, Lake, McHenry and Will counties in northeastern Illinois. 
The VMS would use current, standards-compliant sign and control 
technologies to take advantage of the capabilities of the upgraded 
Traffic Systems Center (TSC) traffic management system software. VMS 
provide for direct center-to-motorist communications for real-time, en-
route management of expressway operations and enhanced security 
response including traffic routing information.
Work Zone Management System--($150,000 Federal)
    Acquire portable work zone traffic management systems to include 
skid platform(s), tower(s), closed circuit video cameras, portable 
Variable Message Sign(s), non-intrusive detector(s), solar power, 
communications, data processing and control systems for deployment to 
enhance work zone safety at construction projects around Illinois. Use 
of the equipment would be scheduled according to planned construction 
and would be available for emergency/security deployment as needed.
I-55/Lake Springfield Fixed Anti-Icing System--($850,000 Federal)
    Deploy a Fixed Anti-Icing System (FAIS) on the 700-foot long bridge 
carrying Interstate 55 over Lake Springfield in Springfield, Illinois. 
This project reduces the risk and increases safety associated with the 
high volume of trucks carrying hazardous material and the frequent 
icing conditions experienced on the bridge. This in turn would reduce 
the likelihood of a hazardous material spill into Lake Springfield, the 
water supply for nearly 150,000 people in the Springfield area. This 
project would provide real-time response to icing conditions through 
the use of advanced detector, anti-icing and control technologies.
    Attachment 2.--Fiscal Year 2003 Illinois Bus and Bus Facilities 
                     (Section 5309) Earmark Request
    Illinois requests an earmark of $28 million in fiscal year 2003 
Section 5309 funds for the projects listed below. The Federal funds 
would be matched with State or local funds.
Northeastern Illinois Bus Request
    Six four heavy-duty transit and paratransit buses for Pace (the 
Regional Transportation Authority's operator of bus service in the 
Chicago, Illinois suburban region). This request is for $7.6 million in 
Federal funds to replace 20 heavy-duty buses and 44 paratransit buses 
that have reached or are beyond their useful life. These buses are in 
addition to those programmed for replacement with available Federal, 
State and local funds.
Downstate Illinois Bus Request
    Forty heavy-duty transit and paratransit buses for Bloomington, 
Peoria, Madison County, River Valley (Kankakee), Rockford, Rock Island 
and Springfield, Illinois. This request is for $6.3 million in Federal 
funds to replace 20 heavy-duty transit buses and 20 paratransit buses 
that have reached or are beyond their useful life. These buses are in 
addition to those programmed for replacement with available Federal, 
State and local funds.
    Thirty two paratransit buses for nonurban areas. This represents 
the combined paratransit vehicle replacement request of the State's 30 
nonurban (Section 5311) general public transportation providers. The 
request is $1.9 million in Federal funds to replace 32 paratransit 
vehicles. Since most of the Federal Section 5311 funds go to operating 
assistance, the major source of funding for vehicle purchases is the 
discretionary bus capital program.
Downstate Illinois Facility Requests
    Bi-State Development Agency, Illinois--Illinois Bus Facility.--This 
request is for $3.9 million in Federal funds to begin constructing a 
new bus maintenance and storage facility on the same site as Bi-State's 
new light-rail maintenance facility in St. Clair County. Bi-State is in 
the process of completing the facility design and the estimated cost is 
$22 million. The State and local agencies have already committed $4 
million for design. Additional discretionary bus capital funds will be 
requested in fiscal year 2004 to help fund construction.
    Bloomington, Illinois--New Garage.--This request is for $3.6 
million in Federal funds for land acquisition, design and construction 
of a new administrative/maintenance facility. The Bloomington-Normal 
Public Transit System's current facility is in need of replacement. 
Previous renovations were done over 12 years ago and in addition, the 
transit system has expanded and needs more work space.
    Champaign, Illinois--Park and Ride Day Care Center.--This request 
is for $1.2 million in Federal funds for design and construction of a 
day care center at a Park and Ride location. The Champaign-Urbana Mass 
Transit District, in cooperation with the University of Illinois, has 
developed a plan to locate a day care center adjacent to the 
University's South Research Park. The center would help the University 
meet day care needs for employees who park and use public transit to 
the central campus. There is no parking available during the day at the 
central campus for these employees.
    Galesburg, Illinois--New Garage (Phase I).--This request is for 
$192,000 in Federal funds for Phase I (design and land acquisition) for 
a new administrative/maintenance facility. The city of Galesburg's 
public transit system needs a new facility. The city is currently 
renting a facility that is very old and too small.
    Madison County, Illinois--Facility Renovation.--This request is for 
$1.2 million in Federal funds to renovate the Madison County Transit 
District's administrative/maintenance facility (Building 1). The 
facility was built in 1987 and the interior of the building needs to be 
renovated to meet current operating and administrative needs. The 
parking lot needs improvement as well.
    RIDES, Illinois--Albion Facility.--This request is for $480,000 in 
Federal funds to construct a new administrative/maintenance facility in 
Albion, IL. The RIDES Mass Transit District (based in Rosiclare, IL) 
received fiscal year 2001 discretionary bus capital funding for Phase I 
(land acquisition and design) for this project and construction funding 
is needed.
    River Valley (Kankakee), Illinois--Transfer Center.--This request 
is for $560,000 in Federal funds to construct a bus transfer facility 
in downtown Kankakee. The River Valley Metro Mass Transit District 
received fiscal year 2002 discretionary bus capital funding for Phase I 
(design and land acquisition) for this project.
    Rock Island, Illinois--Facility Renovation (Phase I).--This request 
is for $600,000 in Federal funds for initial renovation of the Rock 
Island County Metro Mass Transit District's administrative/maintenance 
facility. The facility was built in 1983 and is in poor condition. The 
deficiencies were documented in a study undertaken by the district one 
year ago.
    Springfield, Illinois--Transfer Center Engineering.--This request 
is for $480,000 in Federal funds to undertake Phase I (design and land 
acquisition) for an intermodal transfer center to serve the Springfield 
Mass Transit District. The center would have space for transit buses, 
intercity buses and would house the Amtrak station. The current 
transfer location is on-street and creates a safety problem for 
passengers crossing the street to transfer buses.
                                 ______
                                 

       Prepared Statement of the Los Angeles County Metropolitan 
                     Transportation Authority (MTA)

    Chairman Murray and members of the Subcommittee, on behalf of the 
Los Angeles County Metropolitan Transportation Authority (MTA), I 
appreciate the opportunity to submit testimony in support of Los 
Angeles County's surface transportation programs, projects and 
services. The MTA's fiscal year 2003 Appropriations funding request is 
designed to stimulate the economic growth of Los Angeles County and 
address the mobility needs of over nine million people.
    The MTA's transportation partnership with the Federal Government 
has helped to strengthen this area's economy and move its people and 
visitors to work and recreation venues throughout Southern California. 
The successes experienced by MTA in recent years stem from a resolute 
Board of Directors, the leadership of former CEO Julian Burke and the 
productive partnership this agency has enjoyed with the Federal 
Government. This shared vision to improve the delivery of 
transportation projects and services has served to make Los Angeles 
County a clear example of how Federal funding can work. There is a firm 
foundation of fiscal responsibility and a dedication to serving the 
public that will help to build an even better system for the future.
    Another area of focus on this year is establishing greater 
cooperation with the municipal operators, including the further 
development of a common transit pass. This pass is an interim step to 
the implementation of the Universal Fare Card. Additionally, we hope to 
secure funding from whatever sources possible for security efforts at 
our transportation facilities in Los Angeles County. It should be noted 
that we have also identified the need for $24 million in security 
funding and enhancements for the MTA and the municipal operators. We 
hope to have access to any Federal funding for transit security measure 
which may become available either through Transportation Appropriations 
or other congressional efforts.
             mta's fiscal year 2003 appropriations request
    Specifically, the MTA's fiscal year 2003 Appropriations request is 
as follows:
    $40.5 million in Section 5309 New Starts Funding.--To complete the 
Federal Government's funding commitment to the Metro Rail North 
Hollywood Extension. Under the North Hollywood Full Funding Grant 
Agreement this is the last Federal installment of Federal funds for the 
project. This project opened in June 2000 on budget and ahead of 
schedule, and has exceeded its ridership projections with 147,775 
weekday boardings on this line, the project is a true success story 
that demonstrates the strong working relationship between the MTA and 
the Federal Government.
    $35 million in Section 5309 New Starts Funding.--For use on the 
Eastside light rail transit project. This project, which replaces the 
subway project originally planned under the MOS-3 FFGA, will bring long 
awaited transit improvements to the East Los Angeles communities. This 
funding will be used for the final design of the tunnel for the 
project, land acquisition, and to enter into a design and construction 
contract for the project.
    $4.5 million in Section 5309 New Starts Funding.--For preliminary 
engineering on the Exposition Boulevard light rail transit project from 
downtown Los Angeles to the Mid-city area and eventually onto the city 
of Santa Monica. MTA has approved moving this project into preliminary 
engineering. The Mid-City/Exposition LRT Project is a passenger rail 
project running 6 miles with 10 stations from Downtown Los Angeles 
through Culver City and the City of Los Angeles.
    $11.5 million for MTA and $15 million for the Los Angeles Municipal 
Transportation Operators Coalition in Section 5309 Bus and Bus-Related 
Discretionary Funding.--To assist the MTA in expanding its Metro Rapid 
Bus Program into communities throughout Los Angeles County and help the 
Municipal Operators in Los Angeles County expand and enhance their 
services. The MTA's Metro Rapid Bus Program, which carries 48,415 
people per weekday, utilizes advanced technology to provide more 
efficient bus services, including limited stops, electronic message 
signs at stops and street signalization. This program is popular with 
transit riders and serves as an example for transit properties around 
the Nation. The MTA is requesting that $5 million be appropriated for 
Metro Rapid Buses and $6.5 million be appropriated for Metro Bus 
divisions, facility improvements to support the service sector efforts 
and to enhance the Bus Signal Priority system. The Municipal Operators 
set a figure of $15 million for capital bus needs this year. The MTA 
supports that request.
    $5 million in Intelligent Transportation Systems (ITS) Funding.--
For the further development of the ``smart card'' fare system in Los 
Angeles County. This universal fare system will be used to create 
``seamless'' transit services throughout the Southern California 
Region.
    $2 million in Reverse Commute/Jobs Access Program Funding.--As a 
member of the Los Angeles County's Transportation and Human Services 
Executive Council, the MTA funding request will help implement a 
focused ridesharing matching program for employed Welfare-to-Work 
participants.
                      progress through partnership
    In the last few years the MTA has refined its mission through a 
series of important Board decisions. These decisions have resulted in 
the selection of cost-effective and publicly supported projects in 
corridors previously slated for expensive heavy rail projects. The 
Board has also placed as high priorities the procurement of new, clean 
fuel buses and the development of greater efficiency in bus service. 
This past summer the Board adopted a long-range transportation plan to 
address the current and future growth in the region. We believe the 
MTA's progress has been significant, and reflects the agency's ongoing 
efforts with the Federal Government and other funding partners to 
provide safe and efficient transportation services to Los Angeles 
County residents. The MTA and its transportation partners in Los 
Angeles County have 1.7 million boardings a day. That is equivalent or 
greater than the population of most cities in the United States. We 
have come a long way in meeting the needs of this region, but we also 
have a great deal more to do.
Metro Rail
    Most noteworthy during the last two years is the completion of the 
North Hollywood segment of the Metro Rail Red Line. It is my 
understanding that many in the country, and perhaps in the Federal 
Government, were unsure of the efficacy of this project. This segment 
of the rail system, however, was completed six months ahead of schedule 
and on budget. The opening of that portion of the Red Line resulted in 
a doubling of the ridership on the subway line of the rail system, 
which now has an estimated 147,775 weekday boardings. Federal funding 
has also played a part in advancing the next critical element of the 
MTA's rail system--the Eastside light rail transit project.
Bus Fleet
    It is my understanding that four years ago MTA had one of the 
oldest fleets in the nation. Many of the MTA vehicles were far past the 
average bus retirement age of 12 years. Today I can share that the 
average age of the MTA fleet is under 8 years and nearly half of the 
fleet, over 1,000 buses, are CNG clean fuel vehicles. The accelerated 
procurement plan implemented by the agency three years ago resulted in 
safer, cleaner buses, increased on time pull outs, fewer breakdowns, 
and staying on schedule to our waiting passengers. This workhorse of 
our transit system carries over 1.2 million boardings a day.
Metro Rapid Bus Service
    Another achievement during the last few years was the successful 
demonstration of the Metro Rapid Bus in two corridors in the County. It 
is one of my priorities to expand this successful service as quickly as 
possible throughout the County. This program, which incorporates 
elements such as fewer stops (similar to a light rail line), signal 
synchronization and signal pre-emption, low floor vehicles for faster 
boarding, frequent buses and information technology at bus stops, is 
incredibly popular in Los Angeles. The two corridors of the program 
have seen a 25-28 percent increase in transit usage, with one-third of 
those boardings coming from new bus riders. The MTA Board has voted to 
expand the program to 21 new corridors throughout the county. This bus 
rapid transit network, coupled with the current bus and rail system, 
will greatly enhance access to and acceptance of transit services for 
Los Angeles residents.
                               conclusion
    The MTA appreciates the consistent support of the Subcommittee on 
Transportation for projects and services in Los Angeles County. The MTA 
respectfully submits this fiscal year 2003 Appropriations request as a 
means to help this agency continue to improve mobility and air quality, 
and encourage job development and economic growth in the one of the 
most densely populated and congested regions in the United States.
    As the MTA continues to make significant and sustainable 
improvements to its delivery of transportation services, projects and 
programs, we look forward to continuing our funding partnership with 
the Federal Government. This partnership assists our efforts to provide 
for the safe and efficient movement of goods and people in the Los 
Angeles basin. We believe that funding for Los Angeles County 
transportation is a sound investment for Los Angeles, California and 
the Nation.
    Thank you for this opportunity to share our successes and fiscal 
year 2003 transportation funding requests with the Subcommittee.
                                 ______
                                 

Prepared Statement of the Metropolitan Atlanta Rapid Transit Authority 
                                (MARTA)

