[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



                           AN OVERVIEW OF THE
                           FEDERAL R&D BUDGET
                          FOR FISCAL YEAR 2005

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

                                HEARING

                               BEFORE THE

                          COMMITTEE ON SCIENCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 11, 2004

                               __________

                           Serial No. 108-41

                               __________

            Printed for the use of the Committee on Science


     Available via the World Wide Web: http://www.house.gov/science


                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
91-690                      WASHINGTON : DC
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512ï¿½091800  
Fax: (202) 512ï¿½092250 Mail: Stop SSOP, Washington, DC 20402ï¿½090001

                          COMMITTEE ON SCIENCE

             HON. SHERWOOD L. BOEHLERT, New York, Chairman
RALPH M. HALL, Texas                 BART GORDON, Tennessee
LAMAR S. SMITH, Texas                JERRY F. COSTELLO, Illinois
CURT WELDON, Pennsylvania            EDDIE BERNICE JOHNSON, Texas
DANA ROHRABACHER, California         LYNN C. WOOLSEY, California
JOE BARTON, Texas                    NICK LAMPSON, Texas
KEN CALVERT, California              JOHN B. LARSON, Connecticut
NICK SMITH, Michigan                 MARK UDALL, Colorado
ROSCOE G. BARTLETT, Maryland         DAVID WU, Oregon
VERNON J. EHLERS, Michigan           MICHAEL M. HONDA, California
GIL GUTKNECHT, Minnesota             BRAD MILLER, North Carolina
GEORGE R. NETHERCUTT, JR.,           LINCOLN DAVIS, Tennessee
    Washington                       SHEILA JACKSON LEE, Texas
FRANK D. LUCAS, Oklahoma             ZOE LOFGREN, California
JUDY BIGGERT, Illinois               BRAD SHERMAN, California
WAYNE T. GILCHREST, Maryland         BRIAN BAIRD, Washington
W. TODD AKIN, Missouri               DENNIS MOORE, Kansas
TIMOTHY V. JOHNSON, Illinois         ANTHONY D. WEINER, New York
MELISSA A. HART, Pennsylvania        JIM MATHESON, Utah
J. RANDY FORBES, Virginia            DENNIS A. CARDOZA, California
PHIL GINGREY, Georgia                VACANCY
ROB BISHOP, Utah                     VACANCY
MICHAEL C. BURGESS, Texas            VACANCY
JO BONNER, Alabama
TOM FEENEY, Florida
RANDY NEUGEBAUER, Texas


                            C O N T E N T S

                           February 11, 2004

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Sherwood Boehlert, Chairman, 
  Committee on Science, U.S. House of Representatives............    22
    Written Statement............................................    23

Statement by Representative Bart Gordon, Minority Ranking Member, 
  Committee on Science, U.S. House of Representatives............    24
    Written Statement............................................    25

Prepared Statement by Representative Nick Smith, Chairman, 
  Subcommittee on Research, Committee on Science, U.S. House of 
  Representatives................................................    26

Prepared Statement by Representative Vernon J. Ehlers, Chairman, 
  Subcommittee on Environment, Technology, and Standards, 
  Committee on Science, U.S. House of Representatives............    27

Prepared Statement by Representative Jerry F. Costello, Member, 
  Committee on Science, U.S. House of Representatives............    28

Prepared Statement by Representative Eddie Bernice Johnson, 
  Member, Committee on Science, U.S. House of Representatives....    29

                               Witnesses:

Dr. John H. Marburger III, Director, Office of Science and 
  Technology Policy, Executive Office of the President
    Oral Statement...............................................    30
    Written Statement............................................    32
    Biography....................................................    38

Dr. Rita R. Colwell, Director, National Science Foundation
    Oral Statement...............................................    38
    Written Statement............................................    41
    Biography....................................................    46

Dr. Charles E. McQueary, Under Secretary for Science and 
  Technology, Department of Homeland Security
    Oral Statement...............................................    47
    Written Statement............................................    49
    Biography....................................................    75

Mr. Phillip J. Bond, Under Secretary of Commerce for Technology, 
  Department of Commerce
    Oral Statement...............................................    75
    Written Statement............................................    78
    Biography....................................................    82

Dr. Raymond L. Orbach, Director, Office of Science, Department of 
  Energy
    Oral Statement...............................................    83
    Written Statement............................................    84
    Biography....................................................    97

Discussion.......................................................    98

             Appendix 1: Answers to Post-Hearing Questions

Dr. John H. Marburger III, Director, Office of Science and 
  Technology Policy, Executive Office of the President...........   120

Dr. Arden Bement, Jr., Acting Director, National Science 
  Foundation.....................................................   143

Dr. Charles E. McQueary, Under Secretary for Science and 
  Technology, Department of Homeland Security....................   152

Mr. Phillip J. Bond, Under Secretary of Commerce for Technology, 
  Department of Commerce.........................................   172

Dr. Raymond L. Orbach, Director, Office of Science, Department of 
  Energy.........................................................   182

             Appendix 2: Additional Material for the Record

Letter to Chairman Boehlert from the ACE, AAU, and NASULGC, dated 
  February 10, 2004..............................................   192

Letter to Chairman Boehlert from Hyman Bass, dated February 9, 
  2004...........................................................   193

Statement on behalf of the American Chemical Society, American 
  Mathematical Society, American Astronomical Society, American 
  Physical Society, and Institute of the Electrical and 
  Electronics Engineers..........................................   195

 
       AN OVERVIEW OF THE FEDERAL R&D BUDGET FOR FISCAL YEAR 2005

                              ----------                              


                      WEDNESDAY, FEBRUARY 11, 2004

                  House of Representatives,
                                      Committee on Science,
                                                    Washington, DC.

    The Committee met, pursuant to call, at 11:05 a.m., in Room 
2318 of the Rayburn House Office Building, Hon. Sherwood L. 
Boehlert (Chairman of the Committee) presiding.



                            HEARING CHARTER

                          COMMITTEE ON SCIENCE

                     U.S. HOUSE OF REPRESENTATIVES

                           An Overview of the

                           Federal R&D Budget

                          for Fiscal Year 2005

                      WEDNESDAY, FEBRUARY 11, 2004
                          11:00 a.m.-1:00 p.m.

                   2318 RAYBURN HOUSE OFFICE BUILDING

1. Purpose

    On Wednesday, February 11, 2004, the House Science Committee will 
hold a hearing to consider President Bush's fiscal year 2005 (FY05) 
budget request for research and development (R&D). Five Administration 
witnesses will review the proposed budget in the context of the 
President's overall priorities in science and technology. The Science 
Committee will hold a separate hearing on February 12th to examine the 
budget request for the National Aeronautics and Space Administration 
(NASA). Later this year, the Environment, Technology, and Standards 
Subcommittee will hold a hearing to review the R&D budget of the 
Environmental Protection Agency (EPA).

2. Witnesses

Dr. John H. Marburger III is the Director of the Office of Science and 
Technology Policy (OSTP), the White House science office. Prior to 
joining OSTP, Dr. Marburger served as President of the State University 
of New York at Stony Brook and as Director of the Brookhaven National 
Laboratory.

Dr. Rita R. Colwell is the Director of the National Science Foundation 
(NSF). Before joining the Foundation, Dr. Colwell served as President 
of the University of Maryland Biotechnology Institute and Professor of 
Microbiology at the University of Maryland. She was also a member of 
the National Science Board from 1984 to 1990.

Dr. Charles E. McQueary is the Under Secretary for Science and 
Technology (S&T) at the Department of Homeland Security (DHS). Prior to 
joining the Department, Dr. McQueary served as President of General 
Dynamics Advanced Technology systems, and as President and Vice 
President of business units for AT&T, Lucent Technologies, and as a 
Director for AT&T Bell Laboratories.

Mr. Phillip J. Bond is the Under Secretary for Technology in the 
Department of Commerce. Before joining the Department, Mr. Bond served 
as Director of Federal Public Policy for the Hewlett-Packard Company, 
and previously served as Senior Vice President for Government Affairs 
and Treasurer of the Information Technology Industry Council.

Dr. Raymond L. Orbach is the Director of the Office of Science at the 
Department of Energy (DOE). Prior to joining the Department, Dr. Orbach 
was Chancellor of the University of California at Riverside.

3. Background

Overall Budget
    On February 2, 2004, President Bush delivered his FY05 federal 
budget submission to Congress. The budget proposes $2.4 trillion in 
outlays (versus an estimated $2.0 trillion in receipts), a 3.4 percent 
increase over FY04, and an estimated 19.9 percent of the $12 trillion 
U.S. gross domestic product. The overall budget request focuses heavily 
on Department of Defense (DOD) and Department of Homeland Security 
(DHS) activities, which receive seven and ten percent increases, 
respectively. All other discretionary spending is held to 0.5 percent 
growth.
Research and Development Budget
    The President's R&D budget proposes to spend $132 billion, an 
increase of $5.9 billion, or five percent, over FY04.\1\ Consistent 
with the overall federal budget, the largest percentage R&D increases 
will go to DOD and DHS (7 and 15 percent, respectively), while all 
other agencies receive an average increase of 2.3 percent (Table 9). 
The R&D budget increases are almost entirely for development (eight 
percent), while basic and applied research are almost flat-funded (0.6 
and 0.5 percent increases, respectively).
---------------------------------------------------------------------------
    \1\ A complete federal R&D spending table is provided at the end of 
the charter.
---------------------------------------------------------------------------
Research Budget
    The Federal Science and Technology (FS&T) budget--which differs 
from the R&D budget in that it excludes funding for defense 
development, testing, and evaluation--often provides a more useful 
overall perspective on funding for agencies under the Science 
Committee's jurisdiction. Funding for FS&T in the FY05 budget declines 
by 0.4 percent, to $60.4 billion. The FS&T budgets of the Department of 
Commerce (DOC) and EPA are particularly affected, receiving 12 and 14 
percent cuts, respectively.
Administration Highlights and Perspective
    The Administration points out that, under the proposed budget, R&D 
overall and the research budgets of some key agencies, such as the 
National Science Foundation (NSF) would increase at a rate 
significantly greater than overall domestic discretionary spending. But 
basic and applied research as a whole would grow at about the same rate 
as the rest of the discretionary budget.
    The Administration also argues that the proposed R&D budget should 
be compared not just to the figures for FY04, but to previous years to 
get a true picture of how R&D is faring. For example, the budget notes 
that in FY05, 13.5 percent of all discretionary outlays will go to R&D, 
the highest share in 37 years. The budget also emphasizes that non-
defense R&D outlays are at their third highest level in 25 years. 
Similarly, the budget underscores that funding for total R&D and 
civilian R&D have increased 44 and 26 percent since FY01, respectively.
    In evaluating the budget using FY01 as a baseline, it should be 
noted that the overall R&D increases are often not representative of 
trends for individual agencies and scientific disciplines (and that the 
figures include development funding). For example, R&D at the National 
Institutes of Health (NIH) and DHS accounts for over two-thirds of the 
civilian R&D increases over the last four years, while trends at other 
agencies range from modest increases to significant cuts.
    The Administration also emphasizes that evaluations of how well 
agencies and programs are managed is helping to determine the proposed 
budgets. Agencies are evaluated by the Executive Branch Management 
Scorecard, which grades agencies with green, yellow and red lights. 
Agencies under Science Committee jurisdiction generally scored well on 
these evaluations, in particular NASA and NSF, which were the only 
agencies among the 26 evaluated to receive more than one green light. 
The Office of Management Budget selects a number of specific programs 
to review each year using the Program Assessment Rating Tool (PART). 
Some R&D programs at both the Department of Energy (DOE) and the EPA 
receive cuts in the FY05 proposal because of poor PART scores. NSF 
programs have scored well.
    The budget also emphasizes the Administration's growing concern 
over Congressional earmarks within R&D accounts. The budget notes that 
academic earmarks have increased from just $296 million in 1996 to over 
$2 billion in 2003, and that they now account for eight percent of all 
federal funding to colleges and universities.

4. Primary Issues

    The following highlights flag those areas of greatest interest to 
the Science Committee:

Overall Funding Levels and Balance: The research community (often 
backed by the Science Committee and the federal agencies themselves) 
has been calling for substantial increases in R&D. For example, the 
Congress passed, and the President signed, the NSF Authorization Act, 
which calls for doubling NSF's budget over five years. The proposed 
budget falls significantly short over those goals because overall 
domestic discretionary spending is so tight. The increase for non-
defense, non-homeland security R&D in the proposed budget is 2.3 
percent. Further, research (basic and applied) is essentially flat-
funded while support for development is increased eight percent (Table 
9). Also, while the Committee will review the NASA budget request at a 
later date, the proposed increase for NASA (5.6 percent) may have an 
impact on the availability of R&D funds for other agencies--especially 
NSF and EPA, which are both included in the same appropriations bill as 
NASA (VA-HUD-Independent Agencies Appropriations).

Physical Science Research: The FY05 budget request would continue the 
decade-long trend of flat-funding physical science research. For 
example, the budget requests $3.42 billion for the Department of 
Energy's (DOE) Office of Science--the largest single source of funds 
for civilian physical science research--a decrease of $68 million (two 
percent). Even if Congressional earmarks were excluded from the FY04 
baseline (as the Administration suggests is appropriate), the requested 
increase for the Office of Science would only amount to two percent. In 
constant dollars, physical science research is funded at about the same 
level as in 1993, while biological research has more than doubled.

NSF Math and Science Partnership Program: The budget would eliminate 
the Math and Science Partnership (MSP) program at NSF ($140 million 
enacted in FY04). MSP, which funds partnerships between local school 
districts and institutions of higher education to improve K-12 math and 
science education, was established in the National Science Foundation 
Act of 2002 (P.L. 107-368), following the recommendation of the 
President. After highlighting MSP in the FY03 and FY04 budget requests 
for NSF, the Administration has proposed moving the program and its 
funds to the Department of Education. Opponents of the move believe NSF 
is better suited to run a competitive program that pairs universities 
with school districts. If moved, the NSF program would be merged with a 
Department of Education program that focuses exclusively on mathematics 
for secondary school students, particularly those who are at risk of 
dropping out of high school because they lack basic skills. Also, by 
law, the Department of Education program is distributed to states by 
formula. As part of its proposal, the Administration wants Congress to 
amend the law so that the Department could award funds competitively--
as NSF already does.

National Institute of Standards and Technology (NIST): Overall, NIST 
receives a 14.5 percent decrease in the FY05 budget request, primarily 
due to elimination of the Advanced Technology Program (ATP). ATP has 
long been a contentious program because it assists industrial research. 
The budget requests a 22 percent increase over the FY04 for NIST's core 
laboratories, but some of that money is needed to restore funding cut 
by Congress in FY04. NIST has not yet provided a final assessment of 
the impact of those cuts, but it has estimated that 50 to 100 
scientists and technical staff may be laid off during the current 
fiscal year, and work at all labs will be reduced.

NIST Manufacturing Extension Partnership (MEP): The FY05 budget 
requests no increase for the Manufacturing Extension Partnership (MEP), 
which was cut 67 percent in the FY04 enacted budget. The dramatic 
reduction in MEP funding for the current fiscal year likely will result 
the closure of a significant number of MEP centers and satellite 
offices that provide assistance to small manufacturers to improve their 
competitive position.

5. Interagency Research Activities

National Nanotechnology Initiative (NNI): NNI, which involves ten 
federal agencies, continues to be a high priority of both the 
Administration and the Science Committee. The budget requests an 
estimated\2\ $982 million for NNI in FY05, an increase of $21 million, 
or two percent, over the estimated FY04 level. Funding for the five 
agencies\3\ authorized in the 21st Century Nanotechnology Research and 
Development Act (P.L. 108-153) is up eight percent to $609 million, but 
remains significantly below the $809 million authorized for FY05 in the 
Act.
---------------------------------------------------------------------------
    \2\ OMB and OSTP estimate agency funding levels for NNI activities, 
but the data are not entirely consistent from year to year and there 
are discrepancies arising from the fact that some nanotechnology 
research may be difficult to identify or classify.
    \3\ The National Science Foundation, the Department of Energy, the 
National Institute of Standards and Technology, the National 
Aeronautics and Space Administration, and the Environmental Protection 
Agency.

Networking and Information Technology R&D Initiative (NITRD): NITRD, 
which has been in existence for many more years than NNI, did not 
receive an increase. The budget requests $2.0 billion for NITRD in 
---------------------------------------------------------------------------
FY05, a one percent decrease from the FY04 enacted level.

Climate Change Research: The budget requests $2 billion for the 
interagency Climate Change Science Program (CCSP), approximately the 
same as enacted in FY04. A strategic plan for CCSP was released in July 
2003, but it is unclear to what extent the budget request was guided by 
that strategic plan. The request for CCSP includes $240 million for the 
interagency Climate Change Research Initiative (CCRI), a 42 percent 
increase above the FY04 enacted level. CCRI is intended to target 
critical scientific uncertainties and deliver results in three to five 
years. It is unclear, however, how much of the increase for CCRI 
reflects reprogramming from ongoing research activities in other 
programs.

Cyber Security R&D: Some increases are proposed for cyber security R&D 
programs in FY05. The budget requests $76 million for cyber security 
R&D and education and training programs at NSF and $18.5 million for 
cyber security R&D at NIST (up 48 percent). These are both significant 
increases but still well below the levels authorized in the Cyber 
Security Research and Development Act (P.L. 107-305).\4\ Within the DHS 
Science and Technology (S&T) Directorate, the FY05 budget requests $18 
million for cyber security R&D, the same level as in FY04.
---------------------------------------------------------------------------
    \4\ For FY05, NSF cyber security programs are authorized to be $128 
million and NIST cyber security programs are authorized to be $61 
million.

The National Earthquake Hazards Reduction Program (NEHRP): NEHRP is a 
multi-agency program administered by the Federal Emergency Management 
Agency (FEMA), U.S. Geological Survey (USGS), NIST, and NSF. The 
President's overall FY05 request for NEHRP is $114.5 million, including 
$45.7, $46.5, $20.5, and $1.8 million, respectively, for NSF, USGS, 
FEMA, and NIST. These amounts are roughly flat compared to FY04 levels. 
The House passed a reauthorization bill for NEHRP last year, which is 
pending in the Senate.
    Budget tables for NNI, NITRD, and CCSP are provided in Appendix I.

6. Agency R&D Highlights

National Science Foundation (NSF)

    The National Science Foundation is the primary source of federal 
funding for non-medical basic research conducted at colleges and 
universities and serves as a catalyst for science, technology, 
engineering, and mathematics education reform at all levels.
    The FY05 budget request for NSF is $5.75 billion, an increase of 
3.0 percent, or $167 million over the FY04 level. This is $1.6 billion 
below the funding level in the National Science Foundation 
Authorization Act of 2002 (P.L. 107-368). In the budget proposal, the 
largest percentage increases are for personnel and administrative 
initiatives, as well as construction of major research facilities. The 
Research and Related Activities (RRA) account, which contains the funds 
for most of NSF research grants programs, receives a 4.7 percent 
increase. However, actual spending on research programs would increase 
by only 2.8 percent because the Administration transfers into the 
research account funds that would be used to close out a discontinued 
education program.
    NSF continues to receive high marks from the Office of Management 
and Budget for the quality of its management and for the excellence of 
its programs. As in the FY04 budget request, NSF was awarded two green 
lights on the Executive Branch Management Scorecard. Also, in the past 
year, four NSF programs were examined using the Program Assessment 
Rating Tool (PART): Nanoscale Science and Engineering, Information 
Technology Research, Facilities, and Individuals (programs directed 
toward math, science, and engineering education and training of 
students at the K-12, undergraduate, and graduate levels). All received 
ratings of Effective (the highest rating), and the three continuing 
programs received substantial budget increases.\5\
---------------------------------------------------------------------------
    \5\ Nanoscale Science and Engineering is up 22 percent, Facilities 
is up 12 percent, and the ``Individuals'' category (programs focused on 
education and training) is up 11 percent. (All percentages compare the 
FY05 request with the FY04 enacted level.) The Information Technology 
Research program will be terminated in FY04, as scheduled.
---------------------------------------------------------------------------
Issues/Questions Raised by the FY05 Request for NSF

Education and Human Resources (EHR): In addition to eliminating the MSP 
program as discussed above, the FY05 budget request would cut other NSF 
education programs at the K-12 and undergraduate levels. For example, 
the Science, Mathematics, Engineering, and Technology Talent Expansion 
Program (known as STEP or the Tech Talent program) established in the 
National Science Foundation Authorization Act of 2002 (P.L. 107-368) 
would receive $15 million in FY05, a decrease of $9.85 million (40 
percent) from the FY04 enacted level of $24.85 million. Tech Talent 
funds innovative programs at colleges and universities designed to 
increase the number of American undergraduates completing degrees in 
math, science, and engineering. The Robert Noyce Scholarship Program, 
which was re-authorized in the 2002 Act, would receive $4 million in 
FY05, a decrease of $3.95 million (50 percent) from the FY04 enacted 
level of $7.95 million. The program offers scholarships to math and 
science majors at the junior and senior undergraduate level, and 
stipends to math and science professionals, who are seeking to become 
K-12 math and science teachers.

Major Research Equipment and Facilities Construction (MREFC): The FY05 
budget request proposes $213.27 million for this account, 37 percent 
above the FY04 level. The request includes three continuing projects 
and three new starts: National Ecological Observatory Network (NEON), 
Scientific Ocean Drilling Vessel (SODV), and Rare Symmetry Violating 
Processes (RSVP). The budget does not provide the rationale for 
starting these three projects from among those in the queue.

Organization and Management: Nearly half of the $167 million increase 
requested for NSF in FY05 is slated for the Salaries and Expenses (S&E) 
account. The FY05 budget requests $294 million for S&E, an increase of 
$75 million (34 percent) over the FY04 enacted level of $219 million. 
Most of the proposed increase for S&E--$47.1 million--would be used to 
buy or lease new computer and networking equipment and services. The 
budget does not explain the reason for the large increase. The budget 
does not request significant new funds for personnel, although staffing 
has not kept up with the increases in the number of grants being 
awarded, and the Inspector General has raised concerns about NSF's 
ability to manage grants with its existing staff.


Homeland Security R&D

Homeland Security R&D at the Department of Homeland Security (DHS)
    The budget requests $1.2 billion for R&D in DHS, a 15 percent 
increase over the FY04 enacted level. The primary focus of the DHS 
effort would continue to be on development ($750 million, or 62 percent 
of the total DHS R&D FY05 request), but the budget does propose a 
significant increase in funding devoted to basic research ($153 
million, up $106 million from FY04).
    Although R&D is also funded in other directorates, the bulk of the 
department's proposed R&D expenditures, about $1 billion, is requested 
for the DHS Science and Technology (S&T) Directorate, an increase of 
$126 million (14 percent) over the FY04 enacted level. Most of this 
increase is directed toward biological countermeasures activities, 
including an expansion of BioWatch\6\ coverage in high-threat cities, 
piloting an integrated warning and assessment system for bioattacks, 
and safety/compliance and security upgrades to the infrastructure of 
the Plum Island Animal Disease Center.
---------------------------------------------------------------------------
    \6\ BioWatch is a system of sensors in various cities that is 
designed to rapidly detect trace amounts of biological materials in the 
air so as to provide early warning of the release of a bioagent.
---------------------------------------------------------------------------
    The FY05 budget request proposes to commence consolidation of the 
department's R&D programs into the S&T Directorate by transferring of 
$24 million worth of R&D activities from the U.S. Coast Guard and from 
the Federal Air Marshal Service. Significant R&D programs would remain 
outside of the S&T Directorate, mainly the $154 million R&D program in 
the Transportation Security Administration.\7\
---------------------------------------------------------------------------
    \7\ The Homeland Security Act of 2002, which created DHS, requires 
the Transportation Security Administration to be maintained as a 
distinct entity through November 25, 2004.
---------------------------------------------------------------------------
    S&T Directorate funding is split among various technical portfolio 
areas, such as biological countermeasures, nuclear and radiological 
countermeasures, support of conventional DHS missions (such as the 
Secret Service), and threat and vulnerability testing and assessment 
(TVTA); a complete list of portfolios and their funding is provided in 
Table 2. Cyber security R&D, an element of TVTA, would receive $18 
million (the same level as in FY04).\8\
---------------------------------------------------------------------------
    \8\ At DHS, operational cyber security programs, such as national 
alerts about existing computer and network vulnerabilities and 
technical support for other federal agencies' implementation of cyber 
security activities, are located in the National Cyber Security 
Division of the Information Analysis and Infrastructure Protection 
Directorate, for which roughly $79 million (level funding) has been 
requested for FY05.
---------------------------------------------------------------------------
Homeland Security R&D at Other Agencies
    Approximately $2.4 billion is proposed for homeland security R&D 
programs in departments and agencies outside of DHS. The bulk of this 
funding, $1.7 billion (up 7.5 percent from FY04), is for biodefense 
programs at the NIH, such as basic research on infectious microbial 
agents, applied research on diagnostics, vaccines, and therapies, and 
construction of bio-safety facilities. The remaining funds 
(approximately $700 million) go to a number of other agencies, such as: 
EPA for research on detection of chemical and biological agents in the 
water supply (other homeland security R&D activities at EPA are cut, so 
this item may be controversial); the U.S. Department of Agriculture 
(USDA) for expanding the Nation's laboratory capabilities for animal 
disease diagnosis and research; DOD for detection systems, protective 
gear, and vaccines for biological and chemical agents; and DOE's 
National Nuclear Security Administration for research on detection and 
attribution of radiological and nuclear materials.
    In its first year of existence, the DHS S&T Directorate has begun 
to build relationships with other agencies and some successful 
coordination of projects has occurred. For example, DHS and NSF 
provided joint funding for a cyber security test bed, and DHS and NIST 
worked together on issuing standards for first responders' equipment.
Issues/Questions Raised by the FY05 Request for DHS

Balance Between Internal and External Programs within the S&T 
Directorate: The Science Committee is interested in the balance between 
R&D conducted within the Department and at national laboratories,\9\ 
and extramural R&D funded through a competitive, merit-reviewed grant 
process. The balance is not discernible in the FY05 budget request. The 
request for DHS S&T presents proposed funding levels by technical 
topic, not by organizational unit or research performer. No information 
is provided about how these funds will be expended--whether through 
programs at the national laboratories, grants to industry and others 
through Homeland Security Advanced Research Projects Agency (HSARPA), 
or through contracts for prototype development.
---------------------------------------------------------------------------
    \9\ National laboratories available for use by the DHS S&T 
Directorate include the DOE laboratories, the National Biodefense 
Analysis and Countermeasures Center, and the Plum Island Animal Disease 
Center.

Transitioning Technology from Development to Operations: The DHS S&T 
Directorate has responsibility for the full range of R&D, from basic 
research through prototype demonstrations. In order for the directorate 
to devote resources to all elements of the R&D process, successful 
technologies will have to be passed off to operational units within DHS 
or elsewhere. It is not clear, however, that the Directorate has a 
process in place to effect such transitions.



National Institute of Standards and Technology (NIST)

NIST's Laboratory Programs
    The FY05 budget requests $422 million for a wide range of research 
conducted at NIST laboratories in Gaithersburg, Maryland and Boulder, 
Colorado. The request is $85 million (22 percent) above the FY04 
enacted level of $337 million. This request is less of a jump than it 
initially appears. Congress cut the NIST laboratory programs by $22 
million in FY04, so some of the increase is needed simply to restore 
NIST to its former level. Another $25.7 million of the increase is for 
one-time expenses at the new Advanced Measurement Laboratory (see 
below). Another NIST has not provided a final assessment of the impacts 
of the FY04 appropriation, but it has estimated that 50 to 100 
scientists and technical staff may be laid off, and work at all labs 
will be reduced.

Cyber Security
    The FY05 budget requests $18.5 million for cyber security R&D at 
NIST, an increase of $6 million (48 percent) over the FY04 enacted 
level. With the additional funding, NIST would work with industry and 
government agencies to accelerate the development of more secure 
computer and communications infrastructure, and expand and develop 
stronger cryptographic standards for hand-held wireless technology.

Advanced Measurement Laboratory Equipment
    The Advanced Measurement Laboratory in Gaithersburg, Maryland is 
scheduled for completion this year. The requested increase for NIST's 
laboratory programs includes $25.5 million (non-recurring) to outfit 
the Advanced Measurement Laboratory with state-of-the-art metrology 
equipment required to maximize the usefulness of this facility. The 
ability of NIST to perform other research proposed for FY05, including 
that which would be funded by the President's requested $12 million 
increase for nanomanufacturing and nanometrology, will depend on the 
timely outfitting of this laboratory.

Advanced Technology Program (ATP) and Manufacturing Extension 
        Partnership (MEP)
    Both ATP and MEP are largely extramural (outside of the 
laboratories) grant programs administered by NIST. The goal of ATP is 
to provide grants in to ``bridge the gap between the research 
laboratory and the marketplace'' through grants to the private sector. 
ATP seeks to fund development of pre-competitive, emerging, and high-
risk technologies that promise significant benefit. MEP funds state and 
regional centers that help small U.S. manufacturers adopt advanced 
manufacturing technologies, techniques, and best business practices.
    The President's FY05 budget proposes to eliminate ATP. (The FY04 
enacted level for ATP is $179 million.) Unlike previous proposals to 
eliminate ATP, this budget provides no money for close-out costs, which 
include funds for completing multi-year awards made in previous years 
and continuing funding for internal NIST laboratory work related to ATP 
proposals.
    The request for MEP is $39 million, equal to the FY04 enacted 
level, which represents a 67 percent cut from the FY03 enacted level of 
$106 million. The dramatic reduction in MEP funding enacted for FY04 is 
expected to lead to the closure of a significant number of regional MEP 
centers. There are currently 60 MEP centers and 300 satellite offices.
Issues/Questions Raised by the FY05 Request for NIST

Impact of FY04 Enacted Budget on NIST's Core Laboratory Programs: NIST 
has not resolved how to implement the significant funding reductions 
for its core laboratory programs that were included in the FY04 enacted 
budget, including possible lay-offs and program reductions. It is not 
clear how these reductions will affect NIST's ability to undertake the 
new initiatives proposed in the FY05 budget request.

Impact of Proposed Elimination of ATP: The FY05 budget request proposes 
to eliminate ATP, but provides no funds to close out obligations 
incurred through multi-year ATP awards granted during the current 
fiscal year. These costs could be as high as $30 million. Moreover, ATP 
is expected to fund an estimated $13 million worth of R&D conducted at 
the NIST laboratories in FY04.

Impact of Scaling Back MEP: It is unclear how the MEP program would 
function at the levels proposed by the Administration. The 
Administration has already proposed to re-compete all centers, but it 
is unclear what criteria will be used, how many centers will be 
continued or created, or how they will be organized.



National Oceanic and Atmospheric Administration (NOAA)

    The FY05 budget requests $3.4 billion for NOAA, a decrease of $308 
million (8.3 percent) compared to the FY04 enacted level of $3.7 
billion. NOAA's FY04 budget includes approximately $540 million worth 
of Congressional earmarks. If earmarks are removed from the FY04 
baseline, then the President's budget could be construed as proposing 
an additional $230 million for NOAA in FY05.

National Weather Service
    The FY05 budget requests $837 million for the National Weather 
Service (NWS), an increase of $12 million (1.5 percent). The request 
reflects the transfer of two programs from the Office of Oceanic and 
Atmospheric Research (OAR) to NWS--the Space Environment Center ($7.5 
million request) and the U.S. Weather Research Program ($6.6 million 
request). NOAA's request for the Space Environment Center is an 
increase of $2.2 million over the FY04 enacted level of $5.3 million. 
The Subcommittee on Environment, Technology, and Standards held a 
hearing last year on the activities of the Center (which predicts the 
effects of solar storms) that helped establish the value of the Center 
to the Nation.

Climate Change Research
    The FY05 budget request includes a $13.5 million increase in 
climate change research and observations at NOAA. Most of the increase 
is to support the President's Climate Change Research Initiative 
(CCRI), which focuses on priority areas, such as ocean observations 
($11 million), aerosol research ($7 million), and carbon cycle research 
($6.5 million).

Satellite Acquisition
    The FY05 budget requests $898 million for satellite programs at 
NOAA. This request is a $71 million (8.6 percent) increase over the 
FY04 enacted level of $827 million. The increase is for procurement, 
acquisition, and construction of the next generation of weather 
satellites, and is in line with the long-term budget plans for these 
satellite systems. Polar weather satellites are vital for three- to 
seven-day weather forecasts, tracking of severe weather such as 
hurricanes, and for climate observations. In September 2003, the last 
of the current generation of polar satellites was severely damaged in 
an accident during construction. Unless this satellite can be repaired 
or replaced, there will be gap in polar weather satellite coverage of 
at least 21 months (the time until the next generation polar satellite 
is scheduled to be launched). A report assessing whether the satellite 
can be repaired and the costs associated with that repair is scheduled 
to be released in April.
Issues/Questions Raised by the FY05 Request for NOAA

Weather Satellite Coverage Gap: The Committee is concerned that the 
costs of repairing or replacing the satellite that was damaged during 
construction last year is not included in the FY05 request. If the 
satellite cannot be repaired and funding levels for the next generation 
is not increased significantly, there will be a gap in polar satellite 
coverage at the end of this decade. The current projection for the cost 
of the next generation polar satellite system has risen from $6.5 
billion to $7.4 billion, without taking into account the recent 
accident. The Committee has asked the General Accounting Office (GAO) 
to examine the costs and risks associated with NOAA's satellite 
program.

Organization of Research at NOAA: In the legislative reports 
accompanying the FY04 Commerce, State, Justice appropriations bills in 
the House and Senate, NOAA was asked to examine its research enterprise 
and deliver a report on (1) the costs and benefits of dissolving Office 
of Oceanic and Atmospheric Research (OAR) and distributing its 
activities among the other program offices, and (2) a plan for 
consolidating its laboratories. NOAA quickly assembled a subcommittee 
of its Science Advisory Board to examine the issue. The subcommittee 
provided its observations and recommendations to NOAA in January 2004. 
It appears that based on this review process, NOAA moved programs from 
OAR to NWS in the FY05 request. The Committee is concerned that NOAA is 
beginning to implement major structural changes to its research 
enterprise without fully examining the ramifications or consulting with 
the authorizing committees.



Department of Energy (DOE)

    The FY05 request for civilian R&D at DOE--$5.0 billion--represents 
a decrease of four percent from FY04 enacted levels.\10\ The 
Administration's top funding priorities for energy and science programs 
are hydrogen R&D, fusion, nanotechnology, and the programs of the 
Office of Electric Transmission and Distribution.
---------------------------------------------------------------------------
    \10\ Unlike the Administration's Federal Science and Technology 
Funding Table 5-3 on page 61 of Analytical Perspectives, these figures 
include the $140 million rescission from the Clean Coal Technology 
Account.
---------------------------------------------------------------------------
Office of Science
    The FY05 budget requests $3.43 billion for the Office of Science, a 
decrease of $68 million (two percent) from the FY04 enacted level. The 
Administration describes this as a two percent increase, if one 
excludes Congressional earmarks from the FY04 baseline. The budget is 
far below the $.1 billion level authorized in H.R. 6, the Energy Policy 
Act of 2003, which the House passed last year.
    The budget request includes funds to begin planning and 
construction of several major new facilities, such as the Linac 
Coherent Light Source, a Protein Production and Tags Facility, and the 
U. S. share of the International Fusion Experimental Reactor (ITER).
    The budget requests $264 million for fusion research, an increase 
of $1.6 million (0.6 percent) from the FY04 enacted level of $263 
million, but that increase is not large enough to accommodate U.S. 
participation in ITER in FY05 without cutting other existing parts of 
the fusion program.
    The FY05 budget request proposes significant decreases in funding 
for Biological and Environmental Research (BER)--$502 million 
requested, a decrease of $140 million (22 percent) from the FY04 
enacted level of $641 million. Much of the reduction in BER reflects 
elimination of earmarks or projects that have been completed. The 
budget also cuts the Science Laboratories Infrastructure account nearly 
in half--$29 million requested, a decrease of $25 million (46 percent) 
from the FY04 enacted level of $54 million.

Applied Energy Programs
    The budget continues the trend of cutting most energy efficiency 
and renewable programs to fund hydrogen research and weatherization. 
Excluding the hydrogen/FreedomCAR activities, efficiency and renewable 
R&D for FY05 is $656 million, a cut of ten percent ($72 million) from 
the FY04 enacted level of $727 million.
    In fossil energy, the budget increases coal programs by $108 
million (60 percent), primarily to fund the FutureGen project, which 
would build a new coal plant to experiment with the sequestration of 
carbon dioxide. These increases come at the expense of the stationary 
fuel cell program (Distributed Generation), cut by $49 million (68 
percent), to $23 million; as well as other coal programs. The budget 
proposes to rescind the funds for several Clean Coal projects that 
never got off the ground and to close the Clean Coal Technology 
account, moving most of the money to the base Fossil R&D program. This 
follows what the appropriators have been doing piecemeal for several 
years.
    Oil and gas programs are also cut: oil technology by 57 percent 
(^$20 million, to $15 million) and gas technology by 39 percent (^$17 
million, to $26 million). These two programs were among the few rated 
ineffective by OMB using its Program Assessment and Rating Tool (PART).
    The new Office of Electric Transmission and Distribution receives a 
$10 million increase (13 percent, to $91 million), half of which is for 
R&D programs, and half of which is for program direction for personnel 
increases. Despite the increased resources, some elements of the Office 
were cut. Electricity storage R&D, vital to emerging technologies such 
as wind, fuel cells, and solar-generated electricity, is cut by $5 
million (56 percent, to $4 million). (The sister program in EERE--
Distributed Energy--cited by witnesses at a September 2003 Energy 
Subcommittee briefing as being crucial for reliability--is cut by 13 
percent (to $53 million) ).
    In the nuclear area, large increases for Idaho facilities 
management (up $33 million, 43 percent) come at the expense of nuclear 
energy R&D, which receives a 26 percent cut (^$34 million, to $96 
million) in the budget.
Issues/Questions Raised by the FY05 Request for DOE

Physical Science Research: Funding for the physical sciences has 
remained essentially flat for at least a decade. The proposed cuts to 
the Office of Science--the single largest source of federal funds for 
civilian physical science R&D--continue the pattern even though the 
Administration had signaled that physical science and engineering 
research activities would be given additional consideration during the 
FY05 budget cycle.

Twenty-year Facilities Plan: The Office of Science recently released a 
20-year plan for the acquisition and construction of experimental 
facilities for the physical sciences. That plan was based on the budget 
numbers contained in H.R. 6, the Energy Policy Act of 2003. While the 
budget proposes to move forward with several of these facilities, 
including ITER, the Protein Production and Tag Facility and Linac 
Coherent Light Facility, the budget request for DOE's Office of Science 
declines in the face of these increasing future facility commitments, 
raising questions about the ability to meet these long-term goals 
without reducing existing programs.

Third-Party Financing for Science Infrastructure: The cuts to DOE's 
Science infrastructure funding run counter to complaints from the 
scientific community about deteriorating facilities throughout DOE's 
complex of laboratories. The Administration says that its current plan 
is to have new facilities built and owned by private entities, with DOE 
as the tenant. This approach can increase the cost to the government 
over the life of the building (even though it reduces up-front costs). 
Third party financing can also create incentives that can distort the 
activities of government programs to meet the needs of building owners.

Hydrogen R&D: The budget requests a significant increase for R&D on 
infrastructure for hydrogen as a fuel for transportation, to be offset 
by cuts in energy efficiency R&D, the area of research that likely has 
the most rapid payoff in terms of reducing our dependence on imported 
energy. The recently released National Academies of Science (NAS) 
study, The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D 
Needs, emphasizes that hydrogen R&D efforts need to be approached in a 
systems analysis framework to ``integrate them with other DOE energy 
efforts.'' The report also notes that fuel cell technology necessary 
for transportation is at least a decade away, and the budget sends 
conflicting signals, cutting funding for stationary fuel cells and 
increasing funding for transportation fuel cells and basic research. 
This report raises additional questions regarding the coordination and 
execution of this long-term effort.

FutureGen: The budget makes a $237 million commitment to the 
controversial FutureGen project, which would build a new coal power 
plant to demonstrate the sequestration of carbon dioxide in geological 
formations. The Department's plans for the project include cutting-edge 
equipment throughout the facility, which will both raise the cost and 
increase the chances of failure. Further, the Administration's proposed 
legislative language would remove taxpayer protections, such as cost 
sharing, from the project requirements.



7. Witnesses Questions

    Witnesses have been asked to:

        1.  Review the R&D budget request in the context of the 
        Administration's overall priorities in science and technology.

        2.  Describe the mechanisms that the Administration uses to 
        determine priorities across scientific disciplines.

        3.  Describe the mechanisms the Administration uses to 
        coordinate its scientific research and technical development 
        activities with other federal agencies.

APPENDIX I: Budget Charts for Selected Interagency Programs



    Chairman Boehlert. The hearing will come to order. I want 
to welcome everyone here this morning to our first meeting of 
2004. And in this capacity, I want to welcome Mr. Gordon of 
Tennessee as the Ranking Member of the Committee. Mr. Gordon, 
welcome to your new position.
    Despite the House schedule, we will still have our second 
hearing of the year tomorrow. As you know, we are not in 
session tomorrow, but we will have the hearing with 
Administrator O'Keefe and Dr. Marburger.
    Both hearings concern what will be the issue of the year in 
Congress: the federal budget. I just came from the House 
Republican conference meeting on the budget, and I can assure 
you that this will be an interesting and difficult year. I 
think my views on the proposed R&D budget for fiscal year 2005 
are already pretty well known. On the one hand, I understand 
that the Administration's goal was to protect science in a very 
austere budget environment, and I appreciate that, and I want 
to work with them on that. But on the other hand, we are not 
doing well enough.
    Now I say this is not a good budget for science, but we 
still don't know whether it is the best budget we can get. That 
is going to depend much more on the overall macro decisions 
that Congress makes on the budget than on anything else. It is 
far too early to tell how things will work out. All I know is 
that I will be doing everything I can to see that science 
prospers. It is one of the best investments we can make in our 
economy for the future.
    In particular, I would like to see a larger increase for 
the National Science Foundation and an increase for the 
Department of Energy's Office of Science. The House is on 
record as supporting far greater increases for those agencies, 
and I know that the Administration will do more for them in a 
less constrained environment. I also want to see the Math and 
Science Partnership Program remain at the National Science 
Foundation, where it unquestionably belongs, and where it is 
likely to do the most good.
    And I will be putting a great deal of energy into backing 
the substantial increases the President has proposed for the 
Laboratories at the National Institute of Standards and 
Technology. We have to reverse the bad decisions on NIST that 
this Congress ratified on the omnibus spending bill and move 
forward. I would like to see the Advanced Technology Program 
and the Manufacturing Extension Program, both programs that I 
helped to create, be part of that moving forward.
    And of course, we will continue to work with the Science 
and Technology Directorate of Homeland Security, which this 
committee created, to make sure that they continue the steady 
progress that they have made since coming into being under the 
fine leadership of Chuck McQueary.
    But not everything will be determined by what I like. For 
example, I would like Rita Colwell to stay on longer as NSF 
Director, but we know that today will be her final hearing 
before us in her current position. I thank her for her years of 
service, and I know we will continue to seek her counsel as she 
returns to the University of Maryland and also takes on new 
challenges.
    And just let me read a small portion of the Committee's 
Charter for this hearing, because I think it speaks so well to 
the stewardship of Dr. Colwell. ``NSF continues to receive high 
marks from the Office of Management and Budget for the quality 
of its management and for the excellence of its program. As 
part of the fiscal year 2004 budget request, NSF was awarded 
two green lights on the Executive Branch Management Scorecard. 
Also, in the past year, four NSF programs were examined using 
the Program Assessment Rating Tool, PART as we call it. All 
received ratings of Effective, which is the highest rating, and 
the three continuing programs received substantial budget 
increases.''
    I would like to pause at this moment and ask all of you to 
join me and thank Dr. Colwell for her outstanding public 
service.
    To show you the great lengths she will go to in her 
service, just about a year ago at this time, we were at the 
South Pole together to observe the construction of a new 
research facility at the bottom of the Earth. And it was a 
meaningful experience for me, and I hope for you, Dr. Colwell.
    I also want to welcome Arden Bement back to the National 
Science Foundation where he used to serve on the National 
Science Board. We want Arden back at NIST as soon as possible, 
but we know that NSF will be in good hands under his 
leadership. One article in the Trade Press yesterday pointed 
out that Arden is low-key. In this case, that is a synonym for 
``quietly effective.'' He needs no bombast to demonstrate his 
leadership.
    So today, we mark some significant changes in the agencies 
we oversee. I hope that one of those changes will turn out to 
be that this hearing marks the beginning of taking positive 
steps toward more adequate funding for science. Thank you.
    Mr. Gordon.
    [The prepared statement of Chairman Boehlert follows:]

            Prepared Statement of Chairman Sherwood Boehlert

    I want to welcome everyone here this morning for our first hearing 
of 2004. Despite the House schedule, we will still have our second 
hearing of the year tomorrow with Administrator O'Keefe and Dr. 
Marburger. Both hearings concern what will be the issue of the year in 
Congress, the federal budget. I just came from the House Republican 
Conference meeting on the budget, and I can assure you that this will 
be an interesting and difficult budget year.
    I think my views on the proposed R&D budget for fiscal 2005 are 
already pretty well known. On the one hand, I understand that the 
Administration's goal was to protect science in a very austere budget 
environment, and I appreciate that. On the other hand, it's impossible 
to seriously view this as a good budget for science. Now, I say that 
this is not a good budget for science, but we still don't know whether 
it's the best budget we can get. That's going to depend much more on 
the overall ``macro'' decisions the Congress makes on the budget than 
on anything else. It's far too early to tell how things will work out. 
All I know is that I will be doing everything I can to see that science 
prospers.
    In particular, I'd like to see a larger increase for the National 
Science Foundation (NSF) and an increase for the Department of Energy's 
Office of Science. The House is on record as supporting far greater 
increases for those agencies, and I know that the Administration would 
do more for them in a less constrained environment.
    I also want to see the Math and Science Partnership program remain 
at NSF, where it unquestionably belongs and where it is likely to do 
the most good.
    And I will put a great deal of energy into backing the substantial 
increase the President has proposed for the laboratories at the 
National Institute of Standards and Technology (NIST). We have to 
reverse the bad decisions on NIST that this Congress ratified in the 
Omnibus Spending bill and move forward. I'd like to see the Advanced 
Technology Program and the Manufacturing Extension Program--both 
programs I helped create--be part of that moving forward.
    And, of course, we will continue to work with the Science and 
Technology Directorate of Homeland Security, which this committee 
created, to make sure they continue the steady progress they've made 
since coming into being under the fine leadership of Chuck McQueary.
    But not everything will be determined by what I'd like. For 
example, I'd like Rita Colwell to stay on longer as NSF director, but 
we know that today will be her final hearing before us in her current 
position. I thank her for her years of service, and I know we will 
continue to seek her counsel as she returns to the University of 
Maryland and also takes on new challenges. And I want to welcome Arden 
Bement back to the National Science Foundation, where he used to serve 
on the National Science Board. We want Arden back at NIST as soon as 
possible, but we know that NSF will be in good hands under his 
leadership. One article in the trade press yesterday pointed out that 
Arden is ``low key.'' In this case, that's a synonym for ``quietly 
effective.'' He needs know bombast to demonstrate his leadership.
    So today we mark some significant changes in the agencies we 
oversee. I hope that one of those changes will turn out to be that this 
hearing marks the beginning of taking positive steps toward more 
adequately funding our agencies.
    Mr. Gordon.

    Mr. Gordon. Thank you, Mr. Chairman.
    I want to join Chairman Boehlert in welcoming our panel to 
this morning's hearing.
    I am also going to be as blunt as the Chairman has been in 
also expressing my disappointment in the proposed science 
budget. I am also distressed about the lack of foresight that 
the Administration has shown in putting together this R&D 
budget. It is simply inadequate in light of the challenges that 
we are facing.
    The evidence is growing every day that our nation is moving 
into a very difficult period of economic challenges. I don't 
think that anyone on this dais, on the witness panel, or even 
this room fully understands the dynamics of the economic forces 
that are operating in the world today.
    We do know, however, that the international competition is 
intensifying. And we know that job security is increasingly 
shaky as more jobs, including many high-tech jobs, are being 
outsourced to other countries. Many of our economic competitors 
are training enormous numbers of scientists and engineers, 
which only complicates their existing advantages in wage 
scales--or complements their existing advantages in their wage 
scales.
    We need to respond aggressively to these challenges by 
staying in the forefront of technology and by providing our 
young people and our older workers with the best education and 
training that we can. And I am afraid that the budget before us 
today does not secure that future.
    Dr. Marburger will tell us today that his budget proposes 
to spend more on R&D than any budget in history. And that is 
technically true, but the biggest part of his R&D increase is 
for weapons development, which does very little for the broader 
economy. A better measure of R&D funding is the so-called 
``Federal S&T Budget,'' which includes civilian R&D and defense 
R&D, but not weapons development. And on page 61 of the 
Administration's own budget document under the Federal Science 
and Technology budget, it shows a decrease of 0.4 percent in 
proposed R&D funding. In other words, if this budget were 
enacted, the fiscal year 2005 Federal S&T budget would actually 
decline from 2004 levels. That is simply the wrong direction. 
The Federal R&D spending, as a percentage of GDP, would be at 
historic lows.
    I would simply suggest that we can and must do better as a 
Nation than adopting a declining budget for Federal S&T.
    Let me mention one specific area that I think this budget 
falls woefully short: dealing with the loss of manufacturing 
jobs in this country. After the President unveiled his 
manufacturing initiative last month, I expected this budget 
would contain some thoughtful new initiatives in this area. But 
unfortunately, I was wrong.
    The Manufacturing Extension Program, probably the most 
effective federal program at providing immediate aid to U.S. 
manufacturers, is slashed severely. The ATP is eliminated and 
the technology transfer programs at NASA and DOE are cut. These 
are not wise proposals at a time when the U.S. manufacturers 
are in a crisis.
    Mr. Chairman, we all understand that fiscal restraint is a 
necessity. However, it is more important now than ever that the 
United States remain the world's leader in innovation. This 
country must invest in the future and do everything possible to 
ensure that America does not lose its place as the leader in 
international innovation and R&D.
    And in closing, Mr. Chairman, if I could simply relate a 
meeting that happened in my office the other day. Some folks 
came in, and like many, they were very concerned about jobs 
being outsourced to the rest of the world. And they said, 
``Well, how do we slow down technology so that this outsourcing 
won't happen any longer?'' And I said, you know, ``We don't do 
that by slowing it down; we have to speed it up. We have to 
increase our investment in R&D and research so that we are a 
generation or two generations ahead of them. That is how we 
stop jobs from going overseas is by speeding up, not slowing 
down.''
    And with that, Mr. Chairman, I yield back the balance of my 
time.
    [The prepared statement of Mr. Gordon follows:]

            Prepared Statement of Representative Bart Gordon

    I want to join Chairman Boehlert in welcoming our panel to this 
morning's hearing.
    I am going to be as blunt as the Chairman has been today in 
expressing my disappointment in the proposed science budget. I am also 
distressed about the lack of foresight that the Administration has 
shown in putting together this R&D budget. It is simply inadequate in 
light of the challenges that we are facing.
    The evidence is growing every day that our nation is moving into a 
very difficult period of economic challenges. I don't think that anyone 
on this dais, on the witness panel, or even in this room fully 
understands the dynamics of the economic forces that are operating in 
today's world.
    We do know, however, that international competition is 
intensifying. And we know that job security is increasingly shaky as 
more jobs, including many high-tech jobs, are being out-sourced to 
other countries. Many of our economic competitors are training enormous 
numbers of scientists and engineers, which only complements their 
existing advantages in wage scales.
    We need to respond aggressively to these challenges by staying on 
the forefront of technology and by providing our young people and our 
workers with the best education and training that we can. I am afraid 
that the budget before us today does not secure that future.
    Dr. Marburger will tell us today that this budget proposes to spend 
more on R&D than any budget in history. That is technically true, but 
the biggest part of this R&D increase is for weapons development, which 
does very little for the broader economy. A better measure of R&D 
funding is the so-called ``Federal S&T Budget,'' which includes 
civilian R&D and defense R&D, but not weapons development. On page 61 
of the ``Analytical Perspectives'' document from this year's budget, 
the Administration's own budget document actually shows a decrease of 
0.4 percent in proposed R&D funding. In other words, if this budget 
were enacted, the FY 2005 ``Federal S&T Budget'' would actually decline 
from the 2004 levels. And Federal R&D spending, as a percentage of GDP, 
would be at historically low levels.
    I would simply suggest that we can and must do better as a nation 
than adopting a declining budget for Federal S&T.
    Let me mention one specific area where I think this budget falls 
woefully short--dealing with the loss of manufacturing jobs in this 
country. After the President's unveiled his manufacturing initiative 
last month, I expected that this budget would contain some thoughtful 
new initiatives in this area. Instead, we get more of the same old 
rhetoric.
    The Manufacturing Extension Program--probably the most effective 
federal program in providing immediate help to U.S. manufacturers--is 
slashed severely. The Advanced Technology Program is eliminated and 
technology transfer programs at NASA and DOE are cut. These are not 
wise proposals when at a time when U.S. manufacturing is in crisis.
    Mr. Chairman, we all understand that fiscal restraint is a 
necessity. However, it is more important now than ever that the United 
States remain the world's leader in innovation. This country must 
invest in its future and do everything possible to ensure that America 
does not lose its place as the leader in global innovation and R&D.

    Chairman Boehlert. Thank you very much.
    So it will be clear to everyone, based upon my remarks, I 
am not advocating that we add to the deficit, I am--and that is 
very Republican of me, I suppose, but I am suggesting that some 
of the priorities need to be addressed so that we get the 
funding that we need for the important programs we are going to 
be discussing today. And I would point out to one and all that 
the ten years of unprecedented growth in our economy in the 
'90's into the new century, quarter after quarter, year after 
year of growth was largely driven by the investment this Nation 
made in technology. It is an information and technological age, 
and we have to continue that. That is how we best prepare 
ourselves to address the challenges from all points of the 
globe.
    With that, without objection, all Members have leave to 
submit their record--statements into the record at this 
juncture.
    [The prepared statement of Mr. Smith follows:]

            Prepared Statement of Representative Nick Smith

    I want to thank all of the witnesses for appearing before the 
Committee today to help us review the President's FY05 budget request 
for R&D. I also want to welcome Mr. Hall to our side of the room and 
extend my best to his replacement Mr. Gordon. I look forward to working 
with both of you in your new capacities.
    I'd also like to welcome Dr. Rita Colwell, take this opportunity to 
thank her for her exceptional service as Director of the National 
Science Foundation, and wish her success in her new rolls in the 
private sector and as a distinguished professor at the University of 
Maryland. Rita has successfully guided NSF through a period of 
significant change and expansion. Since I became Chairman of the 
Research Subcommittee, she and I have worked closely and cordially to 
ensure that NSF remains the gem federal research agencies.
    The overall R&D budget request before us today is, in short, a 
continuation of what we have seen in the last two or three years. The 
top-line increase is about five percent, with the largest portion of 
those increases going toward defense and homeland security. The non-
defense, non-homeland security R&D budget increase is just over two 
percent--disappointing, yet not unexpected, and still higher than 
overall non-defense discretionary spending.
    I want to preface my remarks this morning with some thoughts on the 
larger budget picture, as our ability to address our priorities in the 
R&D budget will be substantially dictated by the budget situation at a 
macro level.
    We are facing a massive and ever-increasing debt, and a record 
deficit of $535 billion for the next fiscal year. To be fair, some of 
this plunge into deficits has been the result of events largely beyond 
our control--primarily the general downturn in the economy that began 
in March of 2000, coupled with the substantial impact of the 9/11 
attacks on defense spending and general revenues. Still, spending on 
non-security discretionary items has been out of control, rising at 
more than three times the rate of inflation over each of the last three 
years.
    As we begin the legislative year and sort through the budget, there 
will be a great deal of discussion on how to address these problems. 
There is, I think for the first time in years, a clear sense that the 
spending binge of the last few years has resulted in a spending 
hangover. To that end, many members, including myself, will be pushing 
for a freeze on non-defense, non-homeland security funding, and even in 
these areas, any increases need to be balanced with reductions in other 
areas.
    I will continue to support increases for leading R&D agencies such 
as NSF. Significant new investment in NSF--a true model of government 
efficiency--is quite important to our long-term economic and national 
security, and I will work to see that NSF's budget more closely 
reflects the guidance set forth in my reauthorization legislation of 
2002.
    Funding increases that would allow NSF to meet its goals could be 
accomplished by reducing increases in other areas such as NASA, NIH, 
and elsewhere. First and foremost, I believe, should be stopping the 
reckless practice of earmarking our R&D funds. As noted in the 
President's budget, academic earmarking continues to break records, 
skyrocketing from just $296 million in 1996 to over $2 billion today. 
This increase--$1.7 billion--is more than the current shortfall between 
the NSF budget request and the authorized level for FY 2005. We need to 
make a better effort to spend those funds on only the best 
investigator-driven competitive research.
    Another area that demands critical evaluation is our space program. 
We must remember that if NASA funding increases by $12.6 billion over 
the next five years for substantial new long-term efforts in space 
exploration as the President has proposed, it will come at the expense 
of other priorities.
    I'd also like to express my serious concerns about the President's 
proposal to eliminate the promising Math and Science Partnership (MSP) 
Program at NSF. I have the pen that the President used to sign this new 
initiative into law just 14 months ago. The program intends to create 
real and lasting reforms in math and science education. I think this is 
critical to producing a technologically literate and innovate workforce 
of tomorrow, and it should be continued in the National Science 
Foundation. I feel so strongly about the importance of math and science 
education that I will be introducing legislation to establish a 
national recognition award program for companies and associations that 
do exceptional work to promote math and science in our K-12 schools. 
The administration's budget does not even attempt to provide a 
rationale for the elimination of MSP. If there are aspects of the 
program that are troubling, they should be addressed, and I am willing 
to work to see that is done. However, in the meantime, let us not 
jeopardize the success of this program.
    I want to thank the Chairman for holding this hearing today, and I 
look forward to a productive discussion.

    [The prepared statement of Mr. Ehlers follows:]

         Prepared Statement of Representative Vernon J. Ehlers

    The President's FY 2005 budget request reflects several pressing 
national priorities, including the continuing war on terrorism, 
facilitating economic stimulus, and maintaining fiscal responsibility. 
The Congress will have many difficult choices to make in order to 
balance these priorities, control the deficit and implement our 
considerable domestic spending commitments.
    In making these choices, we must not overlook the fact that 
scientific research and development underpins all of these priorities. 
Scientific research and development forms the foundation of increased 
innovation, economic vitality and national security. Scientific 
research is an investment that promises, and has historically 
delivered, significant returns on that investment.
    For the past several years, research and development funding for 
defense, weapons development, biomedical sciences, and national 
security has increased while other areas of federal research and 
development, especially basic research in the physical sciences, has 
remained flat or declined. The President's FY 2005 request of $132 
billion for research and development continues this trend.
    Basic science research and education are essential to advances in 
medicine, military applications and continued economic prosperity, 
including the development of cancer therapies, GPS- or laser-guided 
missiles, and the Internet. As a nation, we cannot afford to starve 
basic science research and education.
    I want to particularly emphasize three science research and 
development programs that deserve Congress' utmost attention: the 
National Science Foundation, the National Institute of Standards and 
Technology, and the Department of Energy's Office of Science.
    The FY 2005 request of $422 million for NIST's labs is an $85 
million (22 percent) increase over the levels enacted in FY 2004. But, 
it is important to note that NIST's FY 2004 enacted budget was $22 
million below the FY 2003 appropriation, primarily due to significant 
cuts in NIST's core laboratory account. I believe that the FY 2005 
request for NIST's labs should be considered the absolute minimum 
required for NIST to carry out its critical research activities. Much 
of the technology we use every day can be tied to research done by 
scientists at NIST. For example, work at NIST's labs supports our 
nation's efforts to improve cyber security, building safety, and voting 
technology--three areas where this committee recently recognized the 
high-quality work that NIST performs by expanding NIST's authorizations 
for these topics. For our nation to remain competitive in a high-tech 
world, we must support these research programs that will provide the 
foundation for future scientific advances.
    I am very concerned about the FY 2005 request for the Manufacturing 
Extension Partnership (MEP) program. The FY 2004 appropriation cut the 
funding for MEP by more than 65 percent. My constituents have expressed 
dismay that the FY 2005 request did not seek to restore this cut, and I 
fear that the FY 2005 request, if funded at this level, will continue 
to cripple this unique program's ability to promote innovation among 
small- and medium-size manufacturers as they adapt to the globalized 
economy.
    The National Science Foundation (NSF) is the only federal agency 
dedicated solely to supporting basic scientific research and math and 
science education. NSF represents four percent of the total federal R&D 
budget, yet it accounts for 45 percent of non-life science basic 
research at U.S. academic universities. In 2002, Congress passed the 
National Science Foundation Authorization Act of 2002 (P.L. 107-368) 
and made a commitment to double NSF funding over five years. The FY 
2005 budget request for NSF is $5.75 billion. Although this is an 
increase of three percent, it falls $1.6 billion below the authorized 
funding level necessary to complete our doubling commitment.
    NSF is the primary federal supporter of science and math education; 
it underwrites the development of the next generation of scientists and 
engineers. In the FY 2005 budget request, many of the education 
programs at the K-12 and undergraduate level will be cut. The Math and 
Science Partnership (MSP) program will be eliminated from NSF and 
merged with a Department of Education program that focuses only on 
mathematics for secondary school students. These budget choices 
seriously undercut our efforts to improve math and science education 
and to ensure that America has an educated workforce capable of 
competing in the global economy.
    The Department of Energy, Office of Science funds 40 percent of our 
nation's physical science research. Research in these areas has led to 
new economic and medical advancements including new energy sources, 
cell phones, and laser surgery. In constant dollars, physical science 
research funding has remained at 1993 levels while biological research 
has more than doubled in that same time. We must bring funding for the 
physical sciences into balance with that of the life sciences. The FY 
2005 budget request of $3.43 billion for the Office of Science--a 
decrease of two percent from the FY 2004 enacted level--does not 
achieve that goal.
    FY 2005 will be a tough budget year. Significant sacrifices and 
compromises in spending must be made. We must not, however, sacrifice 
the research and education which future generations will need to ensure 
their economic prosperity and domestic security.

    [The prepared statement of Mr. Costello follows:]

         Prepared Statement of Representative Jerry F. Costello

    Good morning. I want to thank the witnesses for appearing before 
our committee to discuss the President's FY05 Budget for Research and 
Development. Today's hearing serves as an opportunity for oversight of 
certain departmental programs. As you are aware, a number of trends 
spotted in last year's budget submission are seen again in the FY05 
budget, including reversal of the trend toward parity in defense and 
non-defense R&D, the marginal increase in the National Science 
Foundation budget, and targeting of cooperative government-industry 
programs for cuts.
    There are a number of new initiatives that build upon the current 
direction in scientific research, as well as a number of previous 
initiatives that have been introduced in a new format.
    The Department of Energy's Fossil Energy Research and Development 
program impacts my congressional district because the coal industry is 
of great importance to the economy and livelihood of my constituents in 
Southern Illinois. As you may know, this area is rich in high-sulfur 
coal. The shifting of production to low-sulfur coal has cost many of my 
constituents high-paying jobs. I welcomed the inclusion of $237 million 
for the FutureGen clean coal power plant project. Further developing 
the technology to burn coal as cleanly as possible is a great national 
investment and it will benefit the economy of Southern Illinois. I have 
led the effort to locate FutureGen in Illinois, including leading a 
bipartisan effort in the House to secure funding for the project. I 
also hosted a roundtable discussion regarding FutureGen and what it 
means for Illinois with Governor Blagojevich, U.S. Senators Durbin and 
Fitzgerald, and U.S. Congressman John Shimkus. Dr. C. Lowell Miller, 
Director of the Office of Coal Fuels and Industrial Systems at the 
Department of Energy, made a presentation on the specifics of the 
project. Implementing the coal research program, which includes the 
clean coal technology program and FutureGen, is significant to my 
district, and I look forward to learning more about planned spending in 
this area.
    I am displeased to see the Advanced Technology Program was 
eliminated and the Manufacturing Extension Program (MEP) was 
significantly cut in the President's budget. The Illinois Manufacturing 
Extension Center (IMEC) has worked with 362 small and mid-sized 
manufacturers. These companies reported that they expected to achieve 
$165 in benefits for every dollar they invested in IMEC services. In 
all, these manufacturers reported more than $346 million in sales, cost 
savings, and productivity. The FY05 budget will leave the MEP Centers 
struggling to survive rather than focused on what they do best: helping 
businesses increase competitiveness, efficiency and productivity- 
exactly what our economy needs to get back on track.
    Finally, I am also displeased to see that most accounts under 
Renewable Energy Resources remain flat, decreased, or were eliminated. 
Non-fossil energy sources including ethanol, solar power, and wind 
energy are extremely important initiatives and I believe we should 
dedicate more resources toward these programs.
    I welcome our panel of witnesses and look forward to their 
testimony.

    [The prepared statement of Ms. Johnson follows:]

       Prepared Statement of Representative Eddie Bernice Johnson

    Thank you, Mr. Chairman. I also would like to thank our witnesses 
for agreeing to appear before us today. The purpose of this hearing is 
to provide an opportunity to explore issues affecting the entire 
Research and Development (R&D) budget.
    I am very excited about this hearing today because we will be 
discussing something that is very close to my heart, and that is 
National Science Foundation (NSF) funding.
    Two years ago, Congress sent the President a bill authorizing a 
doubling of NSF's program over five years. Despite signing that bill to 
glowing reviews, the President has sent us three successive budgets 
that fall far short of reaching that goal. This marks a fundamental 
breach of trust with our institutions of higher education and with our 
children, who depend on NSF to fund the best and brightest to pursue 
the most promising scientific insights. The only thing more surprising 
is the 18 percent cut to the education and human resources budget 
account from an administration that has claimed education of our youth 
as one of its rhetorical hallmarks.
    There must be a balance between research in the biomedical sciences 
and research in the physical sciences and engineering. There must also 
be policies for achieving balance between the dissemination of research 
results with national security needs.
    All of this is imperative so that the policies and programs meet 
the future human infrastructure needs of the Nation in science and 
engineering.
    Thank you, Mr. Chairman.

    Chairman Boehlert. And we will go right to our 
distinguished panel of outstanding witnesses, friends to all 
and resources to all: Dr. John H. Marburger III, Director, 
Office of Science and Technology Policy, and affectionately 
referred to as the Science Advisor to the President; Dr. Rita 
R. Colwell, Director of the National Science Foundation; Dr. 
Charles E. McQueary, Under Secretary for Science and 
Technology, Department of Homeland Security. And Dr. McQueary, 
we take great pride in this committee in adding to the proposal 
from the Administration. We detected a void, and we filled that 
void by creating your operation. And I think you are serving 
admirably, and we look for great things from you. An old 
friend, long-standing, Phillip J. Bond, Under Secretary of 
Commerce for Technology, and Dr. Raymond L. Orbach, Director, 
Office of Science, Department of Energy. And it surprises none 
of you to know that you are in friendly territory.
    With that, we will start with Dr. Marburger. You are up, 
sir.

  STATEMENT OF DR. JOHN H. MARBURGER III, DIRECTOR, OFFICE OF 
                 SCIENCE AND TECHNOLOGY POLICY

    Dr. Marburger. Thank you, Mr. Chairman. It is a great 
pleasure to be here to discuss the President's 2005 budget for 
R&D this year with the Committee, but before I do, I would like 
to add my praises to yours for Rita Colwell's many years of 
service to American science, years that are not yet over. I 
have been aware of Dr. Colwell's plans for some time, and they 
are very exciting. I leave it to her to elaborate on them, but 
I am sorry that she is leaving. She is leaving an agency that 
has expanded greatly in size and in the level of excellence 
under her leadership, and I look forward to seeing her products 
in the future and helping to make careers like her's possible 
for other scientists throughout the Nation. So thanks, Rita.
    The President's fiscal year 2005 budget request commits 
13.5 percent of the total discretionary outlays to research and 
development, which is the highest level in 37 years. Not since 
1968, during the Apollo program, have we seen an investment of 
this magnitude in federally funded R&D. Of that amount, the 
budget commits fully 5.7 percent of total discretionary outlays 
to non-defense R&D, which is the third highest level in 25 
years.
    Under this proposed budget, the total R&D investment over 
the four years of this Administration would be increased by 44 
percent to a record $132 billion in 2005, compared to $91 
billion in 2001. This substantial investment is reaping 
benefits in American scientific and technological leadership. 
We are a stronger Nation--more formidable in defense, more 
productive in labor--and we are more effective and healthier 
individuals because of our willingness to invest in basic and 
applied research and technical development. President Bush 
understands that science is the basis for innovation and 
innovation is the basis for a secure Nation and a strong 
economy.
    President Bush is also determined to control the deficit 
and reduce it as the economy continues to grow, while ensuring 
that our national security needs are met. Funding the Nation's 
expanding security needs while limiting non-security budget 
growth to less than 0.5 percent will lead to smaller increases 
for other categories, including some R&D programs. This 
situation increases the need for careful planning, 
prioritization, and implementation of our research and 
development programs. The President's R&D budget for this year 
targets opportunities and needs in a balanced and disciplined 
way, and my colleagues and I welcome your support, and need it, 
to realize the benefits for America implicit in this proposal.
    I don't have too much time this morning. I have many 
colleagues that can fill in gaps, so I will only say a few 
details about the agencies and provide an overview.
    Of this $132 billion R&D budget, it is true that programs 
in the Department of Defense account for about half, and 
programs administered by the National Institutes of Health 
account for nearly half of the remainder. These agencies are 
not represented on today's panel, but with 3/4 of the R&D 
budget, they obviously have a large impact on the Nation's 
science and technology activities. I mention them here, because 
they do participate in the interagency coordination for which 
my office is responsible, and their contributions are essential 
for a balanced and effective R&D effort.
    Here are the increases that are proposed in this budget--
the changes in this R&D budget for the largest agencies. The 
Department of Defense is up seven percent from the 2004 enacted 
level. Health and Human Services is up four percent, of which 
$28.6 billion goes to NIH, which is an increase of 2.6 percent. 
NASA's budget will increase 5.6 percent to $16.2 billion. NSF's 
budget will increase three percent to $5.75 billion. The 
portion of the Department of Energy Office of Science budget 
not impacted by congressional earmarks is increased by 3.3 
percent. All of these increases substantially exceed the 
average domestic discretionary budget increase of 0.5 percent 
for non-security related activities.

    Mr. Chairman, this reference to earmarks in the Department 
of Energy's Science budget points to an issue that is 
highlighted once again in the narrative of the President's 
budget request. In 2003, earmarks accounted for eight percent 
of all federal research funding to colleges and universities. 
The existence of congressionally directed expenditures in 
appropriations language poses difficult problems for agencies 
that are attempting to improve their planning and management of 
research programs. It tends to disrupt interagency 
coordination, and it reduces the ability of agencies to direct 
their funds to the most productive projects.

    Unplanned transfers in response to congressional direction 
obscure the budget picture this year not only for DOE, but for 
the Department of Defense, NASA, the U.S. Geological Survey, 
and the U.S. Department of Agriculture. In each case, the 
enacted 2004 budgets entail transfers out of agency priorities 
into other programs. Congress certainly has the right to 
establish its priorities, but the earmark subset of those 
priorities creates holes in productive programs in these 
agencies that the President's budget seeks to fill. The 
President's commitment to this Administration's science and 
technology priorities is measured by the increments to those 
budgets, omitting the congressionally directed programs. And by 
this measure, in each of the cases I have mentioned, apparent 
reductions are shown actually to be increases in the agencies' 
own priority areas. For example, just one example, the 
President's budget adds three percent to the agency's priority 
aeronautics research programs in NASA, but other programs 
received a number of earmarks in fiscal year 2004 that lead to 
an apparent decrease of 11 percent in the fiscal year 2005 
proposal.

    I wanted to bring this to your attention, Mr. Chairman, 
because this Administration is committed to establishing 
priorities and standards and following through on them. I 
appreciate this committee's historical support of good planning 
and peer-reviewed, merit-based award of science funding, and I 
look forward to working with you to make sure that that 
continues in the future.

    There are priorities in this budget, and they are familiar 
to this committee. The National Nanotechnology Initiative is up 
two percent overall, and up 9.3 percent in non-defense 
agencies. The National Information Technology R&D program, 
which is a mature, multi-billion dollar program, is down by 
about one percent overall. It is up slightly in non-defense 
agencies. Both of these priority programs have increased 
substantially in this Administration. The President's Hydrogen 
Fuel Initiative, a small initiative, is increased by 43 
percent. Physical sciences and engineering funding is 
strengthened through increases by 20 percent in nanotechnology 
and 12 percent in cyberinfrastructure in the National Science 
Foundation, and other targeted increases in budgets in the 
Department of Energy, NIST, and other agencies.

    The large increases in the Department of Defense R&D add 
significantly to the engineering sector. Homeland Security R&D, 
among all agencies, is increased to about $3.6 billion, with 
emphasis on bioterrorism, food, and agriculture security, and 
countering chemical, biological, radiological, nuclear, and 
other catastrophic threats.
    Much more detail is contained in my written testimony and 
in the other materials available from the agencies. Here, I 
only wanted to convey the outlines of this strongly priorities-
driven budget.
    Mr. Chairman and Committee Members, I believe the 
President's 2005 budget proposal does maintain science and 
technology R&D at world leadership levels. Thank you again for 
your strong historical support of the President's R&D goals, 
and I will be pleased to answer questions.
    [The prepared statement of Dr. Marburger follows:]

              Prepared Statement of John H. Marburger III

    Mr. Chairman and Members of the Committee, I am pleased to meet 
with you today to discuss the President's federal research and 
development budget for fiscal year 2005.
    I have appreciated the close and productive relationship with this 
committee and look forward to working with you again this year as we 
make important choices to optimize federal R&D investment. Your 
continued support of our country's research and engineering enterprise 
is yet another reason why the U.S. Government continues to lead the 
world in research and development.
    The President said in his State of the Union address that ``Our 
greatest responsibility is the active defense of the American people,'' 
which includes not only winning the war on terrorism, but also securing 
the homeland. The President's budget focuses on these important 
priorities and builds on the economic recovery now underway. The 
Administration is also determined, however, to control the deficit and 
reduce it as the economy continues to grow, while ensuring that our 
national security needs are met. Funding the Nation's expanding 
national and homeland security needs while limiting other budget growth 
to less than 0.5 percent will lead to smaller increases for other 
categories, including some R&D programs.
    In my testimony today, I would like to place the President's R&D 
request in the context of strong support for science and technology in 
this Administration. With the President's FY 2005 budget, total R&D 
investment during the first term will be increased by 44 percent, to a 
record $132 billion in 2005, compared to $91 billion in FY 2001. That 
equates to increases of nearly ten percent each year. This 
Administration understands that science and technology are major 
drivers of economic growth and important for securing the homeland and 
winning the war on terrorism. The President's budget, as in years past, 
continues to emphasize improved management and performance to maintain 
excellence and sustain our national leadership in science and 
technology.
    In my prepared statement I will review the broad goals of the 
President's budget and provide an overview of the request for federal 
research priorities that cut across multiple agencies and research 
disciplines.

THE PRESIDENT'S FY 2005 R&D BUDGET

    The President's FY 2005 budget request commits 13.5 percent of 
total discretionary outlays to R&D, the highest level in 37 years. Not 
since 1968 during the Apollo program have we seen an investment in 
research and development of this magnitude. Of this amount, the budget 
commits 5.7 percent of total discretionary outlays to non-defense R&D, 
the third highest level in 25 years.
    The programs in the federal R&D budget continue to build upon 
exciting areas of scientific discovery from hydrogen energy and 
nanotechnology to the basic processes of living organisms, the 
fundamental properties of matter, and a new vision of sustained space 
exploration. Not all programs can or should receive equal priority, and 
this budget reflects priority choices consistent with recommendations 
from numerous expert sources. In particular, this budget responds to 
recommendations by the President's Council of Advisors on Science and 
Technology (PCAST) and others about needs in physical science and 
engineering.
    The budget also reflects an extensive process of consultation among 
the federal agencies, OMB, and OSTP, to understand thoroughly the 
agency programs and priorities, interagency collaborations, and 
directions for the future. The National Science and Technology Council 
(NSTC) continues to provide a valuable mechanism to facilitate this 
interagency coordination. This process resulted in guidance to agencies 
issued by OSTP and OMB last June, concerning their program planning, 
evaluation, and budget preparation, and culminating in the budget you 
see before you today.
    An important component of this budget is an increase in education 
and workforce development, which are essential components of all 
federal R&D activities and continue to be high priorities for the 
Administration. As President Bush has stated, ``America's growing 
economy is also a changing economy. As technology transforms the way 
almost every job is done, America becomes more productive, and workers 
need new skills.''
    As in previous years this R&D budget highlights the importance of 
collaborations among multiple federal agencies working together on 
broad themes. I will describe high-priority R&D initiatives for FY 2005 
in five categories: a cluster of programs fostering innovation, which 
includes the National Nanotechnology Initiative, Networking and 
Information Technology, and manufacturing; the hydrogen fuel 
initiative; space exploration; physical sciences and engineering; and 
homeland security.

AGENCY BUDGET HIGHLIGHTS

    Each agency has an opportunity to describe its own programs. In 
this testimony I will concentrate on priority programs that cut across 
agency boundaries. Here I will only give a quick overview of science 
agency budgets proposed for FY 2005.

Department of Defense (DOD):
    The Defense Department's FY 2005 R&D budget is almost $70 billion. 
This funding helps ensure that our military forces have the tools to 
protect themselves and our nation and helps the Nation avoid 
technological surprise by our adversaries in the future. It provides 
support for the entire spectrum of R&D, including the longer-term 
Science and Technology programs, totaling $10.5 billion for basic and 
applied research and concept and prototype development, through 
development of systems and test and evaluation of systems. Development 
programs include: ballistic missile defense; the Joint Strike Fighter; 
the next generation destroyer; the Army Future Combat System; and 
chemical and biological defense systems and technology; to name just a 
few. A total of $5.2 billion is provided for basic and applied 
research, which, for the Department of Defense, promotes the thinking 
and experimentation that will form the basis for future generations of 
systems and capabilities that help deter adversaries from attack or, 
when deterrence fails, allows us to defeat the attacker. This level is 
$225 million, or five percent, more than FY 2001. And when you subtract 
earmarks out, the 2005 request for basic and applied research funding 
actually increases by about $370 million over the appropriated FY 2004 
level.

National Institutes of Health (NIH):
    Building on the research momentum generated by the fulfillment of 
the President's commitment to complete the five-year doubling of the 
NIH budget, the FY 2005 budget provides $28.6 billion for NIH, an 
increase of $729 million or 2.7 percent over 2004. Since 2001, the NIH 
budget has grown by $8.2 billion or 40 percent. The budget's strong 
investment in new NIH grants illustrates the Administration's continued 
commitment to research. The budget includes 10,393 new grants, 258 more 
than last year and equal to the highest level ever awarded.
    As NIH ushers in the next century of biomedical research, it is 
beginning to transform our medical research capabilities, such as 
improving access to state-of-the-art instrumentation and biomedical 
technologies; developing of specialized animal and non-animal research 
models; and emphasizing ``smart'' network connected technologies, 
computer-aided drug design, gene and molecular therapy development, and 
bioengineering approaches to decrease health care costs. In addition, 
the NIH budget continues to support biodefense research by providing 
$1.74 billion to accelerate clinical trials, target the development of 
new therapeutic and vaccine products for agents of bioterrorism, and 
establish Regional Centers of Excellence in Biodefense and Emerging 
Infectious Diseases.

National Science Foundation (NSF):
    The 2005 budget provides $5.75 billion for NSF, a three percent 
increase over the 2004 enacted level. Since 2001 the NSF budget has 
increased by 30 percent.
    The budget provides over $1 billion for NSF programs that emphasize 
the mathematical and physical sciences, including mathematics, physics, 
chemistry, and astronomy. These programs have increased by 31 percent 
since 2001.
    NSF participates strongly in this Administration's cross agency 
priority programs in information- and nano-technology, climate science, 
and education. This budget provides $761 million for NSF's part in the 
National Information Technology R&D initiative, focusing on long-term 
computer science research and applications; $210 million for climate 
change science; and $305 million for NSF's lead role in the National 
Nanotechnology Initiative, a 20 percent increase from the 2004 level.
    Science and math education is strongly supported in this budget, 
with funds for 5,500 graduate research fellowships and traineeships, an 
increase of 1,800 since 2001. Annual stipends in these programs have 
increased to a projected $30,000, compared with $18,000 in 2001.
    Science infrastructure funding is provided to initiate construction 
for the National Ecological Observation Network (NEON), the Scientific 
Ocean Drilling Vessel, and a set of experiments in fundamental physics 
called ``Rare Symmetry Violating Processes'' (RSVP).

Department of Energy (DOE):
    The 2005 budget provides $8.9 billion for R&D at DOE, a $1.1 
billion (or 14 percent) increase since 2001.
    DOE has the lion's share of the President's Hydrogen Fuel 
Initiative to accelerate the worldwide availability and affordability 
of hydrogen-powered fuel cell vehicles. This Initiative is proposed at 
$228 million--a threefold increase over 2001. For the first time it 
will include basic research investments in the DOE Office of Science 
focused on understanding and controlling the chemical and physical 
interactions of hydrogen with materials.
    DOE will also continue its efforts to reduce the cost of renewable 
energy technologies, such as wind, solar, geothermal, and biomass at 
$375 million, a five percent increase over current funding. The budget 
provides a three percent increase for nuclear energy R&D, including $34 
million for the Generation IV Nuclear Energy Systems Initiative to 
develop next-generation nuclear reactor and fuel cycle technologies 
that are sustainable, proliferation-resistant, and economical.
    Electricity transmission and distribution reliability R&D 
activities are funded at $91 million, a 12 percent increase over 2004. 
These funds include $45 million for high temperature superconductivity, 
$6 million for the new Gridworks program to support research that will 
enable power lines to carry more power and better control the flow of 
electricity to prevent blackouts, and $5 million for the Gridwise 
program to improve the communications and control system for the 
electricity grid.
    This budget provides $3.4 billion for the Office of Science, 
including funding to ensure its continuing leadership in physical 
science research and its unique research in genomics, climate change, 
and supercomputing. The fifth and final nanoscience research center 
will begin construction as part of the Office's $211 million investment 
in the National Nanotechnology Initiative, 57 percent more than four 
years ago.

Department of Commerce:
    The 2005 budget provides over $1 billion for R&D at the Department 
of Commerce.
    National Institute of Standards and Technology (NIST) ``core'' 
programs receive $482 million for research and physical improvements at 
NIST's measurement and standards laboratories. This supports equipment 
for the Advanced Measurement Laboratory and overdue renovations of 
facilities. These ``core'' R&D programs are exceptionally high-leverage 
activities that foster commercialization of new technologies through 
the development of measurement tools and methods, and the establishment 
of industrial standards. In an era of global commerce, strong national 
standards help to protect the interests of U.S. production by reducing 
artificial technical barriers to trade. The Manufacturing Engineering 
Laboratory, whose role is to strengthen manufacturing innovation, is 
funded at $30 million, 50 percent over 2001. I would urge that Congress 
strongly support these key ``competitiveness'' R&D activities. Last 
month's Congressional reduction of $22 million in these programs goes 
in the wrong direction.
    The 2005 budget again proposes to terminate the Advanced Technology 
Program (ATP). The Administration believes firmly that other NIST 
research and development programs are both necessary and more effective 
in supporting the fundamental scientific understanding and 
technological needs of U.S.-based businesses, American workers, and the 
domestic economy.
    For the National Oceanic and Atmospheric Administration (NOAA), the 
2005 budget provides $350 million for ongoing research on climate, 
weather, air quality, and ocean processes, 11 percent more than 2001. 
This funding level includes $19 million for NOAA to expand climate 
observing capabilities in support of the Administration's recently 
released Climate Change Science Program (CCSP) Strategic Plan.
National Aeronautics and Space Administration (NASA):
    The President has committed the United States to a sustainable, 
affordable program of human and robotic exploration of the solar system 
and beyond, including a human return to the Moon that will ultimately 
enable future human exploration of Mars and other destinations. This 
vision not only sets a course to the planets, but also focuses 
technology development applicable to society on Earth.
    To support this and other NASA missions, the budget requests $16.2 
billion in FY 2005 and $87 billion over five years, an increase of $1 
billion over the FY 2004 five-year plan. NASA will reallocate $11 
billion within this five-year amount toward new exploration activities. 
Robotic trailblazers to the Moon will begin in 2008, followed by a 
human return to the Moon no later than 2020. The pace of exploration 
will be driven by available resources, technology readiness, and our 
ongoing experience.
    The budget continues the growth in space science with a request for 
$4.1 billion in FY 2005, an increase of $1.5 billion, or over 50 
percent, since 2001. This budget supports the next generation of space 
observatories that will be used to better understand the origin, 
structure, and evolution of the universe. The budget also initiates new 
exploration missions to Mars.
    The 2005 budget supports a variety of key research and technology 
initiatives to enable the space exploration vision. These initiatives 
include refocusing U.S. research on the International Space Station to 
emphasize understanding and countering the impact of long-duration 
space flight on human physiology. In addition, the agency will pursue 
optical communications for increased data rates throughout the solar 
system, space nuclear power to enable high-power science instruments, 
advanced in-space propulsion technologies, and systems that enable 
robots and humans to work together in space.
    Although exploration will become NASA's primary focus, the agency 
will not forsake its important work in improving the Nation's aviation 
system, in education, in Earth science, and in fundamental space 
science.

Department of Transportation (DOT):
    The budget provides $659 million for science at DOT, an increase of 
$53 million (nine percent) over 2004, distributed as follows:
    The Federal Highway Administration receives $429 million to support 
research, technology and education to improve the quality and safety of 
the Nation's highway transportation infrastructure with initiatives 
such as increasing the quality and longevity of roadways, identifying 
safety improvements and promoting congestion mitigation efforts.
    The Federal Aviation Administration receives $117 million to 
continue critical safety and capacity research with initiatives such as 
the Joint Planning and Development Office's planning and development of 
the next generation air transportation system.
    The National Highway Traffic Safety Administration receives $103 
million for R&D in crash worthiness, crash avoidance, and data analysis 
to help reduce highway fatalities and injuries.

Department of Homeland Security (DHS):
    Research and development funding within DHS continues to be a 
priority with $1.2 billion in FY 2005, an increase of 15 percent over 
FY 2004 enacted. R&D is focused on countering chemical, biological, 
radiological, nuclear, and other catastrophic threats.
    In 2005, the Administration will launch a biosurveillance 
initiative that includes $274 million for integrated monitoring of 
human health, food, agriculture and the environment. This plan includes 
$118 million for the expansion of the BioWatch program and $11 million 
to enable the Department of Homeland Security to integrate widely 
collected biosurveillance data in real-time.
    The budget includes $60 million to continue research and 
development of countermeasures to protect commercial aircraft against 
man portable air defense systems (MANPADS).
    The President's budget also funds the Homeland Security Scholars 
and Fellows Program that provides scholarships to students pursuing 
scientific studies in homeland security, and the Homeland Security 
Centers of Excellence (HS-Centers) program, a coordinated university-
based system to enhance the Nation's homeland security.

PRIORITY INITIATIVES

    The 2005 budget highlights high priority inter-agency initiatives 
described briefly below. These initiatives are coordinated through the 
National Science and Technology Council (NSTC) for which my office has 
responsibility for day-to-day operations. The Council prepares research 
and development strategies that cross agency boundaries to form a 
consolidated and coordinated investment package.

Innovation--The FY 2005 budget calls for research and development 
investments to promote technological innovation in high-priority areas 
including nanotechnology, information technology and manufacturing; the 
creation of incentives for increased private sector R&D funding; and 
stronger intellectual property protections. These investments will 
stimulate innovation and enhance U.S. competitiveness.

          Nanotechnology. The President's budget includes $1 
        billion in funding to increase understanding, and develop 
        applications based upon, the unique properties of matter at the 
        nanoscale--that is, at the level of clusters of atoms and 
        molecules. Funding for nanotechnology R&D has more than doubled 
        since 2001.

          Networking and Information Technology. Since 2001, 
        funding for networking and information technology R&D has 
        increased by 14 percent to over $2 billion, and the R&D funded 
        by this effort has laid the foundation for many of the 
        technological innovations that have driven this sector forward. 
        The President's FY 2005 budget sustains this significant 
        investment.

          Manufacturing Technology. The President's budget 
        requests increased funding for a number of programs that 
        strengthen manufacturing innovation, including those within the 
        National Science Foundation's Design, Manufacture and 
        Industrial Innovation Division--up 27 percent since 2001 to $66 
        million--and the Manufacturing Engineering Laboratory at the 
        National Institute of Standards and Technology (NIST)--up 50 
        percent since 2001 to $30 million. The FY 2005 budget sustains 
        funding for the Manufacturing Extension Partnership at the 2004 
        level and proposes to implement reforms to improve the 
        efficiency and effectiveness of the program.

Hydrogen Fuel Initiative--The Hydrogen Fuel Initiative (HFI), announced 
in the President's 2003 State of the Union address, seeks to help 
industry develop practical and cost-effective approaches using hydrogen 
to power automobiles. HFI focuses on technologies for the production, 
storage, and delivery of hydrogen, and on the enhancement of fuel cells 
that promise unusually efficient and clean sources of power. The 2005 
budget for HFI is $228 million, 43 percent larger than the amount just 
enacted for FY 2004.
    The 2005 budget expands fundamental research related to hydrogen 
fuel technology within the Department of Energy (DOE) Office of 
Science. Basic research is necessary for improved technologies for 
hydrogen production, storage, and conversion.
    HFI supports research on hydrogen production from renewable energy, 
coal, nuclear energy, and biomass, safe and effective hydrogen storage 
systems, and affordable hydrogen fuel cells for consumer automobiles. 
The Initiative has spurred increased hydrogen technology development 
efforts among private-sector, state, and international stakeholders.

Physical Sciences and Engineering--Research in the physical sciences 
and engineering is an essential component of space exploration, 
nanotechnology, networking and information technologies, biomedical 
applications, and defense technologies. The President's 2005 budget 
strengthens the Nation's investment in the physical sciences and 
engineering by making significant investments in these, and other, 
priority areas.

          National Science Foundation (NSF). The President's 
        budget provides $1.1 billion for the Mathematical and Physical 
        Sciences, and proposes significant increases for the priority 
        areas of nanotechnology (up 20 percent to $305 million) and 
        cyberinfrastructure (up 12 percent to $399 million).

          Department of Energy (DOE). The budget provides $3.4 
        billion for DOE's Office of Science, a $52 million decrease 
        from FY 2004 enacted. Excluding Congressionally directed 
        projects for 2004 that are not proposed for 2005, the Office of 
        Science budget would increase by $88 million (+2.6 percent). 
        The budget includes increases in priority areas such as 
        nanotechnology (up four percent to $211 million), targeted 
        hydrogen and fuel cell research (+$21 million), national 
        scientific user facility operations (+$46 million), and initial 
        funding for the development of an x-ray laser light source that 
        will open entirely new realms of discovery in materials, 
        chemistry, and biology.

          Department of Commerce (DOC). The President's budget 
        includes $53 million in nanometrology research at NIST.

Homeland Security--Research and development (R&D) funding for homeland 
security continues to be a priority with an estimated $3.6 billion in 
FY 2005, tripling the resources dedicated in FY 2002, the first budget 
following the terrorist attacks of September 11, 2001. Research and 
development is focused on countering chemical, biological, 
radiological, nuclear, and other catastrophic threats. Priority areas 
include:

          $2.5 billion over three years for Project BioShield, 
        an initiative that encourages the development and procurement 
        of next-generation medical countermeasures against WMD agents.

          $568 million to improve food and agriculture defense 
        through R&D in the U.S. Department of Agriculture, the 
        Department of Health and Human Services and the Department of 
        Homeland Security.

          $23 million for R&D in EPA for enhanced methods for 
        detecting biological and chemical agents intentionally 
        introduced in drinking water and waste water systems and 
        methods for safe disposal of waste materials resulting from 
        cleanups.

          $340 million in the Department of Defense, for R&D to 
        address terrorist and other unconventional threats. Systems and 
        technologies under development to address defense against 
        chemical or biological agents include: improved detectors of 
        chemical and biological threats; troop protective gear for use 
        under chemical and biological attack that is both more 
        effective and more comfortable; and vaccines to protect against 
        biological agents.

MANAGING THE FEDERAL RESEARCH BUDGET

    R&D is critically important for keeping our nation economically 
competitive, and it will help solve the challenges we face in health, 
defense, energy, and the environment. As a result, and consistent with 
the Government Performance and Results Act, every federal R&D dollar 
must be invested as effectively as possible.
    As directed by the President's Management Agenda, the R&D 
Investment Criteria were first applied in 2001 to selected R&D programs 
at DOE. Through the lessons learned from that DOE pilot program, the 
criteria were subsequently broadened in scope to cover other types of 
R&D programs at DOE and other agencies. To accommodate the wide range 
of R&D activities, a new framework was developed for the criteria to 
address three fundamental aspects of R&D:

          Relevance--Programs must be able to articulate why 
        they are important, relevant, and appropriate for federal 
        investment;

          Quality--Programs must justify how funds will be 
        allocated to ensure quality; and

          Performance--Programs must be able to monitor and 
        document how well the investments are performing.

    In addition, R&D projects and programs relevant to industry are 
expected to meet criteria to determine the appropriateness of the 
public investment, enable comparisons of proposed and demonstrated 
benefits, and provide meaningful decision points for completing or 
transitioning the activity to the private sector.
    OSTP and OMB are continuing to assess the strengths and weaknesses 
of R&D programs across the Federal Government in order to identify and 
apply good R&D management practices throughout the government.

CONCLUSION

    Mr. Chairman and Members of the Committee, I believe this is a good 
budget for science and technology. This Administration is committed to 
strong science and technology as a foundation for national security and 
economic strength. I would be pleased to respond to questions.

                  Biography for John H. Marburger III

    John H. Marburger III, Science Adviser to the President and 
Director of the Office of Science and Technology Policy, was born on 
Staten Island, N.Y., grew up in Maryland near Washington, D.C., and 
attended Princeton University (B.A., Physics 1962) and Stanford 
University (Ph.D., Applied Physics 1967). Before his appointment in the 
Executive Office of the President, he served as Director of Brookhaven 
National Laboratory from 1998, and as the third President of the State 
University of New York at Stony Brook (1980-1994). He came to Long 
Island in 1980 from the University of Southern California where he had 
been a Professor of Physics and Electrical Engineering, serving as 
Physics Department Chairman and Dean of the College of Letters, Arts 
and Sciences in the 1970's. In the fall of 1994 he returned to the 
faculty at Stony Brook, teaching and doing research in optical science 
as a University Professor. Three years later he became President of 
Brookhaven Science Associates, a partnership between the university and 
Battelle Memorial Institute that competed for and won the contract to 
operate Brookhaven National Laboratory.
    While at the University of Southern California, Marburger 
contributed to the rapidly growing field of nonlinear optics, a subject 
created by the invention of the laser in 1960. He developed theory for 
various laser phenomena and was a co-founder of the University of 
Southern California's Center for Laser Studies. His teaching activities 
included ``Frontiers of Electronics,'' a series of educational programs 
on CBS television.
    Marburger's presidency at Stony Brook coincided with the opening 
and growth of University Hospital and the development of the biological 
sciences as a major strength of the university. During the 1980's 
federally sponsored scientific research at Stony Brook grew to exceed 
that of any other public university in the northeastern United States.
    During his presidency, Marburger served on numerous boards and 
committees, including chairmanship of the governor's commission on the 
Shoreham Nuclear Power facility, and chairmanship of the 80 campus 
``Universities Research Association'' which operates Fermi National 
Accelerator Laboratory near Chicago. He served as a trustee of 
Princeton University and many other organizations. He also chaired the 
highly successful 1991/92 Long Island United Way campaign.
    As a public spirited scientist-administrator, Marburger has served 
local, State and Federal Governments in a variety of capacities. He is 
credited with bringing an open, reasoned approach to contentious issues 
where science intersects with the needs and concerns of society. His 
strong leadership of Brookhaven National Laboratory following a series 
of environmental and management crises is widely acknowledged to have 
won back the confidence and support of the community while preserving 
the Laboratory's record of outstanding science.

    Chairman Boehlert. Thank you very much, Dr. Marburger. And 
I want to thank you publicly, not just because you are a New 
Yorker, but for your invaluable service. And it is refreshing 
to see you, as the Science Advisor to the President, in the 
deliberations when OMB makes some of the difficult decisions it 
makes. And so I want to thank you for what you have done.
    Dr. Colwell.

 STATEMENT OF DR. RITA R. COLWELL, DIRECTOR, NATIONAL SCIENCE 
                           FOUNDATION

    Dr. Colwell. Mr. Chairman and Ranking Member Gordon, 
Members of the Committee, I am very pleased to appear before 
you today. It has been an honor to serve as the NSF Director, 
and especially to work with you, Mr. Chairman, and with this 
committee. I will assume the Chairmanship of Canon USA Life 
Sciences subsidiary to develop genomic diagnostics, and I will 
also serve as distinguished University of Maryland professor 
and jointly at the Johns Hopkins University School of Public 
Health to focus on global infectious diseases, safe water, and 
human health. So I am going to be pretty busy once I leave NSF.
    Let me speak now to the National Science Foundation's 
commitment to the science and engineering enterprise. It comes 
from a very strong conviction that knowledge is the most 
powerful force for progress. NSF works hard to open new 
frontiers in research and education, and we keep our eye on the 
biggest prize, which is economic and social prosperity, and 
very importantly, security benefiting all citizens.
    The most powerful mechanism for keeping our nation 
prosperous and secure is keeping it at the forefront of 
learning and discovery. That is NSF's business, to advance 
fundamental research in science and engineering, to educate and 
train scientists and engineers, and to provide the tools to 
accomplish both of these objectives.
    So first, the big picture. This year, the National Science 
Foundation is requesting $5.745 billion. That is an increase of 
$167 million, or three percent more than last year. In spite of 
the significant challenges that are facing our nation in 
security, defense, and the economy, NSF is, relatively 
speaking, doing well. An increase of three percent when many 
agencies are looking at budget cuts is, I think, a vote of 
confidence in the Foundation's working toward two of the 
Nation's goals.
    NSF has been growing surely and steadily. Our investments 
this year will continue us on the right path. We are grateful 
for the leadership and the vision of this committee, and we 
believe that will help keep us moving in the right direction.
    Now, having said that, in a year of very tight budgets, we 
had to set priorities. We had to make informed, but very tough 
choices. And that is never an easy job, and it is particularly 
difficult when the opportunities to make productive investments 
are as plentiful as they are today in research and education. 
The largest dollar increase is in the Research and Related 
Activities account: $201 million, that is five percent above 
the fiscal year 2004 level. The largest decrease is in the 
budget for the Education and Human Resources directorate, with 
the major share of the decrease due to the consolidation of the 
Math and Science Partnership with the Department of Education.
    Nevertheless, we are increasing investments in people, 
science and engineering students, researchers, as well as 
public understanding and diversity participation in science and 
engineering throughout all of the directorates as part of our 
strategy for horizontal and vertical integration of all of our 
programs.
    I am going to begin with our investment in organizational 
excellence. This is NSF's single greatest need for the coming 
year. In fiscal year 2005, we are requesting an increased 
investment of $76 million to ensure that we continue to make 
the productive investments wisely and efficiently and to 
perform even better in the future and to remain the best 
managed agency in the entire Federal Government.
    A number of considerations have elevated the organizational 
excellence portfolio in our budget. Let me point out that, for 
20 years, NSF's staffing has remained level as the total budget 
and the workload increased significantly. And the work has 
become more complex. This investment will streamline and update 
NSF operations and management by allowing us to address the 
mounting workplace pressure, and it will allow us to add new 
skills to the workforce, and it will improve the quality and 
responsiveness for our customers.
    Today's science and engineering challenges are more 
complex. Increasingly, they involve multi-investigation 
research as well as a strong emphasis on interdisciplinary 
research. So increasing award size and duration across the 
board remains one of NSF's top long-term priorities. We will 
make some additional progress in fiscal year 2005 with an 
increase in the average annual award. This will bring the total 
increase from $90,000 to $142,000 since 1998, an increase of 58 
percent.
    Our ability to attract the Nation's best talent has been 
facilitated by increasing the level of graduate stipends. This 
has gone from a base of $15,000 in 1999 to $30,000 today, and I 
thank you, all of you, for your support in achieving that goal. 
In fiscal year 2005, we will increase the number of fellowships 
from 5,000 to 5,500 for the NSF flagship Graduate Education 
programs, which, I might add, require U.S. citizenship.
    NSF's five focused priority areas are also slated to 
receive more than $537 million in 2005. As the lead agency in 
the Administration's National Nanotechnology Initiative, 
support for Nanoscale Science and Engineering will increase by 
20 percent to $305 million. Support for Biocomplexity in the 
Environment and the Mathematical Sciences will continue at the 
2004 levels.
    The Human and Social Dynamics priority area will provide 
$23 million to investigate the impacts of change on our lives 
and on the stability of our institutions, with a special 
emphasis on the way people make decisions and how they take 
risks. The budget includes $20 million to start NSF's Workforce 
for the 21st Century priority. This is critical, because it 
focuses on U.S. citizens and broadening participation.
    Researchers need access to cutting-edge tools to tackle 
today's complex and radically different research. The fiscal 
year 2005 investment in tools is $1.5 billion. It is an 
increase of $104 million. It continues an accelerated program 
to revitalize and to upgrade the Nation's aging research 
infrastructure through investments in cutting-edge tools of 
every kind. Nearly $400 million of that investment in tools 
will support the expansion of a state-of-the-art 
cyberinfrastructure, and I know this is something, Mr. 
Chairman, you believe in very strongly.
    So, Mr. Chairman, I conclude my remarks by emphasizing, 
once again, how carefully and diligently we work together at 
NSF to identify clear priorities in a time of very tight 
budgets, and we made tough choices. We are confident that the 
NSF's fiscal year 2005 investments will have long-term benefits 
for the entire science and engineering community and will 
contribute to the security and the prosperity for our nation. 
And that is precisely why I have no doubt that NSF's budget 
merits the attention and the support that your NSF 
Authorization Act gave us.
    Mr. Chairman, I would be happy to answer any questions that 
you may have.
    [The prepared statement of Dr. Colwell follows:]

                 Prepared Statement of Rita R. Colwell

    Chairman Boehlert, Ranking Member Gordon, Members of the Committee, 
I am pleased to appear before you today. For more than fifty years, the 
National Science Foundation (NSF) has been a strong steward of 
America's science and engineering enterprise. Although NSF represents 
roughly three percent of the total federal budget for research and 
development, it accounts for one-fifth of all federal support for basic 
academic research and 40 percent of support for basic research at 
academic institutions, outside of the life sciences. Despite its small 
size, NSF has an extraordinary impact on scientific and engineering 
knowledge and capacity.
    During NSF's five decades of leadership, ground-breaking advances 
in knowledge have helped reshape society and enabled the United States 
to become the most productive nation in history. The returns on NSF's 
strategic investments in science, engineering, and mathematics research 
and education have been enormous. Much of the sustained economic 
prosperity America has enjoyed over the past decade is the result of 
technological innovation--innovation made possible, in large part, by 
NSF support for fundamental research and education.
    In our 21st century world, knowledge is the currency of everyday 
life, and at the National Science Foundation we are in the knowledge 
business. Our investments are aimed at the frontiers of science and 
engineering, where advances in fundamental knowledge drive innovation, 
progress, and productivity.
    Our commitment to the science and engineering enterprise comes from 
an abiding belief that knowledge is a powerful force for progress. As 
we work to open new frontiers in research and education, we have our 
eye on the main prize--economic and social prosperity that can improve 
the quality of life for all.
    The surest way to keep our nation prosperous and secure is to keep 
it at the forefront of learning and discovery. That is NSF's business--
to educate and train scientists and engineers, advance fundamental 
research and engineering, and provide the tools to accomplish both. The 
NSF FY 2005 budget request aims to do that, and I am pleased to present 
it to you today.
    I'll begin with the big picture. This year the National Science 
Foundation is requesting $5.745 billion dollars. That's an increase of 
$167 million, or three percent more than in the FY 2004 enacted level.
    In light of the significant challenges that face the Nation--in 
security, defense, and the economy--NSF has, relatively speaking, fared 
well. We are pleased to be able to anticipate an increase of three 
percent when many agencies are looking at budget cuts. This is 
certainly a vote of confidence in the National Science Foundation's 
stewardship of these very important components of the Nation's goals. 
Let me put the three percent increase in context.
    NSF has been growing--surely and steadily. Our investments this 
year will continue us on the right path, and with the leadership and 
vision of this committee, the NSF Authorization Act will keep us moving 
in the right direction in the years to come.
    Nonetheless, in a year of very tight budgets, we have had to set 
priorities and make informed choices in a sea of opportunity and 
constraint. That is never an easy job, but it is particularly difficult 
when opportunities to make productive investments are as plentiful as 
they are today in research and education.
    The NSF FY 2005 Budget Request addresses these opportunities and 
challenges through an integrated portfolio of investments in People, 
Ideas, Tools, and Organizational Excellence. The NSF budget identifies 
what we see as NSF's most pressing needs during the coming year:

          Strengthen NSF management to maximize effectiveness 
        and performance. The FY 2005 Request assigns highest priority 
        to strengthening management of the investment process and 
        operations. The budget request includes an increase of over $20 
        million to strengthen the NSF workforce and additional 
        investments of over $50 million to enhance information 
        technology infrastructure, promote leading-edge approaches to 
        e-Government, and ensure adequate safety and security for all 
        of NSF's information technology and physical resources. It's a 
        sizable increase, especially in a constrained environment, but 
        it's really the minimum needed to keep pace with our growing 
        workload and expanding responsibilities.

          Improve the productivity of researchers and expand 
        opportunities for students. Boosting the overall productivity 
        of the Nation's science and engineering enterprise requires 
        increasing average award size and duration. The recent survey 
        of NSF-funded principal investigators provides convincing 
        evidence that an increase in award size will allow researchers 
        to draw more students into the research process, and increasing 
        award duration will foster a more stable and productive 
        environment for learning and discovery. The level proposed for 
        FY 2005 represents a 58 percent increase over the past seven 
        years in average annual award size.

          Strengthen the Nation's performance with world-class 
        instruments and facilities. In an era of fast-paced discovery 
        and technological change, researchers need access to cutting-
        edge tools to pursue increasingly complex avenues of research. 
        NSF investments not only provide these tools, but also develop 
        and creatively design the tools critical to 21st Century 
        research and education. Consistent with the recent 
        recommendations of the National Science Board, investment in 
        infrastructure of all types (Tools) rises to $1.47 billion, 
        representing 26 percent of the FY 2005 Budget Request.

    Targeted investments under each of NSF's four strategic goals will 
promote these objectives and advance the progress of science and 
engineering.

NSF Strategic Goals: People, Ideas, Tools and Organizational Excellence

    The National Science Foundation supports discovery, learning and 
innovation at the frontiers of science and engineering, where risks and 
rewards are high, and where benefits to society are most promising. NSF 
encourages increased and effective collaboration across disciplines and 
promotes partnerships among academe, industry and government to ensure 
that new knowledge moves rapidly and smoothly throughout the public and 
private sectors.
    NSF's investment strategy establishes a clear path of progress for 
achieving four complementary strategic goals: People, Ideas, Tools and 
Organizational Excellence. ``People, Ideas and Tools'' is simple 
shorthand for a sophisticated system that integrates education, 
research, and cutting-edge infrastructure to create world-class 
discovery, learning and innovation in science and engineering. 
Organizational Excellence (OE)--a new NSF strategic goal on a par with 
the other three--integrates what NSF accomplishes through People, Ideas 
and Tools with business practices that ensure efficient operations, 
productive investments and real returns to the American people.
    People. The rapid transformations that new knowledge and technology 
continuously trigger in our contemporary world make investments in 
people and learning a continuing focus for NSF. In our knowledge-based 
economy and society, we need not only scientists and engineers, but 
also a national workforce with strong skills in science, engineering 
and mathematics. Yet many of today's students leave secondary school 
without these skills. Fewer young Americans choose to pursue careers in 
science and engineering at the university level. Of those that do, 
fewer than half graduate with science or engineering degrees. The FY 
2005 Request provides $1.065 billion for programs that will address 
these challenges.
    To capture the young talent so vital for the next generation of 
discovery, we will increase the number of fellowships from 5,000 to 
5,500 for NSF's flagship graduate education programs: the Integrative 
Graduate Education and Research Traineeships (IGERT), Graduate Research 
Fellowships (GRF), and Graduate Teaching Fellows in K-12 Education (GK-
12).
    Ideas. New knowledge is the lifeblood of the science and 
engineering enterprise. Investments in Ideas are aimed at the frontiers 
of science and engineering. They build the intellectual capital and 
fundamental knowledge that drive technological innovation, spur 
economic growth and increase national security. They also seek answers 
to the most fundamental questions about the origin and nature of the 
universe, the planet and humankind. Investments totaling $2.85 billion 
in FY 2005 will support the best new ideas generated by the science and 
engineering community.
    Increasing grant size and duration is a fundamental, long-term 
investment priority for NSF. Larger research grants of longer duration 
will boost the overall productivity of researchers by freeing them to 
take more risks and focus on more complex research goals with longer 
time horizons. More flexible timetables will also provide researchers 
with opportunities to provide expanded education and research 
experiences to students. Investments in FY 2005 bring NSF average 
annual research grant award size to approximately $142,000, an increase 
of $3,000 over FY 2004--a 58 percent increase since 1998. Average 
annual award duration will continue at approximately 3.0 years.
    Tools. The FY 2005 request for Tools totals $1.47 billion, an 
increase of $104 million over the FY 2004 Estimate. The increase 
continues an accelerated program to revitalize and upgrade the Nation's 
aging infrastructure through broadly distributed investments in 
instruments and tools. Progress in research and education frequently 
depends upon the development and use of tools that expand experimental 
and observational limits. Researchers need access to cutting-edge tools 
to tackle today's complex and radically different avenues of research, 
and students who are not trained in their use are at a disadvantage in 
today's technology-intensive workplace.
    Organizational Excellence (OE). With activities that involve over 
200,000 scientists, engineers, educators and students and with over 
40,000 proposals to process each year, NSF relies on efficient 
operations and state-of-the-art business practices to provide quality 
services and responsible monitoring and stewardship of the agency's 
investments. NSF's Request includes $363.05 million to support 
Organizational Excellence (OE). This represents an increase in the 
share of the total NSF budget for OE from five percent in FY 2004 to 
six percent in FY 2005.
    A number of considerations have elevated the Organizational 
Excellence portfolio in NSF's FY 2005 Request. For twenty years NSF 
staffing has remained level as the total budget and workload increased 
significantly, and the work has become more complex. Proposals 
increasingly involve large, multidisciplinary and interdisciplinary 
projects and require sophisticated monitoring and evaluation. NSF is 
also committed to maintaining its traditional high standards for 
stewardship, innovation and customer service. Key priorities for FY 
2005 include award monitoring and oversight, human capital management 
and IT system improvements necessary for leadership in e-Government, 
security upgrades and world-class customer service.
    It is central to NSF's mission to provide effective stewardship of 
public funds, to realize maximum benefits at minimum cost and to ensure 
public trust in the quality of the process. The FY 2005 investment in 
Organizational Excellence will streamline and update NSF operations and 
management by enhancing cutting edge business processes and tools. It 
will also fund the addition of 25 new permanent employees to address 
mounting workplace pressure, add new skills to the workforce and 
improve the quality and responsiveness of customer service.
    Of course, People, Ideas, Tools, and Organizational Excellence work 
together to give us the best returns in discovery, learning and 
innovation.

Priority Areas

    Before providing a few highlights of the budget, let me stress that 
the priority-setting process at NSF results from continual consultation 
with the research community. New programs are added or enhanced only 
after seeking the combined expertise and experience of the science and 
engineering community, NSF management and staff, and the National 
Science Board.
    Programs are initiated or enlarged based on considerations of their 
intellectual merit, broader impacts of the research, the importance to 
science and engineering, balance across fields and disciplines, and 
synergy with research in other agencies and nations. NSF coordinates 
its research with our sister research agencies both informally--by 
program officers being actively informed of other agencies' programs--
and formally, through interagency agreements that spell out the various 
agency roles in research activities. Moreover, through our Committee of 
Visitors process there is continuous evaluation and feedback of 
information about how NSF programs are performing.
    Producing the finest scientists and engineers in the world and 
encouraging new ideas to strengthen U.S. leadership across the 
frontiers of discovery are NSF's principal goals. NSF puts its money 
where it counts--94 percent of our budget goes directly to the research 
and education that keep our knowledge base strong, our economy humming 
and the benefits to society flowing.
    Our nation's science and engineering workforce is the most 
productive in the world. To keep it that way, we have to attract more 
of the most promising students to graduate-level studies in science and 
engineering.
    Since our founding in 1950, NSF has supported 39,000 fellows. We 
will increase Fellowships from 5,000 to 5,500 for NSF's prestigious 
graduate education programs: the Integrative Graduate Education and 
Research Traineeships (IGERT), Graduate Research Fellowships (GRF), and 
Graduate Teaching Fellows in K-12 Education (GK-12).
    Our ability to attract the Nation's best talent has been 
facilitated by increasing the level of graduate stipends from a base of 
$15,000 in 1999 to $30,000 in FY 2004. Stipend levels will remain at 
the $30,000 level in FY 2005.
    Today's science and engineering challenges are more complex. 
Increasingly, they involve multi-investigator research, as well as a 
strong emphasis on interdisciplinary research. So, increasing award 
size and duration-across the board-remains one of NSF's top long-term 
priorities. We will make additional progress in FY 2005 with an 
increase of $3,000 in average annual award. That brings the total 
increase to 58 percent since 1998.
    Opportunities to advance knowledge have never been greater than 
they are today. NSF invests in emerging areas of research that hold 
exceptional potential to strengthen U.S. world leadership in areas of 
global economic and social importance. This year, we are requesting 
funding for five priority areas with very promising research horizons: 
biocomplexity, nanoscale science and engineering, mathematical 
sciences, human and social dynamics, and the 21st century workforce.
    Biocomplexity in the Environment explores the complex interactions 
among organisms and their environments at all scales, and through space 
and time. This fundamental research on the links between ecology, 
diversity, the evolution of biological systems, and many other factors 
will help us better understand and, in time, predict environmental 
change. In FY 2005, Biocomplexity in the Environment will emphasize 
research on aquatic systems.
    The Human and Social Dynamics priority area will explore a wide 
range of topics. These include individual decision-making and risk, the 
dynamics of human behavior, and global agents of change--from 
democratization, to globalization, to war. Support will also be 
provided for methodological capabilities in spatial social science and 
for instrumentation and data resources infrastructure.
    Mathematics is the language of science, and is a powerful tool of 
discovery. The Mathematical Sciences priority areas will focus on 
fundamental research in the mathematical and statistical sciences, 
interdisciplinary research connecting math with other fields of science 
and engineering, and targeted investments in training.
    NSF's investment in Nanoscale Science and Engineering targets the 
fundamental research that underlies nanotechnology--which very likely 
will be the next ``transformational'' technology.
    Investments in this priority area will emphasize research on 
nanoscale structures and phenomena, and quantum control. NSF is the 
lead agency for the government-wide National Nanotechnology Initiative 
(NNI). NSF is requesting $305 million, an increase of nearly $52 
million or 20 percent. This is by far NSF's largest priority area 
investment.
    To operate in an increasingly complex world, we have to produce a 
general workforce that is scientifically and technologically capable, 
and a science and engineering workforce that is world class by any 
measure.
    The FY 2005 request provides $20 million to initiate the Workforce 
for the 21st Century priority area. This investment will support 
innovations to integrate NSF's investments in education at all levels, 
from K-12 through postdoctoral, as well as attract more U.S. students 
to science and engineering fields and broaden participation.

Budget Highlights

    Every year it becomes more difficult to choose only a few NSF 
activities to highlight in the budget presentation. But they are all 
genuinely significant, and I want to make brief comments about each.
    In FY 2005, NSF will make significant investments in our diverse 
Centers Programs. Centers bring people, ideas, and tools together on 
scales that are large enough to have a significant impact on important 
science and engineering challenges. They provide opportunities to 
integrate research and education, and to pursue innovative and risky 
research. An important goal beyond research results is developing 
leadership in the vision, strategy, and management of the research and 
education enterprise. The total investment for NSF's Centers Programs 
is $457 million, an increase of $44 million in FY 2005. Here are some 
highlights of the Centers.

          $30 million will initiate a new cohort of six Science 
        and Technology Centers. A key feature of these centers is the 
        development of partnerships linking industry, government, and 
        the educational community to improve the transfer of research 
        results, and provide students a full set of boundary-crossing 
        opportunities.

          $20.0 million will continue support for 
        multidisciplinary, multi-institutional Science of Learning 
        Centers. These centers are intended to advance understanding of 
        learning through research on the learning process, the context 
        of learning, and learning technologies. The Centers will 
        strengthen the connections between science of learning research 
        and educational and workforce development.

          The budget request provides for two new 
        nanotechnology centers; two or three centers that advance 
        fundamental knowledge about Environmental Social and Behavioral 
        Science; three Information Technology Centers, and additional 
        funding for the NSF Long-Term Ecological Research network. An 
        additional $6 million will fund a number of mathematical and 
        physical science centers, including: Chemistry Centers, 
        Materials Centers, Mathematical Sciences Research Institutes, 
        and Physics Frontiers Centers.

    Today, discoveries emerge from around the world. It is essential 
that American scientists and engineers have opportunities to engage 
with the world's top researchers, to lead major international 
collaborations, and to have access to the best research facilities 
throughout the world and across all the frontiers of science and 
engineering. The FY 2005 budget to carry out these activities through 
NSF's Office of International Science and Engineering is $34 million, 
an increase of $6 million, or 21 percent over the FY 2004 estimate.
    Finally, NSF will initiate an Innovation Fund at $5 million. The 
Fund provides an opportunity for the Foundation to respond quickly to 
rapidly emerging activities at the frontiers of learning and discovery.

Tools--Opening Up New Vistas

    Researchers need access to cutting-edge tools to tackle today's 
complex and radically different research tasks. If students are not 
trained in their use, they will be at a disadvantage in today's 
technology-intensive workplace. The FY 2005 investment in Tools totals 
one and a half billion dollars, an increase of $104 million. This 
continues an accelerated program to revitalize and upgrade the Nation's 
aging research infrastructure through investments in cutting-edge tools 
of every kind.
    Nearly $400 million of the FY 2005 investment supports the 
expansion of state-of-the-art cyberinfrastructure. Our new information 
and communication technologies have transformed the way we do science 
and engineering. Providing access to moderate-cost computation, 
storage, analysis, visualization and communication for every researcher 
will make that work more productive and broaden research perspectives 
throughout the science and engineering community.
    In FY 2005, there are three continuing and three new projects 
funded by the proposed $213 million investment in Major Research 
Equipment and Facilities Construction.
    NEON, the National Ecological Observatory Network, is a continental 
scale research instrument with geographically distributed 
infrastructure, linked by state-of-the-art networking and 
communications technology. NEON will facilitate studies that can help 
us address major environmental challenges and improve our ability to 
predict environmental change. Funding for NEON planning activities is 
included in the FY 2004 estimate.
    The Scientific Ocean Drilling Vessel is a state-of-the-art drill 
ship that will be used by the Integrated Ocean Drilling Program (IODP), 
an international collaboration. Cores of sediment and rock collected 
from the ocean floor will enhance studies of the geologic processes 
that modify our planet. Investigators will explore the history of those 
changes in oceans and climate, and the extent and depth of the planet's 
biosphere.
    The Rare Symmetry Violating Processes (RSVP) includes two highly 
sensitive experiments to study fundamental symmetries of nature. RSVP 
will search for the particles or processes that explain the 
predominance of matter that makes up the observable universe. It will 
focus on questions ranging from the origins of our physical world to 
the nature of dark matter.
    NSF plans to invest in major research equipment and facilities 
construction projects over the next several years. We expect to start 
funding for two additional projects; Ocean Observatories and an Alaska 
Regional Research Vessel in FY 2006.
    In making these critical investments, NSF continues to put a very 
strong emphasis on effective and efficient management. We are proud of 
our track record.

Conclusion

    Mr. Chairman, the budget highlights I've just presented don't even 
begin to portray the variety and richness of the NSF portfolio. We 
support research programs to enhance homeland security. This includes 
the Ecology of Infectious Diseases program, jointly funded with NIH, 
and the Microbial Genome Sequencing program, jointly funded with the 
Department of Agriculture. NSF participates on the National Interagency 
Genome Sequencing Coordinating Committee, where our programs have 
attracted a great deal of interest from the intelligence community, and 
have been touted as the best. The Critical Infrastructure Protection 
program, and cyber security research and education round out our 
important contributions to enhancing homeland security.
    Additionally, as part of the Administration's Climate Change 
Research Initiative, NSF supports research to reduce uncertainty 
related to climate variability and change, with the objective of 
facilitating decision making and informing the policy process.
    Let me conclude my remarks by emphasizing once again how carefully 
and diligently we worked together at NSF to identify clear priorities 
in a time of tight budgets. We are confident that NSF's FY 2005 
investments will have long-term benefits for the entire science and 
engineering community, and contribute to security and prosperity for 
all. That is precisely why I have no doubts that NSF's budget merits 
the attention and support that your NSF Authorization Act gave us.
    Mr. Chairman and Members of the Committee, I hope that this brief 
overview conveys to you the extent of NSF's commitment to advancing 
science and technology in the national interest.
    I ask not only for your support for our FY 2005 budget request, but 
also want you to know how much I appreciate the long-standing 
bipartisan support of the committee for NSF. Mr. Chairman, I would ask 
to include a copy of NSF's budget summary as part of my testimony, and 
would be happy to answer any questions that you have.