                   introduction and executive summary
    Atlanta is the one of the fastest growing metropolitan areas in the 
nation, and has played a key role in the economic vitality of the 
Southeast. Metro Atlanta, however, is now confronted by serious traffic 
congestion and air pollution problems, which threaten both the quality 
of life and economic health of the region. In order to provide improved 
transit service to this expanding region, the Metropolitan Atlanta 
Rapid Transit Authority (MARTA) is requesting Federal appropriations 
for three major capital projects in fiscal year 2003. These projects 
consist of the North Line heavy rail extension to North Springs, 
including the purchase of additional rail cars; the acquisition of 
clean fuel buses; and the Hamilton Clean Fuels Bus Facility.
    MARTA respectfully requests the United States Senate Committee on 
Appropriations to designate $16,363,780 in fiscal year 2003 FTA Section 
5309 New Starts funds for the North Line Extension Project, including 
the purchase of associated rail cars. This project was authorized in 
TEA-21 and is the subject of a Full Funding Grant Agreement between the 
Federal Transit Administration (FTA) and MARTA. The requested funds 
will be utilized to partially fund the acquisition of new rail cars 
needed to serve this extension.
    Additionally, MARTA has significant capital funding needs in 
support of our Bus and Bus Facilities program. As part of an effort to 
improve air quality in the Atlanta non-attainment area, MARTA is 
committed to the use of clean-fuel vehicles. To further this 
commitment, we respectfully request the Committee on Appropriations to 
allocate $17,600,000 in fiscal year 2003 FTA Section 5309 Bus and Bus 
Facilities funds for the purchase of 41 clean-fuel buses and the 
development of the Hamilton Clean Fuels Bus Operations & Maintenance 
Facility.
    The background, rationale and justification supporting these 
requests are set forth in the following pages.
               new starts and extensions project request
    The North Line Extension Project consists of the development of a 
two-mile, two-station extension of the MARTA heavy rail system to North 
Springs and the acquisition of 56 new rail cars. This project is 
authorized in Section 3030 (a)(3) of the Transportation Equity Act for 
the 21st Century, and has been implemented pursuant to a Full Funding 
Grant Agreement with FTA.
    The North Line Extension--including the new Sandy Springs and North 
Springs stations--opened for revenue service as scheduled on December 
16, 2000. The construction phase of this project is complete. The major 
remaining component of the project is the production, delivery, testing 
and acceptance of the new rail cars.
    The original scope of the project included the purchase of 28 rapid 
rail cars. In late 1996, MARTA's reevaluation of expanded customer 
service demands and estimated patronage growth in this rapidly 
developing area resulted in a decision to increase the number of rail 
cars to be acquired to support this extension. Due to the projected 
increase in ridership and service requirements following the opening of 
the North Line Extension, the planned rail car requirement was 
increased from 28 to 56 passenger vehicles, a net increase of 28 cars. 
This project scope change was authorized in Section 3030 (d)(2) of TEA-
21. FTA has approved the MARTA Rail Fleet Management Plan, which 
provides a detailed justification for these 28 additional vehicles. The 
new rail cars will allow MARTA to run longer trains to accommodate the 
additional passenger loads.
    The 56 passenger vehicles that are associated with the North Line 
Extension are being acquired under a major contract that will procure a 
total of 100 rail cars. MARTA awarded this contract (CQ 312) to Breda 
Costruzioni Ferroviarie (``Breda''), a major Italian rail car 
manufacturer, in February 1998. The final assembly and testing of these 
new cars is taking place in Tucker, Georgia at an existing 120,000 
square foot light industrial facility that has been leased and modified 
by Breda.
    These new stainless-steel rail cars include a number of features to 
enhance customer convenience and safety, including ADA-compliant 
between car barriers, digital scrolling interior signs, a sporty new 
blue interior, with a more comfortable configuration for both seated 
passengers as well as standees. These state-of-the art rail vehicles 
also employ an alternating current (AC) propulsion system that will 
provide greater reliability and be easier to maintain.
    As of March 15, 2002, MARTA has accepted delivery of 36 of the new 
rail cars, which have been placed into revenue service and well 
received by our passengers. The status of the remaining 20 federally 
funded rail cars is as follows: Six of the 20 cars are in pre-revenue 
testing, with the remaining 14 cars undergoing final production at the 
Tucker facility. The current schedule calls for the 56th rail vehicle 
to be delivered and accepted for revenue service in August 2002.
    Appropriations requested for fiscal year 2003 in the amount of 
$16.4 million will be utilized to reimburse MARTA for the cost incurred 
to purchase the ten remaining rail cars included in the scope of this 
project.
Financial Status
    The Full Funding Grant Agreement reflects a total (multi-year) 
Federal contribution of $370,543,000 for the North Line Extension 
project. This funding level represents 80 percent of the total project 
cost of $463,179,000. Of the total proposed Federal share, $354,343,058 
has been secured to date either through previous Congressional 
appropriations or FTA reobligations to the Project. This leaves a 
remaining Federal share of $16,200,142 needed to complete this project. 
In anticipation of the one percent FTA deduction for Project Management 
Oversight (PMO), MARTA is requesting the slightly higher amount of 
$16,363,780.
             marta bus and bus facilities project requests
    The Committee is respectfully requested to appropriate $17.6 
million in fiscal year 2003 funds, including $10 million for the 
purchase of 41 clean fuel buses and $7.6 million for the Hamilton Clean 
Fuels Bus Facility. These projects are described in greater detail 
below.
Acquisition of Clean Fuel Buses
    Due to the serious air quality problems in the Atlanta region, 
MARTA has embarked upon a program to convert our bus fleet to clean 
fuel operation by fiscal year 2007. Through the combined assistance of 
the Congress, the FTA and the State of Georgia, MARTA acquired 118 
compressed natural gas (CNG) fueled buses in 1996. Recently, MARTA 
received delivery of our second order of CNG buses, consisting of 206 
low floor models manufactured by New Flyer Industries. Our clean fuel 
CNG bus fleet now includes a total of 324 vehicles, the 2nd largest CNG 
fleet in the nation.
    For fiscal year 2003, MARTA is requesting a federal share of 
$10,000,000 for the purchase of 41 clean fuel buses to replace aging 
non-clean fuel buses that will have exceeded their recommended useful 
life.
    In 2001, MARTA placed an order for 140 clean fuel buses--including 
130 fueled with CNG--with Orion Bus Industries. The first set of 70 
buses under this order are due for delivery in late Spring 2002, with 
the second group of 70 buses targeted for revenue service by February 
2003. To date, federal funding has been secured for 119 of the Orion 
buses on order, leaving a balance of 21 buses targeted for funding 
through fiscal year 2003 appropriations. This summer, MARTA plans on 
awarding our next procurement contract that would call for the delivery 
of 65 clean fuel buses in 2004, to replace buses that were acquired in 
1991/92. Our fiscal year 2003 appropriations request includes funding 
for 20 of these buses.
    The buses to be acquired will be a mix of 35-ft. and 40-ft. low-
floor models designed to meet specific local service, community and 
operational requirements. Low-floor buses are wheelchair accessible, 
allow for easy and convenient boarding by all passengers, and are 
economical to operate.
    All buses being replaced will exceed the minimum FTA replacement 
criteria of 12 years or 500,000 miles of accumulated service. The new 
buses will fully meet or exceed the requirements of the Americans with 
Disabilities Act (ADA), as well as, the Clean Air Act Amendments 
(CAAA). Currently, 46 percent of the 703 buses in the fleet operate on 
clean fuels, and there is an obvious need to convert the remaining 379 
buses to clean-engine, low emission operation as soon as feasible.
    MARTA is committed to provide bus service that is fully accessible 
to persons with disabilities. With the final acceptance of the buses in 
the recent New Flyer order, the Authority's fixed route bus fleet is 
now 100 percent ADA accessible.
    MARTA is also acquiring low emission clean diesel buses in order to 
provide emergency-response capability, in the event needed, to respond 
to natural disasters throughout the State of Georgia. Because CNG re-
fueling capability is limited in other parts of our state, a complement 
of clean diesel buses will enable MARTA to respond to such emergency 
public transportation needs, as needed, in a timely and effective 
manner. The clean diesel buses will incorporate the latest low emission 
technology, and will meet or exceed EPA emissions requirements.
    MARTA is also engaged in a strong partnership with the State of 
Georgia in terms of receiving matching funds to support our bus 
replacement program. Over the past two years, the Georgia Legislature, 
with the support of the Governor and the Georgia Department of 
Transportation, has allocated over $4 million in State general funds to 
be applied to the non-federal matching share for the purchase of MARTA 
clean fuel buses.
Bus Facilities Program
    MARTA is investing in the capital infrastructure necessary to 
support clean fuel bus operations. In 1996, a CNG Bus Maintenance and 
Fueling facility was constructed at Perry Boulevard with local MARTA 
funds prior to the Olympic Games. The major conversion of our Laredo 
bus operating and maintenance facility serving DeKalb County to support 
CNG operation was completed in March 2001. At present, two of our three 
bus operating facilities are able to support CNG operations. There 
remains, however, a critical need to provide clean fuel bus 
infrastructure in the southern portion of the MARTA service area.
    The need to provide clean fuel bus capacity on Atlanta's southside 
has resulted in plans for the retrofit and expansion of MARTA's 
Hamilton Bus Operating & Maintenance Facility in southeast Atlanta. Due 
to the unique characteristics of CNG, various capital improvements must 
first be made to enable the safe operation and maintenance of CNG buses 
at the Hamilton site. These planned improvements include the 
construction of a CNG compressor station and refueling/service 
facility, the renovation or construction of the bus wash facility, new 
ventilation and heating systems in the maintenance bay areas, a CNG gas 
detection system, and partial modifications to the ceiling lights and 
electric conduit.
    The currently estimated cost for this Phase, including design and 
project management costs, is approximately $19 million, based on our 
experience with the recent Laredo Garage conversion project. It is 
likely that this estimate will undergo refinement as design progresses 
on this project. MARTA is requesting the Senate Committee on 
Appropriations to allocate $7,600,000 in fiscal year 2003 Federal 
Transit Section 5309 funds to assist in financing these CNG-related 
capital improvements.
    The capacity of the existing Hamilton facility is now limited to 
approximately 200 buses. Should additional funding be identified, there 
are conceptual plans to increase the capacity of the facility to 
accommodate up to 250 buses, as well as to improve the flow of buses 
into and out of this facility. There is also the potential for shared 
use of this facility, once it is modernized and expanded, for broader 
regional transit purposes and by other CNG vehicle operators.
                                 ______
                                 

 Prepared Statement of the National Association of Railroad Passengers

    Thank you for the opportunity to submit this statement. We support 
the Amtrak request for $1.2 billion. We also support efforts to make 
the Federal Government a true funding partner with states to permit 
development of high speed rail corridors, for which many states already 
have well-advanced plans. Attached is a copy of my letter to Federal 
Railroad Administrator Allan Rutter, commenting on his written 
statement to the House appropriations subcommittee, which was virtually 
identical to his statement to you. I ask that this letter also be 
included as a part of the record.
    We believe that the nation's existing intercity passenger rail 
network is ``skeletal,'' that it should be preserved and improved in 
its entirety, and expanded when possible. The message from the 
traveling public supports this view.
Current Ridership
    February was the sixth straight month in which the percentage 
change in travel from a year ago was sharply stronger on Amtrak than on 
the airlines. In spite of rising fares on Amtrak and heavy airline 
discounting, passenger-miles rose 8.6 percent at Amtrak but fell 10.3 
percent for domestic airline service. (A passenger-mile is one 
passenger traveling one mile.) Amtrak ticket revenues rose 17.0 
percent.
    Amtrak's strong performance was not confined to the Northeast 
Corridor. For example, sleeping cars nationwide outperformed the 
overall system: passenger-miles up 13.5 percent; ticket revenues up 
18.0 percent. Overall, 10 of Amtrak's 19 long-distance trains posted 
double-digit ticket revenue gains, and the single train which posted a 
decline is on a passenger-unfriendly schedule which will be 
significantly improved in the April 29 timetable.
    As the attached graph indicates, for six straight months--September 
through February--Amtrak has significantly outpaced domestic air travel 
in terms of percentage change from one year ago. Many of the smaller 
communities served by Amtrak's long-distance trains have born the brunt 
of airline service reductions.
    Obviously, air travel remains vastly greater in absolute volume. 
However, the general public--and many elected officials--increasingly 
realizes that our transportation system and our economy would be far 
less vulnerable if our passenger rail network was more completely 
developed.
Ridership History
    Amtrak's historical ridership data understate the growth of true 
intercity ridership, particularly when 1979 is used as the base year. 
That year is misleading as a baseline because that was when the 
gasoline availability crisis artificially and dramatically increased 
Amtrak travel. Passenger-miles rose 22 percent to a level not achieved 
again until 1986. Ridership rose 13 percent to a level not achieved 
again until 1988. Also, since Amtrak's early years a number of daily 
commuters in the Northeast have been deliberately diverted from Amtrak 
trains to regional commuter trains, and a Chicago-Indiana commuter 
train Amtrak inherited from Penn Central was discontinued. The Amtrak 
Reform Council has used 1979 as a base year without explaining any of 
the above caveats.
Subsidies and Costs
    Amtrak's $1.1 billion operating loss in fiscal year 2001 includes 
depreciation on right-of-way property mostly, but not entirely, in the 
Northeast Corridor. In Fiscal 2001, this rose by $54.9 million (or 28 
percent)--from $196 million in fiscal year 2000 to $251 million and now 
represents about 23 percent of the entire operating loss. The increase 
in right-of-way depreciation in fiscal year 2001 equals 43 percent of 
the total $129 million increase in the operating loss. No airline or 
bus company carries equivalent right-of-way costs on its books. This 
may or may not argue for someone other than Amtrak owning the Northeast 
Corridor, but anyone analyzing Amtrak's finances needs to be aware of 
this.
    The claim is frequently made that other modes pay for themselves 
through trust funds. We believe the biggest ``subsidy'' in 
transportation is the mode-specific Federal approach to trust funds. By 
recognizing all air ticket taxes, and most gasoline taxes, as ``votes'' 
for more investment in aviation and highways, respectively, and by 
providing generous Federal matches for air and road projects and none 
for intercity passenger rail projects, the Federal Government insures a 
strong state investment bias against passenger rail. The fact that some 
states--including yours--have made significant investments absent 
meaningful Federal matches is testimony to the popularity of rail, and 
the broad realization even before September 11 that the rail choice is 
important to travelers today and will be even more important in the 
future. That future importance will become more obvious with continuing 
growth in both the cost of--and logistical obstacles to--building new 
highways and airports.
Economic Performance
    The oft-quoted measure, ``subsidy per passenger,'' does not measure 
economic efficiency on an intercity network in which different 
passengers make trips of widely differing lengths. The better measure 
would be operating ratio (i.e., costs divided by revenues) or perhaps 
subsidy per passenger-MILE. CHECK AMTRAK IG'S REPORT.
    For example, the Southwest Chief, which links Chicago and Los 
Angeles via Kansas City, Albuquerque and Flagstaff, is the fastest 
Chicago-West Coast train. According to the table at page 96 of the ARC 
report, this train in fiscal year 2001 had the fourth best operating 
ratio among long-distance trains (behind Auto Train, Silver Meteor, and 
Empire Builder) but one of the highest subsidies per passenger, because 
it has a relatively small number of passengers traveling very long 
distances. (One quarter of the Chief's ticket is generated by just two 
city-pairs: Chicago-Los Angeles and Chicago-Fullerton.) Indeed, at 
Amtrak, subsidy per passenger corresponds more with average trip length 
than with economic performance.
    The Association stands ready to do our best to provide any further 
information the committee may need.
    Thank you for considering our views.

               National Association of Railroad Passengers,
                                    Washington, DC, March 13, 2002.
The Honorable Allan Rutter,
Federal Railroad Administrator.
    Dear Allan: An impressive amount of work went into your written 
statement for House Appropriations, but in a number of ways--by errors 
of omission and commission--the statement seemed to undermine the case 
for a national passenger rail network, or even any Federal funding for 
intercity passenger rail. I wanted you to be aware of how this came 
across to me and probably other rail passenger supporters who read your 
statement.
    You acknowledge that ``as demonstrated in the aftermath of 
September 11th, a strong argument can be made for flexibility and 
redundancy in this Nation's passenger transportation system that could 
be provided by intercity passenger rail'' (page 2). But, except for a 
backhanded reference on page 13, the statement is silent on the message 
the traveling public has been sending ever since about the desire for 
more rail travel--Amtrak's September-January travel percentage changes 
far stronger than the airlines', with January Amtrak travel up 5 
percent (sleeping cars up 10 percent) and the airlines' down 13 
percent. The table below understates the shift: the airline decline is 
in spite of massive fare discounting and Amtrak's growth is in spite of 
aggressive fare policies.

                  YEAR-TO-YEAR CHANGE IN PASSENGER-MILES HANDLED--AMTRAK AND DOMESTIC AVIATION
----------------------------------------------------------------------------------------------------------------
                                     September        October        November        December         January
                                     (percent)       (percent)       (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
Amtrak..........................            +0.2            -2.2            +0.9            +3.8            +5.0
Domestic Aviation...............           -32.5           -21.1           -17.7           -13.2           -12.8
----------------------------------------------------------------------------------------------------------------


                                                                                                  
                                                                                                  