                    Biography for Rita Rossi Colwell
    Dr. Rita R. Colwell became the 11th Director of the National 
Science Foundation on August 4, 1998. Since taking office, Dr. Colwell 
has spearheaded the agency's emphases in K-12 science and mathematics 
education, graduate science and engineering education/training and the 
increased participation of women and minorities in science and 
engineering.
    Her policy approach has enabled the agency to strengthen its core 
activities, as well as establish major initiatives, including 
Nanotechnology, Biocomplexity, Information Technology, Social, 
Behavioral and Economic Sciences and the 21st Century Workforce. In her 
capacity as NSF Director, she serves as Co-chair of the Committee on 
Science of the National Science and Technology Council.
    Before coming to NSF, Dr. Colwell was President of the University 
of Maryland Biotechnology Institute, 1991-1998, and she remains 
Professor of Microbiology and Biotechnology (on leave) at the 
University Maryland. She was also a member of the National Science 
Board (NSF's governing body) from 1984 to 1990.
    Dr. Colwell has held many advisory positions in the U.S. 
Government, non-profit science policy organizations, and private 
foundations, as well as in the international scientific research 
community. She is a nationally respected scientist and educator, and 
has authored or co-authored 16 books and more than 600 scientific 
publications. She produced the award-winning film, Invisible Seas, and 
has served on editorial boards of numerous scientific journals.
    She is the recipient of numerous awards, including the Medal of 
Distinction from Columbia University, the Gold Medal of Charles 
University, Prague, and the University of California, Los Angeles, and 
the Alumna Summa Laude Dignata from the University of Washington, 
Seattle.
    Dr. Colwell has also been awarded 35 honorary degrees from 
institutions of higher education, including her Alma Mater, Purdue 
University. Dr. Colwell is an honorary member of the microbiological 
societies of the UK, France, Israel, Bangladesh, and the U.S. and has 
held several honorary professorships, including the University of 
Queensland, Australia. A geological site in Antarctica, Colwell Massif, 
has been named in recognition of her work in the polar regions.
    Dr. Colwell has previously served as Chairman of the Board of 
Governors of the American Academy of Microbiology and also as President 
of the American Association for the Advancement of Science, the 
American Society for Microbiology, the Sigma Xi National Science 
Honorary Society, and the International Union of Microbiological 
Societies. Dr. Colwell is a member of the American Academy of Arts and 
Sciences, the American Philosophical Society, and the National Academy 
of Sciences.
    Born in Beverly, Massachusetts, Dr. Colwell holds a B.S. in 
Bacteriology and an M.S. in Genetics, from Purdue University, and a 
Ph.D. in Oceanography from the University of Washington.

    Chairman Boehlert. Thank you very much, Dr. Colwell. Thank 
you for highlighting some of the positives.
    Dr. McQueary.

   STATEMENT OF DR. CHARLES E. McQUEARY, UNDER SECRETARY FOR 
    SCIENCE AND TECHNOLOGY, DEPARTMENT OF HOMELAND SECURITY

    Dr. McQueary. Chairman Boehlert, Members of the Committee--
--
    Chairman Boehlert. Turn on your mike.
    Dr. McQueary. There we go. It looked green, but it was not 
on. Pardon me.
    Chairman Boehlert and Congressman Gordon and distinguished 
Members of the Committee, it is a pleasure to be here with you 
today to discuss the research and development activities of the 
Department of Homeland Security's Science and Technology 
Directorate. And, Mr. Chairman, I would like to thank you for 
the very generous remarks you made about me personally, as well 
as the men and women that I am fortunate enough to lead in the 
Science and Technology Directorate. I greatly appreciate that.
    I also want to recognize and thank my colleagues from the 
Office of Science and Technology Policy, the Department of 
Energy, the Department of Commerce, and the National Science 
Foundation for the essential role their organizations have in 
advancing this Nation's scientific knowledge and for the strong 
support they have provided to us as we have stood up the 
Science and Technology Directorate.
    The Nation's advantage in science and technology is key to 
securing the homeland. The most important mission for the 
Science and Technology Directorate is to allow the dedicated 
men and women who protect and secure our homeland to perform 
their jobs more effectively and efficiently. These men and 
women I view as my customers and the customers of the Science 
and Technology Directorate.
    When I first reported to you about our activities last 
year, we had just begun our work. The Science and Technology 
Directorate has accomplished much since its inception last 
March, and I would like to give you a few highlights.
    We have deployed monitoring systems that operate 
continuously to detect biological pathogens in approximately 30 
U.S. cities. We have also set up testbeds to provide accurate 
radiation and nuclear warnings at air and marine cargo ports in 
cooperation with the Port Authority of New York and New Jersey. 
We have established the first series of inter-operability 
guidelines for the Nation's wireless emergency communications 
network. In another effort, we have greatly reduced the time it 
takes to develop national standards for technologies to protect 
the homeland, and our new standards for radiation detection 
equipment will help put needed technologies into the hands of 
first responders quickly. And the Homeland Security Advanced 
Research Project Agency has started extensive research for our 
next generation of biological and chemical and radiological and 
nuclear detectors. We have awarded the first round of 100 
Homeland Security Fellowships and Scholarships to help build 
the U.S. leadership in science and technology. We have also 
established the first university-based Homeland Security 
Centers of Excellence to address both the targets and means of 
terrorism. And finally, we have become active contributors in 
numerous interagency Working Groups.
    In accomplishing this, we have doubled the staff of this 
Directorate with some of the country's best and most dedicated 
people. We started this Directorate last March with 87 people, 
and 53 of those are actually in a laboratory in Manhattan in 
our Environmental Measurements Lab, so we had a very small 
staff to begin. Today, we have more than 210 people.
    However, the threats to our homeland are diverse and remain 
daunting. We must constantly monitor current and emerging 
threats and assess our vulnerabilities to them, and we must 
develop new and improved capabilities to counter them and 
respond to and recover from potential attack.
    The Science and Technology Directorate has prioritized its 
research and development efforts based on the directives, 
recommendations, and suggestions from many sources, including 
the Homeland Security Act of 2002, President Bush's National 
Strategies and nine Homeland Security Presidential Directives, 
the report from the National Academies of Sciences on Making 
the Nation Safer, and reports from the Gilmore, Bremer, and 
Hart-Rudman Committees.
    Identifying and integrating the information contained in 
these sources has not been a small task, but the result, 
coupled with the expert evaluation and judgment by our Science 
and Technology scientific staff, is the basis for determining 
the R&D needed to meet our mission.
    We recognize that many organizations, such as those 
represented here today, are contributing to the Homeland 
Security Science and Technology base. In the Homeland Security 
Act of 2002, Congress recognized this as well and directed that 
the Under Secretary of Science and Technology coordinate the 
Federal Government's civilian efforts to identify and develop 
countermeasures to current and emerging threats.
    We take this responsibility very seriously.
    We began this coordination process by evaluating and 
producing a report on the Department of Homeland Security R&D 
activities underway that were not under the direct cognizance 
of the Science and Technology Directorate. Where appropriate, 
Science and Technology will absorb these R&D functions.
    We are now initiating the effort needed to coordinate 
Homeland Security research and development across the entire 
United States Government. Discussions are ongoing with federal 
departments and agencies as well as with the Office of 
Management and Budget, the Office of Science and Technology 
Policy, and the Homeland Security Council to ensure that the 
strongest possible links are made and the best possible 
coordination occurs.
    At this time, I would like to briefly describe our fiscal 
year 2005 plans. We have an overall budget request of $1.04 
billion, which is an increase of $126.5 million, or a 13.9 
percent increase over the fiscal year 2004 levels. With these 
funds, Science and Technology will continue to make progress in 
securing the homeland. For example, under President Bush's new 
Biosurveillance Initiative, which accounts for most of the 
increase in funding, additional capability will be implemented 
quickly in the top-threat urban areas to provide more than 
twice the current capability.
    Also during fiscal year 2005, we expect to continue our 
annual awarding of scholarships and fellowships, and we will 
continue with our University Centers of Excellence, each 
focusing on a different aspect of terrorism. We will wrap up 
our work on the Counter-MANPADS, or the Man-Portable Air 
Defense Shoulder-fired missiles, to improve technologies to 
protect commercial aircraft. We will award contracts in 2005 
for integrating commercial prototype equipment on selected 
commercial aircraft and conduct tests and evaluations, 
including live-fire range tests.
    With less than a full year completed, the scientists and 
engineers in the Science and Technology Directorate have 
accomplished more than I could have expected, and I am proud to 
have shared with you some of those success stories we have 
today, and I have appended a more comprehensive summary of 
those accomplishments for the record. And yet, we also 
recognize there is much to do, and we will be working just as 
hard in fiscal year 2005. I look forward to working with you in 
the Science Committee, with my colleagues here today and 
private industry to continue this work and improve our ability 
to protect the homeland.
    This concludes my prepared statement.
    [The prepared statement of Dr. McQueary follows:]

               Prepared Statement of Charles E. McQueary

Opening Statement

    Good morning. Chairman Boehlert, Congressman Gordon, and 
distinguished Members of the committee, it is a pleasure to be with you 
today to discuss the research and development activities of the 
Department of Homeland Security's Science and Technology Directorate.
    I also want to recognize and thank my colleagues from the Office of 
Science and Technology Policy, the Department of Energy, the Department 
of Commerce, and the National Science Foundation for the essential role 
their organizations have in advancing this nation's scientific 
knowledge--and for the strong support they have provided to us as we 
have stood up the Science and Technology Directorate.
    The Nation's advantage in science and technology is key to securing 
the homeland. The most important mission for the Science and Technology 
Directorate is to allow the dedicated men and women who protect and 
secure our homeland to perform their jobs more effectively and 
efficiently--these men and women are my customers.
    When I first reported to you about our activities last year, we had 
just begun our work. The Science and Technology Directorate has 
accomplished much since its inception last March. I'd like to give you 
some highlights:

          We have deployed monitoring systems that operate 
        continuously to detect biological pathogens in approximately 30 
        U.S. cities.

          We have also set up testbeds to provide accurate 
        radiation and nuclear warnings at air and marine cargo ports in 
        cooperation with the Port Authority of New York and New Jersey.

          We have established the first series of inter-
        operability guidelines for the Nation's wireless emergency 
        communications network.

          In another effort, we have greatly reduced the time 
        it takes to develop national standards for technologies to 
        protect the homeland--our new standards for radiation detection 
        equipment will help put needed technologies into the hands of 
        first responders--quickly.

          And HSARPA--our Homeland Security Advanced Research 
        Projects Agency--has started extensive research for next 
        generation biological/chemical, and radiological/nuclear 
        detectors.

          We have awarded the first round of 100 Homeland 
        Security Fellowships and Scholarships to help build U.S. 
        leadership in science and technology.

          We have also established the first university-based 
        Homeland Security Centers of Excellence to address both the 
        targets and means of terrorism.

          And we have become active contributors in numerous 
        interagency working groups.

    In accomplishing this, we have doubled the staff of this 
Directorate with some of this country's brightest and most dedicated 
people. We started this Directorate last March with 87 people. Today we 
have more than 210.
    However, the threats to our homeland remain diverse and daunting. 
We must constantly monitor current and emerging threats and assess our 
vulnerabilities to them. And we must develop new and improved 
capabilities to counter them--and respond to and recover from a 
potential attack.
Prioritization
    The Science and Technology Directorate has prioritized its research 
and development efforts based on the directives, recommendations and 
suggestions from many sources, including:

          Homeland Security Act of 2002;

          President Bush's National Strategies and nine 
        Homeland Security Presidential Directives;

          The report from the National Academies of Sciences on 
        Making the Nation Safer, and

          Reports from the Gilmore, Bremer and Hart-Rudman 
        Committees.

    Identifying and integrating the information contained in these 
sources has not been a small task. But the result--coupled with expert 
evaluation and judgment by our scientific staff--is the basis for 
determining the R&D needed to meet our mission.
Consolidation and Coordination
    We recognize that many organizations, such as those represented 
here today, are contributing to the homeland security science and 
technology base. In the Homeland Security Act of 2002, Congress 
recognized this as well, and directed the Under Secretary of Science 
and Technology to coordinate the Federal Government's civilian efforts 
to identify and develop countermeasures to current and emerging 
threats.
    We take this responsibility very seriously.
    We began this coordination process by evaluating and producing a 
report on DHS R&D activities underway that were not under the direct 
cognizance of the Science and Technology Directorate. Where 
appropriate, S&T will absorb these R&D functions.
    We are now initiating the effort needed to coordinate homeland 
security research and development across the entire United States 
Government. Discussions are ongoing with Federal Departments and 
Agencies, as well as the Office of Management and Budget, the Office of 
Science and Technology Policy and the Homeland Security Council to 
ensure that the strongest possible links are made and the best possible 
coordination occurs.
Budget Request
    At this time I would like to briefly describe our FY 2005 plans. We 
have an overall budget request of $1.039.3 billion--which is an 
increase of $126.5 million or 13.9 percent over the FY 2004 levels.
    With these funds, Science and Technology will continue to make 
progress in securing the homeland. For example,

          under President Bush's new Biosurveillance 
        Initiative, which accounts for most of the increase in funding, 
        additional capability will be implemented quickly in the top 
        threat urban areas to provide more than twice the current 
        capability.

          Also during FY 2005, we expect to continue our annual 
        awarding of Scholarships and Fellowships. And we will continue 
        with our University Centers of Excellence, each focusing on a 
        different aspect of terrorism.

          We will ramp up our work in Counter-MANPADS to 
        improve technologies to protect commercial aircraft from the 
        threat of MAN-Portable Air Defense Systems. We will award 
        contracts in FY 2005 for integrating commercial prototype 
        equipment on selected commercial aircraft and conducting test 
        and evaluation, including live fire range tests.

Conclusion
    With less than a full year completed, the scientists and engineers 
in the Science and Technology Directorate have accomplished more than I 
could have expected. I am proud to have shared with you today some of 
those success stories. We have appended a more comprehensive summary of 
accomplishments to date for the record.
    And yet, we also recognize that there is much to do, and we will be 
working just as hard in FY 2005.
    I look forward to working with you on the Science Committee--and 
with my colleagues here today and private industry to continue this 
work and improve our ability to protect our homeland and way of life.
    This concludes my prepared statement. With the Committee's 
permission, I request my formal statement be submitted for the record. 
Mr. Chairman, Congressman Gordon and Members of the Committee, I thank 
you for your attention and will be happy to answer any questions you 
may have.

Introduction

    Good morning. Chairman Boehlert, Congressman Gordon, and 
distinguished Members of the Committee, it is a pleasure to be with you 
today to discuss the research and development activities of the 
Department of Homeland Security's Science and Technology Directorate. I 
also want to recognize and thank my colleagues from the Office of 
Science and Technology Policy, the Department of Energy, the Department 
of Commerce, and the National Science Foundation for the essential role 
their organizations have in advancing this nation's scientific 
knowledge and for the strong support they have provided to us as we 
have stood up the Science and Technology Directorate.
    The Nation's advantage in science and technology is key to securing 
the homeland. The most important mission for the Science and Technology 
Directorate is to develop and deploy cutting-edge technologies and new 
capabilities so that the dedicated men and women who serve to protect 
and secure our homeland can perform their jobs more effectively and 
efficiently - these men and women are my customers. When I last 
reported to you about our activities, we had just begun our work. It is 
now less than a year later.
    Since its inception less than a year ago, the Science and 
Technology Directorate has:

        1)  deployed continuously operating biological pathogen 
        detection systems to approximately 30 United States cities;

        2)  set up testbeds for radiation and nuclear warnings at air 
        and marine cargo ports in cooperation with the Port Authority 
        of New York and New Jersey,

        3)  established the first series of inter-operability 
        guidelines for the Nation's wireless emergency communications 
        network;

        4)  established the first national standards guidelines for 
        radiation detection equipment;

        5)  awarded the first Homeland Security Fellowships and 
        Scholarships;

        6)  established the first Homeland Security University Center 
        of Excellence,

        7)  transferred the Plum Island Animal Disease Center from the 
        Department of Agriculture to the Science and Technology 
        Directorate;

        8)  engaged private industry in bringing innovative and 
        effective solutions to homeland security problems through the 
        Technical Support Working Group and issuance of HSARPA's first 
        two Broad Agency Announcements and a Small Business Innovative 
        Research Program solicitation;

        9)  initiated a development and demonstration program to assess 
        the technical and economic viability of adapting military 
        countermeasures to the threat of man portable anti-aircraft 
        missiles for commercial aircraft;

        10)  collaborated with and assisted other components of the 
        Department to enhance their abilities to meet their missions 
        and become active contributors in interagency working groups--
        all while staffing this Directorate with some of this country's 
        brightest and most dedicated people.

    I continue to be energized by and proud of the scientists, 
managers, and support staff in the Science and Technology Directorate. 
We have accomplished a great deal in a short amount of time and are 
positioning the Directorate to make continuing contributions to the 
homeland security mission of the Department.
    However, the threats to our homeland remain diverse and daunting. 
We must constantly monitor current and emerging threats and assess our 
vulnerabilities to them, develop new and improved capabilities to 
counter them, and mitigate the effects of terrorist attacks should they 
occur. The Science and Technology Directorate must also enhance the 
conventional missions of the Department to protect and provide 
assistance to civilians in response to natural disasters, law 
enforcement needs, and other activities such as maritime search and 
rescue.

Prioritization

    The Science and Technology Directorate has prioritized its research 
and development (R&D) efforts based on the directives, recommendations 
and suggestions from many sources, including:

          Homeland Security Act of 2002;

          The FY 2004 Congressional Appropriations for the 
        Department of Homeland Security;

          President Bush's National Strategy for Homeland 
        Security, the National Strategy for the Physical Protection of 
        Critical Infrastructure and Key Assets, the National Strategy 
        to Combat Weapons of Mass Destruction, the National Strategy to 
        Secure Cyberspace, and the National Security Strategy;

          President Bush's nine Homeland Security Presidential 
        Directives;

          Office of Management and Budget's 2003 Report on 
        Combating Terrorism;

          Current threat assessments as understood by the 
        Intelligence Community;

          Requirements identified by other Department 
        components;

          Expert understanding of enemy capabilities that exist 
        today or that can be expected to appear in the future; and

          The report from the National Academies of Sciences on 
        ``Making the Nation Safer: The Role of Science and Technology 
        in Countering Terrorism,'' and the reports from the Gilmore, 
        Bremer and Hart-Rudman Committees.

    Identifying and integrating the information contained in these 
sources has not been a small task, but the result, coupled with expert 
evaluation and judgment by our scientific staff, is the basis for 
determining the research and development (R&D) needed to meet our 
mission requirements.

Consolidation and Coordination

    The Department of Homeland Security, Science and Technology 
Directorate recognizes that many organizations, such as those 
represented here today, are contributing to the science and technology 
base needed to enhance the Nation's capabilities to thwart terrorist 
acts and to fully support the conventional missions of the operational 
components of the Department. Congress recognized the importance of the 
research and development being conducted by numerous federal 
departments and agencies, and in the Homeland Security Act of 2002, 
directed the Under Secretary of Science and Technology to coordinate 
the Federal Government's civilian efforts to identify and develop 
countermeasures to current and emerging threats.
    We take this responsibility very seriously.
    We have begun this coordination process by evaluating and producing 
a report on the research, development, testing, and evaluation work 
that was being conducted within the Department of Homeland Security but 
was not already under the direct cognizance of the Science and 
Technology Directorate. Where it is appropriate, the Science and 
Technology Directorate will absorb these R&D functions. In other cases, 
the Science and Technology Directorate will provide appropriate input, 
guidance, and oversight of these R&D programs.
    We are now initiating the effort needed to coordinate homeland 
security research and development across the entire United States 
Government. It will come as no surprise to the Members of this 
committee that good, solid, effective research and development relevant 
to homeland security is being conducted by the Departments of 
Agriculture, Commerce, Defense, Energy, Justice, Health and Human 
Services, State, and Veteran's Affairs; within the National Science 
Foundation, the Environmental Protection Agency and other federal 
agencies; and by members of the Intelligence Community.
    Several interagency working groups already exist that are 
addressing issues important to homeland security. The Science and 
Technology Directorate has been, and continues to be, an active 
participant in these working groups, and in most cases has taken a 
leadership role. These fora foster an active exchange of information 
and assist each participating agency in identifying related needs and 
requirements, conducting research and development of mutual benefit, 
and avoiding duplication of effort.
    We also continue to have discussions at multiple levels of 
management with Federal Departments and Agencies, as well as with the 
Office of Management and Budget, the Office of Science and Technology 
Policy, and the Homeland Security Council. These discussions ensure 
that the strongest possible links are made and the best possible 
coordination occurs between our Department and those who are conducting 
sector-specific research. By the autumn of 2004, all Department of 
Homeland Security research and development programs will be 
consolidated and all United States Government research and development 
relevant to fulfilling the Department's mission will have been 
identified and coordinated as appropriate. It is important to note that 
this identification and relevant coordination does not imply the 
Department of Homeland Security should have the responsibility and 
authority for these programs within other federal agencies; it does 
recognize that science and technology advances can have many 
applications, including homeland security.

Definition of Research and Development (R&D)

    The Science and Technology Directorate is both a generator and a 
consumer of scientific and technological advances resulting from basic 
and applied research and development. We also have a responsibility for 
testing and evaluating capabilities to ensure that their deployment 
results in improved operational systems. Standards are needed to assist 
first responders and operational components of the Department in 
evaluating, procuring, and deploying new capabilities. This is a broad 
range of responsibility and one we take seriously. The Department has 
defined R&D activities as follows:

         Activities associated with R&D efforts include the development 
        of a new or improved capability to the point where it is 
        appropriate for operational use, including test and evaluation. 
        R&D activities include the analytic application of scientific 
        and engineering principles in support of operational 
        capabilities, concept exploration, systems development, proof 
        of principle demonstration and pilot deployments, standards 
        development, and product improvement including application and 
        integration of technologies. For mission (non-management) 
        systems, resources associated with developing technology to 
        provide new capabilities (including systems engineering, 
        research, development, testing and prototyping) are covered 
        under the R&D category.

    This definition encompasses all of the research, development, test, 
and evaluation (RDT&E) efforts of the Science and Technology 
Directorate.

Science and Technology Directorate Organization

    Because our Department is relatively new, I'd like to describe the 
way we are structured. We have four key offices in the Science & 
Technology Directorate, each of which has an important role in 
implementing the Directorate's RDT&E activities. Individuals with 
strong credentials have been appointed to head each office and we 
continue to strategically add highly skilled technical, professional 
and support staff. These offices are: Plans, Programs and Budgets; 
Research and Development; Homeland Security Advanced Research Projects 
Agency; and Systems Engineering and Development. In addition, we have 
created the Office of Weapons of Mass Destruction Operations and 
Incident Management to offer scientific advice and support.
    Crosscutting the four key offices, the Science and Technology 
Directorate is implementing its activities through focused portfolios 
that address biological, chemical, high explosives, radiological and 
nuclear, and cyber threats; support the research and development needs 
of the operational units of the Department; support the development of 
standards; develop an enduring R&D capability for homeland security; 
and receive valuable input from private industry and academia as well 
as national and federal laboratories. I will talk about the offices 
first and then about the portfolios.

Office of Plans, Programs and Budgets

    The Office of Plans, Programs and Budgets operates under the 
supervision of Dr. Penrose Albright. He has organized this office into 
the portfolios I just mentioned, each of which is focused on a 
particular discipline or activity; taken together, these portfolios 
span the Directorate's mission space. As I will cover the portfolios in 
detail later in this testimony, I will limit myself here to a summary 
explanation. The staff of each portfolio is charged with being expert 
in their particular area; with understanding the activities and 
capabilities extant in federal agencies and across the broad research 
and development community; and with developing a strategic plan for 
their particular portfolio, to include near-, mid-, and long-range 
research and development activities. In addition, we have staff that is 
charged with understanding the threat from a technical perspective, 
with integrating the various portfolios into a coherent overall plan, 
and with developing the corresponding budget and monitoring its 
financial execution.
    Finally, the Office of Plans, Programs and Budget is responsible 
for executing the Directorate's implementation responsibilities for the 
SAFETY (Support Anti-Terrorism by Fostering Effective Technologies) 
Act.

Office of Research and Development

    We are fortunate to have Dr. Maureen McCarthy as our Director of 
Science and Technology's Office of Research and Development (ORD). Dr. 
McCarthy has served as Chief Scientist for the National Nuclear 
Security Administration and the Department of Energy (DOE) and was 
previously DOE's senior representative to the Homeland Security 
Transition Planning Office. She will lead the office as it strives to 
provide the Nation with an enduring capability in research, 
development, demonstration, testing and evaluation of technologies to 
protect the homeland. This office also plans to provide stewardship to 
the scientific community and to preserve and broaden the leadership of 
the United States in science and technology.
    Activities within ORD address the resources that can be brought to 
bear to better secure the homeland through the participation of 
universities, national laboratories, federal laboratories and research 
centers. Directors have been appointed to lead efforts in each of these 
areas and staff is being added rapidly.

Homeland Security Advanced Research Projects Agency

    Dr. David Bolka joined us in September 2003 as director of the 
Homeland Security Advanced Research Projects Agency, known as HSARPA. 
Dr. Bolka made significant contributions in advancing technical and 
scientific projects in his prior work with Lucent Technologies and Bell 
Laboratories, following a notable career in the United States Navy.
    HSARPA is the external research-funding arm of the Science and 
Technology Directorate. It has at its disposal the full range of 
contracting vehicles and the authority under the Homeland Security Act 
to engage businesses, federally funded research and development 
centers, universities and other government partners in an effort to 
gather and develop viable concepts for advanced technologies to protect 
the homeland.
    HSARPA's mission, as stated in the Homeland Security Act of 2002, 
is to support basic and applied homeland security research to promote 
revolutionary changes in technologies that would promote homeland 
security; advance the development, testing and evaluation, and 
deployment of homeland security technologies; and accelerate the 
prototyping and deployment of technologies that would address homeland 
security vulnerabilities. Its customers are state and local first 
responders, and federal agencies that are allied with homeland security 
such as the United States Coast Guard, United States Secret Service, 
the U.S. Citizenship and Immigration Services, the Federal Emergency 
Management Agency and others.
    About 60 percent of the Science and Technology Directorate's 
appropriation in FY 2004 will be executed directly through the private 
sector with HSARPA managing about half of that. At least five to ten 
percent of HSARPA's funds are dedicated for revolutionary, long-range 
research for breakthrough technologies and systems.

Office of Systems Engineering and Development

    Mr. John Kubricky joined us in early October 2003 as our Director 
of the Office of Systems Engineering and Development (SE&D). He is 
tasked with leading the implementation and transition of large-scale or 
pilot systems to the field through a rapid, efficient and disciplined 
approach to project management. Mr. Kubricky previously served as 
Advanced Program Development Manager for Northrop Grumman and has held 
senior positions with California Microwave and Westinghouse Defense.
    One of the Science and Technology Directorate's challenges is to 
evaluate a wide spectrum of military and commercial technologies so 
rapid, effective and affordable solutions can be transitioned to the 
Department's customers that include first responders and federal 
agencies. In some cases, military technologies could be candidates for 
commercialization, but rigorous systems engineering processes need to 
be applied to ensure a successful transition. SE&D's role is to 
identify and then, in a disciplined manner, retire[TSPU1] risks 
associated with such technologies to ready them for deployment to the 
field. In doing so, the office must view each technology through the 
prism of affordability, performance and supportability--all critical to 
end-users.
    SE&D must weigh considerations such as the urgency for a solution, 
consequences of the threat, safety of the product, and life cycle 
support as new products are introduced. Products must be user friendly, 
have a minimum of false alarms, require little or no training and 
consistently provide accurate results. SE&D will demonstrate and test 
solutions before they are released to the field, and will validate that 
those solutions meet user expectations.

Office of Weapons of Mass Destruction Operations and Incident 
                    Management

    We created the Office of Weapons of Mass Destruction Operations and 
Incident Management to serve as the Science and Technology 
Directorate's technical support for crisis operations. The office 
provides scientific advice and support to the Office of the Secretary 
of Homeland Security in assessing and responding to threats against the 
homeland. This office's activities are primarily focused on the 
biological, chemical, radiological, and nuclear threats.

Portfolio Details

    The Science and Technology Directorate has organized its efforts 
into 11 budget categories; these are further divided into portfolios 
that span the set of product lines of the Directorate.
    Four portfolios address specific terrorist threats:

          Biological Countermeasures

          Chemical Countermeasures

          High Explosive Countermeasures

          Radiological and Nuclear Countermeasures.

    Four portfolios crosscut these threats:

          Threat and Vulnerability, Testing and Assessment--
        this portfolio includes our support to the Information Analysis 
        and Infrastructure Protection Directorate, including our 
        critical infrastructure protection and cyber security 
        activities.

          Standards

          Emerging Threats

          Rapid Prototyping

    We also have portfolios that support the operational units of the 
Department (Border and Transportation Security; Emergency Preparedness 
and Response, United States Coast Guard and United States Secret 
Service) in both their homeland security and conventional missions.
    Our University and Fellowship Programs portfolio addresses the need 
to build an enduring science and technology capability and support 
United States leadership in science and technology.
    Our most recent portfolio, Counter-MANPADS, is seeking to improve 
technologies to protect commercial aircraft from the threat of MAN-
Portable Air Defense Systems (MANPADS).
    In addition, the Science and Technology Directorate is responsible 
for the management of one of the United States Government's E-Gov 
Initiatives, the SAFECOM Program. There are tens of thousands of state 
and local public safety agencies, and 100 federal law enforcement 
agencies that depend on inter-operable wireless communications. The 
SAFECOM (Wireless Public SAFEty Inter-operable COMmunications) program 
is the umbrella initiative to coordinate all federal, State, local, and 
tribal users to achieve national wireless communications inter-
operability. The placement of SAFECOM in the Department of Homeland 
Security's Science and Technology Directorate allows it full access to 
the scientific expertise and resources needed to help our nation 
achieve true public safety wireless communications inter-operability.
    At this time I would like to briefly describe some of our 
accomplishments to date and our FY 2005 plans. As can be seen in the 
following chart, we have an overall FY 2005 budget request of $1.0393 
billion, which is an increase of $126.5 million (13.9 percent) over the 
FY 2004 levels. The request includes $35 million for construction of 
facilities. In addition, the increase includes President Bush's request 
for an additional $65 million dollars to enhance and expand the 
BioWatch Program.



Biological Countermeasures

    Biological threats can take many forms and be distributed in many 
ways. Aerosolized anthrax, smallpox, foot and mouth disease, and bulk 
food contamination are among the threats that can have high 
consequences for humans and agriculture. Our Biological Countermeasures 
portfolio uses the Nation's science base to prevent, protect, respond 
to and recover from bioterrorism events. This portfolio provides the 
science and technology needed to reduce the probability and potential 
consequences of a biological attack on this nation's civilian 
population, its infrastructure, and its agricultural system. Portfolio 
managers and scientists are developing and implementing an integrated 
systems approach with a wide range of activities, including 
vulnerability and risk analyses to identify the need for vaccines, 
therapeutics, and diagnostics; development and implementation of early 
detection and warning systems to characterize an attack and permit 
early prophylaxis and decontamination activities; and development of a 
national bioforensics analysis capability to support attribution of 
biological agent use.
    In FY 2003 and 2004, the Biological Countermeasures portfolio:

          Deployed BioWatch to approximately 30 cities across 
        the Nation. BioWatch consists of air samplers that detect the 
        release of biothreat pathogens, such as anthrax, in a manner 
        timely enough to allow for effective treatment of the exposed 
        population. In addition, with additional funds provided by 
        Congress in FY 2004, we were able to integrate environmental 
        monitoring data with biosurveillance to provide early attack 
        alerts and assessments. The environmental monitoring activities 
        include not only BioWatch, which provides continuous monitoring 
        of most of our major metropolitan areas, but also targeted 
        monitoring that is temporarily deployed for special national 
        needs, such as a Homeland Security Elevated Threat Level. While 
        serving the primary function of mitigating attacks, both 
        BioWatch and environmental monitoring systems also play a 
        significant deterrent role, since terrorists are less likely to 
        attack when they know that defensive systems prevent them from 
        attaining their goals.

          Established the National Biodefense Analysis and 
        Countermeasures Center, which provides scientific support for 
        intelligence activities, prioritizes biothreats, and conducts 
        bioforensic analyses for attribution and hence deterrence.

    In FY 2005, we will build upon our past work and continue to deploy 
and improve wide area monitoring systems for urban areas. Under 
President Bush's new Biosurveillance Initiative, which accounts for 
most of the FY 2005 increase in funding, additional capability will be 
implemented quickly in the top threat urban areas--more than twice the 
current capability. We will be working on decontamination technologies 
and standards for facilities and outdoor areas, and a National Academy 
of Sciences study characterizing contamination risks will be completed 
in FY 2005. At a smaller scale, we will define requirements for 
expanded technology in detect-to-warn scenarios relevant to facilities 
monitoring. At the same time, we will be building our capabilities in 
the National Biodefense Analysis and Counterterrorism Center (NBACC) 
and at Plum Island Animal Disease Center (PIADC). At the NBACC, we are 
focusing first on bioforensics and development of a biodefense 
knowledge center; for agro-bioterrorism, we are prioritizing 
countermeasures to foreign animal diseases. We are requesting 
additional funding in FY 2005 for Plum Island to improve the facilities 
and security of this important research and development site.

Chemical Countermeasures

    The National Research Council Report, Making the Nation Safer, 
points out that ``chemicals continue to be the weapon of choice for 
terrorist attacks.'' The large volumes of toxic industrial chemical and 
materials along with the potential for chemical warfare agents and 
emerging threat agents constitute a broad range of threats that may be 
applied to virtually any civilian target.
    Our Chemical Countermeasures portfolio provides the science and 
technology needed to reduce the probability and potential consequences 
of a chemical attack on this nation's civilian population. The 
portfolio places high priority on characterizing and reducing the 
vulnerability posed by the large volumes of toxic industrial materials 
in use, storage or transport within the Nation. The research and 
development activities include prioritization of efforts among the many 
possible chemical threats and targets, and development of new detection 
and forensic technologies and integrated protective systems for high-
value facilities such as airports and subways. These activities are 
informed by end-user input and simulated exercises.
    Over the past year, our Chemical portfolio completed Project 
PROTECT--Program for Response Options and Technology Enhancements for 
Chemical/Biological Terrorism--a program conducted in collaboration 
with the Washington Metropolitan Area Transit Authority (WMATA). 
PROTECT, an operational chemical agent detection and response 
capability, significantly decreases response time, which in the event 
of an attack will save human lives. PROTECT is deployed in 13 Metro 
stations and is operated by the WMATA.
    In FY 2005, our focus will be on protecting facilities from 
chemical attacks and controlling the industrial chemicals that may be 
used for such attacks. Our scientists, working with the Information 
Analysis and Infrastructure Protection Directorate (IAIP), will 
complete a detailed end-to-end study of three reference scenarios, to 
culminate in recommendations for top-level architectures, 
identification of key gaps, and a ``report card'' showing present, mid-
term (three-year), and long-term (five-plus year) capabilities. We will 
qualify candidate off-the-shelf sensors for demonstration in an 
application to facilities protection. We will address response and 
recovery, too. Working with the user community, we will develop first-
generation playbooks for responding to the three reference scenarios 
and develop technical requirements for personal protection equipment.

High Explosives Countermeasures

    The High Explosives Countermeasures portfolio addresses the threat 
that terrorists will use explosives in attacks on buildings, critical 
infrastructure, and the civilian population of the United States. The 
Science and Technology Directorate's portfolio is closely coordinated 
with the activities ongoing in the Transportation Security 
Administration to ensure that R&D activities are complementary, not 
duplicative. R&D priorities in this portfolio have focused on the 
detection of vehicle bombs and suicide bombers, and on providing the 
science and technology needed to significantly increase the probability 
of preventing an explosives attack on buildings, infrastructure and 
people.
    This portfolio in FY 2005 will develop and field equipment, 
technologies and procedures to interdict suicide bombers and car and 
truck bombs before they can reach their intended targets while 
minimizing the impact on the American way of life. We will complete 
testing and evaluation of known procedures and commercial off-the-shelf 
devices applicable to indoor or outdoor interdiction of suicide 
bombers, and develop a training package for local law enforcement, 
including recommended equipment and procedures. In addition, we will 
support the development of new devices to interdict suicide bombers and 
study the feasibility of using existing detectors to identify 
explosives in trucks. Finally, we will analyze the costs and benefits 
of hardening aircraft cargo containers, cargo bays, and overhead bin 
storage compartments to better withstand the effects of an explosion.

Radiological and Nuclear Countermeasures

    Potential radiological and nuclear threats range from the 
deliberate dispersal of small amounts of radioactive material to the 
detonation of an improvised or stolen nuclear weapon to an attack on 
our nuclear power industry. Our Radiological and Nuclear 
Countermeasures portfolio provides the science and technology needed to 
reduce both the probability and the potential consequences of a 
radiological or nuclear attack on this nation's civilian population or 
our nuclear power facilities.
    In FY 2003, our Radiological and Nuclear Countermeasures portfolio 
formally assumed (on August 19, 2003) management of the Port Authority 
of New York and New Jersey radiation detection testbed. The test bed 
was previously managed by the United States Department of Energy. 
Following the transfer, we have broadened the project scope beyond just 
testing and evaluating individual pieces of technology to a systems 
approach, including response protocols and operational concepts. As 
part of the Science and Technology Directorate's effort, radiation 
detection sensors will be deployed and operated by federal, State, and 
local inspectors and police at land, maritime and aviation venues. By 
judging the efficacy of deployed systems over time, we will be able to 
inform future decisions on detection technology R&D investment, 
deployment of urban monitoring systems, configurations best able to 
enhance security, and viable ways to defend against a radioactive 
dispersal device or an improvised nuclear device.
    For FY 2005, we plan to leverage our previous technology and 
capability successes and place a high priority on providing the end-
user community with the most appropriate and effective detection and 
interdiction technologies available to prohibit the importation or 
transportation and subsequent detonation of a radiological or nuclear 
device within U.S. borders. Specifically, we will do the following:

          Integrate at least five federal, State, and local 
        sites into an operational detection system architecture to 
        detect radiological and nuclear threats;

          Establish a test and evaluation capability, and test 
        and evaluate 90 percent of the FY 2005 prototype technologies 
        developed in the portfolio's programs;

          Demonstrate two advanced characterization 
        technologies for crisis response;

          Demonstrate a prototype for automatic radiological 
        imaging analysis that enhances current imaging systems at one 
        pilot site.

Threat and Vulnerability, Testing and Assessment

    Our Threat and Vulnerability, Testing and Assessment (TVTA) 
portfolio is one of our largest portfolios, and includes our scientific 
and technical support to the Information Analysis and Infrastructure 
Protection (IAIP) Directorate. TVTA includes our R&D activities in 
Critical Infrastructure Protection and Cyber Security. Activities in 
this portfolio are designed to help evaluate extensive amounts of 
diverse threat information; detect and document terrorist intent; 
couple threat information with knowledge of complex, interdependent 
critical infrastructure vulnerabilities; and enable analysts to draw 
timely insights and distribute warnings from the information. This 
portfolio provides the science and technology needed to develop methods 
and tools to test and assess threats and vulnerabilities to protect 
critical infrastructure and enhance information exchange; this 
portfolio also includes a Biometrics Program and a Cyber Security 
Program.
    In FY 2004, TVTA:

          Developed and installed an operational component, the 
        Threat-Vulnerability Mapper (TVM), as part of the Threat and 
        Vulnerability Integration System for the Information Analysis 
        and Infrastructure Protection Directorate. The TVM provides 
        counterterrorism analysts with a simple, straightforward way 
        not only to depict the geographic distribution of threats 
        across the United States, but also to search the underlying 
        databases for information on the possible actors, agents, 
        potential severity of attacks, and extent of the 
        vulnerabilities to and effects of such attacks.

          Co-funded the Cyber Defense Technology Experimental 
        Research (``DETER'') Network with the National Science 
        Foundation, a $5.45 million, three-year research project to 
        create an experimental infrastructure network to support 
        development and demonstration of next-generation information 
        security technologies for cyber defense. This is a multi-
        university project led by the University of California at 
        Berkeley.

          Developed a Decision Support System focused on 
        prioritizing investment, protection, mitigation, response, and 
        recovery strategies related to Critical Infrastructure 
        Protection. The initial proof-of-concept began in August 2003 
        and a case study is being conducted in February 2004. The 
        prototype model will include representation of all 14 critical 
        infrastructure sectors/assets and their interdependencies.

          Developed advanced algorithms for speeding the 
        creation of DNA signatures for biological pathogen detection 
        through the Advanced Scientific Computing Research and 
        Development program. These discoveries will result in cheaper, 
        faster and more reliable bio-detectors for homeland security.

    In FY 2005, TVTA will provide the science and technology 
capabilities and enduring partnerships needed to develop methods and 
tools to test and assess threats and vulnerabilities to protect 
critical infrastructure and enhance information exchange. The Threat-
Vulnerability Mapper is only one component of a large Threat and 
Vulnerability Information System that we will continue to build, 
drawing upon advances in the information and computer sciences as well 
as innovative analytic techniques. Our objective is to continually 
improve an analyst's capability to answer threat-related questions. The 
Science and Technology Directorate will contribute to the capability to 
produce high-quality net assessments and assessments of weapons of mass 
destruction. We will develop advanced computing algorithms in support 
of improved aerosol dispersion models, blast effects calculations, 
neutron interrogation models, bioinformatics, and scalable information 
extraction; improved algorithms make more accurate information 
available faster. We will continue to provide, in collaboration with 
other relevant organizations, the science and technology and associated 
standards needed in the development of biometrics for precise 
identification of individuals and develop instrumentation to aid 
authorized officials in detecting individuals with potentially hostile 
intent. In the cyber security area, the DETER Network testbed will be 
up and running, and we will competitively fund several low-cost, high-
impact solutions to specific cyber security problems.

Standards

    Ensuring that standards are created and adopted is critically 
important for homeland security. We need consistent and verifiable 
measures of effectiveness in terms of basic functionality, 
appropriateness and adequacy for the task, inter-operability, 
efficiency, and sustainability. Standards will improve the quality and 
usefulness of homeland security systems and technologies. Our Standards 
portfolio cuts across all aspects of the Science and Technology 
Directorate's mission and all threats to improve effectiveness, 
efficiency, and inter-operability of the systems and technologies 
developed, as envisioned in the Homeland Security Act.
    Our Standards portfolio continues to actively engage the federal, 
State, and local first responders to ensure that developed standards 
are effective in detection, prevention, response, management, and 
attribution. This portfolio also conducts the essential activities in 
order to meet the requirement of the SAFETY (Support Anti-Terrorism by 
Fostering Effective Technologies) Act in developing certification 
standards for technologies related to homeland security.
    In FY 2004, our Standards portfolio:

          Created initial standards guidelines, with formal 
        standards nearing completion, for radiation pagers, hand-held 
        radiation dosimetry instruments, radioisotope identifiers and 
        radiation portal monitors. These standards were developed under 
        the auspices of the American National Standards Institute's 
        Accredited American Standards Committee on Radiation 
        Instrumentation.

          Published guidelines for inter-operable 
        communications gear. Common grant guidance has been developed 
        and incorporated in the public safety wireless inter-
        operability grant programs of both the Justice Department and 
        the Department of Homeland Security;

          Launched the SAFETY Act process for evaluating anti-
        terrorism technologies for potential liability limits.

    In FY 2005, the Standards portfolio will continue to work on many 
fronts and with many partners to establish needed standards for 
technologies (including equipment), processes, and systems. We will 
especially focus on two major milestones. First, we will establish 
technical standards and test and evaluation protocols for 
decontamination technologies and analysis across the ranges of weapons 
of mass destruction. Second, we will publish a ``Consumer's Report'' on 
radiation and bio-agent detection devices for federal, State, and local 
users.

Emerging Threats

    It is truly the threats we do not yet know that are often the most 
terrifying. Our Emerging Threats portfolio addresses the dynamic nature 
of terrorist threats, as science and technology advancements enable new 
agents of harm and new ways to employ them. This portfolio places high 
priority on developing the capability to use innovative, crosscutting, 
out-of-the-box approaches for anticipating and responding to new and 
emerging threats. Successful identification of emerging threats will 
permit capabilities to be developed to thwart these emerging threats 
before they are used.
    Relevant R&D is underway at other agencies and organizations; thus, 
partnerships in this area hold great potential for synergistic focus on 
homeland security. Work is being done and will continue to be pursued 
in partnership with the Departments of Energy, Defense, Justice, and 
Agriculture, the intelligence community, and the National Institutes of 
Health.
    In FY 2003 and 2004, our scientists in the Emerging Threats 
portfolio established informal partnerships with the intelligence 
community and with the United States Secret Service in order to 
leverage ongoing activities in support of over-the-horizon assessment.
    In FY 2005, we will leverage the activities started during FY 2004, 
and continue to focus on developing the capability to use innovative, 
crosscutting, out-of-the-box approaches for anticipating and responding 
to new and emerging threats and to develop revolutionary technologies 
to combat them.

Rapid Prototyping

    By accelerating the time needed to develop and commercialize 
relevant technologies, the Science and Technology Directorate will 
ensure that operational end-users will be better able to prevent 
terrorist attacks, reduce the Nation's vulnerability, and minimize the 
damage and assist in recovery if attacks occur. Our Rapid Prototyping 
portfolio advances the Directorate's mission to conduct, stimulate and 
enable research, development, test, evaluation and timely transition of 
homeland security capabilities to federal, State and local operational 
end-users.
    In FY 2003 and FY 2004, the Rapid Prototyping portfolio provided 
funding of $30 million each year through HSARPA to the interagency 
Technical Support Working Group (TSWG) to solicit ideas, concepts and 
technologies for 50 requirement areas of interest to both the 
Department and TWSG; initial contracts have been made and HSARPA will 
provide the programmatic monitoring of those efforts for the Science 
and Technology Directorate. This portfolio also provided support 
through HSARPA for a joint port and coastal surveillance prototype 
testbed with the United States Coast Guard, designated ``HAWKEYE.'' 
Funding has been made available to support the creation of a Technology 
Clearinghouse as required in the Homeland Security Act of 2002.
    In FY 2005, this program will continue to provide a mechanism for 
accelerated development of technologies relevant to homeland security 
in a process driven by technology developers. Through rapid prototyping 
and commercialization, these technologies will be made available to 
operational end-users as quickly as possible, thus increasing their 
capability to secure the homeland.

Support to Department of Homeland Security Components

    As I have mentioned, the operational components of the Department 
are my customers. The Department of Homeland Security's Science and 
Technology Directorate supports the missions of the Information 
Analysis and Infrastructure Protection (IAIP) Directorate, Border and 
Transportation Security (BTS), Emergency Preparedness and Response 
(EP&R), United States Coast Guard (USCG), and United States Secret 
Service (USSS). Our TVTA portfolio supports the mission of the IAIP 
Directorate as previously indicated. This portfolio places high 
priorities on high-risk, high-reward research and development relevant 
to homeland security that might not otherwise be conducted in support 
of the missions of BTS, EP&R, USCG, and the USSS.
    In FY 2003 and FY 2004, we continued to support the conventional 
missions of these operational components. Ongoing activities within 
BTS, USCG and USSS focus on preventing terrorists and terrorist weapons 
(particularly weapons of mass destruction) from entering the United 
States, on detecting and preventing cyber attacks, supporting maritime 
transportation, safety and economy (Port and Channel navigation, Search 
and Rescue, and Aquatic Nuisance Species Remediation), and on 
preventing attacks on United States Secret Service protectees and high-
visibility venues.

Support to Border and Transportation Security

    The Science and Technology Directorate supports all elements of BTS 
enforcement and facilitation processes through identifying operational 
requirements, developing mission capabilities-based technological needs 
and implementing a strategic plan. We are providing systems engineering 
support to various BTS programs including US VISIT and Unmanned Aerial 
Vehicles.
    The Science and Technology Directorate's support to the BTS 
Directorate is accomplished by implementing a capabilities-based 
technology planning process. The capabilities-based approach 
establishes the scope of effort and framework for a technology plan. 
Through a series of user conferences and technology opportunity 
conferences, requirements are developed and prioritized for new and 
improved capabilities. Operational personnel identify capabilities and 
technology personnel identify potential development opportunities. 
Capability gaps and possible technology solutions are proposed, and a 
budget is developed to distinguish between both funded and unfunded 
needs.
    The Science & Technology Directorate co-chairs with BTS, the 
Department's Unmanned Aerial Vehicle (UAV) Working Group, which is 
currently focused on developing the Border and Transportation Security 
operational requirements for UAVs and related technologies, e.g., 
aerostats, blimps, lighter than air (LTA) ships, and fixed and mobile 
towers. The starting point for the requirements generation process is 
six BTS capability objectives we have identified that could benefit by 
the utilization of UAVs: surveillance and monitoring communications, 
apprehension, targeting, intelligence, deterrence, and officer safety. 
Functional capabilities that could be filled or improved through the 
application of UAVs and other technologies have been identified. Based 
on these high-level requirements, the Science and Technology 
Directorate is developing concepts of operations and assumptions that 
will be used in conducting an Analysis of Alternatives that will 
include UAVs and other technologies.
    In FY 2005 we will be involved in a wide range of activities 
supporting the components, based upon their needs. For BTS, we will 
focus on discovering and implementing technologies that include 
improved screening and inspection, access control, document 
verification and validity, and data compression and analysis.

Support to Emergency Preparedness and Response

    The Nation has more than 750 regionally accredited community 
colleges. Community colleges train more than 80 percent of our 
country's first responders; these first responders are critical for 
homeland security. The Science and Technology Directorate has a 
responsibility to ensure that these first responders have the necessary 
tools available to them to perform their jobs effectively and safely on 
a daily basis. This portfolio has a key role in our meeting that 
responsibility.
    The scope of our EP&R portfolio includes research, development, 
test and evaluation for State, local and federal emergency responders 
and emergency managers. Particular emphasis is placed on technology 
integration at all levels of government, technology insertion for 
weapons of mass destruction detection and monitoring systems, and long-
term sustained performance and inter-operability to enhance State and 
local preparedness.
    Our work in the EP&R portfolio focuses on three major areas:

          Technology development for first responders

          Scientific and technical support to federal response

          Technology integration--Safe Cities

    The Safe Cities Program, a new initiative in FY 2004, is focused on 
implementing technology and operational system solutions in local 
communities/regions. This program is being piloted in a select number 
of cities in FY 2004 and will be conducted in close cooperation with 
State and local emergency managers and city planners to identify 
capability needs and gaps that advanced technologies being developed by 
the Science and Technology Directorate can meet. The Safe Cities 
Program seeks to provide technology and operational solutions that are 
sustainable by the communities in which they are implemented. The Safe 
Cities Program will enable us to better understand the operational 
context into which new technologies will be inserted. The Program will 
result in the creation of an infrastructure that facilitates the 
evaluation of new technologies in real-world operating environments as 
well as providing a venue for integrating these technologies with 
existing state and local systems.
    In FY 2005 the EP&R portfolio will continue its focus on technology 
development and technical guidance for first responders (State and 
local), scientific and technical support to the EP&R Directorate; and 
expansion of technology integration--Safe Cities.

Support to United States Coast Guard

    The Science & Technology Directorate is integrating a major 
research program into a United States Coast Guard operational testbed 
in south Florida. The HAWKEYE program injects technologies (such as 
Surveillance, Command & Control, Sensor Fusion, and Communications) 
allowing simultaneous evaluation of technology performance as a direct 
impact on mission execution. Additionally, funding has been made 
available to support many conventional mission research including 
improvements to Search and Rescue, Remediation of Aquatic Nuisance 
Species, and Spill Response.

Support to the United States Secret Service

    We have coordinated with the United States Secret Service and 
established its first direct-funded R&D program. Based upon 
appropriated funding, four initiatives have been identified and 
prioritized, and are underway in FY 2004. In addition, there will be 
joint activities in support of the assessment of emerging threats.

Homeland Security University and Fellowship Programs

    In this portfolio we seek to develop a broad research capability 
within the Nation's universities to address scientific and 
technological issues related to homeland security. The portfolio places 
high priorities on developing academic programs and supporting students 
in order to build learning and research environments in key areas of 
Departmental interest.
    In FY 2004, this portfolio established the Department of Homeland 
Security's first University-based Center of Excellence, for Risk and 
Economic Analysis of Terrorism events. The Center, based at the 
University of Southern California, The Center, based at the University 
of Southern California, will assess the level of risk associated with 
various terrorist scenarios, in particular the potential economic 
consequences. A request for proposals has been issued for the next two 
Centers of Excellence, which will focus on Foreign Animal and Zoonotic 
Disease Defense and Post-Harvest Food Protection and Defense.
    Last fall, we awarded our 2003-2004 academic year DHS Scholarships 
and Fellowships, and welcomed our new Scholars and Fellows with a 
reception in Washington, DC. The solicitation for this program received 
just under 2,400 applications for 100 scholarships and fellowships. 
Besides making immediate contributions to homeland security-related 
R&D, these students will be part of the development of a broad research 
capability within the Nation's universities to address scientific and 
technological issues related to homeland security.
    During FY 2005, another 100 Scholars and Fellows will be supported 
for the academic year of 2004-2005, bringing the total of supported 
students to 200. We will also continue to support the Homeland Security 
University Centers of Excellence established in FY 2004, each with a 
different subject expertise focused on reducing the terrorist threat on 
the United States. Each Center of Excellence is awarded an initial 
three-year contract whose annual cost we account for in our planning.
    Because our university programs are focused on conducting the 
foundational research needed for current and future requirements, now 
is also a good time to briefly discuss the amount of basic research, 
applied research, and development we are currently conducting and our 
plans for the future. In the 11 months that this Department has been in 
existence, the Science and Technology Directorate has focused its 
initial efforts on near-term development and deployment of technologies 
to improve our nation's ability to detect and respond to potential 
terrorist acts. However, we recognize that a sustained effort to 
continually add to our knowledge base and our resource base is 
necessary for future developments. Thus, we have invested a portion of 
our resources, including our university programs, toward these 
objectives. The following table indicates our expenditures in basic 
research, applied research, and development to date, excluding 
construction funding.




    Our initial expenditures in basic research are heavily weighted by 
our investments in university programs. These university programs will 
not only provide new information relevant to homeland security, but 
will also provide a workforce of people who are cognizant of the needs 
of homeland security, especially in areas of risk analysis, animal-
related agro-terrorism, bioforensics, cyber security, disaster 
modeling, and psychological and behavioral analysis.
    We expect to gradually increase our total percentage of basic and 
applied research to the level needed for sustaining our role as an 
RDT&E organization.

Counter-MANPADS

    The Counter-MANPADS program is focused on identifying, developing, 
and testing a cost-effective capability to protect the Nation's 
commercial aircraft against the threat of man-portable, anti-aircraft 
missiles. This program also provides the science and technology base 
needed to reduce the vulnerability of commercial aircraft to terrorist 
attack using man-portable anti-aircraft missiles.
    Over the past year, we have had a successful solicitation 
announcing a program to address the potential threat of MANPADS to 
commercial aircraft. White papers responding to the Counter-MANPADS 
program solicitation were reviewed by technical experts from the 
Department of Homeland Security, Department of Defense, and other 
government agencies; proposals were evaluated; and awards were made to 
three contractor teams to perform the first of two program phases, 
which began in January, 2004. The first phase will result in a 
preliminary design and a test plan to demonstrate missile 
countermeasure equipment on selected commercial aircraft.
    The second program phase is an 18-month effort beginning in August 
2004, with the one or two contractors that produced the most promising 
results in Phase One. During this phase, the commercial prototype 
countermeasure equipment will be integrated on selected commercial 
aircraft, and live-fire range tests will be accomplished with extensive 
data collection and analysis. Results of this second phase will be 
presented to the Administration and Congress to aid in formulating an 
informed decision on how best to address the protection of commercial 
airlines from the MANPADS threat.

SAFECOM

    The SAFECOM (Wireless Public SAFEty Inter-operable COMmunications) 
program is the umbrella initiative to coordinate all federal, State, 
local, and tribal users to achieve national wireless communications 
inter-operability. The placement of SAFECOM in the Department of 
Homeland Security's Science and Technology Directorate allows it full 
access to the scientific expertise and resources needed to help our 
nation achieve true public safety wireless communications inter-
operability. Since the Science and Technology Directorate formally 
assumed responsibility for the management of the SAFECOM program barely 
seven months ago:

          SAFECOM has been established as the one umbrella 
        group in the Federal Government for the management of public 
        safety wireless inter-operability programs.

          Common grant guidance has been developed and 
        incorporated in the public safety wireless inter-operability 
        grant programs of both the Justice Department and the 
        Department of Homeland Security.

          A federal coordinating structure has, for the first 
        time, been created to coordinate all federal public safety 
        wireless inter-operability programs.

          The first catalog of national programs touching on 
        public safety wireless inter-operability has been developed and 
        published.

          The ten major state and local organizations concerned 
        with public safety wireless inter-operability--the Association 
        of Public-Safety Communications Officials (APCO), International 
        Association of Fire Chiefs (IAFC), International Association of 
        Chiefs of Police (IACP), Major Cities Chiefs Association (MCC), 
        National Sheriffs' Association (NSA), Major County Sheriffs' 
        Association (MCSA), National Association of Counties (NACO), 
        National League of Cities (NLC), National Public Safety 
        Telecommunications Council (NPSTC), and the United States 
        Conference of Mayors (USCM)--released a statement in support of 
        the SAFECOM program which declared that ``With the advent of 
        the SAFECOM Program. . .Public safety, State and local 
        government finally have both a voice in public safety 
        discussions at the federal level and confidence that the 
        Federal Government is coordinating its resources.''

Engaging Private Industry

    On May 14, 2003, the Science and Technology Directorate, and the 
interagency Technical Support Working Group issued a joint Broad Agency 
Announcement soliciting ideas, concepts, and technology for 50 
requirements areas of mutual interest. This solicitation received 3,344 
submittals by the closing date of June 13, 2003. These initial 
submittals and the subsequent white papers and proposals used a 
comprehensive criteria-based evaluation to determine awards, of which 
more than 50 are expected when the process is completed. HSARPA will 
provide the programmatic monitoring for the Science and Technology 
Directorate for these awards.
    In addition to its work with TSWG, HSARPA has engaged the private 
sector in its first solicitation, seeking detection systems for 
chemical and biological weapons and associated materials. We are 
interested in a timeline of nine to 36 months for taking a technology 
from concept to prototype. Interest and response from the private 
sector has been exceedingly strong. We held a bidders' conference in 
Washington, D.C., on September 29, 2003, that drew approximately 400 
participants; and we have received more than 500 white papers as a 
result. Finalists have been selected for negotiation, and work has 
already begun in a number of the more important areas.
    HSARPA issued its second major solicitation to address radiological 
and nuclear detection and portal monitoring systems. This and other 
solicitations will seek to engage our nation's research and development 
community, including academia, federally funded research and 
development centers, non-profit organizations, and industry.
    On November 13, 2003, HSARPA issued a Small Business Innovation 
Research Program Solicitation. The purpose of this solicitation was to 
invite small businesses to submit innovative research proposals that 
address eight high-priority DHS requirements:

          New systems/technologies to detect low vapor pressure 
        chemicals (e.g., toxic industrial chemicals)

          Chemical and biological sensors employing novel 
        receptor scaffolds

          Advanced low-cost aerosol collectors for surveillance 
        sensors and personnel monitoring

          Computer modeling tool for vulnerability assessment 
        of U.S. infrastructure

          Ship compartment inspection device

          Marine Asset Tag Tracking System

          Automatic Identification System tracking and 
        collision avoidance equipment for small boats

          Advanced Secure Supervisory Control and Data 
        Acquisition (SCADA) and related distributed control systems.

    By the December 15, 2003, deadline 374 proposals had been received. 
Evaluation of these proposals is complete and 66 proposers have been 
notified that they will enter negotiations for Phase I contracts 
beginning February 9, 2004.
    We are very pleased with the response and interest that private 
industry has shown in helping strengthen homeland security and want to 
publicly acknowledge their contributions.

Other Science and Technology Activities

    In addition to the portfolios and programs previously described, we 
also have addressed the legislative requirement to establish a Homeland 
Security Institute and a Homeland Security Science and Technology 
Advisory Committee, both of which will serve to provide independent 
input and assessment to the Department and the Science and Technology 
Directorate.
    A formal solicitation was issued in December 2003 for the Homeland 
Security Institute, a legislative requirement for a federally funded 
research and development center to assist the Secretary and the 
Department in addressing important homeland security issues that 
require scientific, technical, and analytical expertise. Proposals were 
received in January 2004. Those proposals are currently being evaluated 
with an expected five-year award by early May 2004.
    In addition, we have now established the Homeland Security Science 
and Technology Advisory Committee, a legislative requirement for an 
advisory committee to be a source of independent, scientific and 
technical planning advice for the Under Secretary for Science and 
Technology. The committee will hold its initial meeting in February 
2004.

Staffing

    When the Department of Homeland Security stood up on March 1, 2003, 
the Science and Technology Directorate had a total staff of about 87, 
including the 53 staff transferred from the Department of Energy's 
Environmental Measurements Laboratory. The balance was comprised of 
permanently assigned personnel, employees detailed from within and 
without the Department, Intergovernmental Personnel Act assignments, 
and personnel support from the National Laboratories.
    By January 6, 2004, we more than doubled our staff. In January 
2004, we had a total staff of 212, including 100 DHS employees, six 
Public Health Service Officers, 21 Intergovernmental Personnel Act 
employees, 26 individuals on assignment from other agencies, and 59 
contractors.
    We continue to be active in staffing our Directorate with well-
qualified individuals whose skills support the full breadth of our 
responsibilities and RDT&E activities. We continue to actively seek 
additional staff in accordance with our approved staffing plan.

Interagency Coordination

    One of the accomplishments of which I am personally most proud is 
the emphasis our new Directorate has put on interacting with other 
federal departments and agencies. Knowledge of other science and 
technology programs and their results, appropriate collaboration 
between agencies, coordination of relevant programmatic activities, and 
information sharing are essential for us to best meet our mission 
requirements. With pride, I point to interactions between our cyber 
security personnel and those at the National Science Foundation and the 
National Institute of Standards and Technology, who dialog frequently 
and have already established collaborative and coordinated programs to 
ensure no duplication of effort. Our biological and chemical 
countermeasures staff have partnered with DOD's Defense Threat 
Reduction Agency (DTRA) to plan and execute the BioNet program and 
roadmap the biological countermeasures R&D programs in both agencies to 
understand capabilities and shortfalls. They work with the National 
Science Foundation on pathogen sequencing. The BioWatch program, 
although led by the Science and Technology Directorate, was 
accomplished through collaboration with personnel from the Department 
of Energy's National Laboratories, contractors, the Environmental 
Protection Agency, and the Centers for Disease Control and Prevention. 
We work with DOD's Office of Homeland Defense to ensure the effective 
transfer to the Department of relevant DOD technologies.
    Our high explosives scientists are working with the interagency 
Technical Support Working Group, managed by the Department of State, to 
evaluate commercial off-the-shelf systems with capabilities against 
suicide bombers. The Director of the Homeland Security Advanced 
Research Projects Agency is a member of the TSWG Executive Committee. 
Our staff are in frequent contact with the Office of Science and 
Technology Policy on a range of issues, and several are members and co-
chairs of the Office of Science and Technology Policy's National 
Science and Technology Council. Our Office of Research and Development 
works closely with the Department of Agriculture to ensure that the 
Plum Island Animal Disease Center facility is operating smoothly and 
fully meeting its mission. The Office of Research and Development also 
interfaces with the Department of Energy to keep the Office of Science, 
as well as the National Nuclear Security Administration, apprised of 
our long-term homeland security requirements.

Conclusion

    With less than a full year under the Department's belt, the 
scientists and engineers in the Science and Technology Directorate have 
accomplished more than I could have expected. I am proud to have shared 
with you today some of those success stories. We have appended a more 
comprehensive summary of accomplishments to date for the record.
    And yet, we also recognize that there is much to do, and we will be 
working just as hard in FY 2005.
    I look forward to continuing to work with you on the Science 
Committee, my colleagues here today, other federal departments and 
agencies, the academic community and private industry to continue the 
work begun and continually improve our ability to protect our homeland 
and way of life.
    Mr. Chairman, Congressman Gordon and Members of the Committee, this 
concludes my prepared statement. I thank you for the opportunity to 
appear before this committee and will be happy to answer any questions 
you may have.

Appendix

       Accomplishments of the Science and Technology Directorate
                    Department of Homeland Security
                      March 2003 to February 2004

Biological and Chemical Countermeasures

Biowatch: National Urban Monitoring for Biological Pathogens
    The Biowatch program has been established and deployed to cities 
across the Nation. The program--developed, funded, and managed by the 
Science and Technology (S&T) Directorate--is executed in cooperation 
with the Environmental Protection Agency (EPA) and the Centers for 
Disease Control and Prevention (CDC). It employs environmental sampling 
devices to quickly detect biological pathogens, such as anthrax, in 
time to distribute life-saving pharmaceuticals to affected citizens. 
The S&T Directorate is now focusing its efforts on piloting the next 
generation of environmental samplers, which will reduce the amount of 
labor required and the response time needed for detection while keeping 
the detection probability high and false alarm rates low. These devices 
will take advantage of the latest advances in micro-chemistry, commonly 
referred to as ``chemistry on a chip.''

PROTECT (Program for Response Options and Technology Enhancements for 
        Chemical Terrorism): Chemical Defense and Response Capability 
        for Transportation Facility
    The S&T Directorate, in collaboration with the Washington 
Metropolitan Area Transit Authority (WMATA), completed PROTECT (Program 
for Response Options and Technology Enhancements for Chemical/
Biological Terrorism). PROTECT, which is an operational chemical agent 
detection and response capability, is deployed in 13 stations and 
operated by the WMATA. PROTECT is a team effort that owes its success 
to the scientific and engineering talent from Argonne, Sandia, and 
Livermore National Laboratories and operational expertise from WMATA 
and the First Responder community (the District of Columbia; Arlington, 
VA; Montgomery County, MD; and others). Also contributing significantly 
to the project are private industry partners, including LiveWave Inc., 
ManTech Security Technology, the detector manufacturer (name withheld 
for security reasons); and federal partners, including the Federal 
Transit Administration (FTA), Department of Transportation (DOT), 
National Institute of Justice (NIJ), and the Department of Homeland 
Security's (DHS's) Office of Domestic Preparedness (ODP). The system 
integrates chemical detector data and video feed and transmits the 
integrated information to the Operation Control Center (OCC), where the 
information is analyzed and an event confirmed. The information is then 
transmitted to the first responders who access it in both their OCC and 
through the use of wired jacks on the scene to facilitate response and 
recovery. PROTECT also has application in other areas, including fire 
and emergency response, security, and forensics. Upon completion, the 
system will be totally owned and operated by WMATA and expanded to 
approximately 20 stations. FTA is working with WMATA and Argonne 
National Laboratory to transfer the technology nationally. The 
information gleaned from PROTECT will have direct application to 
facility protection and response. A related effort is being piloted in 
the Boston subway system.

Joint Urban 2003: Experimental Atmospheric Transport and Modeling
    In June 2003, the S&T Directorate, in coordination with the 
Department of Defense's Defense Threat Reduction Agency, Department of 
Energy, and University of Oklahoma sponsored a month-long atmospheric 
dispersion study in Oklahoma City, OK. Nearly 150 scientists, 
engineers, and student assistants were dedicated to this study, which 
tracked the air movement of safe, non-toxic tracer gases in and around 
city buildings. The resulting data is being used to enhance and develop 
urban-specific atmospheric dispersion computer models that will allow 
emergency management, law enforcement and other personnel to train for 
and respond to potential chemical, biological, and radiological 
terrorist attacks.

ProACT (Protective and Response Options for Airport Counter Terrorism): 
        Chemical and Biological Counterterrorism Demonstration and 
        Application Program
    The S&T Directorate and its partners at the San Francisco 
International Airport are involved in a pilot program that couples 
biological and chemical detection with vulnerability analysis, 
response, and restoration. This program integrates networked sensors 
with the operation of ventilation systems, allowing redirection of 
contaminated air and effective evacuation should an event occur. 
Guidance for the airport facility operators to manage biological and 
chemical crises will be finalized soon for distribution throughout the 
applicable community. Protocols and concepts of operation for 
restoration also are under development. This program is designed to 
serve as a template for deployment of these capabilities to other 
similar facilities.

LINC (Local Integration of National Atmospheric Release Advisory Center 
        [NARAC] with Cities): Hazard Assessment Tool for Operational 
        Event Management
    LINC demonstrates the capability for providing local government 
agencies with advanced operational atmospheric plume prediction 
capabilities that can be seamlessly integrated with appropriate federal 
agency support for homeland security. LINC's approach is to integrate 
NARAC capabilities with local emergency management and response 
centers. In the event of a chemical or biological release, NARAC 
predictions can be used by emergency managers and responders to map the 
extent and effects of hazardous airborne material. Prompt predictions 
are provided to guide front-line responders in determining protective 
actions to be taken, critical facilities that may be at risk, and safe 
locations for incident command posts. LINC provides response teams from 
multiple jurisdictions with tools to effectively share information 
regarding the areas and populations at risk. To date, several cities 
have participated in the project. New York City used LINC to help 
inform and manage an explosion and fire at a Staten Island refinery in 
the Spring of 2003.

BioNet: Integrated Civilian and Military Consequence Management
    The Department of Homeland Security (DHS) and the Department of 
Defense's Defense Threat Reduction Agency have initiated the BioNet 
program to address joint civilian-military consequence management 
issues for localities near military bases. Upon completion of BioNet, a 
seamless consequence management plan that incorporates concepts of 
operation, information products, area monitoring, population health 
monitoring, and sample analysis laboratory will be developed that can 
be used nationally.

Plum Island Animal Disease Center (PIADC)
    The S&T Directorate assumed responsibility for the operations of 
the ``facilities and liabilities'' of PIADC in June 2003. A 60-day 
review of security and operations resulted in immediate improvements 
and a plan for enhancements to security and operational maintenance. 
Dr. Beth Lautner has become new Center Director for PIADC. Dr. Lautner 
was with the National Pork Board for 13 years, most recently serving as 
the vice-president of Science and Technology. Highly respected 
throughout animal agriculture for her work on numerous issues, she 
pioneered the establishment of the Pork Quality Assurance (PQA) Program 
and has worked extensively with the USDA and other organizations on 
national agricultural security issues. In 1994, she was awarded the 
prestigious Howard Dunne Memorial Award by the association. In 
addition, DHS announced on December 9, 2003, the selection of Field 
Support Services, Inc. (FSSI), as the new contractor for maintenance at 
PIADC. FSSI is a subsidiary of Arctic Slope Regional Corporation, an 
Alaskan Native corporation, headquartered in Barrow, Alaska.

TOPOFF2 Exercise
    In May 2003, leadership and staff members of the Science and 
Technology Directorate served as members of the Secretary's Crisis 
Assessment Team (CAT) and the interagency Domestic Emergency Support 
Team (DEST) and provided expert technical advice on understanding, 
communicating and responding to the hypothetical radiological and 
plague events during the TOPOFF2 exercise.

Radiological and Nuclear Countermeasures Programs

Radiation Detection in Metropolitan Areas
    The Science and Technology division formally assumed management of 
the Port Authority of New York and New Jersey's radiation detection 
test bed on August 2003. The test bed was previously managed by the 
U.S. Department of Energy. The transfer will broaden the project scope 
beyond testing and evaluation of individual pieces of technology to a 
systems approach including response protocols and operational concepts. 
Radiation detection equipment will be installed at tunnels, bridges, 
ports, and airports in the New York City metropolitan area, and all 
functions associated with their operational use will be evaluated. By 
judging the efficacy of fielded systems over time, the Science and 
Technology division will be able to influence future decisions on 
detection technology R&D investment, deployment of urban monitoring 
systems, configurations best able to enhance security, and viable 
solutions for protecting the Nation from radiological and nuclear 
threats.

Determined Promise Exercise
    In August 2003, staff members of the S&T Directorate participated 
in Determined Promise, a Department of Defense (DOD) exercise held in 
Las Vegas, NV. The exercise demonstrated the military's capability to 
assist in the response to a natural disaster, a bioterrorism event, and 
a number of other emergency situations nationwide. The exercise also 
provided a forum for initiating discussions that will foster 
interagency cooperation between DHS and USNORTHCOM.

Nuclear Threat Assessments
    The S&T Directorate has provided eight rapid nuclear threat 
assessments for the Federal Bureau of Investigation (FBI), and 
approximately two dozen assessments on reports of illicit trafficking 
in nuclear materials for the Department of State and other customers. 
The Department of Homeland Security has been leading the interagency 
Nuclear Trafficking Focus Group, which regularly brings together the 
operational players of all agencies involved in response to and 
understanding of nuclear smuggling events.

Secondary ``Reach Back''
    In August 2003, the S&T Directorate's Nuclear Assessment Program 
stood up a system to provide secondary ``reach back'' support to 
operational DHS entities employing radiation detection systems in the 
field. Secondary reach back provides inspectors with an additional 
information resource to utilize for the resolution of radiation 
detection alarms that draws upon experience in the analysis of nuclear 
smuggling incidents and threat analysis.

Standards

Radiation Detection
    The S&T Directorate has developed a suite of four radiation 
detector standards under the auspices of the American National 
Standards Institute (ANSI)'s Accredited American Standards Committee on 
Radiation Instrumentation. The four standards deal with radiation 
pagers, hand-held dosimetry instruments, radioisotope identifiers and 
radiation portal monitors. The S&T Directorate has formed three writing 
groups to prepare Test and Evaluation (T&E) protocols for hand-held 
radiation detectors, radionuclide identifiers and radiation portal 
monitors. The writing groups have met in working sessions in San Diego, 
CA (July 2003) and Las Vegas, NV (September 2003) and have prepared 
draft T&E protocols. Benchmark testing against these draft protocols 
has been initiated at four National Laboratories.

Biopathogen Identification
    The Science and Technology Directorate has partnered with the 
Department of Defense, Office of the Secretary of Defense to fund a 
contract with the Association of Analytical Communities International 
to develop Reference Methods and Official Methods for bulk assay of 
bacillus anthracis. This work will also permit the comparison of 
commercially available rapid identification methods (hand-held assays) 
for B. anthracis.

SAFETY Act
    On October 10, 2003, Secretary Ridge signed an interim final rule 
implementing the Support Anti-Terrorism by Fostering Effective 
Technologies (SAFETY) Act which was a requirement of the Homeland 
Security Act of 2002. The SAFETY Act is designed to encourage the 
development and rapid deployment of life-saving, anti-terrorism 
technologies by providing manufacturers and sellers with limited 
liability risks. The Department is now accepting applications for 
designation under the Act and evaluating the proposed technologies.

Inter-operability of Communications

SAFECOM: E-Gov Initiative to Improve Inter-operability of Wireless 
        Communications
    The Department of Homeland Security is taking steps to boost the 
ability of the approximately 44,000 local, tribal and State entities 
and 100 federal agencies engaged in public safety to communicate 
effectively with one another, particularly during an emergency. SAFECOM 
is a federal umbrella program under the S&T Directorate that is 
dedicated to improving public safety response through enhanced inter-
operable wireless communications. The goal is to enable public safety 
agencies to talk across disciplines and jurisdictions via radio 
communications systems, exchanging voice or data with one another on 
demand and in real time. SAFECOM is providing seed money for the 
Department of Justice's Integrated Wireless Network program, which will 
create inter-operability among local, State and federal public safety 
agencies in 25 cities. In addition, technical guidance for inter-
operable communications that was developed under SAFECOM is included in 
this year's Office of Domestic Preparedness grants.

Summit on Inter-operable Communications for Public Safety
    In June 2003, the S&T Directorate, Project SAFECOM, the National 
Institute of Standards and Technology (NIST) and the National Institute 
of Justice hosted a Summit on Inter-operable Communications for Public 
Safety. The event focused on familiarizing attendees with programs that 
assist public safety practitioners, including first responders, and is 
the first national effort ever undertaken to convene all the players. 
In addition, it provided insight on federal resource needs, how 
government can leverage existing program successes and resources in the 
area of standards development, approaches, and products and services. 
The Summit results provided help in formulating a coordinated approach 
toward nationwide communications inter-operability.

SAFECOM Vendor Demonstration Day
    In August 2003, the Science and Technology Directorate held its 
first SAFECOM Vendor Demonstration Day, with an overwhelmingly positive 
response from technology providers. Due to the increasing number of 
vendor requests to present their technologies to the SAFECOM Program, 
the S&T Directorate is holding a vendor demonstration day on the last 
Friday of every month. These Friday sessions will offer a chance for 
SAFECOM to learn about new technologies for inter-operability, provide 
a clear process for managing vendor requests, and ensure that every 
vendor has a fair opportunity to participate.

Information Analysis and Infrastructure Protection Programs

Addressing Threats and Vulnerabilities in the Oil and Gas Industries
    The S&T Directorate sponsored and delivered a prototype system to 
the Information Analysis and Infrastructure Protection (IAIP) 
Directorate to perform Graphical Information System (GIS) based 
computer assisted threat and vulnerability mapping of the oil and gas 
infrastructure in the American Southwest. S&T is also in the process of 
delivering to IAIP cutting edge visualization, data searching, data 
correlation, and all-source analytic aids to provide IAIP advanced 
analytic capabilities integrated with vulnerability information.

Advanced Algorithms for Bio-detectors
    Researchers funded by the S&T Directorate's Advanced Scientific 
Computing Research & Development program achieved an important 
milestone in the speed acceleration of software used to develop 
advanced bio-detectors. Scientists have made a pair of related 
algorithmic advances that will speed the creation of DNA signatures for 
pathogen detection at considerably reduced cost. These discoveries will 
result in cheaper, faster, and more reliable bio-detectors for homeland 
security.

Threat-Vulnerability Mapper
    Part of the Threat-Vulnerability Information System, the Threat-
Vulnerability Mapper (or TVM), was installed in the analysis center of 
the Information Analysis and Infrastructure Protection Directorate in 
December 2003 and is already in constant use. Developed by the S&T 
Directorate, the TVM provides counterterrorism analysts with a simple, 
straightforward way to not only depict the geographic distribution of 
threats across the United States, but also to search the underlying 
databases for information on the possible actors, agents, potential 
severity of attacks, and extent of the vulnerabilities to and effects 
of such attacks. A second TVIS component was delivered to IAIP in 
January 2003 and should be installed and operational by the end of 
February 2004.

Critical Infrastructure Protection Decision Support System
    On December 24, 2003, S&T's Critical Infrastructure Protection 
Decision Support System (CIP/DSS) team was asked to conduct a rapid 
analysis of potential consequences following discovery of a cow in 
Washington State with bovine spongiform encephalopathy (BSE), commonly 
known as Mad Cow disease. An analysis was developed within hours using 
available open literature, past historical data, and the results from 
an early stage, Dynamic Simulation agriculture model.

Cyber Security

Experimental Infrastructure Network for Cyber Defense
    Led by the S&T Directorate, DHS is co-funding with the National 
Science Foundation a $5.45M, three-year research project to create an 
experimental infrastructure network to support development and 
demonstration of next generation information security technologies for 
cyber defense. This project supports national-scale experimentation on 
emerging security research and advanced development technologies. 
Called Cyber Defense Technology Experimental Research (``DETER'') 
Network, this is a multi-university project led by the University of 
California, Berkley.

Evaluation Methods in Internet Security Technology
    DHS is co-funding with the National Science Foundation, a second 
cyber security project called Evaluation Methods in Internet Security 
Technology (EMIST). EMIST is a testing framework that can be adapted to 
simulators, emulation facilities, other testbeds, and hardware testing 
facilities. The framework will include attack scenarios, attack 
simulators, generators for topology and background traffic, data sets 
derived from live traffic, and tools to monitor and summarize results. 
EMSIT is a three-year, $5.6M, multi-university research project that 
includes Penn State; University of California, Davis; Purdue; and the 
International Computer Science Institute.

United States Coast Guard

Maritime Surveillance Testbed Prototype
    In September 2003, S&T's Homeland Security Advanced Research 
Projects Agency and the United States Coast Guard planned and funded 
the South Florida Coastal Surveillance Prototype Testbed, a port and 
coastal surveillance prototype in Port Everglades, Miami, and Key West 
areas. The prototype is an evolutionary testbed that:

          Provides an initial immediate coastal surveillance 
        capability in a high priority area

          Offers the Coast Guard and other DHS agencies the 
        means to develop and evaluate CONOPS (Concept of Operations) in 
        a real world environment

          Implements and tests inter-operability among DHS and 
        DOD systems and networks such as the U.S. Navy/Coast Guard 
        Joint Harbor Operations Center (JHOC).

          Tests and evaluates systems and operational 
        procedures

          Becomes the design standard for follow-on systems in 
        other areas and integration with wider area surveillance 
        systems.

    The program has two phases; an initial prototype development phase, 
and an improvements and update phase. The program is expected to begin 
operations in June 2004 and is funded at $2.4M for FY 2003 and $5M for 
FY 2004.

Partnerships

Workshop on Scientific Computing in Support of Homeland Security
    The Science and Technology Directorate brought together experts 
from academia, private industry and the national laboratories with 
staff from various organizations within the Department to understand 
how the S&T Directorate's advanced scientific computing (ASC) 
capabilities, centered at the national laboratories, can help address 
needs across the Department. This workshop, held October 8-9, 2003, has 
resulted in identifying several areas of potential high payoff for the 
use of these unique capabilities; two examples are advanced research in 
data management and information extraction, and research and 
development of computational simulation tools. The workshop will 
produce a formal report identifying relevant ASC capabilities and 
matching them up with identified needs within the Department of 
Homeland Security for improved operational capabilities.

Infrastructure Subcommittee of the National Science and Technology 
        Council
    Staff members of the Science and Technology Directorate had a major 
role in drafting the first charter for the National Science and 
Technology Council's (NSTC's) Infrastructure Subcommittee; the 
Subcommittee's first Co-Chairs are from the S&T Directorate and the 
Office of Science and Technology Policy. The Subcommittee serves as a 
forum within the National Science and Technology Council (NSTC) for 
developing consensus and resolving issues associated with coordinating 
R&D agendas, policy, and programs to develop and protect the Nation's 
infrastructure. The Subcommittee will also be the vehicle used by the 
Department of Homeland Security and the White House Office of Science 
and Technology Policy to develop the National R&D Plan for Critical 
Infrastructure Protection.

Homeland Security Standards Panel
    The S&T Directorate worked with the American National Standards 
Institute (ANSI) and the National Institute of Standards and Technology 
(NIST) to establish a Homeland Security Standards Panel (HSSP) that 
would coordinate the development of consensus standards among the 280 
different standards development organizations. On June 9-10, 2003, the 
inaugural meeting of the ANSI Homeland Security Standards Panel was 
held at NIST. Plenary session presentations were given by four S&T 
Directorate staff members to outline the needs in Department for 
standards. The panel selected a small list of topics to address with 
focus workshops. The first of these occurred in September 2003 with a 
focus on needs for standards in biometrics.

Joint DHS/USDA National Strategy for Foreign Animal Disease
    At the request of the Congressional Appropriations Committees for 
both DHS and the Department of Agriculture (USDA), the two departments 
have coordinated a report on a national strategy for foreign animal 
disease. Participants in the joint study included DHS (S&T), USDA (the 
Agricultural Research Service and the Agriculture and Plant Health 
Inspection Service), and stakeholder groups. The joint study has 
prompted an end-to-end review of the national response strategy 
following the identification of a case of foot-and-mouth disease, 
including the R&D requirements and gaps for assays, diagnostics, 
vaccines, and antivirals. Comprehensive roadmaps have been developed 
for these research areas, in one-, three-, and five-year timeframes. 
These roadmaps are important elements of program planning for S&T.

National Security Council Attribution Working Group
    The S&T Directorate initiated and leads the National Security 
Council Attribution Working Group, which is revisiting national 
capabilities to rapidly perform forensic analysis in cases of nuclear 
and radiological events of any size. This effort is expected to lead to 
a robust and completely coordinated forensic capability for 
attribution.

Workshops on Comparative Analysis
    S&T's Office of Comparative Studies has sponsored two workshops on 
identifying analysis techniques and information sources crucial for 
analyzing the interaction of the terrorist threat with S&T activities. 
These workshops brought together participants from two DHS 
directorates, other government entities, academia and private industry 
and have helped to improve communication between these groups. 
Important analytical techniques and sources of information were 
identified and have been utilized. The workshops were also used to 
establish a set of topics which the office could profitably study. A 
proposal is being prepared which will solicit work on several of these 
topics.

Homeland Security Institute, and Homeland Security Science and 
                    Technology Advisory Committee

Homeland Security Institute
    A formal solicitation was issued in December for the Homeland 
Security Institute (HSI), and proposals were received in January 2004. 
Those proposals currently are being evaluated with an expected five-
year award by early May 2004. However, current legislation states that 
the Institute's operation will terminate in November 2005; this issue 
is of concern to the bidders.
    The HSI was mandated by the Homeland Security Act to assist the 
Secretary and the Department in addressing important homeland security 
issues that require scientific, technical, and analytical expertise. 
The Institute will provide a dedicated, high-quality technical and 
analytical support capability for informing homeland security decision 
making at all levels. This capability will consist of an extensive 
program of operational assessments, systems evaluations, technical 
assessments, and resource analyses comparable to the capability 
developed and used for decades by the Defense establishment. The 
Institute will also provide analytical and technical evaluations that 
support DHS implementation of the SAFETY Act. Finally, the Institute 
will create and maintain a field operations program that will help 
further introduce real-world needs and experiences into homeland 
security is a disciplined and rigorous way.
Homeland Security Science and Technology Advisory Committee
    The Homeland Security Science and Technology Advisory Committee 
(HSSTAC) was formally established in December 2003 and holds its first 
meeting in February 2004.
    The HSSTAC was mandated by the Homeland Security Act to be a source 
of independent, scientific and technical planning advice for the Under 
Secretary for Science and Technology. The committee will (1) advise the 
Undersecretary on the mission goals for the future; (2) provide advice 
on whether the policies, actions, management processes, and 
organization constructs of the Science and Technology Directorate are 
optimally focused on mission objectives; (3) provide advice on whether 
the research, development, test, evaluation, and systems engineering 
activities are properly resourced (capital, financial, and human) to 
accomplish the objectives; (4) identify outreach activities 
(particularly in accessing and developing, where necessary, the 
industrial base of the Nation); and (5) review the technical quality 
and relevance of the Directorate's programs.

Countermeasures to Man-Portable Air Defense Systems

    The S&T Directorate has selected three firms to provide analyses of 
the economic, manufacturing and maintenance issues needed to support a 
system to address the potential threat of MAN-Portable Air Defense 
Systems (MANPADS) to commercial aircraft. The next phase of the program 
will include development of prototypes using existing technology which 
will be subjected to a rigorous test and evaluation process. This 
initiative is not intended to develop new technology, but rather to re-
engineer existing technology from military to commercial aviation use.

University and Fellowship Programs

Fellowships and Scholarships
    In September 2003, the S&T Directorate named 100 students to the 
inaugural class of the Department of Homeland Security's Scholars and 
Fellows Program. The program, which received more than 2,400 
applications, supports United States students who choose to pursue 
scientific careers and perform research in fields that are essential to 
the homeland security mission. The first class consists of 50 
undergraduate students and 50 graduate students who are attending 
universities across the country majoring in the physical, biological, 
and social and behavioral sciences including science policy, 
engineering, mathematics, or computer science. The Directorate has 
already issued a notice inviting applications from students for the 
2004-2005 academic year. The website is http://www.orau.gov/dhsed/.

University Centers of Excellence
    The Science and Technology division has created the Homeland 
Security Centers Program that supports university-based centers of 
excellence dedicated to fostering homeland security mission critical 
research and education. The program has established the first Center of 
Excellence focused on risk analysis and modeling related to the 
economic consequences of terrorism at the University of Southern 
California, partnering with the University of Wisconsin at Madison, New 
York University and the University of California at Berkeley. A request 
for proposals has been issued for the second and third Centers of 
Excellence, which will focus on animal-related and post-harvest food 
agro-terrorism.

Homeland Security Advanced Research Projects Agency

Near-Term Technologies
    In May 2003, the Science and Technology Directorate's Homeland 
Security Advanced Research Projects Agency (HSARPA) released a Broad 
Agency Announcement through the Technical Support Working Group for 
near-term technologies that can be rapidly prototyped and deployed to 
the field. A total of 3,344 responses as received in the following 
broad categories: chemical, biological, radiation and nuclear 
countermeasures; personnel protection; explosives detection; 
infrastructure protection; physical security; improvised device defeat; 
and investigative support and forensics. The first contract award went 
to North Carolina State University for the development of the next-
generation of structural fire fighting personal protective equipment.

Detection Systems
    The S&T Directorate reviewed and selected proposals for funding in 
response to its Research Announcement for Detection Systems for 
Biological and Chemical Countermeasures, which was published through 
the Technical Support Working Group. In September 2003, the Homeland 
Security Advanced Research Projects Agency (HSARPA) held its first 
Bidders Conference in Washington, DC. Approximately 420 private sector 
and university representatives attended the event and over 500 white 
papers were submitted. Finalists have been selected for negotiation, 
and work has already begun in a number of the more important areas.

Virtual Cyber Security Center
    On December 13, 2003, a Request for Proposals and Statement of Work 
for technical and administrative support for the virtual Cyber R&D 
Center was published to seven capable performers listed on the GSA 
schedule. The deadline for response was December 15, 2003, and two 
responsive proposals were received. A three million dollar technical, 
management, and administrative contract was awarded to SRI 
International on February 2, 2004, to support the functions of the 
HSARPA Cyber R&D Center. The Cyber R&D Center will be the primary S&T 
interface with the academic and industrial cyber security research 
communities.

Small Business Innovation Research (SBIR) Program Solicitation
    On November 13, 2003, the Homeland Security Advanced Research 
Projects Agency (HSARPA) issued a Small Business Innovation Research 
(SBIR) Program Solicitation. The purpose of this solicitation was to 
invite small businesses to submit innovative research proposals that 
address eight high-priority DHS requirements:

          New system/technologies to detect low vapor pressure 
        chemicals (e.g., Toxic Industrial Chemicals)

          Chemical and biological sensors employing novel 
        receptor scaffolds

          Advanced low cost aerosol collectors for surveillance 
        sensors and personnel monitoring

          Computer modeling tool for vulnerability assessment 
        of U.S. infrastructure

          Ship compartment inspection device

          Marine Asset Tag Tracking System

          Automatic Identification System tracking and 
        collision avoidance equipment for small boats

          Advanced Secure Supervisory Control and Data 
        Acquisition (SCADA) and related distributed control systems.

    By the December 15, 2003, deadline 374 proposals had been received. 
The evaluation is complete and 66 proposers entered negotiation for 
Phase I contracts beginning February 11, 2004.

SAFECOM Vendor Demonstration Day

    SAFECOM held a Vendor Demonstration Day on January 30, 2004. 
SAFECOM's Vendor Day allows several communications equipment and 
service providers to present their products and/or technologies for 
SAFECOM. Responses from the SAFECOM Request for Information in November 
2003 were used to select vendors for this event. Each vendor selected 
represents a different approach to solving the communications and 
inter-operability problems facing first responders.

International Programs

Agreement with Canada on Border and Infrastructure Security
    On October 3, 2002, Secretary Tom Ridge and Canadian Deputy Prime 
Minister John Manley initialed an agreement on Science and Technology 
Cooperation for protecting shared critical infrastructure and enhancing 
border security. The S&T Directorate is participating in a Working 
Group to develop near-term deliverables and projects to protect shared 
critical infrastructure such as bridges, dams, pipelines, 
communications and power grids; to develop surveillance and monitoring 
technologies to enhance the ability to disrupt and interdict 
terrorists; and to develop technologies for detecting the illicit 
transportation of chemical, biological, radiological, and nuclear 
weapons.

Weapons of Mass Destruction and Incident Management

    Between March and December of 2003, the Office of Weapons of Mass 
Destruction Operations and Incident Management (WMDO-IM) provided 
surveillance and operational incident response to the Homeland Security 
Operations Center and law enforcement officials on 24 separate 
occasions. In addition, the WMDO-IM provided operational support to the 
Homeland Security Operations Center during Hurricane Isabel and the 
Northeast blackout.
    The WMDO-IM established a scientific reach-back and rapid decision 
support capability through the Scientific and Technical Analysis and 
Response Teams (START). In addition to activating the START teams 
during the Code Orange time period in December 2003, WMDO-IM provided 
technical expert consultations on threats to the Nation's water 
resources and responded to concerns about impacts of solar flares.
    WMDO-IM helped develop the Initial National Response Plan (INRP) 
and its National Incident Management System; the INRP represents a 
significant first step towards an overall goal of integrating the 
current family of federal domestic prevention, preparedness, response, 
and recovery plans into a single all-discipline, all-hazards plan.
    WMDO-IM provided technical support to the Homeland Security 
Operations Center (HSOC), assessing vulnerabilities and actions the 
HSOC can take to improve the ability to resist a chemical or biological 
terrorist attack.
    WMDO-IM, with the Defense Threat Reduction Agency and Nuclear 
Regulatory Commission, developed curriculum for a week-long training 
workshop on weapons of mass destruction for the Central Intelligence 
Agency University. Also in the area of education and training, WMDO-IM 
established a homeland security medical executive training course.

                   Biography for Charles E. McQueary

    Dr. Charles E. McQueary was appointed by President Bush as Under 
Secretary for Science and Technology of the Department of Homeland 
Security and confirmed by the U.S. Senate in March of 2003.
    Dr. McQueary leads the research and development arm of the 
Department, utilizing our nation's scientific and technological 
resources to provide federal, State and local officials with the 
technology and capabilities to protect the homeland.
    Prior to joining Homeland Security, Dr. McQueary served as 
President, General Dynamics Advanced Technology systems, in Greensboro, 
N.C. Earlier in his career, Dr. McQueary served as President and Vice 
President of business units for AT&T, Lucent Technologies, and as a 
Director for AT&T Bell Laboratories.
    In addition to his professional experience, Dr. McQueary has served 
his community in many leadership roles as Chair of the Board, and 
Campaign Chair, of the United Way of Greensboro; Member of the Board of 
Trustees of North Carolina Agricultural and Technical State University; 
Member of the Guilford Technical Community College President's CEO 
Advisory Committee; Member of Board of World Trade Center North 
Carolina; Chair for Action Greensboro Public Education Initiative; and 
as a Member of the Board of Guilford County Education Network.
    Dr. McQueary holds both a Ph.D. in Engineering Mechanics and an 
M.S. in Mechanical Engineering from the University of Texas, Austin. 
The University of Texas has named McQueary a Distinguished Engineering 
Graduate.

    Chairman Boehlert. Thank you very much, Dr. McQueary, and I 
would note that the Department of Homeland Security has not 
even celebrated its first anniversary yet. It stood up last 
March 1, and I think you and Governor Ridge and the team there 
have done a remarkable job under very difficult circumstances. 
I think all of us expect miracles, but miracles don't happen in 
government; they only happen on the ice, which is a plug for 
the new movie, ``Miracle on Ice,'' about the 1980 Lake Placid 
Olympic U.S. winning team.
    Mr. Bond, welcome back.

 STATEMENT OF MR. PHILLIP J. BOND, UNDER SECRETARY OF COMMERCE 
             FOR TECHNOLOGY, DEPARTMENT OF COMMERCE

    Mr. Bond. Thank you very much, Mr. Chairman, Ranking Member 
Gordon, Members of the Committee. It is great for me to be 
here. I wanted to add a thought on Rita Colwell's departure, 
which is kind of a double whammy for me; I will not only miss 
the great pleasure and privilege of working with her, but also 
have to, as the Chair alluded to, share the great national 
treasure we call Arden Bement with NSF and also join you, Mr. 
Chairman, in looking forward to his return to NIST.
    I want to thank the Committee, and especially the Chairman 
for your continued support and leadership on all innovation 
issues. You have been a constant and strong voice for the 
science and technology community. I appreciate that, especially 
in the areas, of course, of basic research, cyber security, and 
nanotechnology that are so important to the future. It is a 
privilege for me to be here this morning to join my colleagues 
and discuss the President's R&D budget, which is an 
unprecedented total of $132 billion, representing a 44 percent 
increase since the President took office.
    The President's focus on science and technology is 
reflected as well in the Department of Commerce's R&D 
portfolio, the portfolio that consists, really, of work done in 
our two primary technical research bureaus: NOAA, which the 
Committee is very familiar with, and the Technology 
Administration, which I am privileged to oversee.
    The fiscal year 2005 budget request for NOAA is $3.4 
billion, and in TA, it is $529.8 million. Of course the lion's 
share, $521.5 million, of that is at NIST. Through these two 
bureaus, the Department of Commerce is engaged in critical 
cutting-edge research in high priorities, such as 
nanotechnology, climate change, environmental sciences, 
information technology, and manufacturing technology.
    As you can tell from the witnesses you have heard already, 
these are cross-cutting, multiple agency missions, which is one 
reason why Secretary Evans has put special emphasis on 
collaboration, and it has resulted in Admiral Lautenbacher at 
NOAA serving as the Chair of the NSTC Committee on Environment 
and Natural Resources. And I have been serving as the co-chair 
of the Committee on Technology with long-time Science Committee 
staffer, Richard Russell.
    The Commerce budget reflects the priorities of the 
Department in continuing its commitment to creating conditions 
for economic growth and employment opportunity by promoting 
innovation, entrepreneurship, competitiveness, and stewardship. 
Resources to enhance these services have, in some cases, been 
shifted from various lower-priority programs and, to be sure 
and to underscore, the Administration, as Rita Colwell 
mentioned, has had to make some very tough choices. Some 
otherwise well-managed and successful programs could not be 
given the highest priority for funding.
    That said, the Department has an ambitious agenda to 
leverage our science and technology resources, and we look 
forward to working with you and Members of the Committee as 
these proposals move through the legislative process.
    In my time today, I want to just briefly touch on NOAA, 
because I know the Committee has scheduled a separate hearing 
on that and talk a little bit about the work at NIST. The 
President's request for NOAA in 2005 is $3.4 billion, an 
increase of about $147 million over the 2004 request. NOAA 
believes the proposed budget maintains and enhances programs 
that enable our scientific understanding of the oceans and 
atmosphere while also sustaining the Nation's environmental 
health and economic vitality. The request allows NOAA to 
develop the science necessary to improve weather, water, and 
ecosystem forecasts of the future as well as give policy 
makers, like this committee, the data they need to make 
important decisions related to climate change. The budget 
request supports NOAA's core activities including its fisheries 
and oceans program, climate research, weather forecasting 
capabilities, and satellite infrastructure necessary to support 
these functions.
    In the Technology Administration, the fiscal year 2005 
funding priorities support programs to promote U.S. industries 
in their effort to meet the President's national priorities of 
fostering economic growth, defending the homeland, defending 
the national security, and winning the war on terrorism. The 
requests for NIST specifically were--we are exceedingly proud 
of our world-class research and Nobel Prize winning scientists. 
And the President's request there reflects his appreciation of 
the role that technology plays in both economic security and 
homeland security.
    The request is five percent more than the 2004 request and 
includes $417.5 million for the NIST laboratories: for that 
core function, a 9.4 percent increase. $59.4 million is 
requested for badly needed facilities' maintenance and 
upgrades.
    And let me just say for a moment, if I might, Mr. Chairman, 
that the support for the thrust of this budget, and the support 
for the core efforts at NIST, is so critical. We have witnessed 
in recent years a trend of shortfalls in funding for the NIST 
laboratories, and it does threaten to undermine the very core 
measurements and standards infrastructure upon which so much of 
the Nation's scientific, technological, and industrial 
enterprises rest. It will be incumbent upon us to do as much 
outreach as possible with our partners across the federal 
enterprise, and we look forward to doing that. In fact, I would 
observe, for the record, that in the 2004 omnibus, all but two 
of our labs, NIST's core labs, actually received real 
reductions. And so the challenge going into 2005 is very real.
    Moving on to more details, there is a $39.2 million request 
for the Manufacturing Extension Partnership to help small U.S. 
manufacturers become more competitive and productive.
    Recognizing the importance of manufacturing to our economy, 
Secretary Evans did release a comprehensive manufacturing 
strategy aimed at improving the climate for manufacturers in 
our global marketplace. A key part of that strategy includes 
stable support for the MEP and new steps to review and improve 
its efficiency. To emphasize competition in global markets, for 
example, the Department is exploring ways to team MEP field 
agents to coordinate better with the International Trade 
Administration at Commerce.
    As noted, there is no funding for the ATP in the fiscal 
year 2005 budget. There are, however, several major new R&D 
initiatives. $15.6 million to support advanced manufacturing, 
$18.6 million for work related to public safety and security, 
$16.2 million to develop advanced measurement capabilities to 
meet the needs of 21st century science and industry. Key to 
this, of course, is the AML [Advanced Measurement Laboratory].
    AML also has funding challenges in instrumentation, but it 
will become increasingly critically important to 
nanomanufacturing to have advances there. In fact, the NNI 
initiative touches almost every aspect of NIST in its core 
efforts and standards and metrology, which really are the 
linchpin to commercializing so much of that technology.
    NIST is also requesting an increase to address an issue 
increasingly important to the U.S. economy, which is to equip 
U.S. manufacturers with the tools to track and respond to 
international technical standards that block their entry to 
market. Our formal submission gives you more detail on these 
and other initiatives.
    The budget also includes a very important $8.3 million for 
the NIST Center for Neutron Research, one of the world's true 
jewels, so important in many areas. You have more details in my 
submission there. And critically needed funding in facilities 
that Mr. Udall, in particular, is so aware of out in Boulder.
    With that, let me stop and just observe, Mr. Chairman, that 
the focus of the President on creating growth and opportunity 
is beginning to pay off. We are headed in the right direction: 
unemployment falling down, manufacturing up, job creation up 
over the last four months. And we look forward to working with 
the Committee to keep that going.
    [The prepared statement of Mr. Bond follows:]

                 Prepared Statement of Phillip J. Bond

    Mr. Chairman and Members of the Committee, I am pleased to join 
with my fellow Administration colleagues in your review of the 
President's Fiscal Year (FY) 2005 budget request for science and 
technology programs. As you have already heard from Dr. Marburger, the 
President's budget focuses on leadership in science and technology by 
calling for an unprecedented $132 billion investment in research and 
development (R&D) that represents a 44% increase since President Bush 
took office.
    I want to thank the Committee, especially Chairman Boehlert, for 
your continued support and leadership on innovation issues. You have 
been a constant and strong voice for the science and technology 
community--especially in the areas of basic research and 
nanotechnology. I look forward to continuing to work together to ensure 
America remains the world leader in the science and technology field.
    The President's focus in the area of science and technology is 
reflected in the Department of Commerce R&D portfolio. The Commerce 
budget maintains substantial R&D investments in our two primary 
technical research bureaus, the Technology Administration (TA) and the 
National Oceanic and Atmospheric Administration (NOAA). Through these 
two bureaus, the Department of Commerce is engaged in critical cutting-
edge research in high-priority areas of technological innovation such 
as nanotechnology, information technology, and manufacturing 
technology.
    The Fiscal Year 2005 President's budget request for TA is $529.8 
million in total discretionary budget authority, which includes $8.3 
million for the Office of Technology Policy and $521.5 million for the 
National Institute of Standards and Technology (NIST). The Fiscal Year 
2005 President's budget request for NOAA is $3.4 billion in total 
discretionary budget authority.
    Additionally, both TA and NOAA have developed strong collaborations 
with other federal science and technology agency partners to develop 
interagency activities and coordinate major R&D initiatives in these 
high-priority areas. Given the budget pressures facing our nation, this 
approach is necessary in order to fund important federal science and 
technology programs. Working with my fellow panelists and others 
throughout the Administration, at the Department of Commerce, we have 
been engaged in extending efforts to cross agency boundaries to 
strengthen our research and development capabilities.
    Secretary Evans is proud that the Department has been able to play 
a leadership role in interagency coordination, especially through the 
President's National Science and Technology Council (NSTC). For 
example, I co-chair the NSTC Committee on Technology and NOAA 
Administrator Admiral Lautenbacher chairs the NSTC Committee on 
Environment and Natural Resources. The Secretary has tasked us to 
continue developing partnership models inside and outside of our 
building to leverage the Nation's science and technology enterprise. By 
developing new methods for collaboration within Commerce and with other 
agencies, the Administration can maximize the best use of our scarce 
federal dollars.
    Mr. Chairman, in my time with you today, I wish to review the 
Department's science and technology budget priorities for the upcoming 
fiscal year, as reflected in our TA and NOAA requests. Since I know 
that the Committee intends to hold a separate hearing in the near 
future just on the NOAA budget with Admiral Lautenbacher, I will give a 
short summary of the NOAA FY 2005 priorities before discussing the 
proposed budget priorities for the Technology Administration.
    The Commerce budget priorities reflect the Department's continuing 
commitment to creating conditions for both economic growth and 
employment opportunity by promoting innovation, entrepreneurship, 
competitiveness, and stewardship. To enhance these services, resources 
have been shifted from various lower priority programs. To be sure, the 
Administration has had to make some very tough choices and some 
otherwise well-managed and successful programs could not be given a 
high priority for funding. The Department, however, has an ambitious 
agenda to use our science and technology resources and we look forward 
to working with you as these proposals move through the legislative 
process.

National Oceanic and Atmospheric Administration (NOAA)

    The President's Fiscal Year 2005 budget request totals $3.4 billion 
for NOAA, including program increases of $146.9 million over the FY 
2004 request. NOAA believes that the proposed budget maintains and 
enhances the programs that enable our scientific understanding of the 
oceans and atmosphere, while also sustaining the Nation's environmental 
health and economic vitality. The budget request allows NOAA to develop 
the science necessary to improve weather, water and ecosystem forecasts 
of the future, as well as give policy-makers the data they need to make 
important decisions related to climate change.
    The Fiscal Year 2005 budget request supports the NOAA core 
activities, including its fisheries and oceans programs, climate 
research activities, weather forecasting capabilities, and the 
satellite infrastructure necessary to support these functions. In 
addition, the request continues to focus on maintenance and safety 
issues associated with NOAA facilities, vessels, and aircraft.
    In order to meet international standards for research surveys and 
substantially improve the quality of fishery research, NOAA requests an 
investment of $34 million to complete NOAA's third fisheries survey 
vessel. NOAA will also seek to expand its focus on climate research by 
devoting $19 million of new funding to address the critical knowledge 
gaps identified in the recently released Climate Change Science Program 
Strategic Plan. Finally, NOAA will continue to improve its weather 
forecasting abilities by requesting funding to expand air quality 
forecasts nationwide and investing in improved long-range weather 
forecasting. The Department will also request an additional $56 million 
for the continued development of next-generation geosynchronous and 
polar orbiting satellite programs.
    Some additional highlights of the NOAA FY 2005 budget proposal 
include:

          Weather and Water--to serve society's needs for 
        weather and water information--The $1.41 billion request is an 
        increase of $58.1 million over base goal levels.

          Climate--to understand climate variability and change 
        to enhance society's ability to plan and respond--The $369.3 
        million request is an increase of $28.7 million over base goal 
        levels.

          Ecosystems--to protect, restore and manage the use of 
        coastal and ocean resources through ecosystem approach to 
        management--The $1.158 billion request is an increase of $145.3 
        million over base goal levels.

          Commerce and Transportation--support the Nation's 
        commerce with information for safe, efficient and 
        environmentally sound transportation--NOAA is requesting $252.1 
        million, an increase of $23.1 million over base levels, to 
        address this goal.

Technology Administration (TA)

    TA's Fiscal Year 2005 funding priorities for its $529.8 million 
budget support programs that promote U.S. industries to meet the 
President's national priorities of fostering economic growth, providing 
for a secure homeland and defense, and winning the war on terrorism. TA 
meets these priorities by helping to shape an economic climate that 
leads to innovation and growth; investing in the NIST core mission of 
measurements, standards, research, and services to industry; and 
supplying NIST scientists with the laboratory equipment and facilities 
necessary for world-class research.
    TA's NIST is well-known to the Members of this committee, but the 
world-class research of its award-winning scientists and engineers can 
often be overlooked because the NIST contributions are often made at 
the beginning of the R&D process--invaluable contributions that pave 
the way for the rapid commercialization needed to advance our economy.
    NIST has been often referred to as the ``crown jewel'' of our 
federal laboratory system. It is a well-deserved title because there is 
no other federal lab that industry relies on as much as NIST. Industry 
needs the critical NIST metrology research standards for measurement, 
testing, analysis, and protocols that allow for inter-operable products 
to be created, new products to be developed based on consensus 
standards, assurances that products meet conformity assessment 
requirements, and the ability to effectively bring their innovation 
from the laboratory to the marketplace.
    NIST is an important component of the TA mission, performing world-
class research to enhance productivity, facilitate trade, and improve 
the quality of life. Given the rapidly accelerating pace of technology 
development and change during the past decade, NIST has had to remain 
agile and flexible in order to make the best use of its resources. One 
telling measure of NIST's success is that nearly 30 economic impact 
studies by independent experts calculate that every dollar invested in 
NIST measurement and standards programs returns at least three dollars 
in economic benefits to the Nation. Indeed, most NIST programs return 
substantially more.
    The President's request for NIST for FY 2005 reflects his 
appreciation of the role technology plays in both our economic security 
and our homeland security while holding the line on non-defense 
spending. This request--which is five percent more than his request for 
FY 2004--includes $417.5 million for the NIST laboratories and $5.4 
million for the Baldrige National Quality Program. Another $59.4 
million is requested for badly needed facilities maintenance and 
upgrades.
    The Manufacturing Extension Partnership (MEP) requests $39.2 
million to help small U.S. manufacturers become more competitive and 
productive. Through its network of centers, MEP makes it possible for 
small U.S. firm to tap into the knowledge, skill sets, and experience 
of leading manufacturing, business, and technology specialists from 
across the country. With MEP as a resource, American manufacturers have 
at their disposal the latest and most efficient technologies, processes 
and business practices.
    Recognizing the importance of manufacturing to our economy, 
Secretary Evans recently released a comprehensive manufacturing 
strategy aimed at improving the climate for manufacturers in a global 
marketplace. With the Manufacturing Index rising to its highest level 
in nearly 20 years this past December and new orders at its highest 
level since 1950, it appears America's manufacturing sector is 
expanding and moving in the right direction, but there is more work to 
be done. President Bush will not rest until every American who wants to 
work can find a job. So, the Secretary has asked all bureaus within the 
Department of Commerce to be engaged in support of manufacturers. A key 
part of the manufacturing strategy outlined in Secretary's Evans' 
report includes stable support for the MEP and new steps to review and 
improve its efficiency. To emphasize competition in global markets, for 
example, the Department is exploring ways to team MEP field agents will 
team directly with trade promotion specialists in the International 
Trade Administration (ITA) to leverage ITA's connections and in-depth 
knowledge of industrial sectors. The report also recommends that MEP 
hold a recompetition of all centers that focuses on improving 
effectiveness and efficiency.
    There is no funding proposed for the Advanced Technology Program 
(ATP) in the Fiscal Year 2005 budget. The total NIST request of $521.5 
million is $89 million less than our FY 2004 appropriation. While there 
is an increase in the FY 2005 funding request for the NIST 
laboratories, the overall request for NIST is a net decrease due to the 
termination of funding for the ATP.
    It is also important to note that a recent trend of shortfalls in 
funding for the NIST laboratories threatens to undermine the very core 
measurements and standards infrastructure upon which our nation's 
scientific, technological and industrial enterprises depend. 
Accordingly, the President's request for NIST incorporates several 
major new R&D initiatives, including $15.6 million to support advanced 
manufacturing, $18.6 million for work related to public safety and 
security, and $16.2 million to develop advanced measurement 
capabilities to meet the needs of 21st century science and industry.
    Last June the President's Science Advisor laid out the 
Administration's priorities for science and technology R&D in the FY 
2005 budget. These NIST R&D initiatives are an excellent fit with those 
priorities:

          Under R&D for Combating Terrorism, the NIST public 
        safety proposal includes a funding increase to advance national 
        measurement capabilities in the detection of chemical, 
        biological, radiological, nuclear, or explosive materials; in 
        biometric identification, and in cyber security. This work is 
        closely coordinated with the Department of Homeland Security 
        and other national security agencies.

          In the rapidly developing field of Nanotechnology, 
        the NIST advanced manufacturing proposal encompasses a wide 
        array of measurement tools, devices, measurement technologies, 
        standards, and data to provide a critical measurement and 
        standards infrastructure for leading-edge developments in 
        nanotechnology manufacturing areas. These are assignments 
        directly fulfilling NIST's mission and in line with NIST's role 
        in both the National Nanotechnology Initiative and the 21st 
        Century Nanotechnology Research and Development Act (P.L. No. 
        108-153) that was spearheaded by this committee.

          In line with the Administration's priority emphasis 
        on Molecular-level Understanding of Life Processes, NIST's 
        Measurement Science initiative includes the development of 
        measurements and test methods that will be critical to 
        developments in biosystems and health, such as work in the 
        measurement and analysis of gene and protein expression, 
        nanobiotechnology and DNA and protein markers.

          In Networking and Information Technology, NIST 
        initiatives in Public Safety and Advanced Measurement include 
        IT research ranging from improvements in the state of the art 
        of computer and network security--especially wireless and 
        industrial control systems--to cutting-edge research in the 
        emerging field of quantum information science, which promises 
        to lead to advanced information processing systems with 
        phenomenal increases in information storage and processing 
        speeds.

          NIST also maintains a substantial effort in the areas 
        of Environment and Energy, including unique research facilities 
        and expertise related to various aspects of hydrogen fuel 
        cells, covering the entire spectrum from fundamental science to 
        successful commercialization.

    NIST is also requesting an FY 2005 funding increase to address an 
issue increasingly important to the U.S. economy--equipping U.S. 
manufacturers with the necessary tools to track and effectively respond 
to the development of international technical standards, particularly 
where they impact the access of U.S. manufacturers to international 
markets.
    Our formal submission gives you additional details of these and 
other research initiatives, but I would like to draw the Committee's 
attention in particular to two very important facilities issues at 
NIST.
    This budget includes a proposed initiative for $8.3 million for 
capability improvements at the NIST Center for Neutron Research. The 
NCNR is one of NIST's truly unique facilities and an extraordinarily 
valuable resource for the Nation's research community. Neutron beams--
especially the low-energy ``cold'' beams available at NCNR--have become 
an indispensable research tool in materials science, biotechnology, 
chemistry, engineering, and physics. The NCNR has been cited as the 
highest performing and most used neutron facility in the United States. 
In fact, it draws nearly twice the number of users at the Nation's 
other three neutron sources combined.
    Success, however, has strained the resources of the NCNR, which now 
serves over four times the number of users predicted in 1987 when it 
was first funded. Fuel- and fuel-related costs have spiraled. As a 
result, NIST's ability to operate the facility to its maximum utility 
and to meet the growing demands of the U.S. research community has been 
seriously curtailed.
    The NCNR initiative will not only address this serious problem in 
operating expenses but also allow NIST to expand significantly its 
literally irreplaceable service to the Nation's industrial and academic 
researchers with new instrumentation and analysis methods. The types of 
research that would benefit include:

          The study of proteins, that could lead to the 
        development of new drug therapies, new anti-toxins and improved 
        vaccines;

          The development of ultra-high sensitivity detection 
        methods for environmental pollutants as well as explosives and 
        other terrorist materials;

          The study of the workings of complex cellular level 
        biological systems; and

          The development of more efficient fuel cells, 
        batteries and semiconductors.

    The FY 2005 budget also includes a $25.7 million initiative 
primarily devoted to pressing issues of facility obsolescence at NIST's 
Boulder, Colorado, laboratories.
    Years of inadequate funding for maintenance and upgrades have left 
the NIST laboratories in Boulder, Colorado, severely deteriorated and 
obsolete. That these facilities have managed to provide U.S. 
researchers one of the world's most accurate and precise time and 
frequency standards, for example, or the world's most accurate voltage 
standards, is a tribute to the ingenuity and patience of the NIST 
staff, but it comes at a price.

          Poor heating and air-conditioning controls have 
        prevented on-time delivery of specialized superconducting 
        integrated circuit chips to defense contractors, instrument 
        makers and other NIST clients.

          Researchers making sophisticated measurements of 
        magnetic fields--important work done in support of the data 
        storage industry--often must wait an hour or more for lab 
        temperatures to stabilize sufficiently to work.

          Outages, power spikes, brownouts, and other problems 
        are damaging sensitive equipment, delaying research program, 
        and necessitating expensive repairs.

    NIST conservatively estimates a 10 percent loss in productivity at 
the Boulder Labs purely due to environmental problems in obsolete 
buildings. And that does not begin to touch on the staff safety issues.
    We appreciate that this committee has long been a strong advocate 
for NIST. I am grateful that you understand that an investment in NIST 
returns great benefits to our nation as the only federal laboratory 
with the express mission of working with industry. I look forward to 
working with you in addressing NIST's needs so that its world-class 
scientists and engineers can continue to serve our nation effectively.

Conclusion

    Mr. Chairman, the Department of Commerce's R&D portfolio is not 
only strengthening our science and technology portfolio but also 
strengthening our nation's economy. The past few weeks have confirmed 
that America's economy is strong, and growing stronger. The Nation's 
unemployment rate fell to 5.6 percent in January, the fourth 
consecutive monthly decline, and we added 112,000 new jobs, the largest 
single month increase since December of 2000. Overall, the Nation has 
added 366,000 jobs in the past five months. There's more evidence of a 
strengthening economy. Manufacturers report new orders. GDP rose at a 
6.1 percent in the second half of 2003, the fastest pace in nearly 20 
years. Inflation remains low, and our nation's home ownership rate just 
reached an all-time high. All of these are signs that our economic 
recovery is becoming a lasting expansion. The President has made 
economic recovery a national priority and I know the Members of this 
committee are equally as passionate about this issue. At the Department 
of Commerce we are fully engaged in economic recovery by providing 
leadership in science and technology, with TA and NOAA leading our R&D 
efforts.

                     Biography for Phillip J. Bond

    Phillip J. Bond was sworn in as Under Secretary of Commerce for 
Technology on October 30, 2001. He was nominated by President George W. 
Bush on September 4, and confirmed by the United States Senate on 
October 23, 2001.
    From January 2002 through January 2003, Bond served concurrently as 
Chief of Staff to Commerce Secretary Don Evans. In his dual role, Bond 
worked closely with the Secretary to increase market access for U.S. 
goods and services and further advance America's technological 
leadership at home and around the world.
    Under Secretary Bond serves as the principal advisor to Secretary 
Evans on science and technology policy to maximize technology's 
contribution to America's economic growth. In this context, Mr. Bond's 
primary responsibilities are to supervise policy development and 
direction among the Office of Technology Policy (OTP), the National 
Institute of Standards and Technology (NIST), and the National 
Technical Information Service (NTIS). He also serves on four committees 
of the President's National Science and Technology Council (NSTC), a 
Cabinet-level council established by the President to coordinate 
science, space, and technology policy within the Federal research and 
development enterprise.
    One of Mr. Bond's top priorities has been to transform the 
Technology Administration into the pre-eminent portal between the 
Federal Government and the U.S. technology industry. In that regard, he 
directs TA efforts to advocate on behalf of U.S. technology in the 
federal policy-making process. Some of the high priority issues that he 
is involved in include support for American innovation and 
entrepreneurship; the converging fields of nanotechnology, 
biotechnology, information technology and the cognitive sciences; 
strengthening U.S. technology cooperation with other countries, 
especially in areas such as standards development; education and 
training of a high tech U.S. workforce; and an array of issues of 
concern to the telecommunications and information technology 
industries.
    Mr. Bond was recognized in Scientific American Tech Leaders of 2003 
(December 2003) for promoting nanotechnology effectively within the 
executive branch.
    His experience in the private sector includes serving as Director 
of Federal Public Policy for the Hewlett-Packard Company, a position he 
held immediately before joining Commerce, and previously serving as 
Senior Vice President for Government Affairs and Treasurer of the 
Information Technology Industry Council.
    From 1993 to 1998, Phil Bond served as Chief of Staff to 
Congresswoman Jennifer Dunn (R-WA). He was Principal Deputy Assistant 
Secretary of Defense for Legislative Affairs from 1992 to 1993 for 
then-Defense Secretary Dick Cheney. Earlier, he was Chief of Staff and 
Rules Committee Associate for Congressman Bob McEwen (R-OH) from 1990 
to 1992. From 1987 to 1990, he served as Special Assistant to the 
Secretary of Defense for Legislative Affairs. He is a graduate of 
Linfield College in Oregon.