    ``Together these actions will reduce the quality of Amtrak service 
in 2002 and succeeding years. Amtrak's management is to be commended 
for taking these steps on its own to conserve its cash resources, 
rather than asking for supplemental funding from Congress'' (page 2). 
That is an interesting, and sad, sequence--praising Amtrak for reducing 
its service quality in the face of public demand for more and better 
rail service. The public increasingly has trouble reconciling the quick 
$5 billion aid package for the airlines while Amtrak is left to ``twist 
in the wind.''
    [The only reason NARP did not urge Amtrak to seek and Congress to 
approve a supplemental is our belief that--in large part because of the 
Administration's position--this effort would not succeed. Had Amtrak 
delayed ``these steps'' only to learn later that no supplemental would 
be forthcoming, the task of making it through the year likely would 
have changed from difficult to impossible.]
    ``. . . Some important metropolitan areas (i.e. . . Phoenix. . .) 
lack Amtrak service entirely'' (page 3). Amtrak recently began service 
to Maricopa (near Phoenix) and ridership has grown quickly.
    ``. . . Only 25 to 30 of Amtrak's stations would be regarded as 
realistic transfer points between intersecting routes, while 136 
airports are classified as hubs and Greyhound claims 150 major 
terminals. . . If a prospective traveler can't get there from here' by 
a particular mode, that mode simply can't compete for his or her 
business'' (page 4). These comments, and the absence of any mention of 
Amtrak's Thruway bus connections, seem odd coming from a Department 
which in many other contexts vigorously promotes ``intermodality.'' 
Your subliminal message seems to be, ``Amtrak is too small, so let's 
make it even smaller.''
    Thruway's very important role in California, Florida and elsewhere 
deserves recognition. Longview, Texas, is a major Amtrak stop partly 
because Thruway connections there make possible trips like Chicago-
Houston and Chicago-Shreveport. In addition, there are the growing 
number of intermodal terminals where passengers make their own non-
through-ticketed transfers between Amtrak and other forms of public 
transport (intercity and local bus and rail).
    A few observations about on-time performance:
  --A 30-minute tolerance on a long-distance trip implies many late 
        trains where passenger dissatisfaction is minimal; someone 
        traveling from California to Chicago likely will not be 
        bothered by 40 minutes of lateness (or even longer, if the 
        staff treats them well and they don't misconnect).
  --Passenger (and freight) service, at least in early fiscal year 
        2001, was still recovering from the debacle that immediately 
        followed the NS/CSX splitup of Conrail.
  --Ex-Southern Pacific lines (used by Sunset Limited, Coast Starlight, 
        California Zephyr) deteriorated in years before the Union 
        Pacific acquisition. Since then, an above-normal amount of 
        track work has been necessary. This creates severe problems on 
        heavily-used, single-track lines, but not on a permanent basis. 
        There is concern, however, at the huge number of slow orders 
        now in place on Union Pacific--covering 8 percent of the Los 
        Angeles-Portland route.
    Comparisons of Amtrak running times with those of the mid-1950s--a 
favorite device Joseph Vranich uses to trash Amtrak--miss the point. 
Today's travelers don't care about 1950s schedules. In any event your 
15\1/2\-hour New York-Chicago running time was for the all-Pullman 
Broadway Limited that used a shorter route and skipped most of the 
intermediate stops Amtrak's trains serve.
    ``Amtrak's average fares were approaching 50 percent higher than 
those of air.'' There should be a caveat on statements like this. 
Amtrak's average fares include sleeping car passengers, Auto Train 
travelers--some in sleeping-cars but all transporting automobiles, and 
business travel in the NEC where arguably Amtrak should be charging 
``what the market will bear.'' We certainly agree that coach travel 
should be affordable in the NEC) but that implies a need for larger 
operating grants, which we support but which do not seem widely popular 
at the White House. We also think there is a huge, untapped market for 
economical sleeper rooms, equivalent to the old slumbercoaches Amtrak 
inherited and ultimately discontinued.
    The reference to ``significant market shares'' (page 7, first full 
paragraph) implies that routes without ``significant market shares'' 
are not of value. Long-distance routes (perhaps excepting New York-
Florida) will never have ``significant market shares'' but we think 
they are nonetheless justified if well used. There are issues of 
medical inability to fly, fear of flying, desire for the rail travel 
choice, service to smaller communities with limited or no public 
alternatives, and maintaining the foundation needed for economical 
future development of commuter rail and corridor services.
    ``The Corporation today generates about 800 million fewer 
passenger-miles than it did at its 1991 peak and this decline occurred 
during a significant expansion in total passenger mobility in the 
U.S.''
    It would be more correct to say ``in fiscal year 2001 generated'' 
rather than ``today generates,'' and then to note the post-9/11 trends 
This would have been a logical place to report the post-9/11 trends 
reflected in my first item and the table. As you know, one major reason 
Amtrak travel volume is not greater is the big fare increases imposed 
in 1995-96 in an apparently successful attempt to fill a budget hole.
    ``Average trip lengths have decreased from 288 miles in 1991 to 235 
miles in 2001--a drop of one-fifth. This means that fixed per-trip 
costs, like reservations and ticketing, are spread over fewer miles.'' 
This is a stretch. It ignores that much of the growth has come in the 
Capitol and Pacific Surfliner Corridors where trains are unreserved 
(except in Surfliner business class) and res/ticketing costs are low 
because most trips are simple. Fiscal year 2002 may see an increase in 
average trip length.
    ``In the referenced chart, `revenues' are total core revenues less 
State subsidies and other governmental payments'' (footnote, page 11). 
That fact really belongs in the heading to the table. The decision not 
to credit Amtrak with state payments is significant (and questionable--
much better to show both farebox and state payments as in your page 18 
table), and many readers will have seen similar information displayed 
with state payments.
    ``Train-miles have risen more than twice as fast as passenger-
miles. . . Amtrak's average trainload of passengers has declined'' 
(page 12). So what? As you note, the growth of short-distance trains is 
a major reason. They are shorter trains. (Another reason is the 
Pennsylvanian, a passenger-unfriendly schedule introduced to 
accommodate express, which Amtrak--however belatedly--is planning 
shortly to change to a more passenger-friendly schedule.)
    The page 12 discussion of load factor should include any data 
available from fiscal year 2002, since this probably will show a 
reversal of the trend. Load factor, of course, is less significant on 
trains than on planes and buses because capacity adjustments produce 
fewer cost changes on trains (in contrast with doubling the cost every 
time a plane or bus schedule adds a second section). Rail transit 
typically has relatively low load factors because of lots of empty 
seats are standard even in the peak hour (outlying portions of a run 
and reverse-peak directional service) but this does mean the service is 
inefficient. Load factor also is referenced at the top of page 18 but, 
interestingly, is not shown in the table at the bottom. Segmented by 
business unit, I believe Intercity--dominated by the long-distance 
trains--consistently has the highest load factor.
    In discussing overnight services, you state: ``Their primary market 
is evidently for personal travel; the size of any potential business 
market is unknown because of Amtrak's chronic on-time performance 
difficulties and schedules that have deteriorated, in many cases 
markedly, since the mid-1950s'' (page 15). Here we go ago with the 
1950s comparison. We know that plenty of business travel still existed 
in the 1960s, and it is quite likely that at least the New York-Florida 
run and probably other runs have business travel today. If Amtrak has 
done no surveys recently on this, they should.
    ``Only in terms of annual passenger-trips do the corridors assume a 
preponderant role; because of repetitive travel over shorter distances, 
this statistic does not indicate the number of individuals making use 
off the various Amtrak services yearly'' (page 17). I can recall no 
analysis of airline, auto or intercity bus travel which references 
``repetitive travel'' this way, yet airlines and Greyhound have 
repetitive riders. The phrase seems to imply that, well, the Amtrak 
number really isn't that significant because it reflects some people 
traveling repetitively.
    ``The long-distance trains average only one round-trip daily, 
speeds well below 55 miles per hour. . . '' (page 17). Only a closely-
reading lawyer would assume that ``well below 55'' refers to average 
speed. Top speeds of 79 and 90 mph mean that on many given segments 
trip times are impressive.
    ``The leading causes of Amtrak's weakened financial condition are 
crosscutting cost drivers--those costs that impact every train on every 
route'' (page 19). Readers will be eager to hear the definition and 
discussion of ``crosscutting cost drivers.''
    I look forward to continuing the discussion about insuring the 
future of our national passenger rail network.
            Sincerely,
                                             Ross B. Capon,
                                                Executive Director.
                                 ______
                                 

    Prepared Statement of the National Congress of American Indians

    The more than 200 member tribal nations of the National Congress of 
American Indians urges the Subcommittee on Transportation 
Appropriations to reject any and all cuts to the Indian Reservation 
Roads (IRR) program.
    Tribal governments rely on IRR funding to supply the dollars needed 
to construct and maintain the public roads that provide access to and 
on Indian reservations, Indian trust lands, restricted Indian lands, 
and Alaska Native villages. Unfortunately, this funding is woefully 
inadequate.
    IRR comprise up 2.63 percent of all existing roads in the Federal-
aid highway system, but historically they have received less than one 
percent of all Federal highway dollars. On average, only $500 per 
mile--and in some cases, as little as $80 per mile--is available for 
maintenance. In comparison, an average of $2,200 per mile is spent 
maintaining other Federal roads, and an average of $2,500 to $4,000 per 
mile is spent by States.
    The fact that fully 66 percent of the roads serving Native American 
communities are not even paved has a direct impact on basic services to 
tribal members. These roads are primarily dirt and clay, ungraded, and 
deeply rutted. During spring and fall rains, they turn to mud or wash 
out, forcing people to walk for miles to get to their homes. Even more 
troubling are these seasonal disruptions to emergency health care and 
law enforcement services and to the availability of heating fuel, 
water, and food delivery.
    We all know that the efficient and safe movement of goods and 
services is a basic building block of a viable economic structure. It 
goes without saying that having the type of unreliable transportation 
infrastructure that is the norm in American Indian and Alaska Native 
communities has a direct negative impact on the ability of tribal 
governments to attract economic development.
    During the TEA-21 debate, NCAI and tribal governments fought hard 
to convince Congress to increase funding for Indian roads and bridges. 
In the end, tribes received an increase from approximately $191 million 
a year to $275 million, which is still far less than what is needed to 
address the deplorable road conditions in Indian Country.
    Unfortunately, this increase was in large part offset by a new cut 
imposed on IRR funding. TEA-21 for the first time extended the 
``obligation limitation'' to the Indian roads allocation. Under the 
obligation limitation, the Federal Highway Administration (FHWA) is 
required to withhold a certain percentage of the total IRR obligation 
authority at the beginning of each fiscal year, so that it can be 
redistributed at the end of the fiscal year. When the obligation 
limitation was expanded to the IRR program in TEA-21, Congress failed 
to authorize IRR to participate in this end-of-the-year redistribution. 
As a result, funding that was expressly authorized for tribes is now 
being diverted to States for their transportation projects. Obviously, 
our member tribes consider this to be grossly unfair.
    In recognition of this untenable situation, last year Congress 
approved and the President signed a fiscal year 2002 Transportation 
Appropriations Act that provided funds to offset the obligation 
limitation on the IRR and thus resulted in a final funding level of 
approximately $275 million, the full authorization level.
    We are extremely concerned that the budget request for the 
Transportation Department of eliminates the additional IRR funding 
contained in the fiscal year 2002 appropriation, which means that we 
would see a funding level of approximately $240 million.
    Based on recent information provided by the Bureau of Indian 
Affairs, the estimate of need based on a grossly out of date IRR 
inventory is over $11 billion, not including the cost of project 
engineering (planning, survey, design, environmental, archaeological, 
and perfection of rights-of-ways) or the cost of constructing new or 
existing bridges or other eligible transportation facilities allowed by 
the BIA, such as construction of non-BIA jurisdictional routes, transit 
facilities, enhancements, and matching to State and local projects.
    Today, Indian Reservation Roads are among the worst maintained in 
the United States. Our unreliable transportation infrastructure hurts 
our ability to attract businesses, provide emergency services, and bus 
our children safely to school. The IRR program needs an increase, not a 
decrease, and we urge you to support an appropriation to offset any 
negative effect of the obligation limitation on its authorized level of 
$275 million.
    On behalf of NCAI, the oldest, largest, and most representative 
tribal organization in the United States, thank you for your past 
support of the IRR program and for your consideration of our views.
                                 ______
                                 

            Prepared Statement of the New York State Police

    Good morning Senator Murray. I am James W. McMahon, Superintendent 
of the New York State Police. I would like to thank you and the entire 
Subcommittee on Transportation for the opportunity to discuss with you 
a topic which I consider of the utmost importance in my capacity as 
both the Superintendent of the New York State Police, and as General 
Chair of the State and Provincial Division of the International 
Association of Chiefs of Police. Issues of highway safety have profound 
impacts on communities in New York State and across this country. Our 
roads tie those communities together, move our commerce and thereby 
unite us. Unfortunately, our roads and highways also kill more than 
40,000 mothers, fathers and children each year, and the majority of 
those deaths are needless and preventable.
    Highway safety was one of the founding missions of the New York 
State Police in 1917, and the importance of that mission has never been 
greater. The New York State Police is not a highway patrol, as such. It 
is a full service police agency, providing general enforcement and 
police services to all of New York's rural communities, as well as 
support services to the State's urban police forces, including a 
criminal detective force of 980 members. But there is no mission more 
important, even today, than the safety of our roads and highways, 
because there is no issue which impacts the lives of the average 
citizen more often and more dramatically.
    We are proud of our highway safety record in New York State. The 
year 2000 (the last year for which complete statistics are available) 
was our safest in history, dating back to the early 1920s. Our highway 
fatality rate of 1.15 deaths per 100 million vehicle miles of travel, 
was among the lowest nationally, and the percentage of those deaths 
which were alcohol related was second lowest in the nation. Having said 
that up front, I can attest to you that those life-saving records could 
not have been achieved without strict and targeted enforcement, which 
was enhanced by federal funding to the States through the National 
Highway Traffic Safety Administration (NHTSA). The same is true of 
other States with low fatality rates.
    New York's highway safety enforcement strategy is data driven and 
results oriented. We apply significant resources to target three main 
areas: excessive speed, impaired driving and failure to wear safety 
restraints. As I'm sure is the case in other States, these persistent 
threats are responsible for the majority of highway tragedies. The 
first two, alcohol or drug impairment and speeding, are causative 
factors. The third, the use of safety restraints, is the number one 
factor in preventing deaths or serious injuries, regardless of 
causation.
    Let me begin by talking about the last factor first, because it is 
the easiest way to improve safety, and it affects the human outcome in 
all crashes. To do so, I will provide some history and detail of our 
successful Buckle Up New York Campaign, and the impact this program has 
had on the safety of all New Yorkers.
    New York State was the first State in the nation to enact a 
mandatory safety belt law in 1984. The law became effective January 1, 
1985. It was a primary law from the start, enabling police to stop 
violators solely for not wearing a safety belt. Prior to the law taking 
effect, only 12 percent of motorists wore seat belts, and in 1984, 
1,012 unrestrained occupants were killed on New York's highways. The 
year the mandatory seat belt law took effect, seat belt use jumped to 
50 percent and the number unrestrained deaths dropped to 644. New 
York's mandatory seat belt law saved 368 lives that year alone.
    Over the next 5 years, compliance with the new law rose steadily to 
about 70 percent. As with the rest of the nation, these increases in 
seat belt use were largely the result of programs at the federal and 
State levels, which placed their main emphasis on education and 
awareness. But these campaigns reached a level of diminishing returns 
in New York State by the mid-1990s, and the steady increases in belt 
use stagnated at 70-75 percent between 1994-1998. At the same time, we 
in the State Police began to notice a recurrence of crashes where lives 
were needlessly lost because the occupants were unrestrained, and we 
began discussions about how to increase the use of safety restraints.
    Shortly thereafter, I had discussions with NHTSA administrators and 
Mr. Chuck Hurley and Ms. Janet Dewey of the National Safety Council's 
Air Bag and Seat Belt Safety Campaign, about developing a strategy to 
get the remaining 25 percent of New York motorists buckled up. We 
studied strategies employed elsewhere in this country and abroad, and 
determined that the only strategies which were effective anywhere in 
the world, were those which employed a zero-tolerance enforcement 
approach. We researched the New York State crash data by location, age 
and gender to learn about specific target groups. Lastly, we researched 
the field of occupant safety regarding these target groups, including a 
landmark literature review by the Meharry Medical College, which 
identified a significantly at-risk population of young African-American 
males. Subsequently, we established a goal of 85 percent safety belt 
use by the end of the year 2000, and developed a strategy of highly 
visible zero-tolerance enforcement. We presented the plan to NHTSA and 
asked their experts to estimate the safety impacts of increasing belt 
use from 74 percent to 85 percent in 18 months. NHTSA estimated that if 
successful, 148 lives and $400 million in insurance and medical costs 
could be saved. With this objective in mind, the Buckle Up New York 
Campaign was instituted in May 1999.
    We in the State Police knew from the start that we could not 
achieve this objective alone. As is similar in other States, New York 
State Troopers accounted for 47 percent of all occupant restraint 
enforcement, 55 percent of all speed enforcement, 23 percent of all 
impaired driving enforcement and 41 percent of total traffic 
enforcement in the State, yet comprise just 5.9 percent of police 
manpower. Despite this enforcement presence, an even more extensive law 
enforcement commitment would be necessary to change public behavior. 
The participation and cooperation of local and county law enforcement 
would be critical.
    In some cases, local law enforcement agencies did not, consider 
traffic enforcement a primary mission. In order to involve them, we 
needed a complete package. We had an attainable goal. We developed a 
workable strategy, which involved 3 annual enforcement waves, which 
supplement year-round enforcement efforts. These waves would be 10 days 
long and preceded by 10 days of heightened media. But we knew the local 
agencies would not, and in most cases, could not participate without 
additional funding for the additional enforcement. For this we needed 
the assistance of NHTSA, through the offices of our Governor's Traffic 
Safety Committee.
    When Governor George E. Pataki, nominated me as Superintendent of 
State Police, he provided me a mandate to continue to improve the 
safety of New York's highways and communities by working in cooperation 
with local authorities. That is a mandate I take very seriously. But 
while the governor had made great investments in improving the 
capability of the New York State Police to safeguard the highways, 
including 100 additional troopers, new electronic breath test 
instruments and state-of-the-art speed enforcement instruments, I knew 
that in this case fulfillment of that mandate meant improving the 
capability of other agencies. Only by ensuring funding for the county 
and local agencies, could we improve the safety of our roads and 
highways statewide.
    NHTSA and the Governor's Traffic Safety Committee responded in 
dramatic fashion, providing funding to any agency willing to join the 
enforcement effort. A streamlined funding application procedure was 
implemented through a State Police law enforcement liaison assigned for 
this purpose. Letters were sent to each police chief and sheriff, and 
each was visited personally to enlist his or her support. In addition, 
an extensive child passenger safety program was implemented in 
partnership with other State agencies, local law enforcement and other 
safety practitioners, to improve the safety of our smallest and most 
vulnerable vehicle occupants. With the support of available federal 
funding, a comprehensive Buckle Up New York Campaign began to take 
shape.
    In order to build greater support in minority communities, we 
partnered with NHTSA to host a diversity forum at the New York State 
Police Academy. In attendance were representatives from the NAACP, 
ACLU, Local Urban Leagues, educators, and leaders of faith-based 
communities, some of whom could not have attended without the financial 
assistance provided by NHTSA. Attendees were informed of the findings 
of our research and asked to be part of the solution. The result was 
great community support for our enforcement efforts and relationships 
which continue to this day.
    The second phase of this outreach involved improving the capability 
of the economically disadvantaged to safeguard their children. While I 
consider failure to protect child passengers gross neglect and strict 
enforcement child seat laws is warranted, it is also necessary to 
ensure that those without the financial means to protect their 
children, are provided with the means to do so. Once again, we turned 
to our partners at the Governor's Traffic Safety Committee and NHTSA 
for federal funding, and today a statewide mechanism is in place to 
ensure that no care-giver will be denied access to child restraints due 
to their economic status. This has significantly improved our 
relationships in minority communities.
    Since may 1999, seven Buckle up New York enforcement waves have 
been conducted, resulting in the issuance of more than 300,000 tickets 
for failure to wear restraints. More than 9,600 of those tickets were 
for child restraint violations. The statewide average safety restraint 
use rate has been measured as high as 88.3 percent, a significant 
increase from the 74 percent recorded prior to the first wave. Most 
importantly, 141 lives were saved between 1999 and 2000, nearly 
reaching NHTSAs estimate of 148.
    Throughout the campaign, the involvement of local and county level 
enforcement grew, which contributed significantly to the outcome. 
During the first wave, local and county enforcement accounted for about 
a third of the enforcement effort, but by the end of the seventh wave, 
accounted for 42 percent. More than any other component, this 
involvement was critical to the successful and life-saving outcome of 
the program, and could this not have occurred without significant 
federal funding.
    Please allow me to summarize the main points of our recent 
experience in increasing safety restraint use in New York State, 
because I believe the effective strategies used in the Buckle Up New 
York Campaign, with the support of critical and targeted funding 
provided by NHTSA, can be replicated in States nationwide.
    First, proper use of seat belts and child restraints is the most 
effective way to prevent needless deaths and debilitating injuries, 
regardless of the actual cause of any motor vehicle crash. These 
tragedies exact a great cost and result in widespread suffering in 
American society, and buckling up is the easiest means of prevention.
    Second, enforcement works. When applied across the board by State, 
county and local agencies, the potential of receiving a ticket for not 
wearing a seatbelt is the impetus required to achieve rates of seat 
belt use in excess of 80 percent.
    And third, the additional enforcement required to significantly 
raise seat belt use and thereby save lives and prevent injuries, cannot 
be accomplished without federal funding. This is especially true in 
light of recent demands for enhanced security efforts, and their fiscal 
implications on State and local budgets. Without the federal 
assistance, lives will continue to be needlessly lost on our highways.
    While we have not yet solved the problem of unrestrained occupants 
in New York State, I believe we have found the formula to address it. 
We witnessed nearly a 10 percent reduction in fatalities in New York 
State since implementing Buckle Up New York. It is a model which we 
adopted from others, and it can work elsewhere in America as well.
    In the time remaining, let me turn to the other two highway safety 
concerns, impaired driving and excessive speed.
    There has been great progress made in reducing the incidence of 
impaired driving in the U.S. in recent years, but I fear that apathy is 
setting in, and today we are at risk of relinquishing some of the gains 
made. In highway safety, apathy equals lives lost. The downward trend 
in impaired driving deaths has leveled off, and more attention and 
innovation may be necessary to prevent greater loss of life.
    Impaired driving is a continual concern in New York State, 
particularly where our youngest drivers are concerned. Drivers under 
age 21 make up just 5 percent of the licensed drivers, but are involved 
in 14 percent of fatal crashes in New York. Compounding the problems, 
recent census data indicate that the number of licensed drivers under 
age 21 in New York State will grow by 25 percent in the next decade. 
Therefore, if nothing is done, more young lives will be lost.
    We are attempting to apply the strategies employed in the Buckle Up 
New York Campaign to impaired driving and underage drinking. We are 
developing joint enforcement operations with county and local 
enforcement agencies and the State Liquor Authority to improve 
enforcement of underage consumption and sale of alcoholic beverages. In 
addition, we have the benefit of a State mechanism to fund local 
impaired driving countermeasures. A State law titled Special Traffic 
Options Program for Driving While Intoxicated (Stop-DWI), returns fines 
imposed on impaired driving violators to county level administrators to 
fund additional enforcement efforts. This law, enacted in 1982, is one 
of the main factors contributing to New York's success in combating 
impaired driving. As in the effort to improve safety restraint use, 
coordinated statewide efforts offer the greatest promise to preventing 
impaired driving, and continued funding will be necessary to support 
those efforts.
    In the last area, speed enforcement, I dare to say that law 
enforcement is currently losing the battle. Non-compliance with speed 
limits is widespread in New York State and nationwide. Like no other 
law, many behave as though it is their inalienable right to speed, and 
unfortunately for too many, the results are tragic. In New York State, 
24 percent of fatalities in 2000 were attributable to excessive speed. 
Addressing the issue will take a large scale programming and additional 
resources to provide new technologies and the staffing necessary to 
implement them.
    In closing, I would like to say what I have said to many recruit 
troopers at the State Police Academy. It is hard to prevent a murder 
which occurs behind closed doors, but it is relatively easy to prevent 
a murder on the highway by stopping a drunk or speeding driver. So too, 
it is relatively easy to prevent the needless death of an occupant who 
does not buckle up or of a child who's safety is unconscionably 
neglected by being left unrestrained. And although we may not remember 
the faces of the people we save, we certainly do remember the faces of 
those we fail to save. Both are equally real, and it is incumbent upon 
us to prevent the latter.
    Senator Murray, that concludes my testimony. Again, I want to thank 
you and the entire committee for this great opportunity to express my 
views on highway safety. I would be happy to answer any questions you 
or the subcommittee may have.