    Chairman Boehlert. Thank you very much, Mr. Bond. You have 
a good story, and you tell it well. I can understand why you 
are smiling. I would like to see bigger smiles on Dr. Colwell's 
and Dr. Orbach's faces, but I will say, knowing the Committee, 
as I do, both sides, we agree with your comments on NIST. And 
one of the challenges that we face is to undo the damage we did 
in the omnibus bill earlier in this year, because we have got 
some problems for NIST. Now it is fine for next year, as this 
budget documents, but it is this year that we have got to get 
by. And I mean, to zero out the funding for research on 
standards for new election equipment is goofy. I mean, in view 
of what happened in the last election, we have got to figure 
out how to get that money in there, and it is $2.8 million. And 
I am concerned that NIST is going to have to reduce its 
workforce between now and the next fiscal year by 50 to 100 
people. That is not good news.
    But the good news is I think the Administration recognizes 
the importance of NIST and has been very forthcoming in 
proposing a favorable budget for the next fiscal year, and we 
will work with you to see that it is embraced.
    With that, we go next to Dr. Orbach. Welcome back, Doctor. 
It is good to see you once again.

    STATEMENT OF DR. RAYMOND L. ORBACH, DIRECTOR, OFFICE OF 
                 SCIENCE, DEPARTMENT OF ENERGY

    Dr. Orbach. Thank you, Chairman Boehlert. Chairman 
Boehlert, Ranking Member Gordon, Members of the Committee, it 
is my great pleasure to join you today to present the 
Department of Energy fiscal year 2005 budget submission.
    I also wish to personally thank Dr. Rita Colwell for her 
leadership of the National Science Foundation and for the very 
close and cooperative relationship that my program has 
experienced under her direction. We greatly appreciate it and 
wish you well, Rita.
    I would like to summarize very briefly the programs of the 
Department of Energy, which fall under this committee's 
jurisdiction, and greater detail is in my written testimony.
    For the Office of Science, we are requesting $3.4 billion--
$3.341 billion for fiscal year 2005. This request will set us 
on the path toward addressing the challenges that face our 
nation in the 21st century. The Office of Science supports a 
broad array of research disciplines. This year, we will 
increase our activities across the board in areas such as 
computation, biological research, environmental remediation, 
fusion energy, materials, and nanotechnology R&D. It is also 
the first year that we will make explicit use of our 
laboratories to diversify our scientific workforce.
    The Office of Science recently released ``Facilities for 
the Future of Science: A Twenty-Year Outlook,'' which sets an 
ambitious, prioritized agenda for scientific discovery over the 
next two decades. Our budget will begin the process of 
developing those facilities, which we believe to be essential 
for the advancement of science and, indeed, for job creation in 
our country.
    For nuclear energy, we are requesting $410 million to 
continue the Department's commitment to nuclear energy as a 
clean, reliable, and affordable source of energy for this 
Nation. This request includes funding to establish a new 
laboratory for nuclear energy research, development, 
demonstration, and education. The conceptual design for the 
next-generation nuclear plant continues to work to pave the way 
for a new nuclear power plant order in the near future, and 
international efforts to develop new reactor and fuel cycle 
technologies.
    For our Office of Energy Efficiency and Renewable Energy, 
we are requesting $1.25 billion, reflecting the Secretary's 
view that this Office should take a revolutionary, rather than 
evolutionary, approach to meet the National Energy Policy 
goals. One such revolutionary approach is embodied in the 
President's FreedomCAR and Hydrogen Fuel Initiative. Together 
with programs in fossil energy, nuclear energy, and science, 
the Department's 2005 commitment to this initiative is more 
than $300 million.
    Fossil energy's program supports the President's top 
initiatives for energy, security, clean air, climate change, 
and coal research. The $728.9 million request supports the 
development of lower cost, more effective pollution control 
technologies for coal, extended options for reducing greenhouse 
gases, and the Nation's energy security by providing a short-
term emergency response, such as the Strategic Petroleum 
Reserve, or longer-term response, such as gas hydrates.
    Mr. Chairman, I believe the Department's fiscal year 2005 
budget submission meets the Nation's critical needs for energy, 
environmental, and national security at a difficult time in our 
history.
    I appreciate the opportunity to present the 2005 budget, 
and I greatly appreciate the support of this committee for the 
energy and research goals of this country. Thank you.
    [The prepared statement of Dr. Orbach follows:]

                Prepared Statement of Raymond L. Orbach

Introduction

    Mr. Chairman, Members of the Committee, it is a pleasure to join 
you today to present the Department of Energy's FY 2005 budget 
submission and to focus on the details that fall under the purview of 
this committee. The Department appreciates the support of the Chairman 
and the Members of the Committee over the past years and I look forward 
to working with you to ensure that our nation stays at the leading edge 
of science and technology in the 21st Century. I am testifying on 
behalf of Mr. Robert Card, Under Secretary for Energy, Science and the 
Environment at the Department of Energy.
    The Department of Energy in the last three years has been guided by 
the Administration's commitment to better management in government and 
the importance of scientific discovery. Our cadre of scientists and 
engineers from all disciplines create and inspire dynamic discoveries 
that change our way of life. To complement our support for scientific 
discovery, the Department has fully embraced the President's Management 
Agenda--emphasizing performance, aligning resources directly to mission 
priorities, and integrating these objectives into the management of 
human capital. This synergy has sharpened the focus of the Department 
of Energy and, I believe, will result in dramatic achievements of real 
importance to the everyday lives of Americans.

Setting Priorities

    Three years ago, Secretary Abraham defined the Department's primary 
mission to support national security and established a series of 
programmatic objectives in national security, energy, environmental 
quality, science, and corporate management. From this mission and 
departmental objectives, the Department's Strategic Plan was developed, 
setting in place a long-range programmatic vision. To orient the 
Department to results and performance, the long-range planning goals 
and targets have been articulated into shorter-term performance goals, 
objectives, and metrics that are reflected throughout the FY 2005 
detailed budget justifications.
    The FY 2005 budget request of $24.3 billion is formulated to meet 
four broad programmatic goals and objectives in corporate management:

          Defense--To protect our national security by applying 
        advanced science and nuclear technology to the Nation's 
        defense. The FY 2005 budget proposes $9.0 billion to meet 
        defense-related objectives. The budget request maintains 
        commitments to the nuclear deterrence requirements of the 
        Administration's Nuclear Posture Review and continues to fund a 
        strong strategy to mitigate the threat of weapons of mass 
        destruction.

          Energy--To protect our national and economic security 
        by promoting a diverse supply and the delivery of reliable, 
        affordable, and environmentally sound energy. The FY 2005 
        budget requests $2.7 billion to meet energy-related objectives. 
        The budget request maintains Presidential objectives to promote 
        energy security and reliability through increases in coal 
        research and development, hydrogen production and fuel cell 
        powered vehicles, advanced nuclear energy technologies, and 
        electric transmission reliability.

          Science--To protect our national and economic 
        security by providing a world-class scientific research 
        capacity and advancing scientific knowledge. The FY 2005 budget 
        seeks $3.4 billion to meet science-related objectives. The 
        budget request continues the Administration's commitment to the 
        Nation's scientific strength by maintaining essential facility 
        and national laboratory operations, and support for research in 
        the exciting fields of fusion, advanced scientific computing, 
        nanoscience, microbial genomics, high energy and nuclear 
        physics and the research tools that enable forefront scientific 
        research.

          Environment--To protect the environment by providing 
        a responsible resolution to the environmental legacy of the 
        Cold War and by providing for the permanent disposal of the 
        Nation's high level radioactive waste. The FY 2005 budget 
        requests $8.4 billion to meet environmental-related objectives. 
        The budget request includes significant increases to fulfill 
        commitments to accelerate environmental cleanup, maintain the 
        schedule to establish a permanent geologic nuclear waste 
        repository by 2010, and accelerate assistance to employees of 
        the Cold War nuclear weapons complex who may have been harmed 
        by their work.

    All of the programs and activities highlighted in this Budget 
depend heavily upon advanced research and development and could not be 
achieved were it not for the world-leading scientific and engineering 
capabilities available in the Department's national laboratories and at 
universities across the Nation.
    I am proud to tell you that the Department of Energy was ranked the 
most improved cabinet-level agency in the most recent scorecard to 
assess implementation of the President's Management Agenda (PMA). The 
scorecard, which evaluates agency performance in the areas of human 
capital, competitive sourcing, financial management, e-government, and 
budget/performance integration, was issued by OMB in January and 
recognized the Department as one of the agencies ``leading the pack 
with regard to management improvement.''
    Let me now review the program areas under this committee in greater 
detail.

The Office of Science

Overview
    The Office of Science FY 2005 budget request is $3.432 billion, a 
$68,451,000 decrease over the FY 2004 appropriation levels. When 
$140,762,000 for FY 2004 Congressionally-directed projects is set 
aside, there is an increase of $72,311,000 in FY 2005. When compared to 
the FY 2004 comparable President's Request, the FY 2005 request 
increases $104,885,000 or 3.2 percent. This request allows us to 
increase support for high priority scientific research, increase 
operations at our key scientific user facilities, keep existing 
construction projects on schedule, and support new initiatives. This 
request, coming at a time of tight overall federal budgets, is also a 
demonstration of the Administration's support for basic research and 
the role that fundamental science plays in keeping our nation strong 
and secure.
    When I joined the Office of Science after a career as a university 
scientist and administrator, I came with an appreciation for the four 
key roles that the Office plays in the U.S. research effort: We provide 
solutions to our nation's energy challenges, contributing essential 
scientific foundations to the energy, national, and economic security 
missions of the U.S. Department of Energy (DOE). We are the Nation's 
leading supporter of the physical sciences, investing in research at 
over 280 universities, 15 national laboratories, and many international 
research institutions. We deliver the premier tools of science to our 
nation's science enterprise, building and operating major research 
facilities for open access by the science community. We keep the U.S. 
at the forefront of intellectual leadership, supporting the core 
capabilities, theories, experiments, and simulations to advance 
science.
    This FY 2005 budget request will set us on the path toward 
addressing the challenges that face our nation in the 21st Century. The 
Office of Science has recently released Facilities for the Future of 
Science: A Twenty-Year Outlook which sets an ambitious agenda for 
scientific discovery over the next two decades. The priorities 
established in this plan--which is not a budget document--reflect 
national priorities set by the President and the Congress, our 
commitment to the missions of the Department of Energy, and the views 
of the U.S. scientific community. Pursuing these priorities will be 
challenging, but they hold enormous promise for the overall well-being 
of all of our citizens. We will soon release an updated Office of 
Science Strategic Plan that is fully integrated with the Facilities 
Plan, the Department's new Strategic Plan, and the President's 
Management Agenda--including the R&D Investment Criteria and OMB's 
Program Assessment Rating Tool. The FY 2005 budget request begins to 
implement these plans.
    DOE's Office of Science leads the world in the conception, design, 
construction, and operation of these large-scale devices. These 
machines have enabled U.S. researchers to make some of the most 
important scientific discoveries of the past 70 years, with spin-off 
technological advances leading to entirely new industries. More than 
19,000 researchers and their students from universities, other 
government agencies (including the National Science Foundation and the 
National Institutes of Health), private industry, and those from abroad 
use DOE facilities each year. These users are both growing in number 
and diversity.
    We credit our outstanding track record in construction to a highly 
effective management and review process. We have been so successful 
that our process is now considered a ``best practice'' across the U.S. 
government by OMB and OSTP, and we are being consulted by CERN, 
Europe's premier particle physics laboratory, on construction of their 
Large Hadron Collider, a facility to which the United States (through a 
partnership between the Office of Science and the National Science 
Foundation) is contributing $531 million.
    Because of the extraordinarily wide range of scientific disciplines 
required to support facility users at national laboratories, and the 
diversity of mission-driven research supported by the Office of 
Science, we have developed an interdisciplinary capability that is 
extremely valuable to some of the most important scientific initiatives 
of the 21st Century. There is also a symbiotic relationship between 
research and research tools. Research efforts advance the capabilities 
of the facilities and tools that in turn enable new avenues of 
research.
    The Office of Science funds research at DOE's national laboratories 
and at 280 colleges and universities located across the country. 
Excluding funds used to construct or operate our facilities, 
approximately half of our base research funding goes to support 
research at universities and institutes. Academic scientists and their 
students are funded through peer-reviewed grants, and SC's funding of 
university research has made it an important source of support for 
graduate students and postdoctoral researchers in the physical sciences 
during their early careers.
    Office of Science research programs are managed in seven major 
areas, including an enhanced effort in Workforce Development for 
Teachers and Scientists.

Advanced Scientific Computing Research (ASCR)
    ASCR significantly advances scientific simulation and computation, 
applying new approaches, algorithms, and software and hardware 
combinations to address the critical science challenges of the future, 
and provides access to world-class, scientific computation and 
networking facilities to the Nation's scientific community to support 
advancements in practically every field of science and industry. The 
ASCR budget also supports the Scientific Discovery through Advanced 
Computing (SciDAC) program--a set of coordinated investments across all 
Office of Science mission areas with the goal of achieving breakthrough 
scientific advances via computer simulation that were impossible using 
theoretical or laboratory studies alone.
    The FY 2005 budget includes $204 million for ASCR to advance U.S. 
leadership in high performance supercomputing, networking and software 
development to continue to advance the transformation of scientific 
simulation and computation into the third pillar of scientific 
discovery. The request includes $38 million for the Next Generation 
Computer Architecture (NGA) to acquire additional advanced computing 
capability for existing users, and for longer-term research and 
development on new architectures for scientific computers. Enhancements 
are supported for ASCR facilities--the Energy Sciences Network (ESnet) 
and the National Energy Research Scientific Computing Center (NERSC). 
The request also includes $8.5 million for the new Atomic to 
Macroscopic Mathematics research effort to provide the research support 
in applied mathematics needed to break through the current barriers in 
our understanding of complex physical processes.

Basic Energy Sciences (BES)
    The BES program is a principal sponsor of fundamental research for 
the Nation in the areas of materials sciences and engineering, 
chemistry, geosciences, and bioscience as it relates to energy. This 
research underpins the DOE missions in energy, environment, and 
national security; advances energy-related basic science on a broad 
front; and provides unique user facilities for the scientific community 
and industry.
    For FY 2005, the Department requests $1,064 million for BES 
including $209 million to continue to advance nanoscale science through 
atomic- and molecular-level studies in materials sciences and 
engineering, chemistry, geosciences, and energy biosciences. This 
supports Project Engineering Design (PED) and construction on four 
Nanoscale Science Research Centers (NSRCs) and a Major Item of 
Equipment for the fifth and final NSRC. NSRCs are user facilities for 
the synthesis, processing, fabrication, and analysis of materials at 
the nanoscale. The request also includes $80.5 million for construction 
and $33.1 million for operation of the Spallation Neutron Source and 
$50 million for design and long lead procurement of the Linac Coherent 
Light Source, a revolutionary x-ray laser light source. With these 
tools, we will be able to understand how the compositions of materials 
affect their properties, watch proteins fold, see chemical reactions, 
and design matter for desired outcomes.
    The FY 2005 budget request also includes $29 million for activities 
that support the President's Hydrogen Fuel Initiative. This research 
program is based on the BES workshop report ``Basic Research Needs for 
the Hydrogen Economy,'' which highlights the enormous gap between our 
present capabilities and those required for a competitive hydrogen 
economy.

Biological and Environmental Research (BER)
    BER advances energy-related biological and environmental research 
in genomics and our understanding of complete biological systems, such 
as microbes that produce hydrogen; in climate change, including the 
development of models to predict climate over decades to centuries; 
developing science-based methods for cleaning up environmental 
contaminants; in radiation biology, providing regulators with a 
stronger scientific basis for developing future radiation protection 
standards; and in the medical sciences, by developing new diagnostic 
and therapeutic tools, technology for disease diagnosis and treatment, 
non-invasive medical imaging, and biomedical engineering such as an 
artificial retina that will restore sight to the blind. For FY 2005, 
the Department requests $502 million for BER which does not provide 
continued support for the $141 million in Congressional earmarks from 
FY 2004.
    Research on microbes through the Genomics: GTL program, addressing 
DOE energy and environmental needs, continues to expand from $63.4 
million in FY 2004 to $67.5 million in FY 2005. The request also 
supports initiation of Project Engineering Design (PED) activities for 
the GTL Facility for the Production and Characterization of Protein and 
Molecular Tags, a facility that will help move the excitement of the 
Genomics: GTL systems biology research program to a new level by 
greatly increasing the rate and cost-effectiveness with which 
experiments can be done. DOE, through the Genomics: GTL program, will 
attempt to use genetic techniques to harness microbes to consume 
pollution, create hydrogen, and absorb carbon dioxide.

Fusion Energy Sciences (FES)
    The FES program advances the theoretical and experimental 
understanding of plasma and fusion science, including a close 
collaboration with international partners in identifying and exploring 
plasma and fusion physics issues through specialized facilities. This 
includes: 1) exploring basic issues in plasma science; 2) developing 
the scientific basis and computational tools to predict the behavior of 
magnetically confined plasmas; 3) using the advances in tokomak 
research to enable the initiation of the burning plasma physics phase 
of the Fusion Energy Sciences program; 4) exploring innovative 
confinement options that offer the potential of more attractive fusion 
energy sources in the long-term; 5) focusing on the scientific issues 
of nonneutral plasma physics and High Energy Density Physics; 6) 
developing the cutting edge technologies that enable fusion facilities 
to achieve their scientific goals; and 7) advancing the science base 
for innovative materials to establish the economic feasibility and 
environmental quality of fusion energy.
    When the President announced that the U.S. would join in the 
International Thermonuclear Experimental Reactor (ITER) project he 
noted that ``the results of ITER will advance the effort to produce 
clean, safe, renewable, and commercially available fusion energy by the 
middle of this century.'' To this end, the Department continues its 
commitment to the future of Fusion Energy Science research with a 
request of $264.1 million, slightly above the FY 2004 level. Within 
that amount, DOE's funding in preparation for ITER in FY 2005 is $38 
million, $30 million more than last year. Of this $38 million, $7 
million is for engineers who support the International Team and for the 
qualification of vendors for superconducting cable. The other $31 
million is for experiments on our tokamak facilities and for component 
R&D in our laboratories and universities that is closely related to our 
ongoing program but which is focused on ITER's specific needs.
    Fabrication of the National Compact Stellarator Experiment (NCSX) 
will continue with a target of FY 2008 for the initial operation of 
this innovative new confinement system that is the product of advances 
in physics understanding and computer modeling. In addition, work will 
be initiated on the Fusion Simulation Project to provide an integrated 
simulation and modeling capability for magnetic fusion energy 
confinement systems over a 15-year development period. The Inertial 
Fusion Energy research program will be redirected toward high energy 
density physics research based on recommendations of the recently 
established Interagency Task Force on High Energy Density Physics.

High Energy Physics (HEP)
    HEP advances understanding of dark energy and dark matter, the 
striking imbalance of matter and antimatter in the current universe, 
the basic constituents of matter, and the possible existence of other 
dimensions, collectively revealing the key secrets of the birth, 
evolution, and final destiny of the universe. HEP expands the energy 
frontier with particle accelerators to study fundamental interactions 
at the highest possible energies, which may reveal the rest of the 
universe: new particles, new forces or undiscovered dimensions of space 
and time; explain how everything came to have mass; and illuminate the 
pathway to the underlying simplicity of the universe.
    For FY 2005, the Department requests $737 million for the HEP 
program, about the same as in FY 2004. Highest priority in HEP is the 
operations, upgrades and infrastructure for the two major HEP user 
facilities at the Fermi National Accelerator Laboratory (Fermilab) and 
the Stanford Linear Accelerator Center (SLAC), to maximize the 
scientific data generated.
    In 2005, the Neutrinos at the Main Injector (NuMI) facility will be 
complete and the beam line will be commissioned. The FY 2005 budget 
request also supports engineering design activities for a new Major 
Item of Equipment, the BTeV (``B Physics at the TeVatron'') experiment 
at Fermilab to extend current investigations that uses modern detector 
technology to increase our data rate by more than two orders of 
magnitude. Research, development and design funding continues in FY 
2005 on the proposed Supernova Acceleration Probe (SNAP) experiment for 
the DOE/NASA Joint Dark Energy Mission (JDEM).

Nuclear Physics (NP)
    NP supports innovative, peer reviewed scientific research to 
advance knowledge and provide insights into the nature of energy and 
matter, and in particular, to investigate the fundamental forces which 
hold the nucleus together, and determine the detailed structure and 
behavior of the atomic nuclei. Nuclear science plays a vital role in 
studies of astrophysical phenomena and conditions of the early 
universe. At stake is a fundamental grasp of how the universe has 
evolved, an understanding of the origin of the elements, and the 
mechanisms of supernovae core collapse. The program builds and supports 
world-leading scientific facilities and state-of-the-art instruments 
necessary to carry out its basic research agenda. Scientific 
discoveries at the frontiers of Nuclear Physics further the Nation's 
energy-related research capacity, which in turn provides for the 
Nation's security, economic growth and opportunities, and improved 
quality of life.
    The FY 2005 budget request of $401 million gives highest priority 
to exploiting the unique discovery potentials of the facilities at the 
RHIC and Continuous Electron Beam Accelerator Facility (CEBAF) by 
increasing operating time by 26 percent compared with FY 2004. R&D 
funding is provided for the proposed Rare Isotope Accelerator (RIA) and 
12 GeV upgrade of CEBAF at Thomas Jefferson National Accelerator 
Facility.
    Operations of the MIT/Bates facility will be terminated as planned, 
following three months of operations in FY 2005 to complete its 
research program. This facility closure follows the transitioning of 
operations of the Lawrence Berkeley National Laboratory 88Inch 
Cyclotron in FY 2004 from a user facility to a dedicated facility for 
the testing of electronic circuit components for use in space (using 
funds from other agencies) and a small in-house research program. These 
resources have been redirected to better utilize and increase science 
productivity of the remaining user facilities and provide for new 
opportunities in the low-energy subprogram.

Workforce Development for Teachers and Scientists
    The mission of the Workforce Development for Teachers and 
Scientists program is to continue the Office of Science's long-standing 
role of training young scientists, engineers, and technicians in the 
scientifically and technically advanced environments of our National 
Laboratories.
    The FY 2005 budget request of $7.66 million provides $1.5 million 
for a Laboratory Science Teacher Professional Development activity. 
About 90 participating teachers will gain experience and enhance their 
skills at five or more DOE laboratories in response to the national 
need for science teachers who have strong content knowledge in the 
classes they teach. A new $0.5 million Faculty Sabbatical Fellowship 
activity will provide sabbatical opportunities for 12 faculty from 
minority serving institutions (MSIs). This proposed activity is an 
extension of the successful Faculty and Student Teams (FaST) program 
where teams of faculty members and two or three undergraduate students, 
from colleges and universities with limited prior research 
capabilities, work with mentor scientists at a National Laboratory to 
complete a research project that is formally documented in a paper or 
presentation.

The Office Energy Efficiency and Renewable Energy

    Research, development and deployment of advanced clean energy 
technologies are making a difference in everyday lives of Americans 
today and will make an even larger difference tomorrow. Advanced energy 
efficient technologies and practices that use less energy, as well as 
renewable energy technologies that produce power and heat more cleanly 
than conventional sources, are well on their way to becoming today's 
answers to tomorrow's energy and environmental challenges.
    The Department allocates more funding for energy efficiency and 
renewable energy than it does for any other energy activity. The Fiscal 
Year 2005 Budget Request for the Office of Energy Efficiency and 
Renewable Energy (EERE) is $1.25 billion, a $15.3 million increase over 
the Fiscal Year 2004 comparable funding level. This budget builds on 
successes already achieved and delivers on promises and commitments 
made in past budget requests.
    The Department's Fiscal Year 2005 budget request continues to 
implement the priorities established in the National Energy Policy 
Report and the Department of Energy Strategic Plan, and reflects 
priorities set in the EERE Strategic Program Review. EERE also used the 
research and development investment criteria called for in the 
President's Management Agenda to evaluate its portfolio and focus its 
research and development dollars on long-term, potentially high payoff 
activities that require federal involvement to be successful and 
achieve public benefit.
    The Fiscal Year 2005 budget reflects Secretary Abraham's challenge 
to EERE that it take a bold approach to EERE-sponsored work. 
Recognizing increasing dependence on energy from areas of the world 
that can be unstable, and recognizing that questions surrounding 
climate change can increase the focus on reducing greenhouse gas 
emissions, the Secretary directed that the program take a 
revolutionary, rather than an evolutionary approach to meeting National 
Energy Policy Report's goals of increased energy security, greater 
freedom for Americans in their energy choices, and reduced costs and 
environmental impacts associated with those choices.
    One such revolutionary approach is embodied in the President's 
FreedomCAR Partnership and Hydrogen Fuel Initiative, the goal of which 
is an industry decision by 2015 to commercialize hydrogen-powered fuel 
cell vehicles. To the extent that hydrogen is produced from domestic 
resources in an environmentally sound manner, hydrogen fuel cell 
vehicles will require no petroleum-based fuels and emit no criteria 
pollutants or carbon dioxide, and their commercial success would 
essentially remove personal transportation as an environmental issue 
and substantially reduce our dependence on foreign oil. The FreedomCAR 
Partnership and Hydrogen Fuel Initiative now include both auto 
manufacturers and energy companies, helping to ensure that hydrogen 
will be available and affordably priced when fuel cell vehicles are 
ready for commercialization. Over the past year significant R&D 
advances have increased confidence that the 2015 goal is realistic and 
attainable. Together with programs in Fossil Energy, Nuclear Energy and 
Science, the Department's Fiscal Year 2005 commitment to the Hydrogen 
Fuel Initiative is $227 million.
    The Fiscal Year 2005 budget requests $10.2 million to continue our 
Solid State Lighting program begun last year. Solid State Lighting 
represents a revolutionary approach to lighting our homes and 
businesses that has the potential to more than double the efficiency of 
general lighting systems in the coming decades, conserving enough 
electricity nationally to power the states of Arizona, Colorado, and 
Mississippi. Advancing the technology and lowering the cost of organic 
and inorganic light emitting diodes will lead to more efficient, 
flexible and functional lighting technology in the future. The budget 
for Solid State Lighting keeps the Department on track to overcome 
technical barriers to everyday use of these innovative technologies.
    In the deployment area, the Fiscal Year 2005 budget request 
maintains the President's commitment to increase funding for the 
Weatherization Assistance Program by $1.4 billion over ten years to 
help low-income Americans who spend a disproportionately high share of 
their income on energy. This year's budget request will allow the 
weatherization of nearly 119,000 low-income homes, saving $1.30 in 
energy costs for every dollar invested.
    Federal Energy Management Program (FEMP) alternative financing 
programs and technical assistance helps federal agencies access private 
sector financing to fund energy improvements through Energy Savings 
Performance Contracts and Utility Energy Service Contracts at no net 
cost to taxpayers. In addition, FEMP promotes a whole-building design 
strategy and provides awards to groups within federal agencies that 
achieve excellence in energy management. The Fiscal Year 2005 request 
is $17.9 million for FEMP to continue reducing federal energy 
consumption. As FEMP's core activities have evolved, efficiencies have 
increased, enabling a reduced funding level in Fiscal Year 2005.

The Office of Electric Transmission and Distribution

    The mission of the newly created Office of Electric Transmission 
and Distribution (OETD) is to lead a national effort to modernize and 
expand America's electricity delivery system to ensure a more reliable 
and robust electricity supply, as well as economic and national 
security. This is vital to the Department's strategic goal: to protect 
our national and economic security by promoting a diverse supply and 
delivery of reliable, affordable, and environmentally sound energy.
    The August 14, 2003 blackout demonstrated the electric grid's 
strategic importance to our nation. President George Bush stated in 
September 2003: ``. . .it's clear that the power grid needs an 
overhaul. It needs to be modernized. As we go into an exciting new 
period of American history, we want the most modern electricity grid 
for our people. . .we need more investment; we need research and 
development.. . .''
    OETD requests $90.9 million for FY 2005 to increase reliability, 
which reflects a 12.4 percent increase over the FY 2004 comparable 
appropriation. This effort includes research, development, 
demonstration, technology transfer, and education and outreach 
activities in partnership with industry, businesses, utilities, States, 
other federal programs and agencies, universities, national 
laboratories, and other stakeholders.
    Neither government nor industry alone can satisfy the Nation's 
electric infrastructure needs. The National Delivery Technologies 
Roadmap provides a framework for all of the electric industry 
stakeholders to work together to achieve common aims. The call for grid 
modernization is coming from all levels of leadership. The President's 
2004 State of the Union request to Congress to ``modernize our 
electricity system'' reiterated the Administration's objectives first 
outlined in the National Energy Policy [May 2001] and then reinforced, 
in more detail, in the National Transmission Grid Study (NTGS) [May 
2002].
    Modernizing the grid will involve time, resources, and 
unprecedented levels of cooperation. The Nation's aging electric 
infrastructure--and the increasing requirements placed on it--have 
contributed to market inefficiencies and electricity congestion in 
several regions. These conditions could lead to more outages, more 
power quality disturbances, higher prices, and the less efficient use 
of resources. We must act now or risk even greater problems in the 
future.

The GridWise and GridWorks Initiatives
    OETD's FY 2005 Budget request--reflecting the Administration's 
efforts to modernize and expand the electric grid--includes $10.5 
million for the new GridWorks Initiative and the existing GridWise 
Initiative, which are aimed at reducing the likelihood and impact of 
reliability events, such as blackouts.
    GridWise denotes a modernized electric infrastructure framework 
where open, but secure, communication and information technologies, and 
associated standards, are used throughout the electric grid to enhance 
reliability and robustness, promote economic efficiencies, and provide 
value and choices to electricity consumers. The GridWise program 
activity (software-centric) comprises the intelligence--or brains--
behind a modern electric grid that incorporates GridWorks (hardware-
centric) technology.
    GridWorks is focused on advanced equipment applications, taking an 
integrated approach to the entire electric system. It bridges the gap 
between the laboratory prototypes of the base programs and the 
application needs of the electric industry. GridWorks uses the 
facilities at DOE's National Laboratories to accelerate the development 
and testing of advanced conductors, which can increase much-needed 
transmission line capacity. It complements GridWise's architectural 
software development by developing and demonstrating associated 
hardware, such as sensors. GridWorks pursues advanced power electronic 
breakthroughs to provide faster means of limiting transmission problems 
before they propagate through the electric system.

High Temperature Superconductivity
    OETD's FY 2005 Budget request includes a $10.9 million increase for 
High Temperature Superconductivity R&D to develop second generation 
wire usable in cables, generators, transformers, and motors--equipment 
that crosscuts the entire electric power value chain.
    High temperature superconductors are a good example of advanced 
materials that have the potential to revolutionize electric power 
delivery in America. The prospect of transmitting large amounts of 
power through compact underground corridors, with minimal electrical 
losses and voltage drop over long distances, could significantly 
enhance the overall energy efficiency and reliability of the electric 
system, while reducing fuel use, air emissions, and any physical 
footprint. Also, breakthroughs in basic science are rapidly applied in 
the area of high temperature superconductivity. For instance, benefits 
from nanoscience research are accelerating progress in 
superconductivity wire development.

The Office of Fossil Energy

    Fossil Energy's programs focus on supporting the President's top 
initiatives for energy security, clean air, climate change, and coal 
research. FY 2005 Fossil Energy programs:

          Support the development of lower cost, more effective 
        pollution control technologies embodied in the President's Coal 
        Research Initiative or help diversify the Nation's future 
        sources of clean-burning natural gas to meet the goals of 
        President's Clear Skies initiative;

          Expand the Nation's technological options for 
        reducing greenhouse gases either by increasing power plant 
        efficiencies or by capturing and isolating these gases from the 
        atmosphere as called for by the President's Global Climate 
        Initiative;

          Or measurably add to the Nation's energy security by 
        providing a short-term emergency response, such as the 
        Strategic Petroleum Reserve, or a longer-term alternative to 
        imported oil, such as hydrogen and methane hydrates.

The President's Coal Research Initiative
    Fossil Energy's FY 2005 Budget continues to meet the President's 
clean coal commitment by providing $447 million for the Coal Research 
Initiative, an increase of 40 percent or $126.5 million over last 
year's request.
    Under President Bush's leadership, budget requests for coal R&D 
have more than doubled over historical amounts and appropriations.

Clean Coal Power Initiative and FutureGen
    The Clean Coal Power Initiative (CCPI) is a key component of the 
National Energy Policy to address the reliability and affordability of 
the Nation's electricity supply, particularly from its coal-based 
generation. The FY 2005 Budget includes $287 million for CCPI, of which 
$237 million is for FutureGen, the world's first zero-emissions 
hydrogen and electicity producing power plant. FutureGen will establish 
the capability and feasibility of co-producing electricity and hydrogen 
from coal with essentially zero emissions, including carbon 
sequestration and gasification combined cycle, both integral components 
of the zero emissions plant of the future.
    The CCPI is a cooperative, cost-shared program between the 
government and industry to rapidly demonstrate emerging technologies in 
coal-based power generation and to accelerate their commercialization. 
The Nation's power generators, equipment manufacturers, and coal 
producers help identify the most critical barriers to coal's use in the 
power sector. Technologies are selected with the goal of accelerating 
development and deployment of coal technologies that will economically 
meet environmental standards, while increasing the efficiency and 
reliability of coal power plants.
    CCPI is especially significant because it directly supports the 
President's Clear Skies initiative. The first projects included an 
array of new cleaner and cheaper concepts for reducing sulfur dioxide, 
nitrogen oxides, and mercury--the three air pollutants targeted by the 
Clear Skies initiative.
    Since last year, the Department has made significant progress on a 
new generation of environmentally-clean coal technologies.
    The ``first round'' in the Clean Coal Power Initiative--the 
centerpiece of the President's clean coal commitment--attracted three 
dozen proposals for projects totaling more than $5 billion. In early 
2003, we announced the first winners of the competition--eight projects 
with a total value of more than $1.3 billion, more than one billion 
dollars of which would be provided by the private sector. These 
projects are expected to help pioneer a new generation of innovative 
power plant technologies that could help meet the President's Clear 
Skies and climate change objectives.
    Competitive solicitations for the ``second round'' will be made in 
early 2004 and are open to technologies capable of producing any 
combination of heat, fuels, chemicals, or other useful by-products in 
conjunction with electricity generation.
    FutureGen. In order to assure that FutureGen is successful, it will 
be supported in FY05 by a clean coal R&D effort at a proposed level of 
$46.5 million. It will be focused on all the key technologies needed--
such as carbon sequestration, membrane technologies for oxygen and 
hydrogen separation, advanced turbines, fuel cells, coal to hydrogen 
conversion, gasifier related technologies, and other technologies.

Carbon Management
    Several Clean Coal projects also help expand the menu of options 
for meeting the President's climate change goal of an 18 percent 
reduction in greenhouse gas intensity (carbon equivalent per GDP) by 
2012, primarily by boosting the efficiencies of power plants (meaning 
that less fuel is needed to generate electricity with a corresponding 
reduction in greenhouse gases).
    Carbon management has become an increasingly important element of 
our coal research program. Carbon sequestration--the capture and 
permanent storage of carbon dioxide--has emerged as one of our highest 
priorities in the Fossil Energy research program--a priority reflected 
in the proposed budget of $49 million in FY 2005.
    Continuing in FY 2005, one of the cornerstones of our carbon 
sequestration program will be a national network of regional 
partnerships. This Secretarial initiative, which I announced last year, 
will bring together the Federal Government, state agencies, 
universities, and private industry to begin determining which options 
for capturing and storing greenhouse gases are most practicable for 
specific areas of the country.
    Funding from the Fossil Energy program will be combined with 
funding from the Office of Nuclear Energy and the Office of Energy 
Efficiency and Renewable Energy to competitively fund technology R&D 
with the greatest potential to reduce, avoid, or sequester gas 
emissions.

Hydrogen
    Another aspect of the President's Clean Coal Research Initiative is 
the production of clean fuels from coal. Hydrogen has emerged as a 
major priority within the Administration and the Department of Energy 
as a clean fuel for tomorrow's advanced power technologies (such as 
fuel cells) and for future transportation systems. Within the Fossil 
Energy program, we have allocated $16 million for research into new 
methods for making hydrogen from coal.

Advanced Research
    To provide fundamental scientific knowledge that benefits all of 
our coal technology efforts, our FY 2005 Budget includes $30.5 million 
for advanced research in such areas as materials, coal utilization 
science, analytical efforts, and support for coal research at 
universities (including historically black and other minority 
institutions).

Other Power Systems Research and Development
    We are also proposing $23 million for continued development of fuel 
cells with an emphasis on lower-cost technologies that can contribute 
to both Clear Skies emission reductions, particularly in distributed 
generation applications, and Climate Change goals by providing an 
ultra-high efficiency electricity-generating component for tomorrow's 
power plants. Distributed power systems, such as fuel cells, also can 
contribute to the overall reliability of electricity supplies in the 
United States and help strengthen the security of our energy 
infrastructure.
Natural Gas Research
    The President's Clear Skies Initiative also provides the rationale 
for much of the department's $26.0 million budget request for natural 
gas research. Even in the absence of new environmental requirements, 
natural gas use in the United States is likely to increase by 50 
percent by 2020.
    Our natural gas research program, therefore, is directed primarily 
at providing new tools and technologies that producers can use to 
diversify future supplies of gas. Emphasis will be increased on 
research that can improve access to onshore public lands, especially in 
the Rocky Mountain region where much of our undiscovered gas resource 
is located.
    A particularly important aspect of this research will be to develop 
innovative ways to recover this resource while continuing to protect 
the environmental quality of these areas.
    We also plan to establish a new industry-led, university consortia-
based program to develop breakthrough technologies that can help assure 
a continued supply of affordable natural gas beyond 2015. The focus of 
this program will be on projects that could revolutionize the way 
natural gas is supplied in the United States--a focus that is well 
beyond the type of research industry is now doing.
    Natural gas storage will also assume increasing significance in the 
United States as more and more power plants require consistent, year-
round supplies of natural gas. Toward this end, we will initiate a 
nationwide, industry-led consortium that will examine ways to improve 
the reliability and efficiency of our nation's gas storage system and 
explore opportunities for LNG facility siting.
    Over the long-term, the production of natural gas from hydrates 
could have major energy security implications. Hydrates are natural 
gas-bearing, ice-like formations in Alaska and offshore.
    U.S. Geological Survey estimates indicate U.S. gas hydrates 
resources are larger by several orders of magnitude than previously 
thought and dwarf the estimated 1,400 trillion cubic feet of 
conventional recovered gas resources and reserves in the United States.
    This huge resource warrants a new look at advanced technologies 
that might one day reliably and cost-effectively detect and produce 
natural gas from methane hydrates. Hydrate production, if it can be 
proved technically and economically feasible, has the potential to 
shift the world energy balance away from the Middle East. Understanding 
hydrates can also improve our knowledge of the science of greenhouse 
gases and possibly offer future mechanisms for sequestering carbon 
dioxide. For these reasons, we are continuing a research program to 
study gas hydrates with a proposed funding level of $6.0 million.
Oil Technology Development
    The President's NEP calls attention to the continued need to 
strengthen our nation's energy security by promoting enhanced oil (and 
gas) recovery and improving oil (and gas) exploration technology 
through continued partnerships with public and private entities.
    At the same time, however, we recognize that if the federal oil 
technology R&D program is to produce beneficial results, it must be 
more tightly focused than in prior years. Consequently, our FY 2005 
Budget request of $15.0 million reflects a reorientation of the program 
toward those areas where there is clearly a national benefit.
    One example is the use of carbon dioxide (CO2) injection 
to enhance the recovery of oil from existing fields. CO2 
injection is a proven enhanced oil recovery practice that prolongs the 
life of some mature fields, but the private sector has not applied this 
technique to its fullest potential due to insufficient supplies of 
economical CO2. A key federal role to be carried out in our 
proposed FY 2005 program will be to facilitate the greater use of this 
oil recovery process by integrating it with CO2 captured and 
delivered from fossil fuel power plants.
    We will also refocus much of our Oil Technology program on a new 
Domestic Resource Conservation effort that will target partnerships 
with industry and universities to sustain access to marginal wells and 
reservoirs. These aging fields account for 40 percent of our domestic 
production and contain billions of barrels of oil that might still be 
recovered with ever-improving technology.
    A high priority effort in FY 2005 will be to develop ``micro-hole'' 
technology. Rather than developing just another new drilling tool, the 
federal program will integrate ``smart'' drilling systems, advanced 
imaging, and enhanced recovery technologies into a complete exploration 
and production system. Micro-hole systems may offer one of our best 
opportunities for keeping marginal fields active because the smaller-
diameter wells can significantly reduce exploration costs and make new 
drilling between existing wells (``infill'' drilling) more affordable.
    Using breakthrough technology like this to keep marginal fields in 
production preserves the opportunity to eventually apply even more 
advanced innovations that could recover even larger quantities of 
domestic crude that traditional oil recovery methods currently leave 
behind.

Other Fossil Energy Activities
    Our budget also includes $124.8 million for other activities in our 
Fossil Energy program, including $106.0 million for headquarters and 
field office salaries, $6.0 million for environmental restoration, $3.0 
million for federal matching funds for cooperative research and 
development projects at the University of North Dakota and the Western 
Research Institute, $1.8 million for natural gas import/export 
responsibilities, and $8 million for advanced metallurgical research at 
our Albany Research Center.
    Petroleum Reserves. The Strategic Petroleum Reserve and Northeast 
Home Heating Oil Reserve are key elements of our nation's energy 
security. Both serve as response tools for the President to use to 
protect U.S. citizens from disruptions in commercial energy supplies.
    Strategic Petroleum Reserve. The President has directed us to fill 
the Strategic Petroleum Reserve to its full 700 million barrel 
capacity. The mechanism for doing this is a cooperative effort with the 
Minerals Management Service to exchange royalty oil from federal leases 
in the Gulf of Mexico. We have been able to accelerate fill from an 
average of 60,000 barrels per day at the start of the President's 
initiative to a rate of 130,000 barrels per day.
    Because of the President's ``royalty in kind'' initiative, we have 
achieved the Reserve's highest inventory level ever, now at 638 million 
barrels. Our goal remains to have a full inventory of 700 million 
barrels by the end of calendar 2005.
    Our FY 2005 Budget for the SPR is $177.1 million, all of which is 
now in our facilities development and operations account. We do not 
require additional funds in the oil acquisition account because charges 
for transporting ``royalty in kind'' oil to the SPR are now the 
responsibility of the oil supplier. Also, because we have the authority 
to ``borrow'' funds from other Departmental accounts to support an 
emergency SPR drawdown, we no longer require the same amount of standby 
funding in this account.
    Northeast Home Heating Oil Reserve. We are requesting $5.0 million 
for the Northeast Home Heating Oil Reserve, the same level as last 
year. The 2-million barrel reserve remains ready to respond to a 
Presidential order should there be a severe fuel oil supply disruption 
in the Northeast. A key element of this readiness is a new online 
computerized ``auction'' system that we implemented to expedite the 
bidding process. Installing and testing the electronic system 
(including tests with prospective commercial bidders) has been a major 
element of the Office of Fossil Energy's role in implementing the ``e-
government'' initiatives in the President's management agenda.
    Naval Petroleum and Oil Shale Reserves. The FY 2005 Budget request 
of $20.0 million funds continued operations. The Rocky Mountain 
Oilfield Testing Center (RMOTC), established at the Naval Petroleum 
Reserve No. 3 in Wyoming, will be funded at $3 million. We also are 
working on proposals to transfer the Naval Petroleum Reserve No. 2 in 
California to the Department of the Interior by the end of FY 2005, 
although we anticipate that transition and certain environmental 
compliance activities will continue into FY 2005. We also expect to be 
able to reduce our funding requirements for equity redetermination 
studies for the Government's portion of the Elk Hills Naval Petroleum 
Reserve No. 1, which was divested in 1998. Of the four producing zones 
for which final equity shares had to be finalized, three have been 
completed; the fourth (the Shallow Oil Zone) is expected to be finished 
in FY 2005.

The Office of Nuclear Energy, Science and Technology

Overview
    The FY 2005 budget proposal continues the Department's commitment 
to refining the benefits of nuclear power as a clean, reliable and 
affordable source of energy for this nation. The proposed $410 million 
investment in the Department's nuclear energy program includes funding 
to establish a new laboratory for nuclear energy research, development, 
demonstration and education; preconceptual design work for the Next 
Generation Nuclear Plant; continued work with utilities to pave the way 
for an industry order for a new nuclear power plant in the near future; 
and continued work with other countries to develop new reactor and fuel 
cycle technologies.
    This budget request moves forward the Department's commitment to 
support the President's priorities to fortify U.S. energy independence 
and security while making significant improvements in environmental 
quality through the deployment of non-emitting generation capacity by 
the end of the decade. It also strengthens our nation's nuclear 
education infrastructure, and recommends increased support for the 
Nuclear Hydrogen Initiative, which will take high temperature nuclear 
energy systems for clean hydrogen production from concept to reality. 
Finally, this request supports funds for the Advanced Fuel Cycle 
Initiative, which is aimed at developing proliferation-resistant fuel 
cycle technologies to reduce the volume and toxicity of commercial 
spent nuclear fuel and maximize energy from nuclear fuel.
    Please allow me to explain in more detail how this budget proposal 
continues to advance the Department's nuclear energy initiatives.
Development of the Idaho National Laboratory
    DOE's Nuclear Energy Research Center. This budget supports the 
Secretary's realignment of the mission at the current Idaho National 
Engineering and Environmental Laboratory to a focus on nuclear energy 
research and development. The Department is in the process of 
establishing the Idaho National Laboratory, which will combine the 
resources of the INEEL and the Argonne-West site. As the Department's 
leading center of nuclear research and development, a core mission of 
this laboratory is advanced nuclear reactor and fuel cycle 
technologies, including the development of space nuclear power and 
propulsion technologies. The new Idaho National Laboratory will play a 
vital role in the research and development of enabling technologies for 
the Next Generation Nuclear Plant, which will support the Department's 
long-term vision of a zero-emissions future free of reliance on 
imported energy.
    The Department issued a Request for Proposals last week to find a 
management team to reduce costs and build expertise at the INL. The 
Department's nuclear energy program involves the collective talents of 
universities, the private sector, international partners and many of 
our other national laboratories--Argonne, Los Alamos, Sandia and Oak 
Ridge among them. The rebuilding of the Department's nuclear power 
research and development program, however, will be centered at INL. 
While environmental cleanup remains an important focus at the Idaho 
site, real progress is being made that will aid in the expansion of 
nuclear research and development. Within the 2005 budget, an additional 
$44 million is requested to manage laboratory infrastructure and 
security.

Generation IV Nuclear Energy Systems
    The Generation IV program continues to support the Department's 
work to develop advanced reactor technologies for commercial deployment 
in the 2015 to 2030 timeframe. These advanced reactor concepts offer 
significant improvements in sustainability, proliferation resistance, 
physical protection, safety and economics. Generation IV nuclear energy 
systems will not only be safe, economic and secure, but also include 
energy conversion systems that produce valuable commodities such as 
hydrogen, desalinated water and process heat. These features make 
Generation IV reactors ideal for meeting the President's energy and 
environmental objectives.
    The development of these reactors is being led by the Generation IV 
International Forum, a group of 10 leading nuclear nations (Argentina, 
Brazil, Canada, France, Japan, the Republic of Korea, the Republic of 
South Africa, Switzerland, the United Kingdom and the United States), 
plus Euratom. The forum has selected six promising technologies for 
next-generation nuclear energy systems. While the Department is 
supporting research on several reactor concepts, this budget proposal 
places priority on the Next Generation Nuclear Plant (NGNP), a Very-
High Temperature Reactor. This emphasis reflects the NGNP's potential 
for economically and safely producing electricity and hydrogen without 
emitting greenhouse gases. FY 2005 NGNP activities will be focused on 
research and development of fuels and structural materials for high-
temperature, high-radiation environments, and continuing the concept 
design activities initiated in FY 2004. Research and development for 
the other Generation IV systems will focus on establishing technical 
and economic viability, and the resulting core and fuel designs and 
materials requirements.

Nuclear Hydrogen Initiatives
    Hydrogen offers significant promise as a future energy technology, 
particularly for the transportation sector. The use of hydrogen in 
transportation will reduce U.S. dependence on foreign sources of 
petroleum, enhancing national security. Significant progress in 
hydrogen combustion engines and fuel cells is making transportation by 
hydrogen a reality. The goal of the Nuclear Hydrogen Initiative is to 
demonstrate the economic, commercial-scale production of hydrogen using 
nuclear energy. If successful, this research could lead to a large-
scale, emission-free domestic hydrogen production capability to fuel a 
future hydrogen economy.
    The Nuclear Hydrogen Initiative will focus primarily on hydrogen 
production technologies that utilize high-temperature nuclear reactors 
to produce hydrogen, which then could supplant fossil fuels in our 
transportation system. With funding of $9 million in FY 2005, the 
Nuclear Hydrogen Initiative will move toward demonstrating nuclear-
based hydrogen producing technologies in the laboratory, study 
potential hydrogen production schemes, and develop deployment 
alternatives to meet growing hydrogen demand.
    As previously noted, the Generation IV program priority is on the 
Next Generation Nuclear Plant, which utilizes a Very-High-Temperature 
Reactor for advanced hydrogen production and electricity generation. 
Investigating and demonstrating the Generation IV nuclear energy 
systems will require advances in materials and systems technology, 
including development of high temperature and corrosion-resistant 
materials, and advanced chemical systems analysis. NE is working in 
close cooperation with the Department's Office of Science, through the 
Future Energy Advanced Materials Initiative, to evaluate common areas 
of research to develop advanced materials for use in nuclear hydrogen 
systems, as well as Generation IV Nuclear Energy Systems.

Advanced Fuel Cycle Initiative
    Of all the challenges affecting the expansion of nuclear energy in 
the U.S. and worldwide, none is more important or more difficult than 
dealing effectively with spent nuclear fuel. After a long and difficult 
process, the country is moving forward with licensing a geologic 
repository for spent nuclear fuel. This is an absolute necessity, even 
as the Department develops advanced forms of spent nuclear fuel 
treatment. The Department plans to submit a license application for the 
repository to the Nuclear Regulatory Commission by the end of 2004.
    Research on improving ways to treat and utilize materials from 
spent nuclear fuel will allow the Department to optimize the first 
repository, and delay--and perhaps even eliminate--the need for future 
repositories. The Advanced Fuel Cycle Initiative, with an investment of 
$46 million for FY 2005, will continue the progress made in the 
development of proliferation-resistant treatment and transmutation 
technologies that can reduce both the volume and toxicity of spent 
nuclear fuel. These technologies would support both national security 
and energy independence by reducing inventories of commercially-
generated plutonium while recovering residual energy value from spent 
nuclear fuel.
    The Department is proposing a research program leading to a 
demonstration of proliferation-resistant fuel treatment technology to 
reduce the volume of high-level waste, and development of advanced 
fuels that could allow the consumption of plutonium using existing 
light water reactors, or advanced gas reactors. Under the President's 
request, the Department will continue work toward demonstration of 
proliferation-resistant fuel treatment technology and continue design 
and testing of transmutation fuels for future use with current reactor 
technologies.
    For the Advanced Fuel Cycle Initiative to be successful, advanced 
fuel treatment and transmutation research and development must be 
integrated with the development of Generation IV nuclear energy 
systems, particularly with those reactor technologies that can produce 
very high neutron levels that would be needed to transmute a wide 
variety of toxic radioactive species. To support this goal, the 
Advanced Fuel Cycle Initiative will develop the advanced proliferation 
resistant fuels and fuel cycle systems for Generation IV reactors.
Nuclear Power 2010
    The President's budget supports continuation of Nuclear Power 2010 
in FY 2005 to demonstrate, in cost-shared cooperation with industry, 
key regulatory processes associated with licensing new nuclear plants 
in the U.S. The requested funds of $10 million would support the 
activities associated with achieving NRC approval of early site permits 
and development of Combined Construction and Operating License 
applications.

University Reactor Infrastructure and Education Initiative
    For years, the Energy Department has sponsored an initiative that 
supports nuclear science and technology educational infrastructure 
through our University Reactor Infrastructure and Education Initiative. 
This program is essential to the continued operation of the Nation's 
university research and training reactors, which play a vital role in 
supporting nuclear education and training.
    The growth of nuclear energy in the United States is dependent on 
the preservation of the education and training infrastructure at 
universities. Research conducted using these reactors is critical to 
many national priorities. Currently there are 27 operating university 
research reactors at 26 campuses in 20 states. These reactors are 
providing support for research in such diverse areas as medical 
isotopes, human health, life sciences, environmental protection, 
advanced materials, lasers, energy conversion and food irradiation.
    Beyond technology and equipment, the DOE's university program 
supports the personnel required for a strong nuclear energy future. The 
demand for trained and qualified nuclear scientists currently exceeds 
supply. The President's budget includes $21 million for fellowships, 
scholarships, nuclear engineering research, and for critical support to 
university research reactors--all of which will help address this 
shortage of well-trained nuclear scientists.

Closing

    Mr. Chairman, I believe the Department's FY 2005 budget submission 
meets the Nation's critical needs for energy, environmental and 
national security at a difficult time in our history. The Department of 
Energy, which Secretary Abraham has said might well be called the 
Department of Energy and Science, hopes to join the Members of the 
Committee in working to strengthen American science and technology.

                    Biography for Raymond L. Orbach

    Dr. Raymond L. Orbach was sworn in as the 14th Director of the 
Office of Science at the Department of Energy (DOE) on March 14, 2002. 
As Director of the Office of Science (SC), Dr. Orbach manages an 
organization that is the third largest federal sponsor of basic 
research in the United States and is viewed as one of the premier 
science organizations in the world. The SC fiscal year 2002 budget of 
$3.3 billion funds programs in high energy and nuclear physics, basic 
energy sciences, magnetic fusion energy, biological and environmental 
research, and computational science. SC, formerly the Office of Energy 
Research, also provides management oversight of the Chicago and Oak 
Ridge Operations Offices, the Berkeley and Stanford Site Offices, and 
the ten DOE non-weapons laboratories.
    Prior to his appointment, Dr. Orbach served as Chancellor of the 
University of California (UC), Riverside from April 1992 through March 
2002; he now holds the title Chancellor Emeritus. During his tenure as 
Chancellor, UC-Riverside grew from the smallest to one of the most 
rapidly growing campuses in the UC system. Enrollment increased from 
8,805 to more than 14,400 students with corresponding growth in faculty 
and new teaching, research, and office facilities.
    In addition to his administrative duties at UC-Riverside, Dr. 
Orbach maintained a strong commitment to teaching. He sustained an 
active research program; worked with postdoctoral, graduate, and 
undergraduate students in his laboratory; and taught the freshman 
physics course each winter quarter. As Distinguished Professor of 
Physics, Dr. Orbach set the highest standards for academic excellence. 
From his arrival, UC-Riverside scholars led the Nation for seven 
consecutive years in the number of fellows elected to the prestigious 
American Association for the Advancement of Science (AAAS).
    Dr. Orbach began his academic career as a postdoctoral fellow at 
Oxford University in 1960 and became an assistant professor of applied 
physics at Harvard University in 1961. He joined the faculty of the 
University of California, Los Angeles (UCLA) two years later as an 
associate professor, and became a full professor in 1966. From 1982 to 
1992, he served as the Provost of the College of Letters and Science at 
UCLA.
    Dr. Orbach's research in theoretical and experimental physics has 
resulted in the publication of more than 240 scientific articles. He 
has received numerous honors as a scholar including two Alfred P. Sloan 
Foundation Fellowships, a National Science Foundation Senior 
Postdoctoral Fellowship, a John Simon Guggenheim Memorial Foundation 
Fellowship, the Joliot Curie Professorship at the Ecole Superieure de 
Physique et Chimie Industrielle de la Ville de Paris, the Lorentz 
Professorship at the University of Leiden in the Netherlands, and the 
1991-1992 Andrew Lawson Memorial Lecturer at UC-Riverside. He is a 
fellow of the American Physical Society and the AAAS.
    Dr. Orbach has also held numerous visiting professorships at 
universities around the world. These include the Catholic University of 
Leuven in Belgium, Tel Aviv University, and the Imperial College of 
Science and Technology in London. He also serves as a member of 20 
scientific, professional, or civic boards.
    Dr. Orbach received his Bachelor of Science degree in Physics from 
the California Institute of Technology in 1956. He received his Ph.D. 
degree in Physics from the University of California, Berkeley, in 1960 
and was elected to Phi Beta Kappa.
    Dr. Orbach was born in Los Angeles, California. He is married to 
Eva S. Orbach. They have three children and seven grandchildren.