                                 ______
                                 

              Prepared Statement of the Rail Travel Center

                                summary
    We support Amtrak's request for $1.2 Billion in capital and 
operating funds for fiscal year 2003, but
    We urge that the fiscal year 2003 equipment repair program be 
immediately implemented in fiscal year 2002.
    We support the experimental franchising of a selected Amtrak route 
and/or service.
    We do not support the separation of the Northeast Corridor (NEC) 
from the control of Amtrak.
    We oppose exclusive State funding of regional services.
    We absolutely believe the Federal Government must continue to 
provide meaningful capital and operating grants if any rail system is 
to survive, even the regional corridor services.
    Rail Travel Center has operated tours by train worldwide since 
1982. We have consistently marketed Amtrak travel as a part of that 
program and therefore have an experienced perspective on the current 
Amtrak situation. Too often, discussions of Amtrak are conducted 
without input from those who actually sell and use train travel. This 
situation becomes even more urgent in light of Amtrak's February 1, 
2002 press release, which suggests the carrier might end its national 
network by dropping all long-distance trains as early as October 1, 
2002.
    We believe Amtrak must receive the $200 million it has requested to 
preserve its connected national network, and that now also is the time 
to initiate measures ensuring passenger train services continue to 
operate in the long-term. Therefore, we support bringing the equipment 
repair portion of Amtrak's $820 million fiscal year 2003 capital 
request forward into fiscal year 2002. At present, the company 
gradually is losing its operating fleet due to the effects of deferred 
maintenance, ironically just as demand is trending dramatically upward. 
In the longer term, we support an experimental program of franchising 
selected Amtrak routes and services to bring about better marketing, 
operations and cost-recovery.
    As we note below, the problem with Amtrak is not a lack of 
potential business. Rather, Amtrak's troubles derive in large measure 
from a lack of equipment to meet the demand already on offer. Worse, 
Amtrak's management too often has compounded the equipment shortfall by 
refusing to use assets it already possesses. We will outline our 
concerns with these practices below, in a section we characterize as 
``Institutionalized Pessimism''.
    We also want to reassert our deep respect for Amtrak, which has 
been a good business partner to Rail Travel Center. We know for the 
last thirty years its managers have been forced to grapple with 
virtually no meaningful capital investment outside the Northeast 
Corridor (and on a very few regional lines). This has fostered a 
corporate culture of endless cost cutting combined with a tight focus 
on the needs of the NEC, where Amtrak saw its most likely source for 
immediate funding. That attention has come at the expense of the 
national system. We appreciate our many long-term relationships with 
fine Amtrak employees, but we also recognize that Amtrak, as an 
institution, has flaws which must be addressed.
    Rail Travel Center is concerned about the harmful potential in a 
universal implementation of the recommendations of the Amtrak Reform 
Council (ARC). Although we set forth our chief differences in some 
detail below, we do not oppose all ARC recommendations. In particular, 
we believe the ARC is correct in urging at least some franchising 
(partial privatization) of Amtrak services. If done correctly, this 
could reverse the past Amtrak inclination to avoid opportunity and 
risk, lead to a dramatic increase in passenger train ridership (a trend 
already underway), and ultimately reduce the need for government 
support. Our analysis of these views follows.
 discussion of the arc report, amtrak marketing difficulties, and the 
              arc suggestion for amtrak route franchising
    The worldwide experience with passenger train franchising is mixed 
but far more positive than some recent media coverage of the failure of 
the British Railtrack Company would suggest. Not all the 26 British 
rail franchise operators have failed to turn a profit, improve service, 
or reduce government support. At least ten are operating profitably, 
and more will be when track repairs are completed. The Great 
Northeastern Railway, Scot Rail and First Great Western offer 
outstanding service. Throughout the United Kingdom the frequency of 
trains has increased, and entire fleets of new equipment are in service 
or on order. Clearly, far too many franchises were issued (which should 
be avoided here), but the near meltdown of British operations in the 
last year reflected the mismanagement of the Railtrack infrastructure 
company, not the train operators. We need to learn from the errors of 
the British; but it is false to consider British franchising an overall 
failure.
    An even more relevant example of the successful franchising of 
long-haul services can be found in Australia. The operation of the 
transcontinental INDIAN PACIFIC, GHAN and OVERLAND trains was assumed 
by a private operator (Great Southern Railway) which retained an 
assured level of government support but only could make a profit by 
increasing its business. This is precisely what has happened. More 
frequent trains with more cars are operating. Fares were raised to the 
maximum economic level, especially for First Class travel, yet 
patronage soared with the adoption of the philosophy that ``the more 
passengers we carry, the more money we make''.
    We want to see the Amtrak Reauthorization and the ARC Review 
processes succeed in preserving a truly national U.S. rail passenger 
system. Their actions can facilitate either a creative redesign of 
American rail travel or lead to a virtually useless system of isolated 
corridors best described as ``Balkan Track''. This disconnected system 
would almost certainly disappear, as it would lack both broad-based 
Congressional support and any connectivity, thus becoming woefully 
under-used. As the airlines' ``hub and spoke'' systems have proven, 
easy connections between the maximum number of destinations are 
essential to efficiency, patronage and profitability.
Areas of Concern With the ARC Report.
    Neither Amtrak nor any successor can succeed without adequate 
capital and a multi-year guarantee of operational support.--This need 
must be satisfied for any operator to succeed. No real planning can 
occur if an operator must annually beg for funding. The United States 
must commit to a rationally capitalized and funded rail network, or 
failure is certain. If this can be done, subsidies will gradually 
decline and patronage will increase.
    The semantics used in U.S. transportation policy must change.--Why 
is it said we ``invest'' in highways and air service while 
``subsidizing'' rail? It should be clearly understood by everyone that 
all of these funds accomplish the same thing: government funding 
assistance for the transportation needs of Americans in all parts of 
our country.
    ARC's suggestion that regional services be funded only by State or 
regional agencies is flawed and will insure such trains die.--The 
partial Federal financial support of State-initiated trains (as is 
presently done) is a good approach which has produced outstanding 
routes such as the CASCADES in the Pacific Northwest and the new 
DOWNEASTER between Boston and Portland, Maine. It is unlikely the 
multi-state compacts needed under the ARC recommendations would be 
adequately funded at the State level. If, for example, three States 
were responsible for a route (a good example is trains between Chicago 
and Detroit), all operations could end due to a fiscal crisis in a 
single State. This is precisely what happened in 1971/72 when Amtrak's 
original Buffalo-Chicago train was dropped because the five States 
along the route failed to come to an agreement over how to divide the 
costs.
    ARC's recommendation to strip Amtrak of the ownership of the 
Northeast Corridor would degrade service.--Any experienced railroader 
will attest to the need to control train dispatching. Amtrak's 
difficulty in raising speeds between New York and New Haven eloquently 
speaks to the problem of divided track ownership. This critical portion 
of the NEC is owned and dispatched by the Metro North Commuter 
Railroad, a joint agency of the New York and Connecticut Departments of 
Transportation. Metro North has priorities not necessarily including 
high-speed access for Amtrak. Every other part of the NEC also hosts 
commuter trains, but elsewhere Amtrak controls dispatching and can 
assure access for its trains.
    Most importantly, there is no likelihood a separate agency for the 
NEC would be more successful in garnering Federal funds than Amtrak has 
been. A more likely outcome is that such an agency would try to collect 
ever-increasing track access fees from Amtrak and the various State 
commuter authorities. Since these agencies' resources already are 
severely stressed, the likely outcome would be a further drop in 
services.
    Land-cruise trains are not the answer in providing a national 
system.--Tour trains are essential to the business plan of Rail Travel 
Center, but we clearly understand that they are not the ``real 
transportation'' required of a national rail system. Of necessity, 
these trains serve only end-points, run very infrequently, and are 
extremely expensive. Moreover, they could not provide regular 
transportation even if they wanted to, since their operators could not 
afford to give up their limited capacity to local customers, space that 
might be sold for the full journey. Their schedules also could not 
tolerate frequent stops to accommodate shorter-distance passengers and 
still arrive at sightseeing destinations at appropriate hours.
    The land-cruise trains presently operating nationally do so in 
large measure because they are able to charter engines and train crews 
from Amtrak. Most importantly, they use Amtrak's track-access rights to 
run on the freight railroads. Without a national Amtrak system, these 
trains would disappear because their costs would be impossible and they 
would be unable to reach most scenic areas.
    Amtrak's long-haul trains serve far more passenger than up-scale 
tourists. Only long-haul trains serve such large cities as Denver, Salt 
Lake, Memphis, New Orleans, Dallas and Minneapolis. They feed countless 
connecting passengers into Amtrak's regional and corridor trains, 
virtually none of whom who would ride those services without the long-
haul trains. These trains often are sold-out months in advance, 
particularly in the summer and at holidays. The sleeping car services 
are very heavily used. Even before September 11, First Class space 
frequently was unavailable. Since then, sleeper demand has grown 15-18 
percent, yet (as we will note below) Amtrak's fleet of serviceable cars 
is declining just as demand grows.
    Long-distance trains provide the only public transportation for 
many points and the only reliable winter service over large parts of 
entire routes, such as Chicago to Seattle. They are very well used. For 
example, the often-belittled EMPIRE BUILDER carried 398,000 passengers 
on the Chicago-Seattle (Portland) route in fiscal year 2001. This is an 
average of 1094 passengers per day, or 547 on each train (allowing for 
the fact that the train runs daily in each direction). Yet the EMPIRE 
BUILDER serves such tiny (but rail dependent) towns as Wolf Point, 
Montana and Williston, North Dakota. Many departures are sold out 
months in advance, a fact that often has eluded Amtrak's critics.
    System-wide, these ``little used'' trains actually carried 5.88 
million passengers in fiscal year 2001, over 16,110 riders per day. 
Typically, a third of the passengers on the national services connected 
to other Amtrak routes, frequently including the very corridor trains 
which are so often claimed to be Amtrak's only viable operations. 
Amtrak's own Market-Based Network Analysis (MBNA) in 1999-2000 made the 
clear point that elimination of Amtrak's national network would 
dramatically increase losses on all remaining routes. Not only would 
connecting revenues be lost, but other costs such as depreciation, 
reservations and terminal expenses would fall on a far smaller number 
of routes. This impact could convert a marginally profitable operation 
like the NEC to a money-loser.
    If the tragic events of September 11-15, 2001 proved nothing else 
about our rail transportation policy, they demonstrated the absolute 
necessity of maintaining a real, interconnected, national rail system 
in the United States.
    Having expressed areas of concern about the ARC Report, we turn to 
a discussion of points in the Report we think have real merit. 
Prefacing that analysis, it is necessary to indicate what we observe to 
be Amtrak's marketing problems and how they warrant at least the 
partial implementation of several ARC recommendations.
Amtrak Marketing Problems
    Amtrak tends toward a corporate culture of institutionalized 
pessimism, which too often causes it to miss business opportunities.--
Under unremitting pressure to cut losses, Amtrak managers have focused 
for over three decades on cutting costs; but this concentration has had 
unfortunate consequences. Too often Amtrak has avoided expense by 
avoiding opportunity, acting as if it fears ``the more people we carry, 
the more money we'll lose''. Rail Travel Center's experience in its 20 
years of selling Amtrak have shown us Amtrak's long-haul trains are 
frequently sold-out, yet for a variety of reasons Amtrak rarely 
responds to its lack of space by adding capacity.
    This flies in the face of a fundamental business truth. If a 
merchant has something to sell and it quickly sells out, two lessons 
are properly learned: Get additional inventory now and raise prices 
until sales stop! Amtrak has experimented with market-driven pricing 
but rarely has acted on the need for more capacity. The long-haul 
system has been fundamentally compromised by the failure to meet market 
demand. These trains do not lack for riders; rather they lack capacity 
and frequency.
    Amtrak cripples itself further by not keeping proper records on 
potential business that is lost.--Amtrak refuses to take waitlists for 
sold-out trains because accepting waitlists would require staffing its 
reservations bureaus with extra workers to call passengers as space 
cleared. Amtrak managers always have preferred cost-containment through 
reduced staffing as opposed to having the opportunity to board more 
passengers. The result has been to deny Amtrak information it needs to 
properly estimate unmet demand. Amtrak often has used the excuse of a 
lack of cars to justify its reluctance to take waitlists; and indeed, 
the company clearly needs much more equipment. But if Amtrak managers 
really knew how much business they were losing, they could better 
justify capital expenditures for new equipment and to repair existing 
cars.
    Even in the west, where extra cars should be available given the 
size of the Superliner fleet, extra cars rarely are added. Indeed, in 
the last few years Amtrak has cut the capacity of most western trains, 
even in the face of frequently sold-out consists at peak seasons. 
Ideally a car would be added whenever advanced ticket sales reached the 
capacity of a train. The process of making that decision would be 
further enhanced if proper waitlists were kept. Even if cars never had 
to be added, waitlists would insure programmed capacity rarely ran 
empty by refilling space after cancellations.
    All other transportation carriers . . . rail, sea and air . . . 
keep such waitlists. In 20 years at Rail Travel Center, we never failed 
to get a client onto the frequently sold-out VIA Rail Canada 
transcontinental service who was willing to be waitlisted. VIA 
therefore never lost that revenue.
    Amtrak intentionally has reduced the capacity of many long-distance 
trains by failing to repair wreck-damaged equipment and by deferring 
essential overhauls.--This saved money at the expense of undermining 
patronage on trains which were turning away customers. The result is 
reflected in reduced capacity and declining patronage even on trains 
that often are sold-out long before departure.
    A good example is the vital CALIFORNIA ZEPHYR, which traditionally 
carries three sleeping cars in the summer season over the entire route 
from Chicago to San Francisco. Last summer the third car ran only 
between Chicago and Denver on most dates. The supremely scenic portion 
of the route through the Rocky Mountains and the High Sierras was left 
without adequate sleeper capacity. Lack of cars was blamed. In order to 
obtain the added Chicago to Denver sleeper, Amtrak stripped its 
Chicago-Louisville train of any sleeping car space at all for the 
entire summer. Yet at that very time, Amtrak had many Superliner cars 
in storage awaiting either deferred overhauls or wreck repairs. 
Obviously, Amtrak managers favored short-term cost savings over meeting 
passenger demand. This behavior makes a well-used service like the 
CALIFORNIA ZEPHYR appear to suffer from declining patronage, when in 
fact passengers are being turned away.
    The February 1, 2002 Amtrak Press Release announcing draconian 
maintenance cuts for fiscal year 2002 will compound the problem. If 
cars are not routinely overhauled, the stored fleet inevitably will 
grow. Every 180 days, all Amtrak equipment must receive major 
maintenance or be parked until that work is done. Even if essential 
repairs are performed, business will be lost if trains depart with cars 
that have torn upholstery, malfunctioning air conditioning, or improper 
cleaning.
    In mid-January 2002, 32 of Amtrak's double-decker Superliner 
sleeping cars were out of service for maintenance and/or repair work. 
This represents 26.9 percent of the fleet. Some of these cars have been 
stored for months. Already Amtrak has trouble finding the cars to 
respond to both emergencies and opportunities.
    The Congress could be very helpful by targeting a portion of its 
annual Amtrak appropriation for equipment maintenance and repair and 
insisting those funds not be diverted to any other purpose. In the 
short-term, an emergency appropriation is needed in fiscal year 2002 to 
repair stored cars for service before the summer season begins. Without 
capacity, Amtrak cannot possibly meet any performance goals.
    The VIA Rail Canada system provides dramatic evidence of the 
success of running as many cars as demand requires. For years, VIA 
capped its trans-continental CANADIAN at 9 cars in the off-season and 
17 in summer. VIA also feared ``the more people we carry, the more 
money we'll lose''. But faced with a permanently capped level of 
government support, VIA raised fares as high as the market would bear 
and added cars until demand was filled. Now the CANADIAN often carries 
26 cars, but the train covers its costs in the high season and has 
dramatically improved its finances year-round. No VIA trains have been 
cut since 1994, despite no increase in operating subsidies throughout 
the 1990s.
    Amtrak consistently under-estimates the likely patronage of new 
services.--Such remarkable success stories as the CAPITALS in 
California, the CASCADES in the Northwest, and the DOWNEASTER in Maine 
were grudgingly supported in their early stages by an Amtrak management 
that too often accepted the assumption few passengers would travel even 
on a well-run service.
    The company's 1999-2000 Market Based Network Analysis (MBNA) might 
have offered a way out. Unfortunately, most new routes proposed in the 
first MBNA report were express and mail driven, and few of those 
actually were implemented. Amtrak appears to have completely abandoned 
the promised second round of MBNA recommendations, which was expected 
to include new passenger-oriented lines. The first MBNA was totally 
silent on the most obvious examples of unserved markets. For example, 
no trains were projected to serve Chicago to Florida (one of the 
busiest of all travel routes) or Denver to Dallas.
    Starting new trains requires major Federal and State capital 
investment and some additional operating support. Amtrak would request 
this funding in its annual budget if starting new routes was really an 
Amtrak priority. Congressional and State support follows the perception 
that something might actually happen. Consider the resurgent interest 
in trains in Oklahoma once the Oklahoma City to Fort Worth HEARTLAND 
FLYER began operating.
    Amtrak rarely does effective Route-Specific Marketing.--Although 
Amtrak spends millions annually on advertising, virtually all of its 
media placements for the national network are vague ``image'' 
advertising. Amtrak tells users that ``Trains are Fun'', ``All Aboard 
Amtrak'', or ``Tracks are Back'', but it rarely runs an ad targeting 
the potential users of an individual train. After 30 years of Amtrak 
operation, most people know that Amtrak exists. What they do not know 
is where it goes, what they could see on a trip, and how much it might 
cost to travel.
    Rarely are we told ``The Ten Best Reasons to Take the SOUTHWEST 
CHIEF''. Route-specific promotions work; and when Amtrak has tried this 
approach they often have been very successful, most recently in adding 
patronage to the threatened TEXAS EAGLE. But individual route ads do 
not appeal to national advertising agencies that want to place generic 
ads they perceive meet all needs.
    Even when route-specific marketing has been pursued, Amtrak 
sometimes gets it wrong. The most recent example is the naming of all 
NEC trains ``ACELA''. In the public mind, the term ``ACELA'' denotes 
the 150 mph American super trains; yet passengers board typical NEC 
services run with 25 year-old Amfleet cars and are deeply unhappy to 
find they are not on a true ``ACELA''. Calling an all-stops New York to 
Philadelphia local an ACELA COMMUTER is simply confusing to the public, 
especially when a true ACELA EXPRESS bullet train may leave 5 minutes 
later.
    This brings us to the areas where we feel the ARC report has merit. 
However, a basic principal must preface any discussion of possible 
franchise options.
    The present Amtrak network is far too skeletal, not too large.
    We support experimental and limited franchising of selected Amtrak 
routes or service functions. This should produce operators who will 
aggressively market. We have no illusions that all government support 
can be eliminated, but it very likely can be gradually reduced as 
patronage grows with dedicated marketing. Each franchise award would 
come with an assured level of government support. As noted above, 
Amtrak has historically focused its efforts on the NEC and a few other 
regional corridors (largely to exclusion of the long-haul network) 
because it correctly perceived the money was in those routes. If real 
dollars were applied to the support of the long-haul system, its 
operation should attract both Amtrak and other potential vendors.
Actions to be Taken Before any Franchising Begins
    A special program needs to be funded to restore all stored Amtrak 
equipment to operating condition.--No operator can succeed without 
adequate equipment, nor could any meaningful new routes be started or 
capacity added to existing trains without more cars than presently are 
serviceable. Amtrak must not sell any more of its stored equipment. 
Many fine cars in long-term storage should be renovated for operation. 
For example, an entire fleet of former Santa Fe RR ``High Level'' chair 
cars is stored, offering the potential for hundreds of seats per day if 
returned to service. There is absolutely no lack of demand for any of 
Amtrak's stored assets.
    Tax incentives and grants should be made available for purchase of 
additional passenger cars.--This is the essential capital commitment 
that the government must make to allow any rail program to succeed. New 
cars already are desperately needed, especially on eastern long-haul 
routes where Amtrak uses almost every car it owns every day and 
literally has no reserve fleet. If franchising succeeds, more cars will 
quickly be needed. We must spend money now to make future money. To 
minimize the amount in direct grants, the tax code should be reviewed 
for ways to encourage private sector initiatives; for example, using 
tax credits and accelerated depreciation. In addition, the fuel tax 
collected on the railroads should be diverted to railway capital needs.
    The High Speed Rail Investment Act (HSRIA) should be passed to 
assure regional route development.--We are absolutely in support of the 
incremental upgrade strategy essential to the HSRIA process. A network 
of higher-speed corridors should hugely reduce Amtrak's expenses and 
increase its ridership throughout the system.
    A Federal Passenger Rail Franchise Oversight Agency (FOA) should be 
created to analyze which services might be franchised.--Not all routes 
may offer the prospect of real cost reductions. To assure a reasonable 
chance of success, the train services offered in a franchise award 
package must be sufficient in number to allow for adequate synergies of 
scale. It is very unlikely any individual train alone can be 
franchised. This agency should include representatives of the operating 
railroads, organized labor, the Department of Transportation, Amtrak, 
the States currently supporting Amtrak trains, and the travel industry. 
An independent arbitrator, in cooperation with the FOA, should make the 
actual ultimate award of franchises.
    Amtrak should be retained, and encouraged to bid to operate any 
services included in any franchise award(s).--The objective of any 
franchising should be to encourage an expanded rail passenger system 
with better economics through improved route-specific marketing, 
equipment utilization, and a more pro-active management culture.
    It should be understood that no franchise awards would be likely 
for 2 years.
                              conclusions
Steps to Implement an Experimental Franchise Process
    We should franchise at least one group of Amtrak routes. The 
franchise should contain enough trains to give the operator a 
reasonable synergy of scale. For example, all long-haul trains running 
west from Chicago might be a franchise grouping. Another could be all 
trains run with Superliner equipment, or all long-haul trains to 
Florida, the Carolinas and New Orleans. Amtrak and other potential 
operators (including the freight railroads) should be encouraged to bid 
for the franchise to serve any route. Until the success of the initial 
franchise can be properly evaluated, all other services should remain 
under Amtrak's direct control.
    There must be a Federal guarantee of a fixed level of financial 
support. This guarantee must be for a multi-year period equal to the 
duration of the franchise award, be contractually assured, and not 
subject to the annual appropriations process. For regional trains, 
partial State support also could be a part of the package. An 
expectation of the franchise award would be that an operator seek to 
gradually reduce the government's support; but it would be clearly 
understood the operator would not be expected to cover all fully-
allocated costs.
    The franchise holder would be required to operate the service for 
the full period of the award but could adjust service levels based on 
market demand as long as year-round service was provided. The Amtrak 
right of track access must be transferred to any franchise holder; but 
freight railroads should be encouraged to enter into the process, if 
possible by actually bidding for appropriate franchises. To encourage 
participation by the freight railroads, substantial tax incentives 
should be offered. This will help assure track access and good 
dispatching, even if the freight carrier is not the ultimate franchise 
operator.
    There must be on-going review of the performance (both financial 
and operational), of each franchise. Poorly-run franchises could be 
cancelled or offered to other operators.
    Amtrak's equipment should be allocated on a competitive basis.--If 
equipment needs are recognized on a route-by-route basis, mistakes 
(such as Amtrak's failure to order a single passenger car for its long-
haul national system with the more than two billion dollars in capital 
provided in the recent Roth capital appropriation) can be avoided. From 
that appropriation, only express and mail equipment was purchased for 
routes outside the NEC and California.
    We should experiment with privatizing on-board services including 
dining cars and sleepers.--For years Amtrak has had the authority to 
privatize its food services. This should be done now. Amtrak did 
contract-out the commissary function for its diners but not the actual 
operation on board the trains. This is where the greatest savings can 
be found. While it is unlikely a concessionaire would want to handle a 
single train, the entire long-haul system and/or a route grouping (such 
as all regional services out of Chicago) might look financially 
rewarding to a private operator.
    While it is a clich of rail operations that dining cars cannot be 
operated profitably, this is not always true. For many years the Alaska 
RR has used a contractor for its diners. Amtrak itself has two trains 
with private food operations: the North Carolina PIEDMONT and the 
Boston-Portland DOWNEASTER. Quality food service is absolutely 
essential to the rider, but options for lower cost service should be 
investigated. Amtrak would provide meal cars to the concessionaire, who 
would pay a reasonable fee to Amtrak for an effective service monopoly.
    The same approach could be very successful for the operation of 
sleeping car services. Even if Amtrak retained the basic authority to 
run all routes, a strong argument can be made that subsidy payments 
should be focused on coach travelers, with First Class services 
reasonably expected to run profitably.
    Franchising may reduce the need for Federal support; but Federal 
investment always will be needed, as it is for the airlines with the 
Federally funded air traffic control system. A franchise operator will 
have every incentive to concentrate all resources on the assigned 
route. This can only improve service and revenue returns. An experiment 
with at least one franchised route and/or service package is a risk 
worth taking.
    The ultimate object of the Amtrak Reauthorization and ARC review 
process should be to preserve and expand American rail passenger 
service. The present model does not work, and we see no easy fix simply 
by continuing the status quo. A true national network must be 
preserved. It is essential to the safety and public good of the nation.
                                 ______
                                 

    Prepared Statement of the Regional Transportation Commission of 
                            Southern Nevada