                               Discussion

    Chairman Boehlert. Thank you very much. And thank all of 
you, proving, once again, what valuable resources we have for 
this committee.
    Let me lead from the heart, if I may, and this is a 
question for Dr. Colwell and Dr. Marburger. I am baffled as 
well as disturbed by the proposal to move the Math and Science 
Partnerships to the Department of Education. At the NSF the 
program is peer-reviewed, a competitive effort at an agency 
known for peer-review. The Administration is proposing 
legislation, which I think is unlikely to pass, to force the 
Department of Education to peer-review the program. Why does it 
make sense to move the program to an agency which has 
procedures the Administration itself opposes?
    And while you are thinking about the best way to finesse an 
answer, let me enter into the record at this juncture a letter 
jointly signed by the Presidents of the American Council on 
Education, the Association of American Universities, and the 
National Association of State Universities and Land-Grant 
Colleges, which says in part, ``Transferring the MSP program 
entirely to the Department of Education will fundamentally 
change the manner in which funds are distributed. An MSP 
program at the Department of Education is primarily a block 
grant program where funds are distributed to states on a 
formula basis. This would be a significant disincentive for the 
best researchers at our universities to continue to participate 
in this important program.'' And we want the best researchers 
at our universities to have incentives, not disincentives. I 
mean, that is part of the heart and soul and promise of the 
program. [See Appendix 2 for the information referred to.]
    So Dr. Marburger, I will let you lead off.
    Dr. Marburger. Well, I will make a general statement and 
let my colleague, Dr. Colwell, make more specific statements.
    The Department of Education itself is assuming a greater 
responsibility for research and implementation of programs that 
integrate the educational resources of the Nation. And that is 
reflected in the budget proposals and in the changes that are 
requested for permitting the Department of Education to make 
competitive grants larger than a certain amount. The role of 
research within the Department of Education has been 
strengthened. Mr. Chairman, yet another New Yorker is heading 
up that effort, and I believe that the Department of Education 
is capable of mounting an excellent program----
    Chairman Boehlert. Nice finesse, but if it ain't broke, 
don't fix it.
    Dr. Colwell.
    Dr. Colwell. Well, the Math and Science Partnership is 
clearly a Presidential priority. The Administration decided to 
change the focus of the program, moving in a direction away 
from academic institutions working in partnership with local 
school districts and away from education and research testbeds.
    Chairman Boehlert. Is that the right direction?
    Dr. Colwell. I have always----
    Chairman Boehlert. Well----
    Dr. Colwell [continuing]. Been moving toward a model that 
consolidates the school--control in the school districts.
    Chairman Boehlert. Nice attempt. Thank you very much.
    Let me go to the next question. But I hope you understand 
where we are coming from, at least where the Chair is, and I 
think a vast majority of this committee: we are simply not 
doing well enough in math and science education K through 12, 
and if we don't do better, shame on us. Our preeminent position 
in the global marketplace is going to be lost. And I had a 
meeting last night with some of the Presidents of some of our 
leading companies: Hewlett Packard, Dell, etc., etc. This is a 
major concern that they have. It is a crisis when our kids, in 
the math and science disciplines, are compared with their 
counterparts around the world and score 16 or 17 on the list. 
That is not good enough. And so this is one where we are going 
to do battle, if you all try to just be good soldiers.
    Let me go to the next question for Dr. Colwell and Dr. 
Orbach. And I am not--Chuck and Phil, I am not ignoring you, 
but you did quite well on the budget. I would like each of you 
to tell me, with some specificity, what you would spend money 
on if you had received a five percent or a ten percent increase 
in the Administration's budget rather than the figure you have 
got. Dr. Colwell.
    Dr. Colwell. Well, very clearly, grant size and duration is 
very, very important. And we have focused on management 
excellence, making more efficient and more effective the 
workings of our scientists and engineers and providing them 
with the tools that they need to do good science. So very 
clearly, increasing grant size and duration is a very, very 
important objective.
    Dr. Orbach. We believe that we have made the correct 
priority decisions within the Office of Science. We would like 
to suggest that areas that would help the research community 
explicitly, namely university support, to use the facilities 
that we currently have would be an excellent choice.
    Chairman Boehlert. Thank you very much.
    This committee was very proud when the President, with a 
good deal of fanfare, signed legislation that came from this 
committee to put the National Science Foundation on the path to 
double its budget in five years. We are still wedded to that 
concept, and we think it makes a great deal of sense for the 
American economy. And Dr. Orbach, we have a great deal of 
interest in what you are doing. It is very important work, and 
you need resources to do it. And once again, I am not 
advocating that we just spend willy-nilly and add to the 
deficit. Every Committee Chairman says, ``Don't touch my turf; 
just increase it and worry about everything else.'' In the 
overall budget numbers, I can find wiggle room, and the wiggle 
room would be in your favor.
    Thank you very much.
    Mr. Gordon.
    Mr. Gordon. Thank you, Mr. Chairman.
    And first, let me concur with everything that you said, 
particularly in the science and education----
    Chairman Boehlert. Let the record denote that.
    Mr. Gordon. I think we will do that frequently, but 
particularly in the area of science and education. I hope this 
is something that we can get behind us quickly.
    And Dr. Marburger, I recognize you are the messenger, and 
that you are doing the best that you can with what you have to 
bring us, so don't--you know, I am not here to criticize you in 
any way. And I agree with you that we did make good strides--or 
I am pleased with the increases in the nanotechnology. I think 
that is going to be a high priority, and it should be.
    But I simply can't agree with you on your statement that we 
are maintaining our world leadership. As I look at this 
budget--in the Administration's own budget, on page 61, as I 
look through here, I see NASA, the Earth Science's S&T is down 
eight percent. Aeronautics Technology, a cut of 11 percent. 
Energy research is cut by two percent. The energy conservation 
is cut by a full ten percent. Even Defense, in the S&T area, is 
cut by 11 percent. Basic research, four percent. Applied 
research, 13 percent. Agriculture is cut in S&T by nine 
percent. Interior, two percent. Veteran's affairs research, six 
percent. Environmental Protection Agency, 12 percent. 
Transportation, four percent.
    And Mr. Bond, I was really excited about your statistics, 
and I couldn't--I was trying to, you know, get these equated 
with the book. Fortunately, my Legislative Assistant here is 
smarter than I am, and she explained to me the problem and that 
is you are basing your increases on what the President had 
requested the previous year. But Congress had increased all of 
those. And so yes, you are getting an increase on--the 
President is increasing his request, but not in terms of what 
you are actually getting. I mean, as I see it, the Commerce 
Department, just in R&D itself, is taking a--you know, that is 
a five percent cut. And then if you look over at your S&T 
budget on page 61, the whole S&T Commerce is getting a 14 
percent cut. NOAA is getting cut 11 percent. The Advanced 
Technology Program is getting cut by, as you know, 100 percent. 
So it is--as they talk about statistics, but you did a good 
job. Fortunately, we have someone here that is, as I say, 
smarter than I am to understand this.
    And I know you have no vendetta against the manufacturing 
community. You want to see us prosper and do well. And I am 
sure that with the assets you are giving, you are going to do, 
you know, the best job that you can. And I think it will be a 
good job.
    We talked the other day about the Manufacturing Extension 
Programs. And as a quick review, as you know, the 
Administration requested it be done away with completely two 
years ago as well as the ATP, although they did leave $12 
million in for--from, I think, $106 million to $12 million to 
close it out. Congress, in a bipartisan way, put $36 million 
back in. This year, you are asking for that to be, you know, at 
least maintained at that area. And as you know, this is a 
program where our dollars, our federal dollars, then get 
matching dollars from state and then another match from the 
revenue. So it is a one--you know, it is $1 generating $3.
    And so I am just trying to get a hold of these priorities 
here. In 2002, they did a survey of 1/3 of the MEP clients. And 
they found that the program had resulted in increased and 
retained sales of $2.8 billion, achieved cost savings of $681 
million, led to the investment of $940 million, and created 35 
million jobs. Now with that track record--and that was 
conservative, that was just 1/3. Now they may have taken the 
best 1/3, I don't know, you know, but there was still more to 
go. With that kind of track record and with the match you are 
getting, where should we better be putting money? I mean, what 
programs do you have that are better than this?
    Mr. Bond. Well, I would say that, in this case, the 
Administration has arrived at the conclusion that they want to 
support the MEP program going forward. And as you noted, that 
compares favorably with prior years. What we want to do is try 
to make sure that we are leveraging it and being as smart as we 
possibly can with, admittedly, a very tough legislative 
environment. There is--I am not going to say anything but good 
things about the MEP program and its effectiveness. This is a 
reflection of very difficult budgetary times.
    Mr. Gordon. Well, states are telling me that they are going 
to have to start closing things down. I mean, are you hearing 
the same situation?
    Mr. Bond. The centers and their various partners at 
universities and states and so forth are certainly aware, first 
and foremost, I think, of the 2004 action and trying to figure 
out what that means for the remainder of this fiscal year. And 
we are talking to them. We do want to try to keep the network 
alive. We want to make it useful to manufacturers. We are going 
to look at ways to leverage other resources, both within the 
Commerce Department, but across the federal enterprise, because 
as the Secretary's report made clear, the challenge to 
manufacturers is multifaceted. As I know that you said in our 
meeting the other day, it is not as if fully funding MEP solves 
the manufacturing issue in America. There are intellectual 
property issues that Chairman Smith deals with over in the 
Judiciary Committee. There is tax policy, and many others.
    So we are going to try to look at all of these. In the case 
of MEP, we are going to try to take advantage of technology to 
minimize back office expenses. Maybe coordinate on a regional 
basis, get on a common platform for sharing information and 
data, which doesn't exist currently, and then we are going to 
try to maximize the feet on the street by making sure we work 
smartly with our partners at ITA, but also looking at other 
bureaus of Commerce, looking at the Department of Homeland 
Security, the Department of Defense, the Department of Labor 
and their 21st century jobs act effort wants to go to community 
colleges. 138 community colleges are part of MEP.
    Mr. Gordon. I have been told that my time is over; that 
means your time is over.
    Chairman Boehlert. But our time up here isn't, and this is 
a program we have an affection for.
    Thank you very much.
    In keeping with Committee tradition, first come, first 
served. Next up, Ms. Biggert.
    Ms. Biggert. Thank you, Mr. Chairman. And if I might, for 
the record, associate myself with your remarks about the math 
and science. I truly believe that if this goes over to the 
Department of Education that all of the good work that has been 
done will be lost. And I would hope that there would be more 
talk about what really has happened and what has been done at 
NSF, too, and the good that has been done from this program. I 
go out and talk to young women, and I know that they hold you 
up. And I use you as an example as a role model for young women 
to go into the profession. And so I thank you, Dr. Colwell, for 
all you have done. And I hope that that program remains.
    And ordinarily at this time, I would talk about my strong 
support for scientific research at the DOE and my 
disappointment in the fiscal year 2005 budget for the DOE 
Office of Science, the Nation's primary supporter of research 
in the physical sciences, which has been essentially flat-
funded for the past decade. But today, I want to take the 
opportunity to ask some questions of Dr. McQueary about science 
and technology at the Department of Homeland Security. One of 
the responsibilities that I take very seriously, as Chairman of 
the Energy Subcommittee is my responsibility to oversee and be 
a steward of all of the Department of Energy's National 
Laboratories. And that is why I have to express some strong 
skepticism and concern about the Department of Homeland 
Security's December 16 decision on what various roles different 
National Laboratories will be playing in the Homeland Security 
research.
    I really believe that the labs work best when they are 
allowed to work together, so that they can collaborate and do 
the research that they do best. The structure established by 
the Department to involve the labs in the Homeland Security 
research basically puts a wedge, I think, or a firewall between 
the National Laboratories, creating two classes of 
laboratories, undermining their ability to collaborate and 
essentially setting these two groups up to work against each 
other. And if there is going to be a firewall, wouldn't it be 
better between the--that it be between the labs and the private 
sector rather than DOE's various National Laboratories? So 
namely, I am concerned about the lack of transparency by which 
DHS decided which labs were to be intramural and which were to 
be extramural, and the criteria to make such a determination 
really lacked transparency. And assuming this criteria was 
actually used to make, rather than simply after the fact 
justify the decision, then I would think that the Department 
would have no problem in sharing with me this information. And 
I would ask if you could submit that criteria to me in writing 
as well as something about the different labs and, you know, 
how they stacked up against each other.
    Dr. McQueary. Sure, we would be happy to do that. This has 
been a remarkable experience for me, personally, because when 
we sat in the room deciding how to approach this, what we truly 
believed we were doing was providing the maximum opportunity 
for the labs to be a participant in what we are doing, and yet 
this somehow has been turned into a view that somehow we are 
trying to exclude labs, which is nothing further from what the 
factual truth was. So I would be more than happy to share with 
you what the criteria had been. I would be happy to have an 
independent group come in and review our approach to doing 
this, because, I can assure you, nothing that we ever talked 
about or any discussion that we ever had went along the lines 
of the view that has been developed about what our intentions 
were. It is a complete polarization of what we were really 
trying to do.
    We are in a situation where it is very important that we 
have the support from the labs, and of course, the Homeland 
Security Act not only provided us the opportunity to do that, 
we are greatly appreciative for that, because we could not do 
the work we have to do without it. It also had given us the 
opportunity to work with the labs that we deemed most 
appropriate for our mission that we have. And so our choices 
were really based upon looking at the mission responsibilities 
we have in the chemical, biological, radiological, and nuclear 
areas. So yes, I will be happy to do what you would like from 
us.
    Ms. Biggert. If that independent group recommended a 
different approach to the intramural external--or extramural 
designations, would your Department adopt that recommendation?
    Dr. McQueary. I would like to look at the criteria that 
they would use to come up with a different conclusion, but 
certainly we would listen very attentively to it, which is part 
of the responsibility that we have.
    Ms. Biggert. One other problem, and I did talk to one of 
the senior members of your staff----
    Dr. McQueary. Yes.
    Ms. Biggert [continuing]. About this, that I couldn't--that 
I had trouble understanding is that you talk about a mission-
directed applied research for what the Department will be 
looking at, and specifically not basic research. Isn't the 
support for today's basic research essential to ensure that 
tomorrow's technology--to ensure the technological advances? So 
if it is not your agency who supports the basic research, how 
do you propose to take advantage of the pipeline from basic 
research to fulfill your mission?
    Dr. McQueary. You are touching on something that is very 
important, and I think it relates directly to where we are in 
the formation and execution of the responsibilities of the 
Department. Were we much farther into this process, I think we 
would see a greater emphasis on basic research, but when I came 
into this position, very early on, I thought that the 
responsibly that I was going to have was to set what the 
fundamental research direction had to be. What we have actually 
found is that there is an enormous amount of technological 
capability, not only in the labs, but in private industry and 
universities, that is available, essentially, now to be brought 
to bear to work with the Department.
    Ms. Biggert. But it seems in your structure that you set up 
some of the labs to be in competition with industry, and yet 
there has always been the criteria, or at least in most of 
the--when the labs are doing research, that they will do it 
unless the industry can do it. If the industry is not capable 
of doing it, then the labs step in. So there really has been 
this criteria not to compete with industry. How is that going 
to change?
    Dr. McQueary. Well, I don't believe we set up a situation 
where we----
    Chairman Boehlert. Well, respond to that, and that will 
be--your time is expired, but this is an important question, 
so----
    Dr. McQueary. We did not intentionally set up something 
where the labs were competing with industry, in fact, quite the 
opposite. We think it is absolutely essential that we have the 
participation not only of the labs, because there are 
scientific areas in which only the labs have the expertise and 
capabilities that this country needs in order to excel in this 
mission that we have in Homeland Security. What we have tried 
to do with the selection of the labs as we did was provide the 
opportunity, actually, for some of the labs to work and compete 
with private industry in some of the--and particularly in the 
Homeland Security Advanced Research Project Agency. So we did 
not try to set up any kind of a competition whatsoever, and I 
don't believe that we have in the approach that we have taken. 
It is a----
    Ms. Biggert. Thank you for your indulgence, Mr. Chairman.
    Dr. McQueary. Thank you for the questions, important ones.
    Chairman Boehlert. Mr. Udall.
    Mr. Udall. Thank you, Mr. Chairman. I want to also welcome 
the panel. And if I might, I am going to direct some questions 
to Secretary Bond, but I just want to make a couple of quick 
comments.
    I think we are known as a gentle Committee here or rational 
Committee. We take our cue from the scientists who advise us. 
But I know that the remarks of the Chairman and the Ranking 
Member represent many of the sentiments that we share. And R&D 
is a cause for all of us, and we, for many important reasons, 
understand the role that R&D and these investments make in our 
economic competitiveness, our very quality of life, our 
standing in the world. And I think it is clear, also, that you 
all are messengers, and that you have been asked to deliver 
some tough news to all of us. But you are also messengers going 
back the other way. And I feel a little bit like the situation 
here at the Science Committee is akin to the fact that you have 
got librarians that are concerned about the Patriot Act, and 
those radical librarians, you have got a lot of the rational 
Members of the Science Committee who are very, very concerned 
about where we are heading with this budget that is in front of 
us. And I think you are going to hear more about it, but I am 
asking you to deliver the message back to the people with whom 
you work that we have some grave concerns, and we are going to 
work hard on this committee to see that these budgets are 
boosted up and that we make the kind of investments that are 
going to pay off in the long-term.
    With that, Secretary Bond, great to see you. Thank you for 
your kind words about NIST and the work we are doing together. 
I looked somewhat like Congressman Gordon has at some of the 
numbers, and when I look at the NIST lab funding and I start to 
add up the numbers, we got $85 million added in 2005, but if 
you look at the facts, there is probably only $11 million 
really for new initiatives out of that $85 million. I want to 
run my math by you and get you to comment. We have $26 million 
you have got to transfer for AML minus $35 million for the ATP 
close-out that is not included here. From what I understand, we 
zero out ATP, but we have got $35 million we have to use in the 
close-out. Plus, we have transferred a certain percentage in 
the past of ATP funds to the lab, $13 million, give or take. So 
if you add all of those numbers up, out of that $85 million 
that are in the budget that is a plus, that leaves, really, 
only $11 million. So how are we going to fund these new 
initiatives that, in my math, total about $58 million to $60 
million?
    Mr. Bond. Well, you are putting your finger, in particular, 
on the ATP issue, and we are going to have to try to work 
through the implications of that and look forward to working 
with the Committee on that. It is a very difficult implication 
of both the intramural and buyout proposals, in terms of 
buyouts of existing mortgages within that program. Of course, 
those have always been on a funds-available basis. But that is 
a real challenge. And what our message is, our focus is, the 
core work of the labs along with the really pressing 
construction and facility needs out of Boulder in particular 
and that that needs to be our focal point going forward.
    And so the impacts and implications of some of these other 
numbers, we are going to have to work through, and I am going 
to have to, in conjunction with folks out at NIST, work better 
and smarter at finding other clients, both in the private 
sector, for instance through AML, and in the public sector, who 
use the metrology and great science that is going on at NIST in 
completing their missions and attract more other agency 
funding.
    Mr. Udall. So you are acknowledging, then, in fact, some of 
the numbers I have shared with you make some sense, and when 
you begin to add those up that you have got some inner line 
item transfers and that that $85 million is not what it appears 
to be when you first take a look at it?
    Mr. Bond. Well, the $85 million that you are citing is a 
comparison, I believe, with the 2004 appropriation rather than 
the 2004 request. But there are implications to some of these 
things, and I would be happy to sit down and parse through all 
of the numbers with you in excruciating detail, but the 
challenge is clear in the implications.
    Mr. Udall. Let me move in my remaining time to MEP. I think 
you know my support for MEP. We have some great success stories 
in my District. And again, Congressman Gordon, I think, asked a 
fundamental question. What a great return on investment we have 
had with that program, and what is it going to take to make the 
further investments in the future? But if we move in the 
direction that the budget suggests, we are going to work more 
with the states. And have we contacted--have you been in 
contact with the states to generate some ideas as to how this 
new approach would unfold? I have a whole slew of questions. I 
don't have enough time to ask all of them of you----
    Mr. Bond. Yes.
    Mr. Udall [continuing]. But how are we going to portion the 
funding? Are the states going to be equal partners or are they 
just going to be pass-throughs? How are we going to work this 
new MEP approach out? Can you respond?
    Mr. Bond. Yeah, very quickly. We do envision a 
recompetition in July, as was outlined in the Secretary's 
report. And the centers already are talking among themselves 
about how to coordinate on a regional basis. There may be 
Centers of Excellence that emerge out of that where more than 
one center would go together to form a Center of Excellence. So 
there is going to have to be some creative thinking going 
forward. And from our side, we are going to look at how to 
combine them with the U.S. Export Assistance Centers deployed 
all around the country, perhaps even the Agriculture Extension 
Service offices around the country, to leverage federal 
expenditures, wherever they are, to try to help manufacturers 
both globalize their markets and upgrade their technology.
    Mr. Udall. Again, I want to thank you for sharing your 
point of view with us, and I look forward to some spirited 
discussions and your good work on behalf of NIST. Thank you.
    Mr. Bond. Thank you.
    Chairman Boehlert. Thank you very much. The Chair yields 
five minutes to Mr. Smith.
    Mr. Smith. Mr. Chairman, thank you.
    And Dr. Colwell, in my years as Chairman of the Research 
Subcommittee, I have really appreciated working with you to 
keep NSF as one of our gems. And Dr. Bement, Arden, look 
forward to you taking the baton and running the next 440 lap to 
make sure that we not only continue that gem but maybe improve 
it.
    Mr. Chairman, first, I would like to express my serious 
concern, as you did, about the Administration's suggestion of 
moving the Math and Science Partnership out of the National 
Science Foundation over to Education. And I would like to move 
that a letter from one of my constituents, Hyman Bass, who is 
the immediate past President of the American Mathematical 
Society. He is now President of the International Commission on 
Mathematics Instruction. If I could enter his letter into the 
record expressing his deep concern about the movement of that 
facility. [See Appendix 2 for the information referred to.]
    Chairman Boehlert. Without objection, so ordered.
    Mr. Smith. And I think I would like to just follow that up 
with a question to you, Dr. Colwell, in terms of has the 
National Science Foundation been doing a good job, and what 
have you been doing, just briefly, to try to implement this 
program? I have the pen that the President signed the 
legislation with just 14 months ago with a lot of accolades on 
the potential success for having a research community move into 
the kind of research that is going to make more evident what is 
successful and not successful. What has NSF done in the past 
year and what have you done successfully?
    Dr. Colwell. I think the most important aspect of the 
success is bridging the higher education community with the K-
12 community and with the community itself, the citizenry of 
the community, including industry. I think that triumvirate is 
extremely important in building the kind of strong background 
support that you need for maintaining a really good K-12 
education. And we have introduced into the program learning 
capabilities, hands-on science and math education in the 
programs. It has enabled, as well, integration with the other 
disciplines of the National Science Foundation.
    Mr. Smith. If the program is transferred to another 
department, and I hope it will not be, how are the programs 
that you have initiated going to--are they going to continue--
--
    Dr. Colwell. Oh, yes. They----
    Mr. Smith [continuing]. With the oversight of NSF or will 
that oversight be transferred?
    Dr. Colwell. No, they will continue--the ones that have 
been initiated will continue with NSF oversight, and our 
programmatic thrust will definitely continue.
    Mr. Smith. I want to, I think, preface a lot of people are 
here listening to what is going on in this hearing, because 
there are a lot of people interested in the science and 
research that we do. It is important to our future, but let me 
say we are in a predicament now. We just spent two hours in our 
Republican conference expressing concern over the $540 billion 
deficit that we are amassing this year. And so I would suggest, 
respectfully, that that means there is a responsibility to 
everybody in this audience, certainly the Administration, to 
look for ways that we can improve the efficiency of our 
research programs. Research is vital to our economic future. 
However, we have now seen that our basic research is sometimes 
picked up and implemented or applied by other countries. We 
have got to look for ways, and you are the people that can help 
guide us, on how do we make it a win-win situation for business 
and industry to be more involved in research in general, to be 
more involved in basic research as we look at how we are going 
to write the tax credit for the future, as we look at how we 
can adjust property rights to make sure that our basic research 
is mostly implemented to the advantage of our economy and the 
jobs in the United States, and not simply give into other 
countries who are now spending their federal dollars in 
application.
    Let me also get a quick response, maybe, in terms of what 
we are going to do in terms of the problems of the giant 
increase in major research facilities. I think there is almost 
a 30 percent research increase in large, big facilities. This 
means, to me, that there is an obligation in the future that 
there is going to be an increased financial effort to keep 
these large research projects going. With a 30 percent increase 
now, and I am going to start with you, Dr. Marburger, what are 
we going to do? Does this mean that we are going to expect 
budgets in future years after 2005 to continue the 
implementation of these large research projects? Is that going 
to eat up more of our basic research budget?
    Dr. Marburger. Congressman, that issue is very important to 
us, and it requires planning and wise marshaling of resources 
at the present time. All of the agencies, all of the large 
science agencies that have these types of facilities are doing 
planning. I would point to the facilities plan that was 
recently released by the Department of Energy----
    Mr. Smith. Specifically, does this mean the 2006, the 2007, 
the 2008 budgets are going to have to have a larger dedication 
to the financing, the continuation, the utilization of this 
large research increase effort?
    Dr. Marburger. Our expectation is that facilities will be 
built in the expected envelope for funding. Reasonable 
projections have been made. I know that in the Department of 
Energy Office of Science facilities plan they worked closely 
with the Office of Management and Budget to craft a funding 
framework that could accommodate the operation as well as the 
construction of these facilities. And we look for that. We 
continue to try to make sure that these facilities can be 
operated in the long run. OSTP has a National Science and 
Technology Council Committee that is co-chaired, I believe, by 
NSF and NIH or--I am sorry. I can't recall.
    Dr. Colwell. The Committee on Science----
    Mr. Smith. I am just saying, Mr. Chairman, it is an 
obligation for the future for this subject. It is a problem 
that needs to be looked at very carefully.
    Chairman Boehlert. Yeah, and I would point out that Dr. 
Orbach's report assumes some things that I am not sure we are 
in a position to assume: increases of about ten percent a year.
    Dr. Orbach. The outlook itself did not assume that; it said 
that these were the priorities of the Office of Science and 
were the budget to increase, this is how the money would be 
spent.
    Dr. Colwell. May I comment, Mr. Chairman?
    Chairman Boehlert. Dr. Colwell.
    The gentleman's time has expired, but your comments are 
always welcome.
    Dr. Colwell. Thank you.
    I think it is important to look at it from another 
perspective. That is very critical. We have very carefully 
prioritized, but the projects keep us at the leading edge of 
science. And they--but these are tools which are used to 
educate the next generation, and these are tools that allow our 
scientists to remain at the forefront of discovery. So I think 
the careful selection of the projects that lead us in physics, 
in biosciences, environmental sciences, oceanography, these 
have to--the investments have to be made, but, as Dr. Marburger 
said, we have to make sure that they are very carefully--
budgets are very carefully constructed to get done what we need 
to get done without excess.
    Mr. Smith. May I speak? So the starting with the obligation 
for the future is what I think needs to be examined.
    Thank you, Mr. Chairman.
    Chairman Boehlert. Thank you very much, Mr. Smith.
    Mr. Lampson.
    Mr. Lampson. Thank you, Mr. Chairman.
    First, I want to associate myself with the words of Nick 
Smith about Dr. Colwell and the work that you have done. It has 
been impressive knowing you and working with you and on that 
wonderful trip that we had a little over a year ago I learned a 
great deal from you, that impressive work, I want to 
congratulate you for it.
    And then I want to associate my words with Congressman 
Udall when he commented about all of our concerns about what 
this budget looks like. And I--probably rudely, but I will say 
it anyway, it made me wonder a little bit why some of you who 
believe so strongly on some of these things can sit there and 
tell us some of what you say about the budget and what we--and 
what I know you and many of the people in this room and across 
this country who are watching this would truly like to see. We 
need the help when we can get it, and you are the leaders in 
that area that can put into our minds what we can do to help 
this whole process of growing the knowledge that we have in 
this country.
    Let me ask--try to get three questions in, and the first 
one is on the off-shoring of jobs, and this is of Dr. 
Marburger. There was an article in the Los Angeles Times that 
came out, I think yesterday, ``Bush Supports Shift of Jobs 
Overseas.'' There is a growing concern about jobs moving 
overseas, and increasingly it is the high-tech jobs, like 
radiologists and software developers that seem to be moving. 
One comment that Gregory Mankiw, the Chairman of the 
Administration's Council on Economic Advisors, made the comment 
that maybe we will outsource some radiologists. And what does 
that mean? Well, maybe the next generation of doctors will 
train fewer radiologists and we will train more general 
practitioners and surgeons. Maybe we don't have a real 
comparative advantage in radiology. My brother, who is a 
radiologist, doesn't agree with that and is very concerned 
about what might be the future of his own profession in this 
country. What is the Administration's philosophy about off-
shoring of high-tech jobs? Is it a problem or is it a valuable 
byproduct of free trade, as the President's Chief Economist 
suggested recently? And what are the implications of off-
shoring high-tech jobs on the future need for scientists and 
engineers within this country? Dr. Marburger.
    Dr. Marburger. The answer to the question of off-shoring is 
really to make sure that we have a strong innovation 
infrastructure in the U.S. so that we continue to create high 
value added jobs. Wherever the frontier is in technology, we 
have to be on that frontier, because inevitably, as technology 
increases the global economies throughout the world, we are 
going to have more and more people who are capable of doing 
more and more sophisticated work, and those jobs will be 
shared. The only way we can stay ahead is to make the basic 
investments that this committee advocates in the infrastructure 
that permit us to develop innovative technologies and get them 
into the marketplace. That is the philosophy of this 
Administration: stay ahead, keep moving, and make those jobs 
work for all Americans.
    Mr. Lampson. Well, it remains to be seen, obviously, the 
jobs that we are soon to be creating are coming in at about 30 
percent less income-wise than what those that we seem to be 
losing from this country.
    Let me move on, because I want to get two other points in. 
Dr. McQueary, in the Environmental Protection Agency budget 
documents, we find an $8.2 million reduction that represents 
complete elimination of Homeland Security building 
decontamination research. We have a little bit of an interest 
in that around here, because of the anthrax and the ricin that 
have caused building shutdowns recently. Would you explain the 
logic behind this decision to eliminate this research? And 
would you agree that the value of a network to detect the 
presence of hazardous agents is diminished if we haven't 
determined the most effective ways to recover from the attacks 
detected by that network?
    Dr. McQueary. I don't have the knowledge to comment upon 
the EPA reduction that you mentioned. I was not aware of that. 
I certainly agree with the premise, though, that we must have 
the knowledge to be able to make the detection and the 
determination as to what needs to be done. But I can't answer 
the question. I would be happy to look into it and provide a 
response back to you.
    Mr. Lampson. We would appreciate it----
    Dr. McQueary. Okay.
    Mr. Lampson [continuing]. If you would.
    And then one last thing that has a significant importance 
to me. I have been on the Aviation Subcommittee on 
Transportation. We have the Houston Intercontinental Airport 
just on the fringe of my District, and I am in that airport 
every week coming back and forth here. A significant and near-
term threat is the use of Man-Portable Air Defense Systems to 
attack commercial airliners. What actions has the Directorate 
taken to address this threat? And what is the current 
expectation for seeing those defenses employed--deployed, and 
has the Department given consideration to ground-based defenses 
against these potential missile attacks?
    Dr. McQueary. As you know, we have initiated a program 
called Counter-MANPADS, and we have selected three contractors 
to begin six-month studies to begin looking at what needs to be 
done to transition the military version of aircraft protection 
into a commercial application. If you have talked to commercial 
pilots, people in the commercial airlines industry, it is not 
just a simple issue of translating what the military is already 
doing----
    Mr. Lampson. Right.
    Dr. McQueary [continuing]. And putting it on commercial 
aircrafts. There are a lot of issues that have to be dealt 
with. And we believe the program that we have undertaken to get 
to an answer that the Congress and the President can consider 
at the end of about a two-year period of time, to make the 
determination as to whether putting Counter-MANPADS on the 
aircraft is an appropriate thing to do or not, is a very 
aggressive program, but one that we believe that we can execute 
on.
    Mr. Lampson. We are most anxious to hear more of that.
    And Mr. Chairman, thank you for your time, and forgive me--
--
    Chairman Boehlert. Thank you very much.
    Mr. Lampson [continuing]. I must go to another hearing.
    Chairman Boehlert. Thank you.
    Mr. Lampson. Thank you.
    Chairman Boehlert. Dr. Ehlers.
    Mr. Ehlers. Thank you, Mr. Chairman. Before I get into my 
main questions, I just want to add my voice to the chorus, 
condemning the proposal to move the NSF Math and Science 
Program to the Department of Education.
    Chairman Boehlert. All opposed, say no. Aye. The nos have 
it.
    Mr. Ehlers. It obviously is dead on arrival, but I just 
can't understand where this came from. I mean, the most polite 
comment I can make is that it is strange. A little more 
accurate would be that it is absurd. And if I told you what I 
really thought of it, you would rule me out of order.
    This is a program that we established in law. It is a Math 
and Science Program put in an agency that has 30 or 40 years of 
experience in doing peer-reviewed grants for this type of 
program. In fact, I was a recipient of two of those many years 
ago in my teaching career. And it is being moved to a 
department, which doesn't have that experience. It is stripped 
out of science, makes it simply math for high school students 
and for students who are at higher risk, and it totally defeats 
the original purpose. While at the same time, in the math--in 
the No Child Left Behind Act, we did provide for a Math and 
Science Partnership program there. We authorized it at $450 
million a year, and the Administration has rarely requested 
anywhere near the amount, and the amount we have in it is due 
entirely to my efforts in lobbying the appropriators here. So 
it just--it is a no-starter, and we might as well kill it 
immediately and let everyone know it is killed.
    I will--Dr. Marburger and Mr. Bond, shifting gears, I would 
like to discuss a current budget year problem, even though this 
is a hearing on next year's. And we appreciate some of the 
changes being advocated for NIST for next year, but the current 
year, they are on the rocks, literally. And I am not blaming 
you for that; the Congress deserves as much, or more, blame for 
that than you do. But what are you going to do to get NIST 
through this fiscal year? And there are several programs that 
have to be done. The Voting Committee, establishing standards 
for voting machines, is not going to be finished until after we 
have spent the $2.5 billion for voting machines. That makes 
absolutely no sense. And we need the money for that right now. 
In fact, we needed it months ago. You have other budgetary 
problems there. What ideas do you have for getting them through 
this current fiscal year, and especially if we, for some 
reason, can not get agreement on the appropriations and have a 
continuing resolution, you are in even worse trouble? I would 
appreciate comments from both of you.
    Dr. Marburger. This is an operational problem. As the 
Department of Commerce discovers ideas, my office will 
certainly help to implement them in whatever way we can. There 
is no question that the bill that was passed appropriating 
funds for NIST creates big problems. And Congress may need to 
help.
    Mr. Bond. Mr. Ehlers, if I could, let me start by thanking 
you for your non-stop support for NIST. But let me say that 
there are going to be some real difficulties in probable 
dislocations. We are going to have to look at not only early 
retirement options where that might work, but possible rifts. 
That is a reality that we are looking at. And we are going to 
try to exhaust every opportunity that we can to keep the 
scientists on board, as much as possible.
    In terms of the HAVA, the Help America Vote Act, I do want 
you to know that we are committed to trying to find a solution 
that--I have had our attorneys looking at different options to 
see what we might work out with states and the EAC and others 
involved to see--it is very much a chicken-egg problem. They 
don't want to move ahead until they have the standards 
guidelines from NIST, but we don't have the funding to do that. 
So we need to solve that, and we look forward to working with 
you to do that.
    Mr. Ehlers. Well, all of it has to be solved, and you have 
an agency that has won two Nobel Prizes in a----
    Mr. Bond. More coming.
    Mr. Ehlers [continuing]. Space of two years. Just announced 
the discovery of the Fermion condensate, which may or may not 
be eligible for another Nobel Prize, and you are starving this 
particular year. And I hope--I think it is going to take action 
outside of your Department as well to resolve that problem, and 
I hope, Dr. Marburger, you can help with that.
    Let me shift to the R&D budget, which has also been 
mentioned.
    Chairman Boehlert. A quick shift, if you will. You have 20 
seconds left.
    Mr. Ehlers. Oh, well, I can keep going longer than that.
    Dr. Marburger, you indicated that the budget response to 
the recommendations of PCAST, the President's Council of 
Advisors in Science and Technology, regarding needs in physical 
science research, and they recommend that science--physical 
science research be brought into parity with biomedical 
research and other life science research. This budget doesn't 
do that. And are you--do you have plans to try to bring that 
back up? The Congress has expressed that we want to double the 
NSF budget. This budget certainly is not going to do that, but 
there are other physical science areas that are in trouble, 
such as Dr. Orbach's. Could you comment, please?
    Dr. Marburger. This budget does give a larger increase for 
NSF, for example, than for NIH, which is an unusual----
    Mr. Ehlers. In dollar amounts or percentages?
    Dr. Marburger. Well, the NIH budget is really up there, as 
you know, and so any shifting of emphasis in a budget of this 
size is going to take more than one year. And I believe that 
what we should look for in this budget are signs of intent and 
priorities. And the priorities that receive increases in this 
budget certainly fall in those areas that we have been getting 
a lot of recommendations about. And I believe that that is a 
significant signal. Keep in mind that in many of these areas, 
there is a fairly large base and that it isn't as if this 
Administration has been sitting on its hands for four years, 
that the record of increases in all of the relevant science 
budgets for physical science is good for this Administration. 
So I am optimistic that, with time and the assistance of 
Congress, we will tune up our budget and make sure that it 
stays current with where the opportunities in science are 
today.
    Mr. Ehlers. May I just quickly comment that the record is 
good, primarily because the Congress every year has increased 
the Administration's request, largely due to the efforts of Mr. 
Boehlert and some others.
    Thank you.
    Chairman Boehlert. Thank you very much. I will give you 
more time if you are going to speak like that.
    For the concluding questioning for this round, we will go 
to Dr. Gingrey, and then we will have--Mr. Gordon wants to get 
something on the record, and we hope to have this wrapped up by 
1:00, because we are mindful of your schedules and ours.
    Dr. Gingrey.
    Mr. Gingrey. I thank you, Mr. Chairman.
    You know, these are pretty tough economic times, of course, 
and we are looking at a $520 billion deficit that nobody is 
happy with, but of course, we have got an ongoing war and 
Operation Iraqi and Enduring Freedom. We are trying to continue 
to build a strong national defense and providing a much needed 
prescription drug benefit, especially for the neediest seniors, 
recovering from a recent cyclical recession and, of course, the 
economic devastation of 9/11. So there are a lot of things that 
have contributed to the situation we find ourselves in this 
fiscal year, and, as I say, a $520 billion deficit. Now the 
President is calling for, in this fiscal year 2005, to hold 
discretionary spending, excluding Homeland Security and the 
Department of Defense, to no greater than 1/2 of one percent 
increase. And of course, there are a lot of programs in there 
in that discretionary spending, social programs, education, 
that a lot of Members are going to have a hard time and are 
going to have a lot of heartburn in holding that spending to a 
1/2 of one percent increase, or possibly even decreasing it.
    And so in looking at the Department of Homeland Security, 
in particular, and I will direct this question to you, Dr. 
McQueary, in regard to the increased spending that this 
recommendation has on R&D, and I think that number comes to 
almost 15 percent in this particular, and that is on top of 
almost a 90 percent increase from 2003 to 2004. How can you--
how can we justify that level of increased spending, 
particularly when we have things like the Manufacturing 
Extension Partnership, which took a tremendous hit, and now the 
recommendations that we stayed level at that previous 70 
percent reduction from last year? That is one question I would 
like for you to answer.
    And the other one is this: in the fiscal year 2004 
appropriations report for the Department of Homeland Security, 
Congress instructed the Department to consolidate all research 
and development funding within the Science and Technology 
Directorate in the fiscal year 2005 request, and this has not 
happened. What Department of Homeland Security Research and 
Development activities have not been transferred into the 
Science and Technology Directorate? And are these activities 
that overlap--are there activities that overlap and could be 
consolidated down into a single program? Where can we save some 
funding?
    Dr. McQueary. You--well, you asked several questions. I 
hope I can do justice to all of them. Let me touch upon the 
last question first. We have a plan that we have put together 
and, per the direction of the Congress, to have the 
consolidation for all of the R&D work done within the Science 
and Technology Directorate this fiscal year, and we will have 
that done. We have looked at budgets. We have examined where 
they are. We want to make sure that what we transfer in is 
primarily--is the R&D, not any of the operational aspects. And 
so some of the units have both operational responsibilities as 
well as R&D responsibilities. So how we take that apart and 
transfer it is really important.
    The part that we have not transferred in is--really falls 
in two areas: one, the Secret Service function, we have very 
carefully left that alone for the time being, although we do 
have a Secret Service portfolio so that we believe that we will 
be increasing the amount of R&D to support them, but it will be 
managed by S&T. The second area is in the Coast Guard area. As 
you well know, there is great interest within the Congress. 
They have a small laboratory in Connecticut that has had a 
budget of about $22 million, and that organization will remain 
with the Coast Guard, although we will assume oversight 
responsibility for work that is done there. So in those two 
areas, Secret Service and Coast Guard oversight, and all of the 
others, the R&D work will be transferred in.
    In terms of whether we can save any money yet, sir, it is 
just too early to be able to know. The primary budget increase 
we had was in the biological area, particularly in the--so we 
can do better biological surveys within large metropolitan 
areas. We do have about a doubling of the number of sensors and 
capability in that area.
    And you may have had one other point that I have failed to 
pick up.
    Mr. Gingrey. Well, I think the last point was--and I know 
we are about running out of time, but I think my last point was 
just that the overall amount of increase and your feeling in 
regard to the Department of Homeland Security and a ten percent 
increase as the President's budget calls for----
    Dr. McQueary. Yeah.
    Mr. Gingrey [continuing]. When everything else is being, 
virtually, frozen.
    Dr. McQueary. I have not examined my fellow workers here at 
the table, their budgets, and therefore, I would not, for a 
moment, attempt to try to comment upon those budgets. I think 
it would be inappropriate for me to do so, because we are 
talking in numbers. I think the issues that we have to address 
are what kinds of things that are being accomplished. And that 
is really the measurement, not the amount of money that is 
being spent.
    Mr. Gingrey. Thank you, Mr. Chairman.
    Chairman Boehlert. Thank you very much. The gentleman's 
time is expired.
    Mr. Gordon.
    [No response.]
    Chairman Boehlert. Ms. Jackson Lee.
    Ms. Jackson Lee. I thank the distinguished Chairman, 
Ranking Member, and the panelists. Let me acknowledge and 
express my appreciation, Dr. Colwell, for your service and 
energy behind the National Science Foundation. And I am sure 
that though you are very professional today, there is a sense 
of glee, no more Congressional Committee hearings. And I won't 
ask you to applaud for you, and I thank you so very much for 
your service.
    Dr. Colwell. Well, thank you.
    Ms. Jackson Lee. When I came to this committee some years 
ago, and those of us who are on the Science Committee believe 
it is the most important committee this Congress has, and of 
course it engages us in a vigorous debate, but we believe it is 
very important. I said that--and it preceded the turn of this 
new century--I said that science was the work of the 21st 
century, meaning that as we do science and technology, clearly 
we are preparing not only for bright minds, but we are also 
preparing this economy.
    This morning, also, we participated in the announcing of 
the new Members of the Inventors Hall of Fame and to listen to 
some of the inventions, maybe of yesteryear, that have become 
commonplace, we know how important civilian investment in 
research is.
    So I would like to pose a series of questions that I know 
my colleagues have offered, and I just believe it is important 
to bring home. I am concerned that, as we look at the budget 
for this year, that, in actuality, we are not focusing on how 
science can help create jobs. The bulk of the development work 
or research is housed in the Defense Department. I know that as 
I was leaving the room, this line of questioning was being 
posed. My understanding is that it is $64.6 billion. Though I 
will acknowledge that, for those of us concerned about health 
issues, I will applaud the Department of Defense in that it has 
done some collaborative work on health issues, and I 
acknowledge that. But what I am concerned about is that the 
work on Federal Science and Technology has gone down. It is 
$64.4 billion, but if you look at it, it really has not kept 
pace, as far as I am concerned.
    And the crux of the problem is that most of our research 
seems to dwell on weaponry, more money for that and not enough 
money for civilian research, not enough money for education. 
And I would like all of the panel to address the question of 
how are we preparing for a better quality of life by using 
science, and really, we look to the Federal Government as being 
at the cutting edge of research, science and technology, then 
the private industry tends to follow, or either they say, ``You 
go forward first, because we don't have the capital or the 
where with all or the stock owners' will for us to go 
forward.'' But yet it seems that the dominance of what we are 
doing is in weaponry as opposed to civilian research and 
development. And I have a pause with that and a concern with 
that. And might I start from, I guess, your right to left to be 
able to address that question.
    Dr. Marburger. Yes, regarding the balance of basic 
research, most basic research is, in fact, not performed within 
the Department of Defense but in the other agencies. The basic 
research budgets are dominated by health, biomedical research, 
and many other areas that do, in fact, contribute to the 
quality of life for all Americans. And I would go on to say 
that investments in Defense systems and Homeland Security 
systems are at the foundation of protecting the quality of life 
that we have in America and ensuring its future robustness and 
competitiveness in a very complex world.
    So I think that we should not simply separate this budget 
into useless Defense and useful non-Defense, because the 
Defense budget is a very important part of the technical 
infrastructure of this country, and it does support a very 
substantial number of innovations and products that find their 
way into the civilian marketplace. It provides jobs for the 
people that our higher education community prepares.
    So I think it is very important to keep this budget in 
context. There have been significant increases during this 
Administration in the Federal Science and Technology budget. It 
is certainly flat for this year, but within that, there are 
important priorities that are being addressed in the National 
Science Foundation, in NASA, in the Department of Energy, and 
the other important agencies. So I would tend to disagree with 
the significance of this budget with respect to American 
quality of life.
    Dr. Colwell. I am going to say that the activities that I 
would like to highlight in the National Science Foundation 
budget that address your question include the investment in the 
human and social dimensions focus that I mentioned in my 
introductory remarks and the social behavioral sciences. We are 
making an increased investment there, because we need to 
understand how people live in a world of change, how people 
make decisions and how they assess risks.
    I would say another area that is very important is 
partnerships and innovation, and that is the connection between 
the research that is done and the actual transfer into 
industry, which Congressman Smith alluded to earlier.
    And then thirdly, I would like to point out our investment 
that we are requesting for international cooperation. And I 
think that is very critical, having our students being able to 
interact with students of other countries in the programs that 
we are supporting in international research in the Office of 
International Science and Engineering.
    And finally, I think the investment in people, the graduate 
fellowships, the programs that enhance student opportunities, 
these are the kinds of things that lead to a safer, more 
stable, more secure future.
    Dr. McQueary. In the case of Science and Technology 
representing the Department of Homeland Security, we are just 
developing a very close relationship with the Office of 
Homeland Defense within the Department of Defense, because they 
have the requirement to transfer to the Department of Homeland 
Security those technologies that can be brought from the 
Defense area. So I see that relationship as an important part 
of our being able to not have to spend money that we otherwise 
would if we did not have that close relationship with what they 
are doing.
    Chairman Boehlert. Mr. Bond.
    Mr. Bond. Just very quickly, at NIST, I think that our 
research is tied directly to quality of life issues, unlocking 
the next wireless technologies and the standards there, the 
tissue engineering that will be so valuable in biotechnology, 
nanomanufacturing, advanced manufacturing that offers great 
advantage to American companies, and we will leave it at that.
    Dr. Orbach. Within the Office of Science and the Department 
of Energy, the President's FreedomCAR and Hydrogen Fuel 
Initiative will give us energy independence and will give us 
energy security, something critical for our way of life. And 
this budget represents a real increase in our investment in 
these areas. And you will see that, I believe, showing up in 
the robustness of our economy.
    Chairman Boehlert. Thank you very much.
    The gentlelady's time has expired.
    Mr. Gordon.
    Mr. Gordon. Thank you, Mr. Chairman.
    Finally, and quickly, Mr. Bond, I am not trying to pick on 
you, but you were just--happened to be thrown a tough, hot 
potato. Your solution to many of the problems was creative 
thinking. And I would like to take advantage of your creative 
thinking, and if you could, the ATP, as Mr. Udall pointed out, 
was completely zeroed out. I would assume there is going to be 
some kind of transition cost if that occurs and there is some 
contractual obligation, which means that that money has got to 
come from somewhere, which is probably NIST or somewhere else. 
So if you could let me know what you think those costs would 
be, and where you intend to get those, that would be helpful. 
And with the MEP program, also your creative thinking on what 
you are going to do, and then what impact that is going to have 
on the states. And if you don't mind, you can just send that to 
me in a letter later, because you may not have it all right 
now.
    Mr. Bond. Sure. I would be happy to do that.
    I wanted to just draw attention to one thing on MEP, 
because I think the Chairman and other Members of the Committee 
would be interested. We would love to work with this committee 
to get statutory authority for the MEP network to be able to 
have access to private sector direct money, whether non-profit 
or for-profit. They do not have that authority now. They have 
federal dollars, they have state dollars, and they have fees 
that they raise, but if, for instance, a foundation wanted to 
invest some money to assist U.S. small manufacturers and non-
profit foundations, we can not receive those funds right now, 
and that is one of the things----
    Chairman Boehlert. Yeah, we are rather enamored with that 
proposal----
    Mr. Bond. Right.
    Chairman Boehlert [continuing]. But we want to continue the 
MEP program. We want that to supplement, not replace.
    Mr. Gordon. And you might also let us know who are some of 
those agencies or companies that are volunteering to do that.
    Chairman Boehlert. Yeah, and if you would, Mr. Bond, direct 
your response to the Committee for the attention of Mr. Gordon, 
but I want all Committee Members to share your response.
    Mr. Gordon. Thank you.
    Chairman Boehlert. I said he would be last, but I lied. 
That is not the first time it has happened on Capitol Hill. A 
brief comment from Dr. Ehlers, and then I will close with a 
brief comment.
    Ms. Jackson Lee. Mr. Chairman.
    Mr. Ehlers. Thank you.
    Ms. Jackson Lee. Mr. Chairman, before Dr. Ehlers, may I ask 
a question that goes on the record so I can get an answer in 
writing?
    Chairman Boehlert. All Members will be entitled to ask 
questions in writing, and we would expect the panelists to be 
timely in their response, but we are trying to wrap this up. We 
promised people 1:00, and we are going to try to stick to that 
as close as possible.
    Dr. Ehlers.
    Mr. Ehlers. Thank you, Mr. Chairman.
    I just want--two quick comments. First of all, I made some 
fairly strong statements, and I want to make clear that I have 
complete and utter respect for the members of the panel. I 
think you are--I, in fact, I have some sympathy for you, too. I 
think you have been asked to defend some things that are not 
defensible. But I personally have great respect for you and 
appreciate the service that you are giving. It is not an easy 
job.
    Dr. Marburger. Thank you.
    Mr. Ehlers. The second comment was Mr. Smith asked a very 
searching question: Why is our applied--pardon me, our basic 
research being applied in other countries and not ours? And the 
answer is most other countries put substantially more money 
into technology transfer than we do, and at the same time, we 
are zeroing out ATP and having trouble with MEP, and I hope we 
can reverse that.
    Chairman Boehlert. Good point.
    Mr. Ehlers. Thank you very much.
    Chairman Boehlert. Thank you very much.
    And finally, Dr. Orbach, a quickie. As you know, we have 
been supportive of U.S. participation in ITER [International 
Thermonuclear Experimental Reactor], as long as U.S. 
involvement is limited. With the continuing disputes over 
location, can you assure us that the U.S. cost will not 
increase? As I understand it, the cost projected, a life cycle, 
$700 million?
    Dr. Orbach. That is correct. And I can assure you that. I 
can also tell you that not only will our contribution be capped 
at the current level, but also that the level of performance 
will be maintained so that the baseline will follow the current 
projections.
    Chairman Boehlert. Thank you for that assurance.
    And thank all of you for being such valuable resources. And 
once again, Dr. Colwell, arrivaderci.
    The hearing is adjourned.
    [Whereupon, at 1:10 p.m., the Committee was adjourned.]
                              Appendix 1:

                              ----------                              


                   Answers to Post-Hearing Questions


                   Answers to Post-Hearing Questions
Responses by John H. Marburger III, Director, Office of Science and 
        Technology Policy, Executive Office of the President

Questions submitted by Chairman Sherwood Boehlert

Q1.  Cyber security research and development (R&D) is very important to 
the Committee, as indicated by our Cyber Security Research and 
Development Act signed into law in 2002. At last year's budget hearing, 
we were given assurance that details regarding funding levels and 
coordination of programs would be provided in upcoming budgets. Yet the 
fiscal year 2005 budget still does not provide government-wide 
breakdowns of the current and proposed funding for cyber security R&D. 
Please provide the Committee with this breakdown.

A1. The Office of Management and Budget (OMB) expects to be able to 
provide this information shortly.
    As is the case for detailed information in other areas of R&D 
coordination, it can take considerable time and effort to identify 
activities and funding levels that are relevant to a specific research 
topic such as cyber security R&D. Identifying the appropriate scope for 
what to include or exclude as part of a cyber security data collection 
has been difficult. It is a challenge to identify proportions of 
information technology (IT) security programs or IT R&D programs that 
are specifically devoted to cyber security R&D. Finally, given other 
data we collect on homeland security and information technology R&D, we 
want to understand how these and other data collections interrelate as 
we report them, to maximize their quality and consistency.

Q2.  Last year, the Office of Science and Technology Policy led an 
interagency task force that evaluated federal programs related to high-
performance computing. What results came out of that effort? How did 
the task force affect the fiscal year 2005 request for the interagency 
Networking and Information Technology R&D program?

A2. The High-End Computing Revitalization Task Force (HECRTF) to which 
you refer gathered an array of information from academia, government 
and national labs, and industry through 84 solicited white papers, a 
workshop, and meetings with industry representatives. The draft Task 
Force Plan was completed too late to have significant influence on FY 
2005 budget deliberations for most of the participating federal 
agencies. It is expected that all participating agencies will take the 
plan into account as they form proposals for the FY 2006 Budget.

Q3.  Even though the Administration considers nanotechnology a 
priority, the budget proposes to reduce nanotechnology funding at the 
National Institute of Standards and Technology, the National 
Aeronautics and Space Administration, and the Department of Defense. 
Please provide the rationale for the proposed nanotechnology cuts at 
each of these three agencies.

A3. The decrease in the amount requested for the Department of Defense 
(DOD) in FY 2005 versus estimated spending in FY 2004 reflects the 
scheduled completion of a number of programs, mainly within the Defense 
Advanced Research Projects Agency (DARPA), in FY 2004. Within the 
National Institute of Standards and Technology (NIST), of the $63 
million estimated to be spent for nanotechnology R&D in FY 2004, 
approximately $53 million was within the NIST core budget, and nearly 
$10 million was under the Advanced Technology Program (ATP). Thus the 
FY 2005 request of $53 million represents stable funding for the NIST 
core nanotechnology program. The National Aeronautics and Space 
Administration's (NASA) FY 2005 request of $35 million for 
nanotechnology R&D is an increase over the FY 2004 request ($31 
million). When the FY 2005 Budget was being planned, Congress had yet 
to pass the FY 2004 appropriations, which increased spending to $37 
million.

Q4.  The President's budget proposes an overall decrease of $43 million 
for the Climate Change Science Program. Within that program, however, 
the budget requests a $70 million increase for the Climate Change 
Research Initiative, which supports targeted, short-term climate 
research activities. Please describe more specifically what climate 
change research activities would receive increased funding within the 
President's request. What activities within the larger program is the 
Administration proposing to decrease, terminate or transfer in order to 
arrive at an overall decrease for climate change research?

A4. The edition of ``Our Changing Planet'' that covers fiscal years 
2004 and 2005 is expected to be available shortly and will provide 
detailed program summaries and funding tables for each Climate Change 
Science Program (CCSP) agency.
    The largest dollar increase for the Climate Change Research 
Initiative (CCRI) comes from additional investment in NASA's ``Glory'' 
mission--designed to improve our understanding of aerosols and their 
impact on global climate. The 2005 Budget includes an increase of $42 
million for this mission. Other CCRI increases are in National Oceanic 
and Atmospheric Administration (NOAA) programs (+ $29 million) aimed at 
reducing the scientific uncertainty associated with aerosols and the 
carbon cycle as well as accelerating progress in developing a global 
ocean observing system.
    The drop in total CCSP funding is primarily due to a decrease in 
NASA's Earth Science budget. While NASA's CCSP research efforts 
increase, the budget for space-based observations is reduced by some 
$75 million. This decrease is due to the natural down cycle resulting 
from completion of the initial Earth Observing System, the deferral of 
a new mission to monitor global precipitation and the cancellation of a 
proposed mission to ensure continuity in the measurement of winds on 
the ocean surface. However, NASA's Earth science program will continue 
to provide key data sets and building blocks required for climate 
science and a comprehensive Earth observing system. In addition to the 
aerosol mission discussed above, new research-oriented missions to 
measure ocean salinity and carbon dioxide concentration are supported 
in the 2005 Budget.
    There are some reprioritizations within NOAA's climate program as 
well. While NOAA's overall CCSP contribution is increased by nearly $20 
million, legacy programs in global change, including several Office of 
Global Program grant programs, have been reduced to accommodate 
increased investment in CCRI priorities.
    These changes are the result of a systematic analysis of priorities 
within CCSP.

Q5a.  Because of its role and expertise in emergency response to 
chemical contamination, the Environmental Protection Agency (EPA) plays 
an important role in homeland security R&D. For example, EPA was 
instrumental in removing anthrax and ricin from Senate office 
buildings, and has received substantial funding for building 
decontamination research over the last few years. Yet the budget 
proposes to eliminate the program. What is the rationale for this 
action?

A5a. The Environmental Protection Agency's (EPA) National Homeland 
Security Research Center (NHSRC) was established to conduct research in 
support of drinking water and wastewater infrastructure protection, 
decontamination after an intentional release of chemical or biological 
materials, and risk assessment for rapid response to a terrorist event. 
While the President's 2005 Budget does not provide new funding 
specifically for building decontamination research, it continues to 
support each of these critical activities. In fact, the Budget allows 
EPA to continue decontamination research, keeps the program's technical 
staff intact, and enables EPA to meet its core homeland security 
responsibilities.
    EPA has received significant funding for building decontamination 
research over the last two years. In fact, EPA had sufficient 
unobligated funding at the beginning of this fiscal year that it was 
able to move projects scheduled for FY 2005 into FY 2004. The 
Administration anticipates that the level of funding received to date 
will be sufficient to complete EPA's major priorities and continue 
program activities through FY 2005 using prior year funds. 
Decontamination research and development projects are being conducted 
at other agencies as well. For example, protocols are being developed 
for large-scale decontamination after a chemical, biological, or 
radiological attack including personal decontamination systems for 
processing large numbers of individuals. Research also is being 
conducted to improve decontamination chemicals and personal protection 
equipment, as well as to develop advanced methods for decontamination 
of food. You can see below that EPA's decontamination research program 
represents only a small portion of the U.S. Government's investment in 
decontamination research across the federal agencies with this 
expertise.

Q5b.  For fiscal years 2003 and 2004 and for the 2005 request, please 
provide a breakdown, by agency, of how much the Federal Government 
spent (or will spend) on R&D related to building decontamination.



Questions submitted by Representative Bart Gordon

Q1.  Nanotechnology Funding--Last year Committee Democrats offered an 
amendment to the nanotechnology bill mandating that five percent of all 
federal nanotechnology funding would go toward societal and ethical 
aspects of the program. This was based on the formula used in the Human 
Genome Program. The Committee leadership, reflecting Administration 
views, opposed the amendment and it was not adopted. Does the 
Administration still think that the five percent mandate is a bad idea? 
What fraction of nanotechnology funding would go towards societal/
ethical concerns in FY 2004 and in the FY 2005 budget? Please provide a 
breakdown of these funds by agency and by subject. [NOTE: Do not 
include research into environmental applications of nanotechnology in 
this total.]

A1. The Administration generally believes that it is preferable to 
allow for flexibility in R&D program management instead of establishing 
formula-based set-asides. From its inception, the National 
Nanotechnology Initiative has emphasized the need for addressing the 
societal, ethical, legal, and workforce implications of nanotechnology. 
These issues are being addressed through a number of activities, 
including:

    Societal implications. NSF expects to spend $3.6 million in FY 2004 
and a minimum of $2.5 million in FY 2005 on societal implications of 
nanotechnology research through a combination of specified 
nanotechnology programs and core programs. Additional funding may be 
directed to such research in FY 2005 if the quantity and quality of 
proposals warrants. Among currently funded projects is an 
interdisciplinary research program at the University of South Carolina 
that draws upon members of the philosophy, chemistry, and anthropology 
departments, among others.
    Education and workforce preparation. NSF plans to spend $10.5 
million in FY 2004 and $24.7 million in FY 2005 on educational programs 
relating to nanotechnology. These programs are aimed at all levels, 
from K-12 to post-graduate, and address the developing need for a 
workforce with suitable training and skills to design, work, and 
manufacture at the nanoscale. Curriculum development for K-12 lays the 
groundwork for workforce training and also helps to create an educated 
public that can make informed decisions about science and technology in 
general, and nanotechnology in particular. In the past, DOD and NIH 
have spent $2 million annually on educational programs related to 
nanotechnology.
    Environmental and health effects. In addition to research on 
applications that may prove beneficial to the environment and public 
health, the NNI funds research on the potential health and 
environmental risks of nanotechnology. Such research addresses perhaps 
the most pressing societal implication of this new technology. 
Collectively, the agencies participating in the NNI plan to spend in FY 
2004 $3.2 million on health implications research and $5.3 million on 
environmental implications research. In FY 2005, NSF intends to award 
$17.6 million on understanding the fundamental effects of 
nanostructures on the environment, and EPA intends to award $5 million 
for environmental effects research. Moreover, EPA is working to partner 
with other agencies, such as NSF and the National Institute of 
Occupational Safety and Health (NIOSH), on a joint solicitation for 
proposals in this area.
    In order to protect public health and the environment, it is 
important to understand the properties of nanomaterials that are likely 
to make their way from the laboratory to the marketplace. To address 
this issue, the National Toxicology Program (an interagency program 
within the Department of Health and Human Services) has initiated 
toxicological studies to begin to determine the risks of exposure to 
certain engineered nanomaterials through skin, oral and inhalation 
exposures. In FY 2004, $0.5 million will go towards these studies, 
which will grow to approximately $2 million in FY 2005.
    In addition to the above activities, the Nanoscale Science, 
Engineering, and Technology (NSET) Subcommittee of the National Science 
and Technology Council, through the National Nanotechnology 
Coordination Office (NNCO), is funding a project at the North Carolina 
State University to study methods by which the public can be informed 
of and provide input on nanotechnology. NSET and NNCO personnel also 
devote resources toward public outreach activities aimed at various 
groups, including the public, school children, industry and small 
businesses, and researchers. Along with the educational programs 
described earlier, such activities help to address public concerns and, 
in some cases, misconceptions, about the possible effects of 
nanotechnology.

Q2.  Off-Shoring of Jobs--There is growing concern about jobs moving 
overseas. Increasingly, it is high-tech service jobs (e.g., 
radiologists, software developers) that seem to be moving.

Q2a.  What is this Administration's philosophy about off-shoring of 
high-tech jobs? Is it a problem or is it a valuable by-product of free 
trade, as the President's chief economist suggested recently?

A2a. The President believes the best way to deal with the issue of off-
shoring is to make America the best place in the world to do business. 
A key priority of this Administration is to create jobs in America and, 
as the President has said many times, he will not be satisfied until 
every American who seeks work can find a job. More than 1.4 million 
jobs have been created since last August.
    The most important way to support growth in jobs is to maintain a 
strong pace of economic activity. Administration initiatives aimed at 
promoting economic growth, such as the substantial tax relief package 
passed by Congress, have softened the impact of the recession and 
helped put the economy on the road to recovery. We have seen the 
results of these actions in the robust recovery that has been underway 
since the middle of last year. Real GDP has expanded at an annual rate 
of 5.0 percent over the last year. This is the best four-quarter 
performance in nearly 20 years and the best among the major developed 
economies.
    Policy should also foster an environment in which businesses will 
expand and jobs will be created. The President's initiatives to reform 
the tort system, to ensure a reliable energy supply, to make health 
care more affordable, and to streamline the regulatory burden will 
remove barriers to prosperity and promote sustained growth in output 
and employment.
    Engagement with the world economy represents another key to the 
prosperity of the U.S. economy. Open markets allow American firms to 
sell world-class products and services in the large global economy (95 
percent of the potential customers for American products live outside 
the United States). Open markets also give American households the 
ability to stretch budgets and the freedom to buy the greatest variety 
of goods and services at the best prices. Finally, free trade allows 
American businesses to buy the best equipment and materials, and this 
benefits their workers, owners, and customers.
    At the same time that we recognize the gains from free and open 
markets, we must appreciate that any economic change, whether arising 
from trade or technology, can cause painful dislocations for some 
workers and their families. Public policy should ease the transition 
and help workers prepare for the global economy and the jobs of the 
future. The President's ``Jobs for the 21st Century'' initiative will 
help address this by preparing U.S. workers to take advantage of better 
skilled, higher paying jobs. In addition, since 2002, spending on Trade 
Adjustment Assistance has nearly tripled, and the President's FY 2005 
Budget provides more than $23 billion for worker training and 
employment programs.