                              introduction
    The Regional Transportation Commission of Southern Nevada (RTC) is 
pleased to have the opportunity to submit this testimony to the 
Transportation Appropriations Subcommittee in support of our fiscal 
year 2003 funding requests.
    The RTC is a public entity created under the laws of the State of 
Nevada with the authority to operate a public transit system and 
administer a motor fuels tax to finance regional street and highway 
improvements. In addition, the RTC is the Metropolitan Planning 
Organization (MPO) for the Las Vegas Valley. As the public transit 
provider, the RTC operates Citizens Area Transit (CAT), a mass transit 
system that now carries more than 51.2 million annual passengers and 
recovers over 48 percent of its operating and maintenance costs from 
the farebox.
                               community
    The Las Vegas community is currently home to over 1.4 million 
permanent residents. With 17 of the world's largest resort hotels 
adding over 32 million annual visitors, the actual population of Las 
Vegas on any given day exceeds 1.5 million persons. In addition, the 
Las Vegas metropolitan area continues to experience explosive growth. 
The 2000 census confirmed that the Las Vegas Valley is the fastest 
growing community in the United States. The economy of the Las Vegas 
Valley is characterized by a favorable business environment, a strong 
job market, an absence of a business and personal income tax, and a 
comparatively low property tax by national standards. This environment 
has fostered an era of extraordinary growth that, since 1990, has 
fueled the creation of over 175,000 new jobs and has witnessed the 
influx of over 500,000 new residents to the Valley. Current projections 
indicate that population and employment will continue to increase, 
exceeding 2.1 million residents and over 1 million jobs by the year 
2020. This dramatic growth in population brings additional challenges 
to the transportation network with increases in congestion and travel 
delays. Ensuring adequate mobility is essential to maintaining a 
superior quality of life for residents and continuing growth in 
employment.
                         citizens area transit
     Citizens Area Transit (CAT) began service in December, 1992 and at 
that time represented the largest single start-up of new bus service in 
North America in over 20 years. Annual CAT ridership has grown from 
14.9 million riders in 1993 to over 51.2 million riders in 2001; a 
growth rate of over 243 percent in only 9 years, catapulting CAT to the 
25th largest bus system in the Nation out of 2,250 transit systems. Las 
Vegas is the fastest growing city in the United States, but ridership 
on the CAT system is growing at a rate faster than other local economic 
indicators, including population, employment, hotel rooms, visitor 
volumes, airport passengers, vehicle miles traveled, and auto 
registrations.
    To address the ever increasing demand for transit services, the RTC 
has continually increased bus service. Since startup, total annual 
hours of revenue service have almost doubled, from 585,134 hours in 
1993 to over 1.2 million hours in 2001. Similarly, annual vehicle miles 
have also doubled; from 6,384,660 miles in 1993 to over 16,098,000 
miles in 2001. In addition, the CAT system has continued to 
successfully increase ridership while continuing to operate in a highly 
efficient manner. Costs per passenger have dropped consistently since 
startup, to approximately $1.49 per passenger. The recent Harvard 
study, The Private Provision of Public Transport, found the CAT 
system's cost per hour of service and farebox recovery ratio to be 
among the best in the industry.
    With 46 bus routes operating throughout the greater Las Vegas 
Valley, as well as routes in the rural communities of Laughlin and 
Mesquite, Nevada, CAT is now carrying over 4.5 million passengers per 
month, with some routes operating in excess of 200 percent capacity. 
While the CAT routes operating along the high-profile Las Vegas 
Boulevard provide service to up to 25,000 passengers per day, these 
routes account for only 18 percent of the total monthly ridership. 
Clearly, many Las Vegas residents rely heavily on the CAT system to get 
to work, school, shopping, medical services and recreational 
facilities. Providing mass transit services throughout the Las Vegas 
Valley, CAT has become essential to the fabric of the Las Vegas 
community.
    Although the CAT system has doubled service availability since 
startup, the demands for even more service continue to escalate. The 
urban boundaries of the Las Vegas Valley continue to push in all 
directions, creating new areas of growth and transit demand. In 
addition to under served areas, the frequency of service on most 
existing routes serving the residential base of the Valley is 
substantially less than needed. The single largest constraint faced by 
the RTC to providing more service continues to be lack of a sufficient 
number of coaches to meet demand. When compared to other peer cities, 
CAT transports up to 3 times the number of passengers per vehicle 
annually.
                           new starts funding
     The RTC is requesting $20 million in fiscal year 2003 New Starts 
funding for its Resort Corridor fixed guideway project. The project is 
a 3.1 mile dual direction monorail that would have a seamless 
connection with a privately financed and constructed monorail in the 
Resort Corridor. This unique project exemplifies the opportunities that 
exist in a cooperative effort between the public and private sectors. 
The private sector portion is already under construction. Preliminary 
engineering on the public portion is expected to be completed in the 
Spring of 2002. The project received a recommended rating from the 
Federal Transit Administration (FTA) in its 2002 New Starts Report and 
has been recognized for its cost effectiveness, operating efficiencies 
and environmental benefits--each of which has received a high rating 
from FTA. The Administration has included funding in its fiscal year 
2003 Department of Transportation Budget for the project. The requested 
fiscal year 2003 funds would be used for continuing development of the 
project, including land acquisition, relocation expenses, final design, 
and initial construction activities.
                           bus rapid transit
    The RTC is seeking $5 million in fiscal year 2003 bus discretionary 
funds to assist in the construction of platforms and shelters at bus 
stops for the RTC's Bus Rapid Transit project. The RTC is utilizing an 
innovative optically guided bus, known as Civis, that will operate 
along a heavily traveled commuting corridor. Traditional bus service 
along the Las Vegas Boulevard North Corridor currently carries over 
8,000 passengers a day for a 13-hour peak period. The requested funds 
would enable the RTC to construct platforms and bus shelters along the 
corridor. This project offers a distinct opportunity for the 
implementation of new bus technologies and innovative transit services 
in the United States.
    The Civis is a high capacity vehicle with low floor accessibility, 
perimeter seating, utilizing clean diesel electric power, and providing 
opportunities to reduce roadway spaces and to minimize costly traffic 
engineering improvements. The Civis vehicle carries up to 168 
passengers and has four points of entry. From a service perspective, 
the most significant element of the BRT project is the usage of an 
automated guidance system. This guidance system will assist coach 
operators in the approach to a bus stop and aligning the actual 
stopping point of the vehicle at the platformed bus stop. The 
advantages of such a system in BRT operations include maintaining close 
curb distances, ensuring that vehicle doors are aligned with loading/
exiting areas, and eliminating gaps between the vehicle and the 
platform stopping area. This not only significantly improves boarding 
for wheelchairs and the disabled community, but also allows for off-
vehicle fare collection. More importantly, the features described above 
allow the RTC to carry a greater number of passengers more efficiently, 
expand services, increase passenger comfort and convenience, and assist 
the region in attaining enhanced air quality benefits.
    The identified funds would assist RTC in construction of platforms 
and shelters at bus stops for the Civis service. The shelters will 
include off-board fare collection opportunities such as ticket vending 
machines, a passenger waiting area, seating and shade structures, and 
passenger amenities such as information kiosks.
    The RTC is developing this BRT project to improve capacity, 
increase efficiency, and meet the ever increasing needs for mass 
transit in the Las Vegas Valley. BRT offers the capacity and other 
transit advantages of light rail, at a significantly lower capital 
cost, and this project will help demonstrate the viability of BRT as a 
New Start solution. Given that the demand for New Start funds 
nationwide far exceeds availability, cost effective options such as BRT 
are important not just to the RTC, but to the overall Federal transit 
program.
                            highway requests
     The RTC is requesting $15 million in fiscal year 2003 Federal 
Lands Highway Funding for an Upgrade project to the Southern Beltway 
(I-215). The overall project boundaries are from Interstate 15 to 
Stephanie Street in Henderson, Nevada. This project will be completed 
in two phases, as outlined below.
    The Southern Beltway serves the rapidly growing southeast area of 
the Las Vegas Valley, including Henderson. Originally constructed as a 
4-lane facility, the traffic volumes have increased well beyond the 
Beltway's designed capacity. The facility has seen an increase in the 
number of vehicles using it from about 23,000 daily trips when it 
opened in 1997/98 to about 73,000 in the year 2000 (the last year of 
available data). This represents an average annual increase in traffic 
of about 55 percent, or about 4 percent per month. The automatic 
traffic recorder on the Beltway showed that there were almost 83,000 
vehicles a day using the facility in December, 2000. The constrained 
capacity creates severe degradation in service, particularly during the 
peak travel hours. At these times, there are about 40 percent more 
people trying to use the facility than the two lanes in each direction 
can accommodate.
    The Southern Beltway Upgrade project from Pecos Road to Stephanie 
Street consists of widening into the existing median to provide a third 
travel lane in each direction. The existing twelve foot shoulder is 
Portland Cement Concrete, and was constructed to serve as a future 
travel lane. The identified project would utilize this shoulder and 
pave the remaining twelve foot median to act as the new full width 
inside the shoulder. In addition, auxiliary lanes would be constructed 
between the existing interchanges at Pecos Road, Green Valley Parkway, 
Valle Verde Drive and Stephanie Street. The improvements are necessary 
to accommodate the existing traffic demand on this segment that 
currently meets or exceeds the capacity of the roadway. The existing 
improvements were constructed entirely with local funds. The project 
cost for this segment is $5 million.
                     bus and bus facilities funding
     The RTC is requesting $20 million in fiscal year 2003 bus 
discretionary funds for land acquisition and construction costs for a 
new Central City Transit Center (CCTC). The CCTC project will enhance 
intermodal connections among bus, monorail, and intercity rail modes. 
The project is a key component of the revitalization and redevelopment 
of downtown Las Vegas.
    The current Downtown Transportation Center, located at 300 North 
Casino Center Boulevard is a major transfer point for many CAT routes. 
However, the facility (built in 1983) was never envisioned for a 
dynamic and growing mass transit system. There are currently 17 CAT 
routes using this facility, as well as a City Trolley service and three 
Charter bus companies. During the afternoon peak period, over 55 
departures per hour are made out of this facility. Built on only three 
(3) acres of land, the facility is simply undersized for the transit 
service currently housed there. Additionally, the geographic and space 
constraints eliminate any opportunities to enhance intermodal 
connections and services.
    With this in mind, the RTC has completed a feasibility study to 
identify a potential site for a new Central City Transit Center. The 
identified area encourages intermodal connectivity to high speed rail 
(Amtrak), a New Start monorail project, the Bus Rapid Transit (BRT) 
project identified above, as well as enhancing the passenger experience 
for the regular CAT bus system, the City Trolley service, and local 
charter services. The new area also provides enhanced access for non-
motorized transportation options (such as walking or biking) to major 
local area attractions. Additionally, the development of the new CCTC 
will provide transportation access to a currently undeveloped area in 
the City of Las Vegas, that has been identified for the largest 
redevelopment project in Southern Nevada. The availability of adequate 
transportation options is critical to the success of this redevelopment 
effort. The requested funds will allow the RTC to commence land 
acquisition and construction of this major improvement to Intermodal 
Transportation options.
                               conclusion
     The Subcommittee has been very helpful in the past in recognizing 
the ever increasing transit needs in Southern Nevada. To continue the 
growth of the CAT system, and to facilitate the deployment of 
innovative BRT and Monorail technology, the RTC requests that the 
Subcommittee provide funding in the amount of $25 million in Section 
5309 bus discretionary funds; $20 million in New Start Funding and $15 
million in Federal Lands Highway funds. As described in this testimony, 
these projects are critical components of the comprehensive development 
of an integrated intermodal transportation system capable of meeting 
the needs of the fastest growing city in the United States.
                                 ______
                                 

          Prepared Statement of the Fleet Reserve Association

Certification of Non-receipt of Federal Funds
    Pursuant to the requirements of House Rule XI, the Fleet Reserve 
Association has not received any federal grant or contract during the 
current fiscal year or either of the two previous fiscal years.
The Fleet Reserve Association
    On behalf of the 140,000 members of The Fleet Reserve Association, 
I thank you Mister Chairman and distinguished members of the 
Subcommittee for the opportunity to submit the Association's views on 
the fiscal year 2003 Coast Guard budget.
    The Fleet Reserve Association (FRA) is a Congressionally Chartered, 
non-profit organization, representing the interests of U.S. Navy, 
Marine Corps, and Coast Guard personnel with regard to pay, health care 
and other benefits.
    The Association is the oldest and largest Association in the United 
States representing enlisted men and women of the Sea Services whether 
on active duty, in the Reserves, or retired. Established in 1924, FRA's 
primary mission is to act as the premier `` watchdog'' organization for 
maintaining and improving quality of life for Sea Service personnel. In 
the past 5 years, for example, FRA led the effort to amend the 
military's ``Redux'' retirement system for the better and provided a 
pay study referenced by Congress in the adoption of pay reform for mid-
grade enlisted personnel in 2001, and subsequently by Congress in 2002 
with regard to further revising the pay for all noncommissioned and 
petty officers in grades E5 thru E9.
    In 1996, FRA sought recognition for the arduous duties performed by 
junior enlisted personnel serving aboard the Nation's naval vessels. 
Sea pay was recommended by the Association only to have the proposal 
turned down by the Navy. Last year, Congress gave the Navy and the 
Coast Guard the authority to manage its sea pay programs, the amounts 
paid to career personnel were increased and junior enlisted sailors 
again became eligible for sea duty pay.
    There are other issues and programs advocated by FRA over the past 
years that are now a reality. TRICARE for Life is a major health care 
enhancement championed by FRA and other member organizations of The 
Military Coalition. (The Coalition is comprised of thirty-two military 
and veterans' organizations representing over five million active duty, 
Reserve, Guard, retired, and veterans, their families and survivors.) 
FRA is the leading enlisted association in the Coalition and has the 
distinction of holding two of the organization's six elected offices--
President of the Coalition Corporation, and the Administrator. 
Additionally, three of nine Coalition committees are co-chaired by 
members of the Association's legislative staff including Personnel/
Compensation/Commissary, Health Care, and Taxes/Social Security/
Medicare.
    The Association sponsors annual scholarship and patriotic essay 
competitions, and recognition programs honoring the Coast Guard 
Enlisted Persons and Recruiters of the Year, the Navy Sailors and 
Recruiters of the Year and the Marine Corps Recruiters and Drill 
Instructors of the Year.
Introduction
    The Fleet Reserve Association's mission is focused on quality of 
life programs which are critically important to sustaining military 
readiness and the War on Terrorism. As it has for many years, the 
United States Coast Guard serves with distinction as the fifth branch 
of our Nation's Armed Forces and as an integral component ensuring our 
Nation's security.
    Thanks to the heroic efforts of many Coast Guard personnel in the 
aftermath of the September 11, 2001, and increasingly effective public 
affairs initiatives, the American people have an increased awareness 
of, and appreciation for the Coast Guard's multi-faceted and demanding 
mission. FRA believes this is long over due.
    Before addressing specific issues, the Association wishes to 
acknowledge the tremendous support of this distinguished Subcommittee 
for additional pay and benefit improvements enacted during the First 
Session of the 107th Congress. Across the board and targeted pay 
increases, higher housing allowances, reform of the PCS process and 
increased funding for health care are significant improvements and 
perceived as important recognition of the service and sacrifice of the 
men and women serving in the Coast Guard, and those who've served in 
the past.
    FRA remains totally committed to ensuring Coast Guard parity with 
all pay and benefits provided DOD uniformed personnel. The Association 
notes with pleasure the increased funding levels authorized for key pay 
and benefit programs in fiscal year 2002 and was especially pleased 
that adequate resources were allocated for the implementation of sea 
pay reform benefiting Coast Guard personnel during this year.
The Fiscal Year 2003 Budget
    Regarding the Administration's fiscal year 2003 Budget, FRA first 
draws your attention to the need for additional supplemental funding to 
cover the costs of pay, health care and other benefit enhancements 
enacted as part of the fiscal year 2002 National Defense Authorization 
Act and implemented this year.
    Half of these costs, totaling $21 million, were funded in the 
supplemental legislation included as part of the fiscal year 2002 
National Defense Appropriations Act enacted last fall. FRA understands 
that Congress intends to soon authorize the remaining $21 million to 
fund these programs for the second half of the fiscal year as part of 
an emergency supplemental bill. The Association strongly supports this 
initiative. Unfortunately, this action will serve as yet another 
segment in the ongoing pattern of relying on supplemental 
appropriations to adequately fund the all important quality of life 
programs so important to the men and women serving in the United States 
Coast Guard.
    FRA is encouraged that the $7.1 billion fiscal year 2003 budget 
proposal establishes accrual funding for health care and retirement 
accounts and that the spending plan assumes enactment of the pending 
U.S. Coast Guard Authorization Act (S. 951) which authorizes over 7,462 
additional end strength billets.
    The Association is pleased that full funding for pay increases, 
health care and other benefit improvements is included in the 
Administration's fiscal year 2003 Budget. The U.S. Coast Guard's budget 
request includes operations funding of $4.6 billion, significantly 
above the fiscal year 2002 budget of $3.3 billion, and a retired pay 
account allocation of $736 million to cover the cost of implementing 
accrual accounting procedures similar to the Department of Defense's.
    The Reserve training budget totals $136 million to recruit, train, 
and support a Coast Guard Selected Reserve Force of 9,000 personnel. 
Training is essential to ensuring military readiness and fully funding 
this account is very important because Reservists are increasingly 
called upon to support the prosecution of the war effort. Due to 
inadequate end strengths levels that are commensurate with increasing 
operational commitments, all of the services must rely increasingly on 
Reserve personnel to meet mission requirements.
Stretched to the Limit
    The headline of a November 13, 2001 Washington Times opinion piece 
reads ``Coast Guard more Important than Ever.'' FRA could not agree 
more. The article by Christopher Lehman and Scott Truver offers a 
sobering overview of the challenges facing the Coast Guard in this new 
era of heightened national security. Other newspaper stories chronicle 
the Coast Guard's operational challenges due to limited resources and 
heightened security demands in the wake of the attacks on our Nation 
last September.
    In a January 25, 2002 speech in Portland, Maine, President George 
W. Bush stated, ``I saw how the Coast Guard has responded after 9/11 
and I know how important the Coast Guard is for the safety and security 
and the well-being of our American citizens.'' He cited the rescue of 
five fishermen from a 74-foot fishing vessel that sank in heavy seas 
and noted that ``This story was repeated 4,000 times last year.'' He 
further noted that Coast Guard men and women captured over 60 tons of 
cocaine and responded to over 11,000 oil spills in 2001. These 
statistics were compiled prior the terrorists' attacks and reflect 
consistently impressive efforts and dedication to service of all Coast 
Guard personnel.
    President Bush also recognized the fact the Coast Guard men and 
women are. ``Working around the globe with the Department of Defense.''
    Because of the ``new normalcy'' requirements, Coast Guard people 
are also being pushed to exhaustion by increased work requirements that 
stretch thinly staffed units beyond their work limits and negatively 
affect readiness. To meet the challenge approximately 2,900 Reservists 
have been called to active duty, 10,000 vessels have been boarded, the 
Coast Guard has launched the largest port security operation since WWII 
and the service remains on a heightened state of alert at over 361 
major ports. In addition, hundreds of cutters, aircraft and small boats 
manned by thousands of USCG active duty and Reserve members are 
guarding our coasts. Since last September 11, the USCG has conducted 
over 30,000 port security patrols and over 3,000 air patrols. These are 
impressive efforts contributing significantly to our enhanced security 
B and they are accomplished by dedicated men and women totally 
committed to serving our Nation.
    As it has in the past, FRA strongly supports increasing end 
strengths commensurate with these growing operational commitments. The 
Association salutes the distinguished Subcommittee's leadership with 
regard to the House adopting H.R. 3507, the Coast Guard Authorization 
Act for 2001, while urging the Senate leaders to expeditiously bring 
similar legislation (S. 951) to the floor for a vote by the full 
Senate.
    The Coast Guard has not had the benefit of an authorization act 
since 1998. The Senate version of this legislation authorizes 
significant end strength increases to 45,500. The legislation also 
addresses quality of life enhancements including the authorization of 
compensatory leave for members stationed at isolated duty stations, and 
the extension of expired housing authorities to promote construction or 
acquisition of much needed housing on or near Coast Guard units where 
adequate, affordable housing may not be available.
Pay Comparability
    FRA strongly supports the proposed 4.1 percent active duty pay 
increase included in the Administration's budget and the pending plan 
to again target career enlisted personnel for higher adjustments. The 
Association is also encouraged that the Administration is requesting 
$360 million for additional military pay in the DOD budget, however FRA 
is concerned with commensurate funding in the Coast Guard budget to 
cover this increase for its personnel.
    Thanks to the strong support from the Administration and Congress, 
significant progress is being made in closing the pay comparability gap 
through 2006. The Association believes all personnel need and deserve 
annual raises at least equal to private sector wage growth and 
appreciates the continuing higher than ECI pay hikes authorized by 
Congress and the targeted increases particularly for senior enlisted 
personnel. These leaders are increasingly valuable due to their 
seasoned experience, leadership, education, and advanced technical 
skills. They also command high wages in the civilian market and often 
express frustration regarding compressed pays at the senior enlisted 
level (E-8 and E-9) as a lack of recognition and appreciation for their 
roles as leaders and teachers.
    Pay increases are important to all Coast Guard men and women and 
convey a powerful message to service members about the importance and 
value of their service to our country. However, at the end of the 2000-
2005 period, a pay gap in excess of 7 percent will still remain between 
military and civilian pay levels and additional increases are needed to 
close the gap.
Benefits Disparity
    There are challenges regarding mandatory versus discretionary 
funding for benefits paid to Coast Guard personnel. Along with its 
sister services, the Coast Guard adjusts discretionary funding to best 
address its particular needs. Members of the Coast Guard are authorized 
to receive the same benefits as their DOD counterparts, however, the 
lack of adequate funds may limit what they in fact receive.
    The following list offers examples of the disparities between 
benefits offered to DOD personnel and those offered to Coast Guard 
members.