Q2b.  What are the implications of off-shoring of high-tech jobs on the 
future need for scientists and engineers in this country?

A2b. The President's Council of Advisors on Science and Technology 
(PCAST) has defined what they call the Nation's ``innovation 
ecosystem,'' which has produced the global economic leadership and high 
standard of living our country enjoys. Future generations of scientists 
and engineers will be key to keeping our National innovation ecosystem 
strong, which is why the President requested an increase in the 
Department of Education's Math and Science Partnerships (MSP) program--
an important component of the President's Jobs for the 21st Century 
Initiative. The United States has achieved and solidly retains world 
leadership as measured by prosperity and efficiency from two related 
engines of growth--innovation and productivity. This growth is 
furthered by the federal investment in R&D, for which this 
Administration has provided record levels of funding.
    By promoting strong economic growth and encouraging innovation, the 
President's policies have supported the robust recovery that the 
economy has been experiencing since the middle of last year and they 
will also help economic activity move onto a long-run path of strong 
sustainable expansion. Growing economies both at home and abroad will 
provide an expanding market for the services of scientists and 
engineers in this country.

Q3.  Roadmap for High-End Computing--The fact sheet released on the 
Networking and Information Technology R&D budget refers to the efforts 
of the High-End Computing Revitalization Task Force to develop an 
interagency R&D roadmap for high-end computing core technologies and a 
federal high-end computing capacity and accessibility improvement plan.

Q3a.  What is the status of the roadmap and plan? Will they be 
published?

A3a. The roadmap and plan, entitled ``Federal Plan for High-End 
Computing,'' was released at a House Science Committee hearing on May 
13, 2004.

Q3b.  Did the roadmap influence the FY 2005 budget request, and if so, 
in what way? Are there specific agency programs proposed to implement 
them?

A3b. The draft Task Force Plan was completed too late to have 
significant influence on FY 2005 budget deliberations for most of the 
participating federal agencies. It is expected that all participating 
agencies will take the plan into account as they form proposals for the 
FY 2006 Budget.

Q3c.  What is the relationship between the High-End Computing 
Revitalization Task Force and the interagency working group that has 
been in place for many years to coordinate and plan the Networking and 
Information Technology R&D program?

A3c. The High-End Computing Interagency Working Group (HEC IWG) of the 
Networking, Information Technology Research and Development (NITRD) 
program has been responsible for the coordination of information 
technology for high-end computing across federal agencies for more than 
a decade. The High-End Computing Revitalization Task Force, coordinated 
through the National Science and Technology Council, was charged by 
OSTP to ``develop a plan to guide future federal investments in high 
end computing.'' Most of the members of the HEC IWG were Task Force 
participants. However, recognizing that answering this charge would 
require expertise in areas not currently represented on the HEC IWG 
(primarily regarding certain scientific applications related to high-
end computing), the Task Force was augmented with agency 
representatives having this expertise.

Q4.  IT Plan--Under the High Performance Computing Act of 1991, the 
annual implementation plan for the interagency Networking and 
Information Technology R&D program is due at the time of the 
President's budget submission. When will it be delivered to Congress?

A4. The NITRD Supplement to the President's FY 2005 Budget (often 
called the ``Blue Book'') is expected to be ready for transmittal to 
the Congress this summer.

Q5.  MEP--Your testimony touches on the Administration's three criteria 
for judging federal programs--namely relevance, quality, and 
performance.

Q5a.  Please rate the MEP program. How does it score on each of these 
three criteria?

A5a. The Office of Management and Budget rated the MEP program using 
the Program Assessment Rating Tool (PART). Because MEP Centers provide 
extension services and do not conduct R&D, the program was rated 
according to the criteria for competitive grant programs and not 
according to the R&D criteria noted above. Overall, MEP was rated as 
moderately effective. The review found that the program was well-
managed by NIST. MEP centers are established through open competitions, 
and center activities are closely monitored by MEP staff for 
performance. MEP's annual performance measures do demonstrate benefits 
to MEP firms, but it is difficult to identify the impact of MEP on the 
small manufacturing community as a whole. The review also questioned 
the appropriateness of taxpayer support for services that benefit 
individual firms (e.g., increased sales, capital investment, and 
inventory savings) and are similar to services provided by private 
consultants.

Q5b.  Based on these ratings, explain why you the Administration 
proposed terminating MEP in 2004 and cutting it to one-third of 
historical funding levels in FY 2005.

A5b. While the PART helps inform budget decisions, it is not the only 
consideration. The Budget advances three national priorities: winning 
the war on terror, protecting the homeland, and strengthening the 
economy. These priorities reflect changing needs and require making 
difficult budgetary choices. The Budget proposes $39 million for MEP, 
equal to the amount provided in 2004.
    Under the program's original authorization in 1988, federal 
assistance to MEP centers was to be ended after six years; currently, 
only two centers are less than seven years old. While this original 
funding principle was relaxed by authorizing legislation in 1998, the 
Administration believes that as the centers provide services comparable 
to, and in some cases competitive with, private consulting, federal 
support for the centers can and should be reduced. The Department of 
Commerce has developed a series of reforms to improve the efficiency of 
the centers and reduce their reliance on taxpayer funding.

Q6.  Student Visas--Some universities have reported problems with 
foreign graduate students being able to obtain visas to enter the U.S. 
This has occurred with new students and with enrolled students 
attempting to return to the U.S. after brief visits home. What is being 
done to address this problem, and does your office interact with the 
Departments of State and Homeland Security to help ensure the visa 
approval process is not unnecessarily impeding university-based 
research?

A6. Yes, OSTP works with the Departments of State and Homeland Security 
and others to review policies that may contribute to student visa 
delays, to facilitate interagency efforts to seek improvements in the 
visa process now that SEVIS and USVISIT are in place, and to provide 
policy guidance on visa, immigration and entry-re-entry policy issues 
that impact international students and researchers. The Departments of 
State, Justice and Homeland Security and other relevant agencies, 
including OSTP and the Homeland Security Council, are working to 
improve the efficiency and effectiveness of the visa process, including 
the entry-re-entry policies. OSTP is a full participant in this ongoing 
process and focuses primarily on S&T-related (Mantis) and student visa 
issues.

Q7.  Tracking of Foreign Students--Please give us a status report on 
the implementation of SEVIS, the computerized tracking system for 
foreign students.

A7. SEVIS implementation is underway and ongoing. The Department of 
Homeland Security (DHS) put in place a special support team to 
facilitate the fall arrivals, which was well-received by the university 
community. Some fraudulent cases were discovered and dealt with at 
ports of entry. DHS also conducted a major ``customer service'' 
outreach effort on December 11, 2003--``Foreign Student and Exchange 
Visitor Issues Forum''--to compile a list of residual issues, and 
instituted a weekly conference call to continue the open dialog and to 
address both technical and policy issues. DHS reconvened its special 
team to facilitate the re-entry process of international students after 
the Christmas break. Additional institutions are applying to join the 
SEVIS program. OSTP believes that many of the original concerns about 
SEVIS have been resolved.

Q8.  Earmarks--In both your written and oral testimony, you complained 
about the negative impact of Congressional earmarks on federal research 
portfolios. Please provide us with your plans for ameliorating the 
impacts of earmarks. Specifically:

Q8a.  Have you performed a legal analysis to determine whether existing 
laws may require competition on earmarks that are specified in report 
language? If so, what agencies are covered by these procurement laws?

Q8b.  Have you encouraged agencies to work with earmarked institutions 
so that the output of the project is consistent with agencies' 
missions? Or do most agencies simply write a check for the earmark?

A8a,b. The Administration appreciates your interest and help in this 
matter. As I know you are aware, OSTP concludes that earmarks undermine 
and crowd out merit-based processes for best allocating our important 
research investments. We estimate that $2.2 billion of the Federal 
Science and Technology budget was earmarked in fiscal year 2004. After 
accounting and adjusting for these diverted resources from more merit-
based, competitive awards for our national S&T priorities, the 
President's FY 2005 Budget actually includes a three percent increase 
for the national research portfolio, rather than the 0.4 percent cut 
that results if parochial earmarks are continued. In the case of 
construction programs and R&D programs, 10 USC 2361 requires DOD to use 
competitive procedures in the award of a grant or contract to a 
university or college. This requirement has helped the Department to 
make some awards through a more merit-oriented process than might 
otherwise have been the case. Also, DOD awards officers generally try 
to make sure that earmarked funds are applied against military needs, 
to the degree possible under the terms of the earmark. However, the 
fact that most earmarks are targeted to specific institutions or 
specific geographical locations, or address narrowly conceived 
solutions to needs that may or may not be of high priority to the 
Nation's defense means that, on average, the funds cannot be applied as 
effectively as through an allocation approach that is merit-based from 
conception through the award. In addition, the number of earmarks in 
the DOD S&T program and the amount of additional administrative 
workload required to execute earmarks have significantly hurt the 
Department's ability to execute the rest of its S&T program in a timely 
manner. Certainly, some agencies have had success in working with 
earmarked institutions to guide the relevance of the earmarked effort, 
but success is mixed across the agencies. The Administration has more 
work to do to investigate previously successful and new ways to address 
research earmarks, including the specific ideas you suggest. Going 
forward, we would be most interested in speaking to you, your staff and 
other stakeholders about your ideas and some of our own for avoiding or 
improving research earmarks.

Q9.  Science Education--The fact sheet your office released on science 
education support in the FY 2005 budget request indicates that the NSF 
Math and Science Partnerships program is being moved to the Department 
of Education but does not give a rationale for this action.

Q9a.  Since the President signed the bill authorizing the NSF program 
only a year ago, what has changed--is NSF failing to implement the 
program adequately?

A9a. The President's Budget FY 2005 Budget includes a total of $349 
million, for the joint Math and Science partnerships (MSP) program at 
the Department of Education and the National Science Foundation (NSF), 
a $61 million increase over the 2004 level. The decision to consolidate 
the MSP program in the Department of Education positions the program 
closer to the classroom and to actual teaching practices. The NSF 
supports a number of other programs aimed at developing more effective 
ways of involving universities in efforts to improve both pre-service 
and in-service training for math and science teachers. These efforts 
will continue. NSF will retain $80 million of MSP to continue ongoing 
commitments.

Q9b.  Since the partnerships program is intended to forge links between 
education practitioners and science, math and engineering faculty at 
institutions of higher education, why does the Administration believe 
the Department of Education is better suited to accomplish this goal 
than NSF?

A9b. The consolidation of the MSP in the Department of Education 
reflects a desire to focus the program on integrating research-proven 
practices into classroom settings and a desire to focus the impact of 
the program more directly at the local level. Consolidating the MSP at 
the Department of Education will place this program at the agency best 
positioned to work closely with state and local educational systems to 
implement research-based teacher enhancement efforts within the local 
school systems.

Q10.  International Scientific Cooperation--Your statement does not 
address international scientific cooperation. Even in the depths of the 
Cold War, we had a productive scientific relationship with the Soviet 
Union that provided us with many benefits. And now--at a time when this 
country desperately needs some positive diplomatic initiatives--science 
may offer many wonderful opportunities in this area.

Q10a.  What initiatives do we have to re-invigorate scientific 
relations with countries in the Middle East?

A10a. We have launched several initiatives aimed at the nations of 
North Africa, the Middle East, and South Asia. For the first time, we 
are close to signing umbrella agreements for cooperation in science and 
technology with Morocco, Tunisia, and Algeria (the three countries 
generally referred to as the Maghreb). Based on the findings of an 
interagency assessment team, which visited the science establishments 
of those countries in 2003, there is significant interest in the U.S. 
scientific community in cooperation with the three neighboring 
countries of the Maghreb. Agreements have been drafted, circulated to 
the interagency community, and we expect they will soon be signed, 
opening the way for an unprecedented, wide array of science and 
technology (S&T) cooperation.
    Areas in which we expect to initiate joint projects include basic 
research, science education, meteorology and weather forecasting, 
seismic research, basic space science and remote sensing, health 
sciences and public health, watershed management, marine research 
(including coastal research, aquaculture and fisheries management), 
environment and biodiversity protection, energy and alternative energy 
research and development, information and communications technology, 
and all facets of biotechnology.
    In Egypt, we have expanded funding and S&T cooperation under the 
U.S.-Egypt Science and Technology Joint Board, which operates under the 
bilateral umbrella S&T agreement. This program, now funded at 
approximately $1.5 million per year, supports linkages between U.S. 
agencies and their Egyptian counterparts through collaborative grants, 
workshops and the training of young Egyptian scientists in U.S. 
institutions. Priority areas for these collaborations are agricultural 
biotechnology, meteorology, materials science, energy, and social 
sciences including economics.
    In Jordan, the United States is a partner in the SESAME project, 
which aims to establish a synchrotron light source facility near the 
capital, Amman, at which scientists from the entire Middle East, 
including Israel, can conduct basic research in areas such as materials 
science. Construction of the facility was begun in March of this year 
at Al-Balqa University in Allan, Jordan, about 30 kilometers from the 
capital. The project is being undertaken under the umbrella of the 
United Nations Educational, Scientific, and Cultural Organization 
(UNESCO), of which the U.S. is now a member. The idea for the project 
originated between Stanford's Linear Accelerator Center (SLAC) and the 
DESY Synchrotron Center in Germany. A German synchrotron, which has 
been replaced, was donated as the basis for the project, and Stanford 
is donating a number of Department of Energy (DOE) components, 
surplused by the recent upgrade of their existing synchrotron to a 
third generation facility. DOE is currently working with the Department 
of State on sorting out the international legal aspects of this 
transfer.

Q10b.  Will we aggressively reach out to China in our new space 
initiative?

A10b. The President's Space Vision explicitly calls for the 
participation of international partners in this long-term effort to 
develop space-faring capability, asking NASA to ``pursue opportunities 
for international participation to support U.S. space exploration 
goals.'' Other countries have valuable contributions to bring to this 
effort in terms of engineering capabilities, hardware, human resources, 
expertise, space experience and, of course, financial resources.
    As of now, no country, including China, has been excluded as a 
potential partner. A decision to enter into cooperation with any 
country would be based on several factors: the partner's potential 
contribution; the status of bilateral relations and S&T cooperation 
with that country; and foreign policy and national security 
considerations. If Chinese participation would advance the goals of the 
space vision and is consistent with broader U.S. policy objectives, we 
would consider it at the appropriate time.

Q10c.  What is this Administration doing that is new to utilize S&T as 
a diplomatic tool?

A10c. President Bush announced in 2002 that the United States would 
rejoin UNESCO after an absence of 18 years. This became a reality in 
October, 2003. OSTP has spearheaded the engagement of the United States 
scientific community with UNESCO's science division. We expect to 
strengthen ongoing collaborations in oceans, fresh water, mitigation of 
natural hazards and disasters, and we also plan to make science and 
engineering education an area of emphasis. UNESCO's focus on the 
developing world makes this a unique and valuable platform for us to 
connect with developing countries in science and technology.
    This spring, OSTP concluded a meeting of senior G-8 policy and 
research officials in Washington, to coordinate planning for research 
in three priority areas designated by the G-8 leaders at last summer's 
Evian Summit. The meeting concentrated on three topics: global 
observations, cleaner and more efficient energy technologies, and 
agricultural productivity and biodiversity. The G-8 partners also 
considered how best to assist developing nations that have their own 
research programs in these areas.
    The United States has recently concluded umbrella S&T agreements 
with Pakistan, Bangladesh, and the Maghreb (Morocco, Algeria and 
Tunisia), based on a new model expressly developed to facilitate S&T 
cooperation with developing countries. This new style S&T agreement 
puts the emphasis on capacity building in our S&T partner countries, 
while relaxing the requirement for both partners to bring equal 
resources to the table, a constraint which had previously limited our 
S&T agreements largely to advanced industrial nations.
    Another initiative begun under this Administration which makes 
successful use of science and technology as a diplomatic tool is the 
Embassy Science Fellows Program run by the State Department. This 
program places scientists from U.S. agencies in American Embassies 
abroad, in response to requests from posts, to work on S&T related 
projects and establish liaisons with the science communities of the 
host countries. Over the past three years this program has expanded 
with each cycle and now enjoys the participation of scientists from 
NSF, the United States Geological Survey, NOAA, the U.S. Department of 
Agriculture, and EPA.

Q11.  Union of Concerned Scientists Report--Recently, the Union of 
Concerned Scientists issued a report critical of the Administration's 
use of science. Do you intend to produce a point-by-point response to 
the UCS report? If so, please provide us with a copy of your response.

A11. On April 2, I submitted a statement and a more comprehensive 
response for the record, to reply to questions raised during Senate and 
House Appropriations Subcommittee hearings regarding a document issued 
by the Union of Concerned Scientists. I have attached a copy of the 
response I submitted to Senate Appropriations Subcommittee on VA, HUD 
and Independent Agencies Chairman Christopher Bond, and to other 
Members of the Subcommittee, and to House Appropriations Subcommittee 
on VA, HUD and Independent Agencies Chairman James Walsh, and to other 
Members of the Subcommittee. [The information referred to follows.]

            Statement of the Honorable John H. Marburger III

            Scientific Integrity in the Bush Administration

                             April 2, 2004

    President Bush believes policies should be made with the best and 
most complete information possible, and expects his Administration to 
conduct its business with integrity and in a way that fulfills that 
belief. I can attest from my personal experience and direct knowledge 
that this Administration is implementing the President's policy of 
strongly supporting science and applying the highest scientific 
standards in decision-making.
    The Administration's strong commitment to science is evidenced by 
impressive increases devoted to federal research and development (R&D) 
budgets. With the President's FY 2005 budget request, total R&D 
investment during this Administration's first term will have increased 
44 percent, to a record $132 billion in FY 2005, as compared to $91 
billion in FY 2001. President Bush's FY 2005 budget request commits 
13.5 percent of total discretionary outlays to R&D--the highest level 
in 37 years.
    In addition to enabling a strong foundation of scientific research 
through unprecedented federal funding, this Administration also 
believes in tapping the best scientific minds--both inside and outside 
the government--for policy input and advice. My office establishes 
interagency working groups under the aegis of the National Science and 
Technology Council for this purpose. In addition, this Administration 
has sought independent advice, most often through the National 
Academies, on many issues. Recent National Academies reviews of air 
pollution policy, fuel economy standards, the use of human tests for 
pesticide toxicity, and planned or ongoing reviews on dioxin and 
perchlorate in the environment are examples. The Administration's 
climate change program is based on a National Academies report that was 
requested by the Administration in the spring of 2001, and the National 
Academies continues to review our programs and strategic research 
planning in this field. The frequency of such referrals, and the high 
degree to which their advice has been incorporated into the policies of 
this Administration, is consistent with a desire to strengthen 
technical input into decision-making.
    Climate change has proven to be a contentious science-related 
issue. President Bush clearly acknowledged the role of human activity 
in increased atmospheric concentrations of greenhouse gases in June 
2001, stating ``concentration of greenhouse gases, especially 
CO2, have increased substantially since the beginning of the 
industrial revolution. And the National Academy of Sciences indicates 
that the increase is due in large part to human activity.'' That speech 
launched programs to accelerate climate change science and technology 
to address remaining uncertainties in the science, develop adaptation 
and mitigation mechanisms, and invest in clean energy technologies to 
reduce the projected growth in global greenhouse gas emissions. In 
2004, the U.S. will spend approximately $4 billion in climate change 
science and technology research.
    The President created the new U.S. Climate Change Science Program 
(CCSP) to refocus a disorganized interagency activity into a cohesive 
program, oriented at resolving key uncertainties and enhancing 
decision-making capabilities. The Strategy was heartily endorsed by the 
National Academies in its recent review. Their report, Implementing 
Climate and Global Change Research--A Review of the Final U.S. Climate 
Change Science Program Strategic Plan, stated ``In fact, the approaches 
taken by the CCSP to receive and respond to comments from a large and 
broad group of scientists and stakeholders, including a two-stage 
independent review of the plan, set a high standard for government 
research programs.. . .Advancing science on all fronts identified by 
the program will be of vital importance to the Nation.''
    In this Administration, science strongly informs policy. It is 
important to remember, however, that even when the science is clear--
and often it is not--it is but one input into the policy process.
    Regulatory decisions provide the trigger for some of the most 
contentious policy debates. Science can play an important role in these 
policy decisions, and this Administration has sought to strengthen, not 
undermine, this role. In fact, the Office of Management and Budget 
(OMB) has for the first time hired toxicologists, environmental 
engineers, and public health scientists to review regulations and help 
agencies strengthen their scientific peer review processes. This 
increased attention to science in the regulatory process is providing a 
more solid foundation for regulatory decisions. As several recent 
examples demonstrate, emerging scientific data has prompted swift 
action by the Bush Administration to protect public health, strongly 
guided by advanced scientific knowledge:

          On May 23, 2003 the Environmental Protection Agency 
        (EPA) proposed a new regulation to reduce by 90 percent the 
        amount of pollution from off-road diesel engines used in 
        mining, agriculture, and construction. This proposed rule 
        stemmed from collaboration between EPA and OMB. Recent 
        scientific data from the Harvard School of Public Health 
        indicates that diesel engine exhaust is linked to the 
        development of cardiopulmonary problems and also aggravates 
        respiratory health problems in children and the elderly.

          On July 11, 2003 the Food and Drug Administration 
        required that food labels for consumers contain new information 
        on trans-fat content in addition to existing information on 
        saturated fat content. This rule, requested by the White House 
        via a public OMB letter, responded to emerging scientific data 
        indicating that intake of trans-fats (found in margarine and 
        other foods) is linked to coronary heart disease.

          On December 29, 2003, the Department of 
        Transportation requested public comment on ideas for potential 
        reform of the CAFE program. Several potential reform ideas 
        contained in that request for comment come directly from a 2002 
        National Academies report on the effectiveness of the current 
        CAFE program.

    Regarding the document that was released on February 18, 2004 by 
the Union of Concerned Scientists (UCS), I believe the UCS accusations 
are wrong and misleading. The accusations in the document are 
inaccurate, and certainly do not justify the sweeping conclusions of 
either the document or the accompanying statement. I believe the 
document has methodological flaws that undermine its own conclusions, 
not the least of which is the failure to consider publicly available 
information or to seek and reflect responses or explanations from 
responsible government officials. Unfortunately, these flaws are not 
necessarily obvious to those who are unfamiliar with the issues, and 
the misleading, incomplete, and even personal accusations made in the 
document concern me deeply. It is my hope that the detailed response I 
submit today will allay the concerns of the scientists who signed the 
UCS statement.
    I can say from personal experience that the accusation of a litmus 
test that must be met before someone can serve on an advisory panel is 
preposterous. After all, President Bush sought me out to be his Science 
Advisor--the highest-ranking S&T official in the Federal Government--
and I am a lifelong Democrat.
    I have discussed the issue of advisory committees with the agencies 
mentioned in the UCS document and am satisfied with the processes they 
have in place to manage this important function. I can say that many of 
the cited instances involved panel members whose terms had expired and 
some were serving as much as five years past their termination dates. 
Some changes were associated with new issue areas for the panels or 
with an overall goal of achieving scientific diversity on the panels. 
Other candidates may have been rejected for any number of reasons--this 
is ordinary for any Administration.
    My office is involved in recommending candidates for the 
President's Council of Advisors on Science and Technology, the 
President's Information Technology Advisory Committee, and the 
nominating panel for the President's Committee on the National Medal of 
Science. I have intimate knowledge of the selection process for these 
committees. This process results in the selection of qualified 
individuals who represent a wide range of expertise and experience--the 
right balance to yield quality advice for the President on critical S&T 
issues.
    The UCS document also includes a highly unfortunate and totally 
unjustified personal attack on a Senate-confirmed official in my 
office. I strongly recommended the appointment of that individual after 
evaluating the needs of the office and deciding that it required 
talents and experience that differed from previous incumbents. The 
attack appears to be based on a lack of understanding of the function 
of my office and the qualities that are required to perform them 
properly. Given the ease with which this ignorance could have been 
rectified, it is inexcusable.
    I hope this response will correct errors, distortions, and 
misunderstandings in the Union of Concerned Scientists' document. The 
bottom line is that we have a strong and healthy science enterprise in 
this country of which I am proud to be a part.

Response to the Union of Concerned Scientists' February 2004 Document

I.  THE UCS' CLAIM OF ``SUPPRESSION AND DISTORTION OF RESEARCH FINDINGS 
AT FEDERAL AGENCIES''

The UCS' claims on ``Distorting and Suppressing Climate Change 
        Research''

          The UCS document claims that ``the Bush 
        Administration has consistently sought to undermine the 
        public's understanding of the view held by the vast majority of 
        climate scientists that human-caused emissions of carbon 
        dioxide and other heat-trapping gases are making a discernible 
        contribution to global warming.''

    This statement is not true. In his June 11, 2001, Rose Garden 
speech on climate change, the President stated that the 
``[c]oncentration of greenhouse gases, especially CO2, have 
increased substantially since the beginning of the Industrial 
Revolution. And the National Academy of Sciences indicate that the 
increase is due in large part to human activity.. . .While scientific 
uncertainties remain, we can now begin to address the factors that 
contribute to climate change.'' In this speech, the President cited the 
National Academy's Climate Change Science report that was initiated at 
the Administration's request, and launched a major, prioritized 
scientific effort to improve our understanding of global climate 
change.
    Moreover, the President's Climate Change Science Program (CCSP) has 
developed its plans through an open and transparent process. In the 
development of its Strategic Plan, released in July 2003, the CCSP 
incorporated comments and advice from hundreds of scientists both from 
the U.S. and around the world. The CCSP Strategic Plan received a 
strong endorsement from the National Academy of Sciences in a February 
2004 review, which commended the work of the CCSP.

          The UCS claims that the ``Bush Administration 
        blatantly tampered with the integrity of scientific analysis at 
        a federal agency when, in June 2003, the White House tried to 
        make a series of changes to the EPA's draft Report on the 
        Environment.''

    This statement is false. In fact, the Administrator of the EPA 
decided not to include a short summary on climate change. An ordinary 
review process indicated that the complexity of climate change science 
was not adequately addressed in EPA's draft document. Instead, the 
final EPA report referred readers to the far more expansive and 
complete exposition of climate change knowledge, the Climate Change 
Science Program (CCSP) Strategic Plan.\1\ The Administration chose, 
appropriately, to present information in a single, more expansive and 
far more complete format. This choice of presentation format did not 
influence the quality or integrity of the scientific analysis or its 
dissemination.
---------------------------------------------------------------------------
    \1\ The 205-page CCSP Strategic Plan was released by Secretaries 
Evans and Abraham on July 24, 2003. The EPA Report on the Environment 
was released on June 23, 2003. The draft EPA report had contained a 
four-page segment on climate change.

          The UCS quotes an unnamed EPA scientist as saying 
        that the Administration ``does not even invite the EPA into the 
        discussion'' on climate change issues, and cites a previous 
        Clinton Administration OSTP official, Dr. Rosina Bierbaum, as 
        claiming that the Administration excluded OSTP scientists from 
---------------------------------------------------------------------------
        the climate change discussions.

    These accusations are wrong. The EPA, in fact, is a key participant 
in the development and implementation of climate change policy in the 
Bush Administration. The EPA participates in the development of 
Administration policy on climate change through the cabinet-level 
Committee on Climate Science and Technology Integration, which was 
created in February 2002. The EPA is also a member of subsidiary 
bodies, such as the Interagency Working Group on Climate Change Science 
and Technology, the Climate Change Science Program and the Climate 
Change Technology Program. (A table illustrating the Bush 
Administration's climate change program's organization can be found on 
page 9 of the CCSP Strategic Plan (2003)). Moreover, the EPA is a co-
chair of the National Science and Technology Council's Committee on 
Environment and Natural Resources (CENR). CENR has oversight of and 
responsibility for the Subcommittee on Global Change Research. (This 
subcommittee holds the same membership and is functionally the same 
entity as the Climate Change Science Program, noted above.)
    Dr. Bierbaum's claim refers to cabinet-level discussions that led 
to the development of the Administration's climate change organization 
described above. The cabinet-level discussions referenced by Dr. 
Bierbaum included numerous, respected federal career scientists 
including Dr. David Evans, former Assistant Administrator for Oceanic 
and Atmospheric Research at NOAA, Dr. Ari Patrinos, Associate Director 
of the Office of Biological and Environmental Research at the 
Department of Energy, and Dr. Dan Albritton, Director of the Aeronomy 
Laboratory of Oceanic and Atmospheric Research at NOAA. Starting with 
these early discussions, the Bush Administration's climate change 
organization has fully involved climate change experts from throughout 
the Federal Government.
    As already noted, subsequent to its initial internal discussions, 
the Administration submitted the draft CCSP Strategic Plan to some of 
the Nation's most qualified scientists at the National Academy of 
Sciences for review. The Academy made numerous recommendations, which 
the CCSP incorporated. The CCSP then resubmitted its plans to the 
Academy for further review, and just recently, the NAS returned a 
highly favorable review. The Administration developed the climate 
change science strategic plan through an open, back-and-forth process.

          The UCS claims that the Administration refused the 
        request of the Natural Resources Conservation Service (NRCS) in 
        USDA to reprint a brochure on carbon sequestration prepared 
        several years ago and claims that this was censorship of 
        government information.

    This accusation is false. The USDA's NRCS decided not to republish 
the brochure for appropriate reasons. The brochure had received 
extensive comments from within the Department that the brochure was 
outdated and did not reflect significant recent decisions by USDA to 
address greenhouse gases. For example, in June 2003, Secretary Veneman 
announced that for the first time, USDA would give consideration to 
greenhouse gas reductions and carbon sequestration in setting 
priorities for conservation programs. In addition, USDA is developing 
new accounting rules and guidelines so that farmers and landowners can 
register greenhouse gas reductions and carbon sequestration activities 
with the Department of Energy. The Department of Energy released its 
accounting guidelines for greenhouse gas reporting in December 2003, 
and it is expected to release technical guidelines in early summer 
2004. USDA is working with DOE to develop the guidelines for 
agriculture. The technical guidelines should include more specific 
information as to how farmers and ranchers could report and register 
greenhouse gas reductions. Once the new guidelines are available, USDA 
will reprint this brochure including information on how farmers can use 
the new guidelines.
    Furthermore, there are still approximately 37,000 existing 
brochures available for distribution. The document is posted on the 
Soil and Water Conservation Society website: http://www.swcs.org/docs/
carbon-brochure.pdf. Links to the document are found on the 
NRCS website: http://www.nrcs.usda.gov/news/releases/2000/000424.html.

The UCS' claims on ``Censoring Information on Air Quality''

          The UCS claims that the Administration was 
        withholding the publication of an EPA report on children's 
        health and the environment in order to avoid the issue of 
        mercury emissions by coal-fired power plants. The UCS also 
        claims that the Administration suppressed and sought to 
        manipulate government information about mercury contained in 
        the EPA report.

    This is not true. The interagency review of the EPA report on 
children's health and the environment occurred independently of the 
Administration's deliberations on mercury emissions from power plants. 
The interagency review process is the standard operating procedure for 
reports that include areas of scientific and policy importance to 
multiple agencies. As such, the report was reviewed by a number of 
scientists and analysts across federal agencies. During this review, 
other agencies expressed concerns about the report. OSTP worked 
collaboratively with EPA staff on addressing interagency comments to 
make certain that the proposed indicators had a robust scientific basis 
and were presented in an understandable manner.
    The report contained a statement that eight percent of women of 
child-bearing age had at least 5.8 ppb of mercury in their blood in 
1999-2000 and therefore children born to these women are at some 
increased risk. This information was available well before the EPA 
report both in raw form through the CDC and in an interagency analysis 
(CDC's Morbidity and Mortality Weekly Review, 2001) that indicated that 
approximately 10 percent of women of child-bearing age had blood 
mercury levels above the EPA reference dose, as opposed to the eight 
percent level noted in EPA's report. The updated analysis in EPA's 
report and later published in the scientific literature (Journal of the 
American Medical Association, 2003) included an additional year of data 
and found the level to be eight percent. These updated risk levels were 
used by the Administration in the preparation of its two regulatory 
proposals to reduce mercury emissions from coal-fired power plants.\2\
---------------------------------------------------------------------------
    \2\ The proposed regulations include a Maximum Achievable Control 
Technology standard which would result in a 29 percent reduction by 
2009, and a two-phase cap and trade program which will result in a 68 
percent reduction when fully implemented.
---------------------------------------------------------------------------
    The final report was released in February 2003, as soon as the 
interagency review process was completed.

          The UCS states that ``the new rules the EPA has 
        finally proposed for regulating power plants' mercury emissions 
        were discovered to have no fewer than 12 paragraphs lifted, 
        sometimes verbatim, from a legal document prepared by industry 
        lawyers.''

    The UCS' implication that industry is writing government 
regulations is wrong. The reference here is to a preamble of a proposed 
EPA rule to control (for the first time) mercury emissions from power 
plants. The text in question is in the preamble, not the proposed rule 
itself. The preamble is intended to engage the public and encourage 
comments, including both assenting and dissenting viewpoints. All 
agencies, including EPA, openly seek public comment during rulemaking 
proceedings in order to obtain useful information and advice that is 
accepted or rejected or used in part.
    Such direct use of submitted memoranda should not have occurred. 
However, the text at issue was taken from memoranda that were publicly 
presented to an advisory group made up of environmental activists, 
State officials, and industry representatives. These documents are 
openly available in the public docket. The UCS' allegations are based 
on text that had nothing to do with the integrity of the science used 
by EPA.\3\
---------------------------------------------------------------------------
    \3\ The background of this rulemaking and the text in question is 
as follows. On January 30, 2004, the EPA published a notice of proposed 
rulemaking to regulate mercury emissions from power plants. The 
language at issue, which appears in two places in the proposal's 
preamble, was derived from two memoranda submitted by a law firm early 
in the rulemaking process (March and September, 2002). In the first 
instance, a section of one memorandum discusses the statutory framework 
of Section 112 of the Clean Air Act. Administration staff largely 
copied this discussion into portions of its own discussion, entitled 
``What is the Statutory Authority for the Proposed Section 112 Rule?'' 
The law firm had used this discussion to argue for a regime of 
``system-wide compliance,'' but EPA rejected that argument and did not 
propose such a regime. In the second instance, another memorandum 
argued that EPA should allow ``sub-categorization'' within existing 
coal-fired units under the Maximum Achievable Control Technology (MACT) 
regime. This discussion did not deal with any scientific issues but 
explained how different types of coal are typically classified. EPA 
largely copied several paragraphs from this document into the 
preamble's discussion of sub-categorization.

          The UCS states that the EPA has suppressed research 
        on air pollution; specifically that the EPA evaluated a 
        proposed measure by Senators Carper, Gregg and Chafee to 
        regulate carbon dioxide in addition to sulfur dioxide, nitrogen 
---------------------------------------------------------------------------
        oxides, and mercury, but withheld most of the results.

    This accusation is false. EPA did, in fact, provide full 
information to the Senators. S. 843 was introduced by Senators Carper, 
Gregg, and Chafee on April 9, 2003. EPA submitted a cost analysis of 
the legislation to the Senators in July 2003, and submitted a cost and 
benefits analysis in October 2003. The Energy Information 
Administration (EIA) has also analyzed and compared the costs of S. 843 
and S. 485 (the Administration's Clear Skies proposal), and provided 
the analysis to Congress in September 2003.
    The leaking of a draft EPA analysis was improper and unfortunate. 
The report underwent a standard interagency pre-release clearance 
process, and an intent to release always existed. Furthermore, these 
types of analyses have long been available and released by the 
Administration once completed. In fact, EPA had also analyzed a very 
similar bill Senator Carper introduced in 2002 and provided it to 
Congress in November 2002.
The UCS' claims on ``Distorting Scientific Knowledge on Reproductive 
        Health Issues''

          The UCS claims that the Administration distorted the 
        U.S. Centers for Disease Control and Prevention's (CDC's) 
        science-based performance measures to test whether abstinence-
        only programs were proving effective, and attempted to obscure 
        the lack of efficacy of such programs.

    This accusation is false. The UCS mischaracterizes the program, its 
performance measures, and the reasons behind changes that were made to 
those performance measures. There were no CDC science-based performance 
measures associated with this program. Currently, the Federal 
Government funds abstinence-only education programs through the Health 
Resources and Services Administration, not CDC. The program was never 
designed as a scientific study, and so even if the original performance 
measures had been kept, little or no scientifically usable data would 
be obtained. However, other independent evaluation efforts are underway 
that are intended to address questions of the effectiveness of 
abstinence only programs.

          The UCS claims that a CDC condom fact sheet posted on 
        its web site was removed and replaced with a document that 
        emphasizes condom failure rates and the effectiveness of 
        abstinence.

    This accusation is a distortion of the facts. The CDC routinely 
takes information off its website and replaces it with more up-to-date 
information. Recently updated topics include anthrax, West Nile Virus, 
and other health issues for which new information had become available. 
The condom fact sheet was removed from the website for scientific 
review and was subsequently updated to reflect the results of a condom 
effectiveness review conducted by the National Institutes of Health, as 
well as new research from other academic institutions. The condom 
information sheet was re-posted with the new information.
    The ``Programs That Work'' website was also removed because the 
programs it listed were limited. CDC is exploring new and appropriate 
means to identify and characterize interventions that have 
scientifically credible evidence of effectiveness. In addition, CDC is 
currently working on a new initiative that is aimed at better 
addressing the needs of schools and communities by providing assistance 
in selecting health education curricula based on the best evidence 
available.

          The UCS alleges that information suggesting a link 
        between abortion and breast cancer was posted on the National 
        Cancer Institute (NCI) website despite substantial scientific 
        study refuting the connection, and only revised after a public 
        outcry.

    This claim distorts the facts. The NCI fact sheet ``Abortion and 
Breast Cancer'' has been revised several times since it was first 
written in 1994. NCI temporarily removed the fact sheet from the 
website when it became clear that there was conflicting information in 
the published literature. In order to clarify the issue, in February 
2003 a workshop of over 100 of the world's leading experts who study 
pregnancy and breast cancer risk was convened. Workshop participants 
reviewed existing population-based, clinical, and animal studies on the 
relationship between pregnancy and breast cancer risk, including 
studies of induced and spontaneous abortions. They concluded that 
having an abortion or miscarriage does not increase a woman's 
subsequent risk of developing breast cancer. A summary of their 
findings, titled Summary Report: Early Reproductive Events and Breast 
Cancer Workshop, can be found at http://cancer.gov/cancerinfo/ere-
workshop-report. A revised fact sheet was posted on the NCI website 
shortly after the workshop reflecting the findings.
The UCS' claims on ``Suppressing Analysis on Airborne Bacteria''

          The UCS claims that a former Agricultural Research 
        Service (ARS) scientist at Ames, Iowa, Dr. James Zahn, was 
        prohibited on no fewer than 11 occasions from publicizing his 
        research on the potential hazards to human health posed by 
        airborne bacteria resulting from farm wastes.

    This accusation is not true. Dr. Zahn did not have any scientific 
data or expertise in the scientific area in question. Dr. Zahn's 
assigned research project, as part of the Swine Odor and Manure 
Management Research Unit, dealt with the chemical constituency of 
volatiles from swine manure and ways to abate odors. In the course of 
this research, Dr. Zahn observed incidentally that when dust was 
collected from a hog feeding operation, some of the ``dust'' emitted 
from these facilities contained traces of antibiotic resistant 
bacteria. The recorded data were severely limited in scope and 
quantity, and did not represent a scientific study of human health 
threats.
    In February 2002, Dr. Zahn was invited to speak at the Adair (Iowa) 
County Board of Health meeting in Greenfield, Iowa. Permission was 
initially granted by ARS management for Dr. Zahn to speak because it 
was thought that he was being invited to speak on his primary area of 
scientific expertise and government work, management of odors from hog 
operations. Permission for Dr. Zahn to speak representing the ARS at 
the meeting was withdrawn when it was learned that Dr. Zahn was 
expected to speak on health risks of hog confinement operations, an 
area in which Dr. Zahn did not have any scientific data or expertise.
    The accusation of ``no fewer than 11 occasions'' of ARS denials to 
Dr. Zahn for him to present or publicize his research is not accurate. 
He was approved to report on his preliminary observations of dust borne 
antibiotic resistant bacteria at the 2001 meeting of the American 
Society of Animal Science and at a 2001 National Pork Board Symposium. 
He also was approved on numerous occasions to present and publish his 
research on volatiles and odors from swine manure. However, on five 
occasions he was not authorized to discuss the public health 
ramifications of his observations on the spread of resistant bacteria, 
because he had no data or expertise with respect to public health. 
Three of these occasions were local Iowa public community meetings; two 
others were professional scientific meetings.

          The UCS also claims that the USDA has issued a 
        directive to staff scientists to seek prior approval before 
        publishing any research or speaking publicly on ``sensitive 
        issues.''

    This is not true. USDA-ARS headquarters has had a long-standing, 
routine practice (at least 20 years) that has spanned several 
Administrations to require review of research reports of high-
visibility topics (called the ``List of Sensitive Issues''). ARS 
headquarters review, when required, do not censor, or otherwise deny 
publication of, the research findings, but may aid in the 
interpretation and communication of the results, including providing 
advance alert to others. The purpose of this review is to keep ARS 
Headquarters officials informed before publication and in an otherwise 
timely way of new developments on cutting-edge research, controversial 
subjects, or other matters of potential special interest to the 
Secretary's Office, Office of Communications, USDA agency heads 
(particularly those other agencies in USDA that depend on ARS for the 
scientific basis for policy development and program operations), 
scientific collaborators, the news media, and/or the general public. 
This practice deals with research reporting only and does not relate to 
the initial research priority setting process or to determining which 
studies will be undertaken. To the contrary, the ``special issues'' are 
mostly high-priority items and receive considerable research attention.
The UCS' claims on ``Misrepresenting Evidence on Iraq's Aluminum 
        Tubes''

          The UCS claims that the Administration was aware of 
        disagreement among experts on the purpose of aluminum tubes 
        that Iraq attempted to acquire and that the Administration 
        knowingly disregarded scientific analysis of intelligence data.

    Director of Central Intelligence George Tenet addressed this issue 
directly in his February 5, 2004, speech at Georgetown University:

         ``Regarding prohibited aluminum tubes--a debate laid out 
        extensively in the [National Intelligence] Estimate, and one 
        that experts still argue over--were they for uranium enrichment 
        or conventional weapons? We have additional data to collect and 
        more sources to question. Moreover, none of the tubes found in 
        Iraq so far match the high-specification tubes Baghdad sought 
        and may never have received the amounts needed. Our aggressive 
        interdiction efforts may have prevented Iraq from receiving all 
        but a few of these prohibited items.

         ``My provisional bottom line today: Saddam did not have a 
        nuclear weapon; he still wanted one; and Iraq intended to 
        reconstitute a nuclear program at some point. But we have not 
        yet found clear evidence that the dual-use items Iraq sought 
        were for nuclear reconstitution. We do not yet know if any 
        reconstitution efforts had begun, but we may have overestimated 
        the progress Saddam was making.''

The UCS' claims on ``Manipulation of Science Regarding the Endangered 
        Species Act''

          The UCS claims that the Administration is attempting 
        to weaken the Endangered Species Act.

    This accusation is false. The current listing situation results 
from Fish and Wildlife Service (FWS) practices in place before the Bush 
Administration took office. The FWS listing budget is currently 
consumed by court-ordered listings and critical habitat designations. 
These court orders result from pre-2001 FWS decisions to list 
endangered species but not to designate associated critical habitat as 
required by the Act as well as to ignore pending petitions to list 
species. This practice resulted in a flood of litigation forcing FWS to 
act on petitions that had been languishing for years as well as to 
designate critical habitat for already listed species. Fulfilling the 
resulting court mandates expends all of FWS's listing budget (the 
Administration has taken steps to redirect additional funds to this 
budget account, and the President's FY05 Budget requests an increase of 
more than 50 percent). With respect to the critical habitat 
designations, officials from both the current and prior administrations 
have said that these lawsuits prevent FWS from taking higher priority 
actions such as listing new species.\4\
---------------------------------------------------------------------------
    \4\ Moreover, without regard to the current court-driven budgetary 
situation, the number of new species listed as endangered during a 
particular time period varies over time for numerous reasons, and as 
such is not an appropriate measure of the success of the Act.
---------------------------------------------------------------------------
    This Administration is committed to working in partnership with 
States, local governments, tribes, landowners, conservation groups, and 
others to conserve species through voluntary agreements and grant 
programs in addition to ESA procedures. For FY 2005, the President's 
proposed budget includes more than $260 million in the Interior 
Department budget alone for cooperative conservation programs for 
endangered species and other wildlife. The President created the new 
Landowner Incentive Program and the Private Stewardship Initiative 
grant programs to help private landowners conserve endangered species 
habitat on their property. In early March 2004, for example, Secretary 
Norton announced $25.8 million in cost-share grants to help private 
landowners conserve and restore the habitat of endangered species and 
other at-risk plants and animals. These grants are going to support 
projects in 40 states and the Virgin Islands.
    Because the large majority of threatened and endangered species 
depend on habitat on private lands, this Administration believes it is 
vitally important that the Federal Government provide incentives for 
landowners to engage in conservation efforts. The incentive programs 
implemented during this Administration have shown returns in the form 
of voluntary contributions of time and effort by landowners. These 
contributions provide far more to species conservation than the 
government could ever compel through regulatory action. This 
Administration is focusing on enhancing and restoring habitats of 
threatened and candidate species populations--thus keeping them off the 
list by preventing these species from becoming threatened in the first 
place.

         ``In 25 years of implementing the ESA, we have found that 
        designation of official critical habitat provides little 
        additional protection to most listed species, while it consumes 
        significant amounts of scarce conservation resources,'' Jamie 
        Rappaport Clark, Director, U.S. Fish and Wildlife Service 
        during the Clinton Administration, before the Senate 
        Environment and Public Works Subcommittee on Fisheries, 
        Wildlife, and Drinking Water. May 27, 1999.

         ``These lawsuits [forcing the Service to designate critical 
        habitat] necessitate the diversion of scare federal resources 
        from imperiled but unlisted species which do not yet benefit 
        from the protections of the ESA.'' Jamie Rappaport Clark, 
        Senate Testimony, May 27, 1999.

         ``Struggling to keep up with these court orders, the Fish and 
        Wildlife Service has diverted its best scientists and much of 
        its budget for the Endangered Species Act away from more 
        important tasks like evaluating candidates for listing and 
        providing other protections for species on the brink of 
        extinction.'' former Interior Secretary Bruce Babbitt, New York 
        Times op-ed, April 15, 2001.

         ``The best alternative is to amend the Endangered Species Act, 
        giving biologists the unequivocal discretion to prepare maps 
        when the scientific surveys are complete. Only then can we make 
        meaningful judgments about what habitat should receive 
        protection.'' Bruce Babbitt, New York Times, April 15, 2001.

          The UCS claims that the FWS inappropriately 
        established a new ``SWAT'' team to swiftly revise an earlier 
        2000 Biological Opinion on the Missouri River rather than allow 
        that opinion to take effect in 2003.

    The UCS distorted the facts. The UCS failed to mention several 
vital facts and mischaracterized subsequent events. First, after its 
issuance, the terms and conditions of the 2000 Biological Opinion were 
in effect already. Pursuant to that Biological Opinion, a spring rise 
in water levels was to occur every three years if reservoir levels were 
sufficiently high. Due to the prevailing and serious drought 
conditions, a 2003 water rise would not have occurred under the 2000 
Biological Opinion.
    Second, the development of an amended Biological Opinion was 
triggered by the Corps noting new information\5\ and submitting new 
proposed updates to its Master Water Control Manual for the Missouri 
River. As such, the subsequent consultation process with FWS was 
mandatory, not discretionary.
---------------------------------------------------------------------------
    \5\ Among this new information was that, since the 2000 Biological 
Opinion, two of the endangered species population levels had improved 
significantly: Piping plover numbers had increase 460 percent within 
the Missouri River basin since 1997, with pair counts now exceeding 
recovery goals; and the least terns' estimated population of 12,000 
exceeded the recovery goal by 5,000 terns, although the goal of 2,100 
terns for the Missouri River itself had not been met.
---------------------------------------------------------------------------
    Third, FWS's swift action derived from court mandates imposed on 
the Corps. Due to various court orders the Corps had an obligation to 
ensure finalization of its Master Manual and compliance with the 
Endangered Species Act by Spring 2004. To meet that requirement, the 
Corp requested consultations with FWS under Section 7 of the ESA in 
Fall 2003 regarding its proposed management of the river system. In 
order to allow the Corps time to implement FWS's recommendations by 
Spring 2004, the FWS had to accelerate the consultations. This resulted 
in the FWS having 45 days, rather than the usual 135 days, to complete 
the 2003 amended Biological Opinion. To meet this accelerated 
timeframe, a team of 15 Fish and Wildlife Service experts (including 
seven from the 2000 team) with a collective 300 years of experience was 
assembled.
    Fourth, the 2003 amended Biological Opinion on the Corps' new 
management proposal determined that jeopardy still existed for one of 
the three species that were in jeopardy under the 2000 Biological 
Opinion (the pallid sturgeon), and included specific biological and 
habitat development targets that must be met to protect all three 
species. The 2003 amended Biological Opinion thus presented a new 
reasonable and prudent alternative that includes a number of steps the 
Corps must take, which not only built on measures recommended in a 
National Academy of Sciences' review of the 2000 Biological Opinion, 
but also included the vast majority of the measures included in the 
2000 Biological Opinion.
    Finally, it is important to note that this team operated 
independently and reached a consensus biological opinion based upon the 
best and latest scientific information available. In fact, in an 
unsolicited and unprecedented action, the two career federal officials 
leading the process noted in their cover memorandum transmitting the 
2003 amended Biological Opinion, that the 2003 amended Biological 
Opinion process followed a mandate to go ``where the science leads 
us.''
    They noted they had not been contacted by their superiors, and that 
they were unhindered in pursuing a project with ``only one focus: the 
pursuit of science and the well-being of the species.'' \6\
---------------------------------------------------------------------------
    \6\ Memorandum to the Assistant Secretary for Fish, Wildlife and 
Parks, from the Directors of the Great Lakes-Big Rivers Region and the 
Southwest Region (December 17, 2003).
---------------------------------------------------------------------------
The UCS' claims on ``Manipulating the Scientific Process on Forest 
        Management''

          The UCS claims that the USDA manipulated the 
        scientific process on forest management, and used a ``Review 
        Team'' made up primarily of non-scientists to ``overrule'' an 
        existing forest management plan.

    This claim is false. This case actually highlights how aggressive 
the Administration has been in using input from the scientific 
community to inform its forest management decisions. The UCS claim 
demonstrates a lack of understanding of the NEPA processes used to 
update the Sierra Nevada Forest Plan Amendment (SNFPA) Record of 
Decision. In fact, the Forest Service received over 200 appeals of the 
SNFPA and had to review and respond to them. To address these appeals, 
the Regional Forester (Region Five--California) established the five-
person Review Team to evaluate any needed changes to the SNFPA Record 
of Decision. One scientist provided scientific support to this team. 
Once the Review Team completed its work, a Draft Supplemental EIS 
(DSEIS) was completed. This was developed using an interdisciplinary 
team of 31 people, which included four individuals with Ph.D.s and nine 
additional individuals with Master's degrees in scientific fields.
    A Science Consistency Review (SCR) was conducted to assess the 
DSEIS from a scientific perspective. The Forest Service uses the SCR 
process infrequently and only when the additional level of thoroughness 
is judged necessary to ensure that decisions are consistent with the 
best available science. Controversy is not a consideration in the SCR 
process. The SCR is accomplished by judging whether scientific 
information of appropriate content, rigor, and applicability has been 
considered, evaluated, and synthesized in the draft documents that 
underlie and implement land management decisions. This SCR included 13 
members, with 11 being scientists, nine external to the Forest Service 
and seven of these external to the government, including those from 
universities, the Nature Conservancy, and an independent firm. The 
results of the SCR were provided to a group of Forest Service 
professionals (including those experienced in NEPA, science, writing, 
and resource management) who prepared the final NEPA documents.
    It would be highly unusual for all SCR comments to be reflected in 
the final NEPA documents, since these are prepared in the face of 
significant scientific uncertainty and a diversity of values. 
Nevertheless, the draft documents, the science consistency review, the 
response to the science consistency review, the responses to public 
comments, and the final SEIS are all available on the web so that 
scientific information used and the process that utilized this 
information is transparent. How uncertainty and risk are handled in the 
decision have both scientific and policy elements. In addition, a paper 
discussing the risk and uncertainty issues around the decision was 
developed by four additional university scientists. These documents are 
all available at http://www.fs.fed.us/r5/snfpa/.
The UCS' claims on ``OMB Rulemaking on `Peer Review' ''

          The UCS claims that OMB has proposed a ``rulemaking'' 
        on peer review that would centralize control of review of 
        scientific information within the Administration, prohibit most 
        scientists who receive funding from government agencies from 
        serving as peer reviewers and ``have dramatic effects'' upon 
        the promulgation of new government regulations, ``even though 
        OMB fails to identify any inherent flaws in the review 
        processes now being used at these agencies.''

    This UCS claim is wrong on many levels. First, OMB did not propose 
a new government-wide rule, but rather proposed a new Bulletin or 
guidance document under the Information Quality Act (IQA) and other 
authorities. To improve its proposed peer review Bulletin, OMB 
established a 90-day public comment period, which ended December 15, 
2003. OMB received 187 public comments, all of which are available on 
OMB's website. OMB also sought broad input on its proposal by 
commissioning an open workshop at the National Academy of Sciences to 
discuss its draft. OMB is now in the process of revising the Bulletin 
based on the comments received. It should be noted that while such 
entities as the National Academy of Sciences, the American Association 
for the Advancement of Science, the Association of American Medical 
Colleges, the Federation of American Scientists, the American Chemistry 
Council, the Center for Regulatory Effectiveness, and the National 
Resources Defense Council all submitted comments, the Union of 
Concerned Scientists did not.
    Second, the proposed Bulletin did not prohibit most scientists who 
receive funding from government agencies from serving as peer 
reviewers, nor would it exclude those who are most qualified. While the 
draft Bulletin cites government research funds as one factor that 
agencies should consider when determining which scientists should be 
selected, the listed factors are those ``relevant to'' the decision, 
not criteria that automatically exclude participation. Moreover, the 
proposed Bulletin noted in a variety of places that concerns also exist 
about potential conflicts of interest for those affiliated with the 
regulated community. OMB specifically asked for comments on how members 
of peer review panels should be selected, and will address these 
comments in crafting the final bulletin.
    Third, OMB explained the reasons for its proposal: OMB was (1) 
responding to a new statutory requirement (the IQA) to improve the 
quality of information produced by agencies; (2) seeking to improve the 
Federal Government's practice of peer review so that it is applied 
consistently across the Executive Branch to ensure the highest quality 
scientific information possible; and (3) seeking greater transparency 
of the peer review process.
    Fourth, the proposed OMB Bulletin's peer review requirements should 
not slow down agency regulatory proceedings. A well-conducted peer 
review process can accelerate the rulemaking process by reducing 
controversy and protecting any resultant rules against legal and 
political attack. When done in an open, transparent manner, independent 
peer review improves both the quality of science disseminated and the 
public's confidence in the integrity of science.
    Finally, the UCS description of the proposed Bulletin concludes 
with a quote from the Pharmaceutical Research Manufacturers of America 
(PhRMA) that implies that PhRMA thinks the Bulletin would contribute 
little value and lead to obstruction and delay. This quote is taken 
completely out of context. The PhRMA letter applauds OMB for its 
proposed Bulletin, and discusses how OMB's proposed procedures are 
already being effectively incorporated into many of FDA's regulatory 
activities. It concludes that the terms of OMB's proposed Bulletin, 
especially its exemption for adjudications, is good policy. The quoted 
sentence is used to articulate why OMB should not change the proposed 
Bulletin's exemption for adjudications.

II.  THE UCS' CLAIM OF ``UNDERMINING THE QUALITY AND INTEGRITY OF THE 
APPOINTMENT PROCESS''

    Suggestions of a political litmus test for membership on technical 
advisory panels are contradicted by numerous cases of Democrats 
appointed to panels at all levels, including Presidentially appointed 
panels such as the President's Information Technology Advisory Council, 
the National Science Board, and the nominating panel for the 
President's Committee on the National Medal of Science.
    It is unfortunate that the Union of Concerned Scientists would 
attack specific individuals who have agreed to serve their country. 
Every individual who serves on one of these committees undergoes 
extensive review, background checks, and is recognized by peers for 
their contributions and expertise. Panels are viewed from a broad 
perspective to ensure diversity; this may include gender, ethnicity, 
professional affiliations, geographical location, and perspectives.
    To put this issue in perspective, note that this Administration has 
over 600 scientific advisory committees. HHS alone has 258 advisory 
committees. The UCS accusations involve instances explained below, 
representing rare events among a large number of panels.
The UCS' claims on ``Industry Influence on Lead Poisoning Prevention 
        Panel''

          The UCS claims that industry influence on the lead 
        poisoning prevention panel led to interference with an action 
        to toughen the lead poisoning standard. The UCS also takes 
        issue with the HHS Office of the Secretary appointing 
        individuals for the Advisory Committee, rather than making the 
        appointments at a lower level.

    This claim distorts deliberations on the complex issue of lead 
poisoning. First, there was no link between appointments and 
consideration of toughening the guidelines. The appointments were made 
in October 2002 and the subcommittee work group was not considering the 
lead poisoning guidelines at that time. In October 2003, a subcommittee 
work group of the Childhood Lead Advisory Committee reported its review 
of scientific evidence to determine whether there was sufficient 
evidence of adverse health effects on children with blood lead levels 
less than 10 micrograms per deciliter of blood.\7\ The work group had 
ongoing discussions with CDC about its work, which indicated that while 
there are adverse health effects in children at blood lead levels less 
than 10 micrograms, the possibility of confounding by other factors 
leaves some uncertainty as to the size of the effect. These discussions 
led to the conclusion that more emphasis needed to be placed on primary 
prevention. This conclusion was reached for a variety of reasons, 
including: (1) there are no clinical interventions (treatments) to 
reduce blood lead levels that are in the range of 1-10 micrograms;\8\ 
(2) it is extremely hard to classify sources of exposure for lead 
poisoning at blood lead levels below 10 micrograms;\9\ (3) error rates 
in lab testing make it extremely difficult to classify a blood lead 
level below 10 micrograms;\10\ and (4) there is no evidence of a 
threshold below which adverse effects are not experienced. Thus, there 
was a renewed emphasis on preventing children's exposure to lead in the 
first place while continuing the critical work of identifying and 
intervening on behalf of children with higher blood lead levels.
---------------------------------------------------------------------------
    \7\ In 1991, the federal standard for lead poisoning was set at 10 
micrograms per deciliter of blood.
    \8\ There are no clinical interventions to reduce blood lead levels 
that are in the range of 1-10 micrograms. No drugs or other methods 
have been identified that either lower the blood lead levels for 
children to the levels in the range under discussion (1-10 micrograms) 
or reduce the risk for adverse developmental effects. Should a child 
have an elevated blood lead level, a lead inspection would be conducted 
to determine the source of lead including looking at paint, soil, and 
house dust. Should these sources result in negative readings, other 
sources would then be reviewed with the ultimate goal of removing as 
much of the source as possible. For a blood lead level of 45 micrograms 
or higher, chelation therapy would be used to reduce, as much as 
possible, the lead level in the blood and tissue. At a level of 15-45 
micrograms, the course of action would be to remove external sources of 
lead such as lead paint. At a level below 15 micrograms, the course of 
action would be to educate parents or caregivers about hazards and how 
to reduce access to hazards. But there are no good methods to intervene 
and bring a blood lead level of, for example, eight micrograms down to 
four micrograms.
    \9\ Sources of exposure for lead poisoning are very difficult to 
determine at a blood lead level below 10 micrograms. The higher the 
blood lead level, the easier it is to find the source or sources during 
a lead inspection. But at blood lead levels below 10 micrograms, the 
source or sources can be virtually impossible to determine because 
multiple sources can contribute and each source is additive.
    \10\ As with all lab tests, there is a certain amount of random 
error that is unavoidable. In blood lead testing, the typical error 
rate is + or - 2 micrograms. At a very high blood lead level, this 
error rate is not of great consequence but at a low blood lead level, 
the error rate is too great to ensure that children are properly 
classified.
---------------------------------------------------------------------------
    For all of these reasons CDC concluded that it did not make sense 
to change the guidelines. CDC advised that studies provide a strong 
rationale to emphasize preventing exposure of children to lead. The two 
essential elements are focusing on systematic reduction of lead paint 
in housing and restricting or eliminating non-essential uses of lead 
paint in toys, eating and drinking utensils, cosmetics, etc. Eleven of 
the twelve Advisory Committee members were receptive to CDC's 
recommended approach.
    Regarding the suggestion that two appointees had ties to the 
industry, every candidate is put through a rigorous ethics process that 
includes a conflicts of interest analysis. All of the appointments on 
the Childhood Lead Advisory Committee were cleared through this 
process.
    Regarding the issue of appointment of advisory committee members, 
the members in question replaced outgoing members who had served 
several terms and others had permissibly served beyond the expiration 
of their present terms. Therefore, it was part of the normal advisory 
committee process to identify new members.
    Under the HHS General Administration Manual, the Secretary of HHS 
is required to approve the appointment of Federal Advisory Committee 
members except those members who are appointed by the President. CDC 
and the Office of the Secretary worked to find a balanced slate of 
individuals to serve on the Childhood Lead Advisory Committee who would 
reflect a diverse set of opinions, including those from industry, and 
produce a comprehensive and thoughtful discussion in service of the 
public's health.
The UCS' claims on ``Political Litmus Tests on Workplace Safety''

          The UCS claims that ``circumstances strongly indicate 
        a politically motivated intervention'' for dismissing three 
        experts on ergonomics from a narrowly focused peer review panel 
        at the National Institute for Occupational Safety and Health 
        (NIOSH), implying that at least two were removed because of 
        their support for a workplace ergonomics standard. Another 
        prospective member of the study section charged publicly that 
        someone from Secretary Thompson's staff, while vetting her 
        nomination, had asked politically motivated questions such as 
        whether she would be an advocate on ergonomic issues.