  DOD & U.S. COAST GUARD--COMPARISON OF PERSONNEL INCENTIVES & BENEFITS
------------------------------------------------------------------------
                                     Department of
              Item                      Defense        U.S. Coast Guard
------------------------------------------------------------------------
Enlistment Bonuses..............  $2K to $20K. DOD    $1K to $20K. USCG
                                   is also combining   cannot currently
                                   enlistment          afford to combine
                                   bonuses and         the enlistment
                                   college fund        bonus with the
                                   resulting in a      college fund;
                                   maximum payment     recruits must
                                   of $70K.            select one or the
                                                       other.
College Fund....................  $50K..............  $30K.
College Loan Payback............  $65K. DOD is        Currently the USCG
                                   combining the       does not have
                                   college loan        legislative
                                   payback with the    authority to
                                   enlistment bonus    implement a
                                   which results in    program of this
                                   a maximum payment   nature.
                                   of $85K.
Distance Learning...............  Satellite based &   Currently funding
                                   web-based.          a pilot project
                                                       aboard one CG
                                                       cutter.
Child Care Subsidies............  $3,588 per child..  $327 per child.
------------------------------------------------------------------------

    From this comparison, it is obvious that the Coast Guard faces 
significant challenges in providing competitive incentives to attract 
and retain an adequately trained work force. The childcare subsidy 
disparity is a startling statistic and FRA notes that childcare needs 
for Coast Guard personnel and their families are no less important than 
the needs of their DOD service counterparts.
Housing Allowance (BAH)
    FRA appreciates Congressional support for increased basic allowance 
for housing (BAH) rates and enactment of a plan to eliminate average 
out of pocket housing costs by 2006. Adequate funds are required in the 
Coast Guard budget to cover these improvements. The Association also 
strongly supports an increase of $7 million for housing at various 
Coast Guard stations.
    Unlike the other services, the Coast Guard relies on leased housing 
for its personnel in some duty locations and funding for this program 
must be sustained. This reliance is due to the unavailability of 
military housing at or near Coast Guard duty stations, many of which 
are located in high-cost resort areas along our coasts. Because of 
these challenges, FRA advocates an accelerated implementation of the 
elimination of average out of pocket housing costs to ease the 
financial impact imposed on many Coast Guard personnel and their 
families.
Health Care
    A top FRA priority is access to quality and affordable health care 
for all beneficiaries including U.S. Coast Guard personnel and 
retirees. The Association appreciates TRICARE improvements for active 
duty personnel including enhanced claims processing, implementation of 
TRICARE Prime Remote for dependents, and mileage reimbursement for 
specialty care for all TRICARE Prime beneficiaries including active 
duty personnel and enrolled retirees.
    Major enhancements were also enacted last year for retirees, 
including an expanded pharmacy benefit for Medicare-eligibles along 
with TRICARE For Life that offers second payer coverage to Medicare for 
older retirees. These are major improvements and recognition of the 
government's past commitments of health care for life for those who 
serve careers in the uniformed services.
    FRA offers thanks to members of the Subcommittee for supporting 
these initiatives, while reminding each member of the panel of the 
importance of continued full funding (to include both mandatory and 
discretionary requirements) for these important programs.
    Regarding collaborative efforts between DOD and the Department of 
Veterans Affairs, FRA strongly supports sharing agreements and 
partnering initiatives between the two systems that serve different 
beneficiary groups, but only if those efforts would enhance or maintain 
access to quality health care for the beneficiaries of each of the 
departments. Although this distinguished panel does not have 
jurisdiction over these issues, the Association believes that it's 
important to state its position and advise you of the ongoing work of 
the President's Task Force to Improve Health Care for Our Nation's 
Veterans.
    Other health care concerns include providing adequate health care 
coverage via a ``safety net'' for Coast Guard Reservists and their 
families in the wake of call ups since last September; providing 
TRICARE Prime Remote coverage to family members who are unable to 
reside with the service member; a waiver of the Medicare Part B penalty 
for older retirees who reached age 65 prior to October 1, 2001, and 
increasing the number of TRICARE providers.
Recruiting And Retention
    There is an urgent need for the Coast Guard to recruit and retain 
adequate numbers of personnel to sustain the service's multi-faceted 
mission requirements. As discussed above, pending legislation will 
authorize significant end strength increases over the next three years 
and these additions will require adequately staffed and funded 
recruiting offices with associated support resources.
    Now more than ever senior petty officers are needed to guide, lead, 
teach, train, counsel, and inspire their junior charges and do likewise 
for young men and women entering the officer ranks. These petty 
officers also replace officers in positions of command and, when called 
upon, change their stripes for bars during national emergencies. FRA 
notes with pride the increasing responsibilities shouldered so 
effectively by the Coast Guard's senior enlisted personnel and takes 
great pride in representing their interests on quality of life issues 
on Capitol Hill.
    The Coast Guard is meeting its recruiting and retention goals 
thanks in part to the increased number of recruiters and infusion of 
additional advertising funds in recent years. However, the Coast Guard 
is challenged to maintain adequate numbers of qualified personnel in 
key job specialties. The service must be especially competitive for 
personnel with these skills because they see jobs in the private sector 
that offer better hours, higher wages and much less stress
Conclusion
    As you know, the Coast Guard provides tremendous service to our 
Nation and is integral to our homeland security. Appropriations for the 
Coast Guard generate from four to five times the return on each dollar 
invested. The broad range of services and support provided by the Coast 
Guard and its personnel generally go unnoticed until there is a major 
disaster or national emergency such as the terrorists attacks of last 
September.
    As noted by President Bush in the speech cited above, ``The Coast 
Guard has a vital and significant mission. And, therefore, the budget 
that I send to the United States Congress will have the largest 
increase in spending for the Coast Guard in our nation's history.'' FRA 
strongly supports the President's budget request and urges this 
distinguished Subcommittee to do likewise.
    The Coast Guard is always there, and true to its motto of Semper 
Paratus B always ready. Please ensure adequate funding for the 
personnel programs discussed above to ensure parity with benefits and 
quality of life programs offered by the Department of Defense.
    Thank you again for the opportunity to submit the Association's 
views and for your strong commitment and continuing support of the men 
and women serving so magnificently in the United States Coast Guard.
                                 ______
                                 

   Prepared Statement of the University Corporation for Atmospheric 
                                Research

    On behalf of the University Corporation for Atmospheric Research 
(UCAR) and the university community involved in weather and climate 
research and related education, training and support activities, I 
submit this written testimony for the record of the Senate Committee on 
Appropriations, Subcommittee on Transportation.
    UCAR is a consortium of 66 universities that manages and operates 
the National Center for Atmospheric Research (NCAR) and additional 
research, education, training, and research applications programs in 
the atmospheric and related sciences. The UCAR mission is to support, 
enhance, and extend the research and education capabilities of the 
university community, nationally and internationally; to understand the 
behavior of the atmosphere and related systems and the global 
environment; and to foster the transfer of knowledge and technology for 
the betterment of life on earth. In addition to its member 
universities, UCAR has formal relationships with approximately 100 
additional undergraduate and graduate schools including several 
historically black and minority-serving institutions, and 40 
international universities and laboratories. UCAR is supported by the 
National Science Foundation (NSF) and other Federal agencies including 
the Federal Aviation Administration (FAA).
    The fiscal year 2003 budget request for the FAA should support the 
Administration's and the country's commitment to a safe, efficient, and 
modern aviation system. Specific agency goals include an 80 percent 
reduction in the fatal accident rate on U.S. carriers by 2007 and the 
upgrading of the air traffic control system. While the rate of 
commercial aviation accidents is very low worldwide, recent dramatic 
increases in air traffic (with the exception of the months following 
September 11) have resulted in an increase in the number of accidents. 
If the current rate of increase were to stay constant over the next 15 
years, the result will be an average of 50 catastrophic accidents per 
year--almost one per week. As passenger traffic increases since the 
events of September 11, it is imperative that this country not lose 
sight of the FAA Safer Skies goals and that the proposed request of 
$4.6 billion for the FAA's primary mission of safety in the skies and 
on the ground at airports be applied wisely.
    According to the National Transportation Safety Board, 
approximately 30 percent of all aviation accidents, and 37 percent of 
the fatal accidents, are weather related. Aviation weather hazards 
include low cloud ceilings and visibility; airframe icing, both on the 
ground in the airport terminal area and while airborne; runway 
contamination by ice, snow, and water; and thunderstorms and convective 
activity which produces low-altitude windshear, strong and gusty winds, 
heavy rains, hail, and lightning. (As the 1999 Little Rock accident 
that resulted in 11 fatalities demonstrates, violent thunderstorms 
continue to be among the most dangerous weather phenomena for all 
classes of aviation.)
    Regarding the fiscal year 2003 request for the FAA, I would like to 
comment on accounts related to aviation weather research that fund the 
collaborative work of researchers in universities and Federal 
laboratories. These accounts are relatively small in dollar amounts, 
but the work is potentially life-saving for our nation's pilots and 
passengers.
Facilities and Equipment
    Within the Facilities and Equipment section of the Federal Aviation 
Administration (FAA) budget, please add $5.0 million for development 
and implementation of a terrain-induced windshear alert system. This 
pilot project would be done in the Juneau, Alaska, area because of the 
complex terrain surrounding the airport. The technology developed could 
lead to a National Terrain-Induced Windshear and Turbulence Alerting 
System that would be installed in airports nation-wide to help prevent 
crashes like the one that occurred in 1991 on approach to the Colorado 
Springs Airport. Work would include verifying the prototype alert 
system and transferring the technology to FAA systems developers. I 
urge the Committee to support the request of $2.99 billion for 
Facilities and Equipment in fiscal year 2003, and to add $5.0 million 
to support the development and implementation of a terrain-induced, 
windshear alert system.
Research, Engineering and Development (RE&D)--Weather Program
    The Weather Program conducts applied weather research to solve 
operational aviation problems. In collaboration with the National 
Weather Service, the FAA intends to provide more accurate, accessible 
and efficient weather forecasts and severe weather warnings through the 
development of new technology, better delivery mechanisms, and superior 
aviation weather instruction materials. In addition, upgrades will be 
made to wake turbulence standards and procedures. (Wake turbulence is 
likely to have been a major contributing factor to the November 
commercial airline crash in New York.) These improvements will make 
aviation safer, improve flight planning, and increase air traffic 
controller and pilot decision-making skills regarding interpretation of 
weather forecast data. In order to allow critical research achievements 
to be applied quickly to operations, I would like to make the following 
recommendations regarding the two Weather Program accounts:
Weather Program--Safety
    I urge the Committee to support the fiscal year 2003 Budget Request 
of $19.4 million for the Weather Program Safety account, and to add 
$2.0 million (for a total of $21.4 million) in order to initiate two 
life-saving programs:
    The National Terrain-Induced Windshear and Turbulence Alerting 
System (mentioned above) that would be installed in airports throughout 
the nation, and
    The Gravity Wave Research Program to develop a technique for 
detecting and alerting pilots to a unique set of extremely dangerous 
low-level wind conditions that precede certain thunderstorms. These 
conditions occur at and around a number of airports in the country and 
are of extreme danger to aircraft, particularly during take-off and 
landing.
Weather Program--Efficiency
    The Budget Request for the Weather Program Efficiency account is 
decreased in fiscal year 2003 by $806,000. I urge the Committee to 
support the life-saving work of the Weather Program Efficiency account 
by appropriating the requested $9.1 million and adding $1.5 million 
(for a total of $10.6 million) to initiate a Terminal Area High-
Resolution Winds Product that would give air traffic controllers a 
model depiction of wind location near airports based on special 
processing of data from NEXRAD radars. This addition to the request 
would mean that the account would receive only a 0.07 percent increase 
over fiscal year 2002. If possible, please consider appropriating the 
request plus inflation in addition to the add-on.
    Given past experience with the Weather Program section of the 
budget, I ask that you oppose any attempt to reallocate weather 
research funding within this account. The research community receives 
funding from the R&D budget to do work that is critical to the safety 
of U.S. citizens including turbulence forecasting, ceiling and 
visibility forecasting, thunderstorm and winter storm forecasting, and 
prediction of airborne icing. Any reallocation of funds in this line 
jeopardizes that life-saving work.
    On behalf of UCAR, as well as all U.S. citizens who take to the 
skies, I want to thank the Committee for the important work you do for 
this country's scientific research, training, and technology transfer. 
We appreciate your attention to the recommendations of our community 
concerning the fiscal year 2003 FAA budget and we appreciate your 
concern for safety within the nation's aviation systems, particularly 
during this extraordinary time in our nation's history.
                                 ______
                                 

  Prepared Statement of the Upper Mississippi River Basin Association

    The Upper Mississippi River Basin Association (UMRBA) is the 
organization created in 1981 by the Governors of Illinois, Iowa, 
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating 
the five states' river-related programs and policies and for 
collaborating with Federal agencies on regional water resource issues. 
As such, the UMRBA has an interest in the budget for the U.S. Coast 
Guard.
    In the current national security environment, it has become more 
important than ever to provide the Coast Guard with the resources it 
needs to fulfill its multiple missions. Clearly the Coast Guard has 
vital new functions specifically related to homeland security, and 
these must be adequately funded. But perhaps even more significant are 
the ways in which the Coast Guard's other traditional missions can 
contribute to enhanced security while simultaneously supporting 
navigation safety and environmental protection. This includes 
activities such as aids to navigation, vessel and facility inspections, 
emergency response, and mariner licensing. Nowhere are these services 
more important than on the Upper Mississippi River System, which 
Congress has designated as a nationally significant commercial 
navigation system and a nationally significant ecosystem. The Coast 
Guard must be adequately funded if the river is to continue to serve 
both of these important functions.
Operating Expenses
    Of continuing concern to the UMRBA is funding for the Coast Guard's 
Operating Expenses account. The President's fiscal year 2003 budget 
proposal includes $4.635 billion for this account, an increase of 19 
percent from the fiscal year 2002 enacted level. However, this increase 
would be targeted almost entirely to homeland security projects and 
personnel-related costs, including pay raises and retirement funding. 
While details concerning the security projects are not available, some 
will undoubtedly help enhance other Coast Guard missions. However, it 
is also true that there will be increased demands on these other 
mission areas to support security operations.
    Congress must not lose sight of the fact that the Operating 
Expenses account funds activities that are critical to the safe, 
efficient operation of the Upper Mississippi River and the rest of the 
inland river system. Through these missions, the Coast Guard maintains 
navigation channel markers, regulates a wide range of commercial 
vessels in the interest of crew and public safety, and responds to 
spills and other incidents. In calendar year 1999, the Coast Guard's 
Upper Mississippi River System units inspected 644 vessels; responded 
to 100 oil spills; and managed 401 other reportable marine casualties, 
including groundings, injuries, and vessel breakaways. These numbers 
speak to the Coast Guard's vital role in establishing and enforcing 
standards, maintaining navigation aids, and responding to various 
incidents. The beneficiaries include not only commercial vessel 
operators, but also recreational boaters; farmers and others who ship 
materials by barge; and the region's citizens, who benefit enormously 
from the river as a nationally significant economic and environmental 
resource.
    Recent years have brought a number of changes to the way the Coast 
Guard operates on the inland river system, including elimination of the 
Second District; closure of the Director of Western Rivers Office; 
decommissioning the Sumac, which was the largest buoy tender on the 
Upper Mississippi River; and staff reductions. The states understand 
that these decisions were driven by the need for the Coast Guard to 
operate as efficiently as possible, and the states support that goal. 
However, such changes must be carefully considered and their effects 
monitored, particularly in light of the increased demands that we are 
now placing on the personnel and assets that remain in the region. The 
UMRBA is quite concerned that staff reductions and resource constraints 
have combined to impair the Coast Guard's ability to serve as an 
effective, proactive partner.
    In recent years, the Coast Guard's capacity to participate in 
important regional initiatives has been limited. Moreover, increased 
fuel prices and other factors have constrained the Coast Guard's 
ability to do even routine work, thus raising public safety concerns. 
Now we are learning that increased security demands are reducing the 
staff assigned to vessel inspections and limiting the Coast Guard's 
investigation of reported spills. Sending a single person to conduct 
vessel inspections reduces the rigor of those inspections, and, in a 
worst case scenario, potentially puts the inspector at risk. Similarly, 
electing not to respond to reports of small spills means some of these 
spills will go uninvestigated and puts increased demands on local 
officials who do not have the Coast Guard's expertise or resources. 
Moreover, it could result in costly delays should a spill turn out to 
be considerably larger than first reported. While everyone recognizes 
the need to adjust to our new security environment, it is essential for 
the Coast Guard to retain the capacity to perform its traditional 
missions on the Upper Mississippi River. Temporary adjustments have 
been necessary as the Coast Guard strives to meet immediate needs, but 
these should not become long term standard operating procedures. Toward 
that end, the UMRBA supports the President's fiscal year 2003 budget 
request for the Coast Guard's Operating Expenses account and urges 
Congress to ensure that sufficient resources from within this account 
are allocated to the Coast Guard's inland river work.
Navigation Fees
    The UMRBA continues to oppose fees for navigation assistance 
services, which have been proposed frequently in previous years. Last 
year, the Administration clearly stated its opposition to such fees, 
while this year's budget proposal appears to be silent on the matter. 
The nation's navigable waterways are a critical part of our 
transportation infrastructure, just as is the national highway system. 
Providing the basic services required to operate that infrastructure 
safely is a fundamental role of government. The benefits of buoy 
placement and maintenance, vessel traffic services, radio and satellite 
navigation systems, and waterways regulation do not accrue only to the 
commercial operators who would be subject to such fees. Recreational 
boaters also directly use these services. Moreover, municipal and 
industrial water intake operators, farmers and other shippers, 
consumers, the river's natural resources, and citizens along the river 
all benefit indirectly from the contributions that these Coast Guard 
services make to the safe, efficient operation of the navigation 
system. One group simply should not be required to pay the costs of 
services whose real benefits are distributed so broadly.
Coast Guard Reserve
    Several other Coast Guard missions and programs are also important 
to the Upper Mississippi River states. Unfortunately, devastating 
floods in several recent years have given many of this region's 
citizens direct personal experience with the importance of the Coast 
Guard's reservists. Reserve forces are a critical part of the Coast 
Guard's ability to respond effectively to natural disasters and other 
large-scale events. In addition, reservists perform key staff functions 
at many of the marine safety detachments on the inland rivers. The role 
of reservists in the region has become all the more crucial as the 
detachments' active duty staffing levels have been reduced and their 
security-related activities have increased. The UMRBA supports the 
President's request of $113 million for the Coast Guard Reserve.
Boating Safety Grants
    In addition, the Coast Guard's boating safety grants to the states 
have a proven record of success. The Upper Mississippi is a river where 
all types of recreational craft routinely operate in the vicinity of 
15-barge tows, making boating safety all the more important. As levels 
of both recreational and commercial traffic continue to grow, so too 
does the potential for user conflicts. This is particularly true with 
major events, such as the upcoming commemoration of the Lewis and Clark 
expedition, which is expected to draw large numbers of boaters to the 
St. Louis area. Boat safety training and law enforcement are key 
elements of prevention. Unfortunately, this year the Coast Guard 
continued its long-standing practice of requesting only $59 million for 
state boat safety grants. The UMRBA urges Congress to appropriate the 
full authorized amount of $70 million to the Boat Safety account to 
support the states in this important mission.


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
American Passenger Rail Coalition, prepared statement............   177
American Public Transportation Association, prepared statement...   179

Bennett, Senator Robert F., U.S. Senator from Utah, remarks by...   163
Bond, Senator Christopher S., U.S. Senator from Missouri, 
  statement of...................................................     3
Byrd, Senator Robert C., U.S. Senator from West Virginia:
    Prepared statement...........................................    16
    Questions submitted by.....................................167, 175
    Statement of.................................................    14

Campbell, Senator Ben Nighthorse, U.S. Senator from Colorado:
    Prepared statement...........................................    19
    Questions submitted by.....................................174, 181
    Statement of.................................................   139
Chatham Area Transit, prepared statement.........................   183
City of Newark, New Jersey, prepared statement...................   183
Clapp, Joseph, Administrator, Federal Motor Carrier Safety 
  Administration, Department of Transportation...................    93
Coalition of Northeastern Governors (CONEG), prepared statement..   185

Durbin, Senator Richard J., U. S. Senator from Illinois, prepared 
  state- 
  ments..........................................................17, 52

Engleman, Ellen, Administrator, Research and Special Programs 
  Administration, Department of Transportation...................    93

Fleet Reserve Association, prepared statement....................   218

Garvey, Hon. Jane F., Administrator, Federal Aviation 
  Administration, Department of Transportation:
    Prepared statement...........................................   143
    Statement of.................................................   133

Illinois Department of Transportation, prepared statement........   186

Jackson, Hon. Michael, Deputy Secretary, Department of 
  Transportation, statements of..................................  1, 4

Kohl, Senator Herb, U.S. Senator from Wisconsin:
    Prepared statements..........................................51, 16
    Questions submitted by.....................................174, 181

Leahy, Senator Patrick J., U.S. Senator from Vermont, prepared 
  state- 
  ment...........................................................    19
Los Angeles County Metropolitan Transportation Authority (MTA), 
  prepared statement.............................................   194
Loy, Admiral James M., Commandant, U.S. Coast Guard, Department 
  of Transportation:
    Prepared statement...........................................    55
    Statements of................................................45, 52
MaGaw, Hon. John, Under Secretary of Transportation for Security, 
  Department of Transportation...................................     1
    Prepared statement...........................................    99
    Statement of.................................................    93
McMahon, Captain Christopher, Maritime Administration, Department 
  of Transportation..............................................    93
Mead, Hon. Kenneth M., Inspector General, Department of 
  Transportation.................................................    45
    Prepared statement...........................................    61
    Statement of.................................................    58
Metropolitan Atlanta Rapid Transit Authority (MARTA), prepared 
  state- 
  ment...........................................................   196
Mikulski, Senator Barbara A., U.S. Senator from Maryland:
    Prepared statement...........................................    51
    Questions submitted by.....................................170, 177
    Statement of.................................................    68
Murray, Senator Patty, U.S. Senator from Washington, opening 
  state- 
  ments..................................................1, 45, 93, 133

National Association of Railroad Passengers, prepared statement..   198
National Congress of American Indians, prepared statement........   202
New York State Police, prepared statement........................   203

Pluta, Rear Admiral Paul, Assistant Commandant for Marine Safety 
  and Environmental Protection, U.S. Coast Guard, Department of 
  Transportation.................................................    93

Rail Travel Center, prepared statement...........................   209
Regional Transportation Commission of Southern Nevada, prepared 
  statement......................................................   215
Reid, Senator Harry, U.S. Senator from Nevada:
    Prepared statement...........................................   140
    Questions submitted by.....................................172, 179
Rutter, Allan, Administrator, Federal Railroad Administration, 
  Department of Transportation...................................    93

Shelby, Senator Richard C., U.S. Senator from Alabama:
    Prepared statement...........................................   137
    Statements of.......................................11, 47, 96, 135
Stevens, Senator Ted, U.S. Senator from Alaska, statements of...67, 146

University Corporation for Atmospheric Research, prepared 
  statement......................................................   222
Upper Mississippi River Basin Association, prepared statement....   223


                             SUBJECT INDEX

                              ----------                              

                      DEPARTMENT OF TRANSPORTATION

                                                                   Page
Airport:
    Parking restrictions.........................................    38
    Passenger screening..........................................    22
        Contracts................................................32, 36
American Airlines/TWA work force, integration of.................    26
AMTRAK...........................................................    17
    Funding......................................................    21
Aviation:
    And surface transportation safety............................     9
    Incident.....................................................    11
    Loan guarantees..............................................    27
    Security.....................................................18, 23
        General..................................................32, 33
Border control agency, proposed..................................    41
Cargo security...................................................    40
Chicago aviation capacity expansion..............................    18
Coast Guard......................................................     6
    Capital plan.................................................    23
Explosive detection systems (EDS)................................29, 34
    Contracts....................................................    30
    Cost of equipment............................................    31
FAA capital program..............................................    25
Federal Transit Administration...................................     7
Highway:
    Funding...................................................6, 20, 35
    Funds........................................................    18
    Safety:
        Goals....................................................    29
    Program......................................................    28
Highways.........................................................     9
Homeland security--TSA and the Coast Guard.......................     8
MAGLEV and high-speed rail.......................................    34
Motor carrier safety.............................................    40
National distress and response system............................    43
Navigation user fee..............................................    39
Other programs...................................................    10
Pennsylvania, transportation priorities in.......................    36
Pipeline security................................................    40
Public and rail transportation...................................     7
Public transportation and rail...................................    10
Revenue aligned budget authority.................................    24
Safety funding...................................................     6
Transportation Security Administration...........................
    Associate Under Secretaries..................................    43
    Budget.......................................................    42
Unobligated highway trust fund balances..........................    25

                    Federal Aviation Administration

A more business-like approach....................................   146
Additional committee questions...................................   167
AIP, use of for security:
    Costs......................................................149, 150
    Expenditures.................................................   150
Air traffic control facilities, security of......................   147
Air transportation oversight system (ATOS).......................   158
Airspace, violation of restricted................................   157
ASR-11:
    Certification of.............................................   156
    Wide area augmentation system (WAAS) and.....................   153
Centennial Airport, scheduled passenger service at...............   157
Chartered aircraft, security for.................................   154
Chicago's O'Hare Airport, pending legislation on.................   163
Commercial airplane certification process........................   165
Competitive procurement..........................................   166
Cost control.....................................................   152
Emergency information dissemination..............................   174
En route automation modernization program........................   151
Environmental streamlining.......................................   151
FAA:
    Assistance to airlines with financial difficulty.............   160
    Management...................................................   142
Financing........................................................   143
Fixed based operations (FBOs)....................................   156
Flight 587 accident..............................................   155
Growth, preparing for............................................   145
Montgomery County, MD:
    Airport approaches over......................................   170
    Noise abatement in...........................................   170
National Transportation Safety Board.............................   155
Oceanic air traffic control, technology for......................   152
Olympics, FAA'S performance at the...............................   164
Operational evolution plan.......................................   141
Personnel reform, Senate directive on............................   167
Radars, primary long-range.......................................   171
Runways, time to construct.......................................   152
Safety...........................................................   142
    And security, balancing......................................   161
    Issues, impact of shortfall on...............................   148
    Record, maintaining our......................................   144
    Staffing, hiring of..........................................   159
Salt Lake City, radar for........................................   164
St. George Regional Airport......................................   164
Standard terminal automation replacement system (STARS)........161, 171
    At Philadelphia Airport......................................   174
    Deployment schedule..........................................   172
Summer traffic and overtime costs................................   149
Supplemental request, funding source for.........................   148
Technology, decisions on.........................................   162
Transition to TSA................................................   141
Unanticipated operations costs...................................   147

            Security Challenges for Transportation of Cargo

Administrative Procedures Act....................................   128
Advanced notice of arrival requirements..........................   126
Airports, 300-foot perimeter rule at.............................   121
Aviation security................................................   129
Cargo security in the:
    Maritime sector..............................................   102
    Motor carrier sector.........................................   103
    Rail sector..................................................   104
Communications between agencies..................................   123
Container:
    Examination program, port of origin..........................   127
    Inspection...................................................   125
    Security.....................................................   125
Customer service.................................................   132
Driver awareness and security....................................   113
Explosives detection systems..............................122, 129, 131
Explosives trace detection system................................   121
Foreign vessels entering the United States, risk of..............   127
Hazard materials action group....................................   115
Hazardous materials:
    Direct action group..........................................   107
    Exemption of certain.........................................   114
    Identifying..................................................   111
    In transportation and pipeline systems.......................   105
    Rulemaking...................................................   108
    Shipments....................................................   110
    Transportation of............................................   109
Maritime vulnerability...........................................   118
National risk assessment.........................................   115
Natural gas pipelines............................................   128
Pipeline vulnerability...........................................   120
Safety and security, balance.....................................   111
Security managers, hiring of Federal.............................   130
Shipper information..............................................   120
Smart border.....................................................   124
Technology, paying for...........................................   112
Threat conditions................................................   122
Transportation Information Operations Center (TIOC)..............   124
Transportation:
    Security.....................................................   116
    Vulnerabilities..............................................   117

                            U.S. Coast Guard

Acquisition, construction, and improvements budget provides a 
  significant funding increase for NDS and Deepwater.............    65
Additional committee questions...................................    89
Burlington, Vermont breakwater...................................    91
C-130 aircraft...................................................    73
Capital:
Coast Guard:
    Budget constraints...........................................    80
    Budget request represents a 27.6 percent increase............    63
    Combining with other agencies................................    87
    Fiscal year 2003 budget seeks to balance current priorities 
      with multiple missions.....................................    63
    Funding......................................................    45
    Homeland security role.......................................    47
    New normalcy.................................................    71
    New security teams...........................................    86
    Plan.........................................................    49
    Recruiting and reinlistment..................................    74
    17th district................................................    72
    Status of traditional missions...............................    71
    Traditional missions.........................................    46
Deepwater........................................................    50
    Benefits of system acquisition approach......................    90
    Benefits of the integrated system project....................    89
    Integrated...................................................    54
        Procurement..............................................    48
    Operational capability improvements..........................    90
    Procurement strategy.........................................    76
    Uncertainties with the project should be resolved this year..    66
Fiscal year 2003 funding challenges..............................    45
Future, shaping our..............................................    58
Maritime security................................................    53
National distress and response modernization.....................    60
National distress modernization..................................    54
National distress system.........................................47, 59
    Audit........................................................    78
    Project is likely to experience cost growth..................    65
Navy security initiatives........................................    83
Port security challenges.........................................    85
Readiness, restoring our.........................................    57
Reserve recall...................................................    69
Search and rescue................................................    59
    Enhancements.................................................    82
    Program......................................................    54
    Stations, operating tempo of.................................    69
Small boat station:
    Audits.......................................................    70
    Search and rescue program, fiscal year 2003 budget continues 
      efforts to address deficiencies in the.....................    64
Supplemental funding.............................................    53
Transforming our organization....................................    56
Vessel tracking system...........................................    89

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