    The claim of politically motivated intervention is not true. In 
contrast to the NIH, where emphasis panels, peer review groups, and 
study sections do not come under the purview of Secretarial oversight, 
CDC's study sections are appropriately under the review of the Office 
of the Secretary. Agencies typically review many individuals to serve 
on advisory panels and they may be rejected for a variety of reasons. 
In this instance, one of the scientists that the UCS mentions was 
actually selected to be appointed to the committee.
The UCS' claims on ``Non-Scientist in Senior Advisory Role to the 
        President''

          The UCS asserts that Richard M. Russell is not 
        qualified by his experience to serve in a senior scientific 
        capacity as a Deputy Director of OSTP.

    The notion that Richard Russell's policy experience is insufficient 
for him to lead the Technology Policy division at OSTP is one of the 
most offensive statements contained in the UCS document. Mr. Russell's 
policy experience is as strong, if not stronger, than many of his 
predecessors. He has worked in both the U.S. House of Representatives 
and in the United States Senate and for two Committees of the House of 
Representatives. Most recently, Richard Russell served on the House 
Science Committee. He not only was a professional staff member, as the 
report states, but was also Staff Director of the Technology 
Subcommittee and then Deputy Chief of Staff for the full Committee.
    Senior positions within OSTP are defined by the Director, who, in 
this Administration, has significantly reorganized the office to 
strengthen coordination with other relevant policy offices and 
congressional committees. Mr. Russell possesses superior qualifications 
for the functions he performs in this organization.
    The American Association of Engineering Societies (AAES), the 
umbrella organization for Engineering Societies which represents over 
one million engineers, endorsed Mr. Russell's candidacy. In a letter to 
the Chairman and Ranking Member of the Senate Committee on Commerce, 
Science, and Transportation's Subcommittee on Science, Technology, and 
Space the Chairman of AAES wrote: ``Mr. Russell's experience on Capitol 
Hill and his strong understanding of federal science and technology 
policy make him well suited to lead the Technology Division of OSTP.. . 
.We are very pleased with Mr. Russell's nomination, because his 
professional accomplishments indicate that he appreciates the important 
role federal research policy can play in the economic and national 
security of our nation.'' The Senate concurred with AAES' assessment 
and confirmed Mr. Russell by unanimous consent.
The UCS' claims on ``Underqualified Candidates in Health Advisory 
        Roles''

          The UCS claims that the Administration's candidates 
        for health advisory roles ``have so lacked qualifications or 
        held such extreme views that they have caused a public 
        outcry.'' Two cases cited are the appointment of Dr. W. David 
        Hager to the U.S. Food and Drug Administration's (FDA) 
        Reproductive Health Advisory Committee, and the appointment of 
        Dr. Joseph McIlhaney to the Presidential Advisory Council on 
        HIV/AIDS.

    This accusation is offensive and wrong. Both the individuals cited 
by the UCS are in fact well qualified. Their CV's are widely available 
and it is not necessary to repeat them here.
The UCS' claims on Litmus Tests for Scientific Appointees

          The UCS asserts that a political litmus test was the 
        reason why Dr. William Miller was denied an appointment on the 
        National Institute for Drug Abuse (NIDA) advisory panel.

    This claim is false. The HHS Office of the Secretary recommended 
that Dr. Miller be considered for this panel and NIDA did not concur. 
The decision by NIDA/NIH was not based on any conversations with any 
members of the Secretary's Office.

          The UCS document suggests that a nominee to the Army 
        Science Board was rejected because he had contributed to the 
        presidential campaign of Senator John McCain.

    This contention is without support. Nominees for standing 
membership are approved at several levels within the Army and the 
Office of the Secretary of Defense, and some may be turned down during 
this process for various reasons. Some may later be reevaluated and 
included, depending on the current composition of the Board (with a 
goal to achieve a wide variety of expertise and balance between 
experienced Board members and new voices). Mr. Howard, the individual 
identified by the UCS, has expertise relevant to defense issues, and 
his technical advice has been sought on Army Science Board, Air Force 
Science Advisory Board, and Defense Science Board studies as a 
consultant during the current Administration.
The UCS' claims on Dismissal of Nuclear Weapons and Arms Control Panels

          The UCS document suggests that the Nuclear Weapons 
        and Arms Control Panels of the National Nuclear Security 
        Administration (NNSA) were ``summarily abolished.''

    This contention distorts the facts. The NNSA Advisory Committee was 
established in June 2001, not by Congress, but by the Department of 
Energy to advise the NNSA Administrator on a wide range of issues 
affecting the newly established NNSA, including technology, policy, and 
operations, not just science. As is the case with most advisory 
committees, the NNSA committee was established for a period not to 
exceed two years. The charter expired in June of 2003 and was not 
renewed. The committee had fulfilled its mission. The expiration of the 
Advisory Committee's charter does not preclude the NNSA Administrator 
from initiating other advisory groups when warranted. NNSA gets input 
from the U.S. Strategic Command Strategic Advisory Group, the Defense 
Science Board, the Secretary of Energy Advisory Board, and the National 
Academy of Sciences. The NNSA has always had ample independent 
oversight and analysis requested by DOE or Congress. The Advisory 
Committee had no oversight responsibilities.

          The UCS document claims that the arms control panel 
        that advised the State Department on technical matters was 
        dismissed, and that a promised new committee to take its place 
        has not been formed.

    The Arms Control and Nonproliferation Advisory Group had reached 
the end of its two-year charter (as set forth in the Federal Advisory 
Committee Act (5 U.S.C. Appendix 2) ), as is the case with most 
advisory committees. In order to be reconstituted, the charter and 
composition was examined for any required revision (cf. Section 14 of 
FACA).
    The Arms Control and Nonproliferation Advisory Group has been 
reauthorized by Under Secretary of State for Management Grant Green as 
of November 2003. The specific membership is currently under 
consideration.

III.  THE UCS' CLAIMS OF ``AN UNPRECEDENTED PATTERN OF BEHAVIOR''

The UCS' claims on ``Disseminating Research from Federal Agencies''
    Part III closes the UCS ``investigation'' and contains two 
sections--one on ``Disseminating Research from Federal Agencies'' and 
one on ``Irregularities in Appointments to Scientific Advisory 
Panels.'' Here, the UCS does not provide a single instance of an actual 
suppression of agency research or an appointment irregularity 
occurring. Both sections consist entirely of quotations from various 
individuals and one organization.
    Individual opinions are not actual events with facts that can be 
determined. With no context, one must assume these opinions are based 
upon the type of misinformation presented throughout the UCS document.
    The stated opinions do not reflect the views of many outstanding 
scientists who have worked with this Administration. In particular, the 
National Academy of Sciences has been closely involved in various 
aspects of the Bush Administration's science policies. The Academy of 
Sciences has graciously accepted numerous requests to conduct research 
program reviews, and have gained first-hand knowledge of the 
Administration's commitment to independent scientific advice, a 
commitment that extends to all areas of science under federal support. 
The most prominent example is the National Academy's review of the 
Climate Change Science Program's recently released Strategic Plan. If 
there has ever been an area of contention about this Administration's 
commitment to science, climate change science is it. Yet the Academy 
says about the Strategic Plan that:

         ``The Strategic Plan for the U.S. Climate Change Science 
        Program articulates a guiding vision, is appropriately 
        ambitious, and is broad in scope. It encompasses activities 
        related to areas of long-standing importance, together with new 
        or enhanced cross-disciplinary efforts. It appropriately plans 
        for close integration with the complementary Climate Change 
        Technology Program. The CCSP has responded constructively to 
        the National Academies review and other community input in 
        revising the strategic plan. In fact, the approaches taken by 
        the CCSP to receive and respond to comments from a large and 
        broad group of scientists and stakeholders, including a two-
        stage independent review of the plan, set a high standard for 
        government research programs. As a result, the revised 
        strategic plan is much improved over its November 2002 draft, 
        and now includes the elements of a strategic management 
        framework that could permit it to effectively guide research on 
        climate and associated global changes over the next decades.. . 
        .Advancing science on all fronts identified by the program will 
        be of vital importance to the Nation.''
                   Answers to Post-Hearing Questions
Responses by Arden Bement, Jr., Acting Director, National Science 
        Foundation

Questions submitted by Chairman Sherwood Boehlert

NATIONAL ACADEMY OF SCIENCES REPORT ON NSF PRIORITY SETTING FOR MAJOR 
        RESEARCH FACILITIES

Q1.  What actions does the Foundation plan to take in response to the 
recent report from the National Academy of Sciences calling for a more 
open process for selecting and prioritizing major facilities projects 
supported by NSF?

A1. NSF embraces the goals of the National Academies report, which are 
to promote greater transparency of the process by which large facility 
projects are selected, and to apply uniform principles to their 
management and oversight. The Foundation recognizes the importance of 
promoting this transparency by articulating a selection process that is 
clearly defined and easily understood by the research community and the 
Congress. A number of internal discussions within NSF, and thoughtful 
interactions with the NSB, have already taken place as we consider how 
best to achieve these goals. This dialogue will continue at the May and 
August NSB meetings with a goal of implementing recommendations in 
early Fall.

Q2.  Will NSF develop a roadmap for major facilities, as called for in 
the report and similar to the one developed this year by the Department 
of Energy?

A2. I believe we will develop a road map, but it will be a roadmap with 
NSF characteristics and will have features that are somewhat different 
from those of mission-oriented agencies. NSF supports research in 
nearly every field of science and engineering, and that enormously 
diverse community is very likely to change its views regarding what the 
most important facility requirements are likely to be over the next 
decade. While NSF can identify, with reasonable certainty, the 
facilities likely to be required over the next five years or so, it is 
important for NSF to be able to reconsider and re-prioritize what 
facilities will be needed over longer time scales. Preserving NSF's 
flexibility to reconsider this process in light of continually emerging 
opportunities is critical to promoting and maintaining a forefront 
research portfolio.

Q3.  Also, what plans are underway to establish committees of external 
and internal experts to provide annual assessments of facility 
operations?

A3. NSF has employed practices for post-award oversight of large 
facility projects for a number of years that are very much in accord 
with the review process recommended in the National Academies report. 
For example, LIGO (Laser Interferometer Gravitational-Wave 
Observatory), IceCube, and the joint NSF-DOE participation in the CERN 
Large Hadron Collider program have all been handled this way. For some 
other projects that are now underway or are just getting started, this 
approach is a new paradigm. One of the responsibilities of the recently 
appointed Deputy Director for Large Facility Projects will be to make 
sure that these oversight practices are uniformly applied across the 
NSF.

Q4.  Will NSF strengthen the authority of the Deputy Director for Large 
Facility Projects?

A4. The authority of the Deputy Director for Large Facility Projects to 
act flows down through the internal NSF chain of command from the NSF 
Director. During the next few weeks, the Director intends to consider 
further the appropriate role, authority, scope of responsibilities, and 
resources required for that position.

SALARIES AND EXPENSES ACCOUNT

Q5.  Please provide an explanation of how NSF would use the additional 
funds proposed for the Salaries and Expenses account.

A5. The additional $75.3 million for the Salaries and Expenses (S&E) 
Account is associated with NSF's Organizational Excellence (OE) 
Strategic Goal, a goal that became part of the Foundation's five-year 
Strategic Plan in September 2003. OE serves as the cornerstone for NSF 
operations and activities, and is intrinsically linked with NSF's 
ability to efficiently and effectively achieve its mission-oriented 
outcome goals (People, Ideas, and Tools).
    As NSF's top investment priority for FY 2005, the additional 
resources for OE will enable the Foundation to address the staffing, 
human resource, operational and physical and technological 
infrastructure challenges created by the growing volume and increased 
complexity of the workload. In addition, the resources will enable NSF 
to address the President's Management Agenda, focus on management 
challenges and reforms identified by OMB or GAO, address issues 
identified in NSF's annual review of financial and administrative 
systems as required by the Federal Managers' Financial Integrity Act 
and by the NSF Office of Inspector General, and implement 
recommendations stemming from the comprehensive three-year Business 
Analysis.
    The primary areas of focus within the OE request are:

          Technologies and Tools (+$51.80 million): Areas of 
        investment include IT security and protection of information 
        and assets, next generation grants management capabilities and 
        services, new Human Capital and Learning Management systems, 
        and ongoing applications and IT infrastructure maintenance and 
        operations. Collectively, these investments will promote the 
        Foundation's ability to deliver world-class customer services, 
        secure its infrastructure, enhance leadership and innovation in 
        e-Government and complement Human Capital initiatives.

          Human Capital (+$20.94 million): Areas of investment 
        include a workforce planning system, enhancements in recruiting 
        and retention of employees, an improved performance management 
        system, development of competency-based job families, work 
        life/workplace initiatives, and enhanced education and training 
        opportunities through the NSF Academy. Collectively, these 
        investments will enable the Foundation to attract and retain 
        the highest caliber scientists, engineers, and educators to 
        fulfill its mission, and to ensure that its technical and 
        administrative staff remains innovative and entrepreneurial. An 
        additional 25 FTE are also included in this request to respond 
        to the growing number of proposals, additional administrative 
        responsibilities and to enhance award management and oversight.

          Business Processes (+$2.56 million): The area of 
        investment will be the comprehensive multi-year Business 
        Analysis that is crucial to the overall framework for long-term 
        investments in OE. The Analysis will address issues such as 
        alternative, more efficient methods for conducting the proposal 
        review process, developing more formal procedures for managing 
        the technical risk of awards, assessing the contribution of 
        NSF-funded projects to the advancement of science and 
        engineering, and providing a framework for implementing NSF's 
        next generation IT environment. Collectively, the Analysis will 
        provide a roadmap for improvements in NSF's business processes, 
        human capital management, and technology and tools management.

Questions submitted by Representative Bart Gordon

MATH AND SCIENCE PARTNERSHIP

Q1.  The NSF budget request proposes termination of the Math and 
Science Partnership (MSP) program, transfers $80.0 million for MSP 
close-out funding from EHR to R&RA, and cuts the remaining K-12 science 
education programs in EHR by an additional $40.0 million.

     Should these actions be interpreted as a policy decision by NSF to 
de-emphasize, or abandon, K-12 STEM education programs, and will we see 
additional cuts to these programs in future budgets?

A1. The phasing out of the Math and Science Partnership (MSP) program 
at NSF--and the consolidation of initiative efforts at the Department 
of Education--reflects the Administration's desire to consolidate 
resources into a single program for maximum impact. NSF has requested 
$80 million to honor funding commitments for the existing portfolio of 
MSP awards in 2005. Administering the funding for MSP in the 
Integrative Activities portion of the Research and Related Activities 
Account acknowledges the integrative aspects of the program across NSF.
    Neither the phase-out of MSP nor the additional cuts in EHR should 
be interpreted as a policy decision by NSF to de-emphasize or abandon 
K-12 science, technology, engineering and mathematics (STEM) education 
programs, but rather as a set of strategic decisions by NSF to continue 
its impact on K-12 STEM education within current priorities.

Q2.  And if this is not the intention, in light of the evident need to 
improve K-12 STEM education, what is the rationale for these budget 
proposals?

A2. Within EHR, efforts will continue to enhance comprehensive K-12 
teacher education, to develop high-quality instructional materials, to 
prepare a new generation of education leaders capable of addressing 
emerging issues facing STEM education nationally and to facilitate 
linkages between the informal and formal education communities. 
Increasing efforts will be placed on conducting educational research in 
STEM education and aggressively pursuing efforts to effectively 
disseminate that research to practice. Moreover, complementing EHR 
efforts are the activities within disciplinary directorates that 
integrate research and education at the K-12 level, for example, 
through outreach efforts of the Science and Technology Centers and the 
Engineering Education Centers.

BROADENING PARTICIPATION

Q3.  The NSF budget presentation describes the Human Resource 
Development activity at NSF as being focused on increasing 
participation and advancement of under-represented groups and 
institutions in STEM education.

     Since there is wide agreement on the importance of such programs, 
why does the budget request cut them by seven percent overall and 
freeze funding for a particularly effective program, the Louis Stokes 
Alliances for Minority Participation? What is the rationale for these 
funding decisions, particularly with regard to programs that NSF's own 
assessments have found to be effective?

A3. Programs supported by the Human Resource Development (HRD) sub-
activity are focused on increasing participation and advancement of 
under-represented groups and institutions in STEM education. The 
funding requested for HRD is $4.53 million above the Administration's 
FY 2004 Request, although less than the amount eventually appropriated 
by Congress. It will provide for continued coordination with the Louis 
Stokes Alliances for Minority Participation (LSAMP) and the Alliances 
for Graduate Education and the Professoriate. The Education and Human 
Resources Directorate has been working to broaden the impact of the 
LSAMP program (e.g., co-funding of collaborative initiatives between 
Mathematical and Physical Sciences programs and LSAMP and the summer 
internship collaboration between Department of Energy and LSAMP). The 
LSAMP funding level provides for full funding for Cohort I Alliances. 
Additionally, the FY 2005 Budget Request will provide first year 
support for at least four new awardees. Thirteen of the 14 STEM 
doctoral degree granting HBCUs that are eligible for CREST/THRUST 
awards will have been funded by the end of FY 2004. These 13 HBCUs are 
not eligible for additional CREST/THRUST awards in FY 2005, but four 
can compete for supplements from the regular CREST program in FY 2005.

NSF WORKING GROUP ON POSTDOCTORATES

Q4.  A response to a written question that Congresswoman Johnson sent 
to NSF prior to this hearing indicated that one result arising from the 
efforts of the NSF-wide Working Group on Postdoctorates is the policy 
for NSF's postdoctorate programs to include support for fringe 
benefits, especially heath care.

     With regard to postdocs who are supported as research personnel 
under normal research grants, does NSF plan to institute terms and 
conditions in its grants to regulate the treatment of postdocs in a way 
that is consistent with NSF's own postdoc programs?

A4. NSF does not have plans ``to institute terms and conditions'' for 
the support of postdocs on research grants beyond its current policy. 
In particular, although subject to external peer and NSF staff review 
before a grant is awarded, the stipend level and benefits package are 
developed by the submitting institutions according to their policies 
and practices. With input from the community, NSF is continuing a 
review of its policies with respect to financial support of postdocs 
and mechanisms that improve their career development.

CYBERINFRASTRUCTURE

Q5.  The FY 2004 Budget Request included $20.0 million for a new 
Cyberinfrastructure sub-activity in the computer science directorate.

     What has happened to this initiative in the FY 2005 Request?

A5. At the time the FY 2004 Request was being formulated, preliminary 
discussions among the NSF directorates were underway and the NSF 
Advisory Committee on Cyberinfrastructure was still in the process of 
preparing its report. Since that time, the Advisory Committee for 
Cyberinfrastructure completed its report, and the agency has 
consolidated responsibilities for shared cyberinfrastructure within a 
single division, the CISE Division of Shared Cyberinfrastructure. The 
$20 million requested as a sub-activity in FY 2004 will be managed in 
the Division of Shared Cyberinfrastructure; this funding augments $92.6 
million available within that division for shared cyberinfrastructure 
in FY 2004. As indicated in the President's Budget Request, in FY 2005, 
NSF expects to invest nearly $400 million in cyberinfrastructure across 
both shared and domain-specific resources. These investments will be 
made through a wide range of programs and funding modes, providing 
opportunities for individual institutions to participate.

Q6.  What resources are available to individual institutions for 
upgrading cyberinfrastructure, and what is being developed for shared 
cyberinfrastructure?

A6. In FY 2005, NSF will continue to take steps toward deploying an 
enhanced cyberinfrastructure for science and engineering research and 
education. These steps build on the results of FY 2004 competitions, 
and draw upon input from the academic community and NSF's programmatic 
directorates and offices, as well as recommendations from the report of 
the NSF Advisory Committee on Cyberinfrastructure.
    As previously announced, the Partnerships for Advanced 
Computational Infrastructure (PACI) have been extended through the end 
of FY 2004. During this period, both PACI lead sites--the National 
Center for Supercomputing Applications (NCSA) and the San Diego 
Supercomputer Center (SDSC)--will deploy significant technology 
upgrades, almost doubling the high-end computing resources that NSF 
makes available to the Nation's scientists and engineers.
    In FY 2005, NSF plans to support the following cyberinfrastructure 
activities, amongst others:

          Support will be provided for NCSA and SDSC to ensure 
        the continuing provision of high-end supercomputing resources 
        and related services to the national community. In addition, 
        SDSC and NCSA will work in partnership with NSF and the science 
        and engineering community at large to define emerging 
        cyberinfrastructure opportunities to advance all fields. These 
        and other community activities will inform NSF's development of 
        future cyberinfrastructure-enhancing competitions.

          Complementing the cyberinfrastructure resources and 
        services provided by NCSA and SDSC, the Extensible Terascale 
        Facility (ETF)--which is on track to be commissioned October 1, 
        2004--will demonstrate the potential of revolutionary grid 
        computing approaches to advance science and engineering 
        research and education. Additional ETF upgrades are planned for 
        FY 2004, which includes a new capability computing investment 
        for the Pittsburgh Supercomputing Center (PSC). This upgrade 
        represents the final stage of the ETF's construction phase. 
        Support for the management and operations of ETF-enabled 
        cyberinfrastructure will be provided beginning in FY 2005 and 
        extending through FY 2009.

          To ensure that all science and engineering 
        communities are prepared to inform the development of and 
        effectively utilize the broad, evolving cyberinfrastructure, 
        NSF plans to hold an open competition during FY 2004 that will 
        ultimately support a comprehensive set of education, training 
        and outreach awards. This competition will build on the work of 
        the successful PACI Education, Outreach and Training (EOT) and 
        other activities.

          Support for the NSF Middleware Initiative will ensure 
        the availability of the tools needed to build future 
        generations of distributed systems and applications. Middleware 
        manages interactions among distributed resources, providing 
        usability, robustness, security and other features, while 
        hiding complexity of individual computers. Emphasis for 2005 
        includes integration of middleware services with domain 
        sciences, and development and prototyping of new middleware 
        functionality and services.

          International Research Network Connections supports 
        the cooperation and collaboration of U.S. based researchers 
        with researchers in other nations by providing access to data, 
        research outputs, and other networked resources; the program 
        also supports connectivity to instruments that are shared 
        across borders. In FY 2005, the program will emphasize 
        solutions that provide the best economies of scale and provide 
        access to the largest communities of scientists, engineers and 
        educators.

Q7.  Where does high-end computing, particularly provision for leading 
edge supercomputers, fit into your cyberinfrastructure plans?

A7. High-end computing remains a priority for NSF. As indicated above, 
supercomputing is a key component in the cyberinfrastructure and NSF 
will address support for supercomputing through awards to NCSA, SDSC, 
and the Extensible Terascale Facility partners (at Pittsburgh 
Supercomputing Center, NCSA, SDSC, Argonne National Laboratories, the 
California Institute of Technology, Indiana University, Purdue 
University, Oak Ridge National Laboratory, and the University of 
Texas).

Q8.  How have the findings and recommendations of the interagency High-
End Computing Revitalization Task Force (HEC-RTF) influenced your FY 
2005 budget decisions for cyberinfrastructure?

A8. NSF is actively pursuing two of the issues explored by the HEC-RTF. 
To address software needed for high-end computers, NSF and DARPA have 
just released an announcement ``Software and Tools for High-End 
Computing'' (NSF-04-569) on this topic; NSF will invest $6.0 million 
and DARPA will invest $1.0 million. This effort also addresses a second 
issue: collaboration among federal agencies. In addition this joint 
announcement, NSF also is collaborating with DARPA on their High 
Productivity Computing Systems program, in which NSF will assist in 
reviews and co-fund projects.

PLANT GENOME RESEARCH

Q9.  The recently enacted NSF authorization law includes an 
authorization for basic genomic research related to crops grown in the 
developing world.

     Within NSF's proposed plant genome research activities and 
international programs for FY 2005, what resources are being made 
available to implement this new budget authority?

A9. To encourage international collaboration on crop plants important 
to the developing world, the Plant Genome Research Program Announcement 
soliciting proposals for FY 2004 and FY 2005 includes the following 
language:

         ``NSF encourages international research collaborations, 
        particularly with investigators from developing countries, and 
        especially where there is a common research focus or system.''

    In FY 2004, the Plant Genome Research Program released a Dear 
Colleague Letter entitled, ``Developing Country Collaborations in Plant 
Genome Research'' (NSF 04-563) to announce the availability of funding 
to augment existing grants for activities designed to foster research 
collaborations between U.S. scientists and scientists from the 
developing world. The focus of the added support would be on research 
on crops grown in the developing world and/or on traits that are 
important to crops grown in the developing world. The NSF Office of 
International Science and Engineering and the U.S. Agency for 
International Development (USAID) provided substantial input to the 
Dear Colleague Letter. USAID has agreed to provide assistance to 
Principal Investigators in identifying potential scientists and 
institutions in developing countries.
    In addition, the Interagency Working Group on Plant Genomes, an 
NSTC subcommittee involving NSF, USDA, USAID, DOE, OSTP, NASA, and OMB, 
is discussing an interagency joint program to support research 
collaboration in plant genomics/biotechnology between U.S. scientists 
and scientists from the developing world.
    Furthermore, database and genomic tools developed through NSF 
funded research will provide the basis for future international 
cooperation. The development of tools for rice is an excellent example. 
These tools can be used to identify genes governing economically 
important traits such as drought tolerance, flowering time, and disease 
resistance across a range of rice species, including African cultivars, 
which are distinct from those grown in Asia.
    It should be noted that NSF-supported researchers are already 
collaborating with institutions in developing countries, utilizing 
results from previously-funded research. Examples include a 
collaboration between the group studying a model legume (Medicago) and 
a group in India studying chickpea, and the group studying Sorghum 
genomics with groups working on Sorghum in Africa. NSF supported a 
training workshop on maize in Mexico City that was attended by students 
and researchers from Africa who received travel support from USAID.

SALARIES AND EXPENSES ACCOUNT

Q10.  The FY 2005 budget proposal for the NSF Salaries and Expenses 
Account includes a request of $84.0 million for information 
infrastructure acquisitions. NSF has underway a three-year, $12.0 
million review of the agency's business processes and required human 
capital and enabling technologies. One outcome is to be an integrated 
enabling technologies plan.

      Why does this proposed, substantial budget increase for 
information infrastructure for internal NSF operations precede the 
completion of the enabling technologies plan?

A10. The budget increase for information infrastructure for internal 
NSF operations reflects and is consistent with analysis and products 
completed to date as part of the Business Analysis, as well as to 
enhance system security and update an aging infrastructure as part of 
our normal operations. Information Technology Plan and Enterprise 
Architecture work being conducted under the agency-wide Business 
Analysis study is designed to be an iterative process, with periodic 
analytical and planning products produced frequently. Planning and 
analysis products are strategic in nature and are focused on the major 
technology initiatives, architectural components, management principles 
and technical standards needed to better support NSF business 
processes. The baseline Enterprise Architecture and the preliminary 
target Enterprise Architecture, delivered in September 2003, were used 
to formulate and inform the FY 2005 budget request for IT investment in 
next generation grants management and human capital systems, and to 
establish priorities for acquisition of critical supporting 
infrastructure.

Q11.  Why do you believe that the technologies you are seeking to 
acquire will be consistent with the recommendations from the management 
study?

A11. The FY 2005 Request reflects an information technology investment 
roadmap and plan for achieving significant improvements in NSF's 
business processes that are fully aligned with the preliminary target 
Enterprise Architecture. NSF is using this roadmap, plan, and 
preliminary Architecture to tactically plan for, assess, acquire, and 
implement identified high priority technologies. The Business Analysis 
recommendations are largely focused on making infrastructural and 
architectural improvements that will be robust enough to accommodate 
future technology environments regardless of the exact form of the 
final target architecture. For example, a high priority recommendation 
is to transition to an enterprise directory service to provide a 
mechanism for consolidating and integrating information, improving 
security, and increasing inter-operability. NSF's FY 2005 Request 
reflects the priority to acquire and deploy this key architectural 
element, recognizing that deployment of specific technologies and 
capabilities will be an ongoing, iterative process within the overall 
Enterprise Architecture framework. The next iteration of the target 
Enterprise Architecture and the information technology plan are 
scheduled for June and September 2004. NSF will continue to plan for 
and acquire recommended enabling IT infrastructure in alignment with 
the target Architecture and implementation plan. NSF will also maintain 
high quality customer service, assure system performance, and improve 
management and operational efficiency of systems, networks, data center 
and help desks.

POST-AWARD MANAGEMENT

Q12.  The FY 2003 independent auditor's report for NSF found one 
reportable condition on post-award management. The audit recommended 
that NSF fully implement post-award grant monitoring policies and 
procedures specified in the NSF ``Award Monitoring and Business 
Assistance Program Guide.''

      When will this recommendation be implemented?

A12. NSF's implementation of this recommendation began with development 
of a Pilot Program in FY 2002 that featured a risk assessment model and 
a select number of site visits. In FY 2002, nineteen award monitoring 
and business assistance site visits were conducted.
    In FY 2003, from lessons learned, NSF developed a strategic 
program--Award Monitoring and Business Assistance Program (AMBAP)--that 
balances risk mitigation and cost-benefit. This program incorporates 
post-award management monitoring and those complementary end-to-end 
award management activities that support its effective implementation. 
This program includes:

          A dynamic risk assessment framework that integrates 
        institutional and award risks. The data elements that describe 
        the risk factors are incorporated into the database, allowing 
        for electronic analysis.

          A site selection process that uses data from the 
        above as a first level of identification. NSF's comprehensive 
        site selection process supplements the outputs from the 
        implementation of the risk assessment framework, with specific 
        program office referrals and requests; institution-initiated 
        requests; reverse site visits; and audit resolution visits.

          The AMBAP Guide includes: core review areas; 
        preparation protocols; site visit tools; post visit follow-up 
        with NSF program staff and NSF grantees; and reporting and 
        documentation requirements.

    The AMBAP Guide is a living document that NSF continues to refine 
as it gains experience and in which new requirements are incorporated 
as they are deemed appropriate. For example, in FY 2004 NSF is 
conducting test work for erroneous payments on high-risk grants as part 
of NSF's compliance with the Improper Payments Information Act of 2002.

SETTING PRIORITIES FOR LARGE FACILITIES CONSTRUCTION PROJECTS

Q13.  A response to a written question Congresswoman Johnson sent to 
NSF prior to this hearing, regarding the recommendations of the 
National Research Council on setting priorities for NSF's large 
facilities construction account, indicated that NSF has reservations 
about developing a 10-20 year roadmap of prioritized facilities 
construction projects. The main objection seemed to be that a 20-year 
timeframe was too long, but implied 10 years may be possible.

      Is the time period your main objection to this NRC 
recommendation? Do you believe it is feasible to develop, say, a 10-
year roadmap?

A13. To reiterate some of the points made in answer to question number 
one, NSF supports the goals of the National Academies study--enhanced 
transparency of the large facilities selection process, development of 
well understood budgets that are needed to construct and operate these 
facilities, and application of the highest standards of oversight to 
their construction and operation.
    NSF has some concerns regarding the rather detailed recommendations 
for implementation contained within the report. The NSF context for 
implementing these recommendations is not fully reflected within the 
report. As mentioned in answer to the first question, the breadth of 
research supported by NSF makes it difficult to predict the needs of 
and opportunities for such a varied group of disciplines far in 
advance. It is possible to do this with good precision at least five 
years into the future, and maybe even further, because the timescale 
for development of construction proposals by the academic community is 
at least that long in most cases. So the timescale is one of the 
concerns, but there are others.
    Another concern we have with the report concerns the rather 
prescriptive role it defines for the Deputy Director for Large Facility 
Projects. NSF recognizes the need to strengthen its oversight 
capabilities during the construction of large facility projects. To 
address this concern, the agency has created this new position. The 
intention in doing so was to hire a person to be charged with the 
responsibility for coordinating with program officers throughout the 
Foundation to make sure that NSF's policies and guidelines for project 
oversight are uniformly applied, within the existing organizational 
framework. NSF feels that it would not be helpful to establish an 
independent organization to oversee and manage large projects during 
their construction phases.

Q14.  Would NSF be willing to encourage and support efforts by science 
and engineering disciplines that do not now do so to develop 
prioritized lists of facilities construction projects in their fields, 
which NSF could then use to develop a prioritized roadmap across 
fields?

A14. NSF is very much willing to encourage and support efforts of 
various research disciplines to articulate their needs for large 
facilities. The Foundation have long supported these activities in 
communities that are facility intensive, such as astronomy and particle 
physics, through workshops, summer studies, and enabling smaller scale 
research and development grants. More recently, NSF extended this 
support to other areas as opportunities have arisen, such as ecology, 
oceanography, and civil engineering, and plan to continue to look for 
ways to enable disciplines to strategically plan. These inputs are very 
helpful to NSF, since fundamentally the Foundation reacts to the needs 
of the research communities it serves to strategically plan for the 
future. However, many disciplines have not traditionally organized 
themselves in this way, and it is likely that some will continue to 
pursue alternative ways to voice their ideas.

NANOSCALE SCIENCE AND ENGINEERING

Q15.  The Nanoscale Science and Engineering priority area receives an 
increase of 20 percent under the FY 2005 NSF budget proposal. However, 
the breakout of funding by research directorate shows a four percent 
decrease in funding in the Social, Behavioral and Economic Sciences 
Directorate, from the already low level of $1.56 million for FY 2004.

      Could you explain why research related to the societal 
implications of nanotechnology appears to be de-emphasized in this 
budget request?

A15. Research on the societal implications of nanotechnology is an 
important priority for the Social, Behavioral and Economic Sciences 
Directorate (SBE) and the National Science Foundation (NSF). SBE and 
the Foundation anticipate substantial investments in research exploring 
the societal implications of nanotechnology. The $1.5 million mentioned 
in the SBE budget reflects the Directorate's formal commitment to the 
Nanoscale Science and Engineering priority area competitions. This 
amount does not reflect the full amount that the NSF anticipates will 
be spent on research on the societal implications of nanotechnology. In 
particular, it excludes investments that SBE is likely to make through 
its core program competitions and its contributions to the Human and 
Social Dynamics (HSD) priority area, as well as work on the societal 
implications of nanotechnology supported by funds budgeted in other 
Directorates. While NSF expects additional investments, they cannot be 
estimated with any precision.
    The Engineering Directorate has recently stated that they will be 
increasing the Directorate's contribution to research in the societal 
implications of nanotechnology in both FY 2004 and FY 2005. This will 
bring the minimum research funding in this area to $2.5 million in both 
years with the ability to increase this level if the quality and 
quantity of proposals are similar to FY 2003.
    Success of Nanotechnology Ad hoc Proposals. The importance of the 
societal implications of nanotechnology to the research community and 
to NSF is demonstrated in the submission and competitive, peer 
reviewed, awarding of significantly more proposals in FY 2003 than 
originally anticipated. In FY 2003, $1.1 million was budgeted for 
proposals involving the social, ethical, and other societal 
implications of nanotechnology. Based on the quality of proposal 
submissions, NSF funded $3.4 million for proposals in this area. This 
is over three times the anticipated amount and demonstrates the 
commitment of the agency and the research community to this important 
area of social scientific research.
    Increased Interest Within the Research Community. Already in FY 
2004, NSF has seen increased interest in the societal implications of 
nanotechnology outside the formal nanotechnology solicitation. Programs 
in the SBE Directorate have received many proposals to perform research 
in this area and the Human and Social Dynamics priority area, which SBE 
coordinates, is stimulating further interest. Researchers have 
submitted letters of intent to submit proposals in this year's HSD 
priority area competition with topics such as perspectives of 
nanotechnology risk, the implications of nanotechnology on society and 
the economy, and the development of research infrastructure associated 
with nanoscience and nanotechnology. These and many more will be peer 
reviewed and will also likely lead to increased funding of the societal 
implications of nanotechnology beyond the formal SBE commitment to the 
Nanoscale Science and Engineering solicitation.

Question submitted by Representative Lamar S. Smith

SILICON NANOELECTRONICS AND BEYOND

Q1.  In the next 10-15 years the country will reach the physical limits 
of the semiconductor technology we have used for the past 30 years, and 
absent a replacement technology, semiconductor driven productivity 
gains will slow significantly. The NSF has just started a program, 
called Silicon Nanoelectronics and Beyond, so that we can continue 
development of replacement technology.

     Does NSF have any plans to increase university research under this 
program to ensure our ability to remain competitive in the 
semiconductor and nanotechnology markets?

A1. The NSF (Directorates for Engineering; Mathematical and Physical 
Sciences; and Computer and Information Science and Engineering) and the 
Semiconductor Research Corporation (SRC), through a Memorandum of 
Understanding, have developed a partnership in Silicon Nanoelectronics 
and Beyond (SNB) to work together in developing the fundamental 
research base and creation of new knowledge needed to sustain the U.S. 
leadership and competitiveness in the global semiconductor industry. 
The SNB joint activity will seek to provide expanded and possibly 
collaborative support for research needs identified in the 
International Technology Roadmap for Semiconductors (ITRS) and in the 
integration of biological, molecular, and other emerging areas of 
electronics at the nanoscale.
    NSF is providing opportunities for U.S. academic researchers to 
submit proposals in SNB within the NSF-wide Nanoscale Science and 
Engineering (NS&E) competition, which is conducted annually as part of 
NSF's investment in its priority area of Nanoscale Science and 
Engineering. The NS&E competitions provide support for centers, 
interdisciplinary research groups, and exploratory research by 
individual investigators. Individual investigators may also submit 
unsolicited proposals in SNB to NSF core program areas.
    The current FY 2004 Nanoscale Science and Engineering solicitation 
has added specific language identifying opportunities in SNB under the 
research area Nanoscale Devices and System Architecture. Beginning in 
FY 2005, and in subsequent years, the NS&E solicitation will include a 
separate section describing research opportunities in SNB. NSF and SRC 
will jointly define and conduct the SNB portion of the FY 2005 NS&E 
competition, in accord with established NSF procedures. NSF's 
investment in SNB is expected to grow in FY 2005 and FY 2006 as the 
community of SNB researchers becomes energized and the number and 
quality of SNB proposals grow. The magnitude of future investments by 
NSF will depend critically on the budget allocations available to this 
research area.
                   Answers to Post-Hearing Questions
Responses by Charles E. McQueary, Under Secretary for Science and 
        Technology, Department of Homeland Security

Questions submitted by Chairman Sherwood Boehlert

Q1.  For the current fiscal year, please provide a breakdown of how 
funds have been allocated among Department of Energy laboratories, 
universities, and private industry. Also, in the current fiscal year, 
how much funding will be allocated to the Homeland Security Advanced 
Research Projects Agency?

A1. For the current fiscal year, $146.0 million has been allocated to 
the Department of Energy (DOE) DOE National Laboratories and sites, 
$69.6 million has been allocated to the University Programs/Homeland 
Security Fellowships, and $483.8 million to private industry. The 
Homeland Security Advanced Research Projects Agency (HSARPA) has been 
allocated a total of $246.5 million.

Q2.  In the fiscal year 2004 appropriations report for DHS, Congress 
instructed the Department to consolidate all research and development 
funding within the Science and Technology Directorate in the fiscal 
year 2005 budget request. This has not happened--for example, the 
budget request explicitly includes $154 million for research and 
development activities in the Transportation Security Administration 
(TSA).

Q2a.  Please describe the DHS research and development activities, 
including those at TSA, that have not been transferred into the S&T 
Directorate.

Q2b.  What is the schedule for transferring these activities to the S&T 
Directorate?

Q2c.  How is your Directorate overseeing and coordinating these 
programs in the meantime?

A2a,b,c. The Science and Technology (S&T) Directorate will establish 
management relationships regarding research and development (R&D) 
activities in the Department of Homeland Security (DHS) with the 
following:

          Transportation Security Laboratory (Border and 
        Transportation Security Directorate, Transportation Security 
        Administration);

          Customs Applied Technology Division (Border and 
        Transportation Security Directorate, U.S. Customs and Border 
        Protection);

          Customs Laboratory System's Laboratories & Scientific 
        Services Research Facility (Border and Transportation Security 
        Directorate, Bureau of Customs and Border Protection); and

          Immigration and Naturalization Service (INS) Forensic 
        Document Laboratory (Border and Transportation Security 
        Directorate, Bureau of Immigration and Customs Enforcement).

          In addition, S&T will establish management 
        relationships with the U.S. Coast Guard R&D Center and with 
        U.S. Secret Service Laboratory R&D activities that will take 
        into consideration the traditional and protective missions 
        respectively of these entities.

    Details of actions and timelines required to establish new 
management relationships and integrate R&D activities in the Department 
will be finalized by the Secretary.
    We will complete the administrative requirements to establish 
management relationships between R&D activities in other DHS components 
and S&T by September 30, 2004. Our intent is to develop and expand 
collaborative relationships as the new management relationships are 
established. To establish these management relationships, the S&T 
Directorate expects to take the following steps:

          The proposed management relationship between S&T and 
        each R&D activity will be determined;

          Memoranda of Agreement will be promulgated between 
        S&T and each R&D activity; and

          Mutually agreed-to transition plans will be 
        developed.

    S&T staff have collaborated as appropriate with R&D-related 
activities located in DHS elements external to the S&T Directorate. The 
formation of official management relationships between the S&T 
Directorate and each R&D activity in the Department will identify 
responsibilities for coordination and oversight of R&D activities as 
appropriate.

Q3.  The fiscal year 2005 budget request proposes that the DHS Science 
and Technology Directorate's University Programs be decreased from $69 
million in fiscal year 2004 to $30 million in fiscal year 2005. How 
would this cut affect your continuing and future programs, such as the 
university centers of excellence and the fellowships for students in 
homeland security-related fields?

A3. Maintaining a cadre of talented scientists and engineers and 
investing in our future scientific workforce is a top priority of the 
Department. DHS will maintain this core program, but will not be able 
to expand the Scholars/Fellows program to include fellowships for post-
docs and faculty at the reduced funding level. The reduced funding may 
also impact the internship component of the Fellowship program in the 
summer of 2005.
    To date, DHS has established three university-based Homeland 
Security Centers of Excellence (HS Centers), the University of Southern 
California's Homeland Security Center for Risk-Based and Economic 
Analysis of Terrorist Events. Two more HS Centers in the area of 
agricultural security--foreign animal and zoonotic disease defense, and 
post-harvest food protection and defense--were recently chosen at Texas 
A&M University and the University of Minnesota respectively.
    DHS has solicited input from the National Academies of Science to 
determine appropriate topics and prioritized areas for future HS 
Centers. DHS expects to release solicitations and award two additional 
HS Centers in FY 2004 for a total of five HS Centers. The reduced 
funding level for the University Programs will not impact the initial 
three-year funding for each HS Center established.

Q4.  How is your Directorate working to transfer technology to the 
operational portions of the Department? Please provide an example of a 
technology that has been successfully transferred to another unit or to 
industry, or plans to transfer one of your nearly mature technologies.

A4. The S&T Directorate's primary focus is on applied research and 
development, improving technologies, and deploying them to emergency 
responders and end-users as rapidly as possible. Several of the primary 
end-user communities (e.g., Secret Service, Coast Guard, Border and 
Transportation Security, and Emergency Preparedness and Response) are 
represented in the S&T Directorate by Portfolio Managers. These 
Portfolio Managers lead the S&T planning and budgeting effort relating 
to end-user organizations. Additionally, S&T staff works within the 
Information Analysis & Infrastructure Protection Directorate (IAIP) to 
facilitate the development and communication of requirements. In 
addition, by emphasizing a systems engineering approach to technology 
development, end-user needs and life cycle considerations such as 
affordability, manufacturability, inter-operability, ease of use and 
sustainability are embedded at the beginning of the development effort.
    Examples of technologies successfully transferred or demonstrated 
by S&T to operational components or industry include:

          PROTECT: a chemical detection and response capability 
        now deployed in the Washington Metro System. This system is 
        being operated and expanded by the Washington Area Metropolitan 
        Authority.

          LINC: provided the tools and know-how to several U.S. 
        Municipalities to facilitate on-site response and decision-
        making if a nuclear, biological and chemical atmospheric 
        release were to occur and to link those cities with the 
        National Atmospheric Release Advisory Center if a more 
        sophisticated analysis is required.

          Audio matrix switches: installed in strategic radio 
        communication locations in the Washington, D.C., metropolitan 
        area, to improve inter-operability in the Metropolitan Inter-
        operability Radio System. This program demonstrates inter-
        operability in a dense urban area through the use of multi-band 
        audio switches in multiple locations and jurisdictions.

          Dual Zone Maritime Inter-operability Solution: 
        implemented in the New Orleans/Baton Rouge, LA, region, which 
        improves regional inter-operability along the Mississippi River 
        using audio matrix switches to connect radios operating on 
        disparate systems.

          Radio Infrastructure Inter-operability Planning Tool 
        (RIIPT): assesses coverage, technology, and inter-operability 
        across government agencies. It is being used to analyze federal 
        agencies along the United States northern border for the 
        Integrated Border Enforcement Team (IBET) to identify coverage 
        deficiencies and overlaps, and to recommend inter-operability 
        improvements.

          Unmanned Aerial Vehicles (UAVs): demonstrated in an 
        operational environment, as part of the Arizona Border Control 
        Initiative/Border and Transportation Security (BTS) 
        Directorate.

          Threat Vulnerability Mapper (TVM): enables the 
        geospatial depiction of terrorist threats against the 
        nationwide infrastructure vulnerabilities. It has been 
        delivered and successfully integrated within the Information 
        Analysis and Infrastructure Protection (IAIP) Directorate.

          BorderSafe: an information sharing capability that 
        allows state and local law enforcement agencies to share 
        relevant information on investigations and includes specific 
        U.S. Customs and Border Patrol (CBP) data that furthers 
        investigation of potential terrorist activities. BorderSafe 
        currently operates in Arizona and California.

    Examples of technologies that are nearly mature and will soon be 
transferred:

          Micro-Chem Lab: a portable capillary electrophoresis 
        analysis tool to conduct on-site characterizations of 
        biotoxins, bacterial and viral threat agents. The S&T 
        Directorate is now entering into a cooperative R&D agreement 
        with a commercial partner.

          Autonomous Pathogen Detection System (APDS): a field-
        deployable system that performs automated on-board analysis of 
        a dozen or more threat agents on a 24/7 basis and communicates 
        any positive results via wireless communications. System 
        research and development will be completed in 2004. The S&T 
        Directorate is now entering into a cooperative R&D agreement 
        with a commercial partner. The APDS will be demonstrated in the 
        field in partnership with New York City for upcoming special 
        events.

          Counter-MANPADS: The Department of Homeland Security 
        (DHS) initiated an aggressive two-phase System Design and 
        Development (SD&D) program for antimissile devices for 
        commercial aircraft. This program intends to migrate existing 
        the Department of Defense (DOD) missile warning and 
        countermeasure technologies to the commercial airline industry, 
        rather than developing new technologies. This re-engineering 
        project will ensure that the resulting countermeasure systems 
        are consistent with commercial air carrier and airport 
        operations, maintenance, support, and logistics activities. The 
        program seeks to balance cost, schedule, and performance and to 
        clarify the needs and requirements of the aviation community 
        stakeholders. It will provide the data and analysis needed by 
        the Administration and Congress to make an informed decision on 
        deployment and implementation.

Questions submitted by Representative Bart Gordon

Q1.  Biological Counter-Measures--The most significant increase in the 
Directorate's budget is requested for biological countermeasures, 
particularly in the area of detection and assay. What does the 
Directorate expect to accomplish if these increases are approved?

Q1a.  To what extent are the detection networks under development 
capable of identifying the full spectrum of biological threats?

A1a. The currently deployed Phase 1 BioWatch system detects six of the 
top threats--both bacterial and viral. Advanced detection systems, now 
under development, should allow us to cost-effectively expand detection 
capability to more than 20 threat agents (including markers for 
antibiotic resistance and engineered organisms) by FY 2009. A 
reasonable expansion in the suite of threat agents detected is likely 
before that time. The scope of these potential additions will be 
decided on the basis of threat information, integration costs and 
operational considerations.

Q1b.  The efforts to detect and counter other threats (chemical, 
explosive or radiation) do not receive equivalent increases. What 
explains the disparity in how the Directorate is focusing its 
resources?

A1b. Resource allocation in the Directorate is based on a comprehensive 
review of the threat, vulnerabilities to the threat, catastrophic 
magnitude of a potential event, national capacity to respond, and other 
factors. This review is married with current national policy directives 
to provide a balanced investment portfolio to counter the threats of 
Weapons of Mass Destruction (WMD). The biological countermeasures area 
has received increased emphasis based on this approach.
    In addition, the Homeland Security Council (HSC) and National 
Security Council (NSC) recently completed a Biodefense End-to-End 
study. This study resulted in a National Biodefense Strategy, to be 
promulgated in a joint National Security Presidential Directive/
Homeland Security Presidential Directive (NSPD/HSPD) in April 2004. One 
of the major recommendations of this study was the need for an 
integrated biosurveillance system which would integrate information on 
the health of our Nation's population, livestock, and plants with 
environmental monitoring data on our cities, food, and water supplies, 
along with threat and intelligence information. This integrated data 
will provide a continuing situational awareness, early detection of 
potential events, and early characterization of the extent of any 
attack.
    Because of the very high leverage that such an integrated 
biosurveillance system has on the rest of the biodefense system, the 
administration highlighted a coordinated, interagency, biosurveillance 
initiative in its FY 2005 budget submittal. Expanding the current, 
successful, BioWatch system and developing the next generation of 
detection technologies to further increase the capability, coverage, 
and monitoring frequency of a next generation BioWatch system figures 
prominently in this interagency initiative. A similar, joint NSC-HSC, 
``end-to-end'' study is now underway for Chemical Defense and it is 
reasonable to expect that this study will also identify key initiatives 
critical to improving the Nation's chemical defense.

Q2.  University Fellowship Cuts--Of all the areas in the Department's 
R&D budget request, there is one that stands out as a significant 
loser: the University and Fellowship Program. It is reduced from $68.8 
million to $30 million.

Q2a.  Given the Directorate's expressed interest in ``ensur[ing] a 
diverse and highly talented science and technology community to achieve 
the DHS mission and objectives,'' how does reducing funding by more 
than half achieve your purpose?

A2a. Maintaining a cadre of talented scientists and engineers and 
investing in our future scientific workforce is a top priority of the 
Department. At the reduced funding level, DHS will maintain this core 
program, but will not expand the Scholars/Fellows program to include 
fellowships for post-docs and faculty.
    To date, DHS has established three university-based Homeland 
Security Center of Excellence (HS Centers), the University of Southern 
California's Homeland Security Center for Risk-Based and Economic 
Analysis of Terrorist Events. Two more HS Centers in the area of 
agricultural security--foreign animal and zoonotic disease defense, and 
post-harvest food protection and defense--were recently awarded to 
Texas A&M University and the University of Minnesota respectively.
    DHS has solicited input from the National Academies of Science to 
determine appropriate topics and prioritized areas for future HS 
Centers. DHS expects to release solicitations and award two more HS 
Centers in FY 2004.

Q2b.  The Department funded 100 undergraduate scholarships and graduate 
fellowships in FY 2003. A new competition is currently underway. Are 
you confident the Department will be able to fulfill its commitment to 
these students, and will this reduction reduce the number of awards 
available for the 2005 competition?

A2b. Yes, the Department of Homeland Security will maintain the core 
program of Scholars and Fellows.

Q2c.  Is the funding for University Centers of Excellence drawn from 
these funds? If so, how does this affect the Department's current plan 
for establishing and supporting these Centers?

A2c. The funding for the University Centers of Excellence comes from 
the same funds as the Fellows and Scholars program. As previously 
discussed, DHS has awarded three university-based homeland security 
Centers of Excellence. DHS expects to release solicitations and award 
two more HS Centers in FY 2004. The reduced funding level for the 
University Programs will not impact the initial three-year funding for 
each HS Center established.

Q3.  USC Center--Last November, the University of Southern California 
was designated the first Homeland Security Center of Excellence. The 
Center, according to the Department, ``will address both the targets 
and means of terrorism, with emphasis on protecting the Nation's 
critical infrastructure systems, such as electrical power, 
transportation and telecommunications. In addition, the HS Center will 
develop tools for planning responses to emergencies, to minimize the 
threat to human lives and reduce the economic impact in the event of an 
attack.''

Q3a.  What are the products the Department expects to receive from its 
investment in the Center, and what is the anticipated schedule for 
delivery?

A3a. The University of Southern California Homeland Security Center for 
Risk and Economic Analysis of Terrorism Events will serve the national 
interests by providing tools and guidance to the Department of Homeland 
Security for the prioritization of counter-measures to terrorist 
threats, identifying areas where investments are likely to be most 
effective, computing relative risks among potential terrorist events, 
and modeling and estimating the social consequences of terrorism.
    More specifically, the Center and its consortium partners will 
develop modeling capabilities that cut across general threats and 
targets, represented by application areas such as electrical power, 
transportation and telecommunications. Additionally, the Homeland 
Security Center will develop tools for planning responses to 
emergencies to minimize the threat to human lives and reduce the 
economic impact in the event of an attack.
    The HS Center will work closely with the Department of Homeland 
Security to prioritize key research areas, and is also expected to 
provide educational programs related to their grant. The grant allows 
the HS Center to pursue research and development and educational 
programs in accordance with DHS priorities. This will provide the 
Department with peer-reviewed, scientifically-validated assessments and 
models and independent technical expert advice.

Q3b.  How does the S&T Directorate anticipate that these products will 
ultimately be employed to support the Department's mission or to assist 
State and local governments and emergency responders?

A3b. The Department of Homeland Security envisions using the assessment 
products to improve estimates of the risks of various attacks. These 
improved risk estimates will aid decision-makers in prioritizing 
terrorist threats and identifying optimal risk management measures, and 
to develop guidelines for risk management. Models may also have the 
potential to be used in conjunction with global information system 
(GIS) software to evaluate security improvements of critical 
infrastructure and surrounding environments.
    As proposed by the University of Southern California (USC), a GIS 
emergency model would be developed to evaluate a set of plans, for 
example, estimating the delays in receiving medical care, applying 
disaster relief, and speeding response and recovery. Also, USC has 
proposed emergency response modeling that incorporates personnel and 
equipment resource allocations during the response to a catastrophic 
terrorist attack. In addition to homeland security applications related 
to terrorist threats, the assessment products will aid the Department's 
operational end-users in preparedness and response to natural and man-
made accidental disasters.

Q3c.  How will the Center's research program address the priorities 
governing the Department's research and development strategy?

A3c. The priorities governing the Department's research and development 
strategy, with particular emphasis on critical infrastructure 
protection, were set forth in the Broad Agency Announcement (BAA) for 
the Center award. DHS focused the first HS Center on Risk-Based and 
Economic Analysis of Terrorist Events in order to validate models that 
may provide direct input on the risk and economic impacts of terrorism. 
This input will assist the Science and Technology Directorate 
prioritize its research agenda. This topic was also included in the 
National Academies of Sciences report, Making the Nation Safer.

Q3d.  The announcement indicates the Department anticipates a three-
year grant of $12 million for the Center. At the end of that period, 
will the grant be re-competed?

A3d. DHS S&T will determine to re-compete or extend a specific grant 
based on several factors, including but not necessarily limited to: 
review and evaluation of the Center's objectives and outcomes; the 
Department's understanding of current and emerging threats; defined and 
anticipated requirements of operational end-users; interagency 
priorities for workforce development in the sciences and engineering 
fields; achievement of regional diversity necessary to strengthen and 
sustain the homeland security complex and Departmental ties to state 
and local end-users; and priorities and resources within University 
Programs.

Q4.  Role of the DOE Labs--On December 17, 2003, Dr. Maureen McCarthy, 
the Director of the DHS Office of Research and Development, sent a 
memorandum to the DOE National Laboratories of the Department of 
Energy. This memorandum described the anticipated relationship between 
the Department and the various Laboratories.

Q4a.  Please submit a copy of Dr. McCarthy's memorandum for the record.

A4a. The Memorandum for the Record identified in this question is 
attached here. In addition, a second memo on ``Additional Guidance to 
the DOE National Laboratories to Assist their Decision-Making on 
Participation in Department of Homeland Security Science & Technology 
(DHS/S&T) Programs'' follows the Memorandum for the Record.




Summary
    The purpose of this memo is to explain the policy and procedures of 
the Department's Science & Technology Directorate (DHS/S&T) for 
utilizing the capability base of the Department of Energy (DOE). The 
DOE DOE National Laboratories, sites, and technology centers have a 
tremendous breadth of technical expertise and capability in areas 
related to homeland security. The nation has invested in building this 
capability base for over sixty years. The DHS/S&T is committed to 
maximizing the opportunities for all of the DOE assets to play a role 
in supporting the missions of the Department.
    In accordance with the Homeland Security Act of 2002, the S&T 
Directorate may utilize the broad base of capabilities at the 
Department of Energy's DOE National Laboratories and sites to meet 
homeland security mission requirements. The Homeland Security Act of 
2002 requires that DHS/S&T manage both intramural and extramural 
programs to satisfy homeland security mission requirements.
    In carrying out its mission requirements, it has become necessary 
for DHS/S&T to establish a division between intramural and extramural 
programs. This division will guard against organizational conflicts of 
interest and inappropriate use of inside government information in 
responding to competitive solicitations open to the private sector.
    DHS/S&T is therefore implementing separate mechanisms to access the 
capability base at the DOE DOE National Laboratories for extramural and 
intramural programs. Designation of ``intramural'' and ``extramural'' 
laboratories is a practical consequence.
    Based on an assessment of the intramural and extramural mission 
requirements, laboratory self-assessments, institutional core 
competencies, and external technical and user reviews of proposed 
projects, the DOE National Laboratories that are designated to lead the 
intramural programs are Lawrence Livermore, Los Alamos, Oak Ridge, 
Pacific Northwest, and Sandia DOE National Laboratories.
    The laboratories designated to participate in the extramural 
programs are Argonne, Brookhaven, Idaho Environmental and Engineering, 
and the Bechtel-Nevada laboratories. The DOE National Laboratories that 
participate in the extramural programs may also be involved in projects 
and tasks through the intramural programs under appropriate conflict of 
interest safeguards.
    All other DOE DOE National Laboratories, sites, and technology 
centers are also eligible to participate in DHS/S&T extramural 
programs. All DOE DOE National Laboratories are invited to continue 
participation in the University Programs' DHS Scholars/Fellows Program, 
and to contribute content and utilize information-sharing benefits of 
the Office of Research and Development's (ORD) Intranet web site.
    The Office of DOE National Laboratories is responsible for ensuring 
that processes are in place to maximize opportunities for the DOE DOE 
National Laboratories to participate in both intramural and extramural 
programs while avoiding organizational conflicts of interest.

Extramural Programs
    The extramural programs are aligned with the mission requirements 
that are best suited for execution by entities in the private sector. 
The majority of this work will be procured through open competitive 
solicitations managed by the Homeland Security Advanced Research 
Projects Agency (HSARPA) and Systems Engineering & Development (SED). 
The HSARPA conducts extramural programs for DHS/S&T that engage the 
private sector through research, development, test, and evaluation 
(RDT&E) programs to satisfy homeland security mission requirements. The 
SED manages extramural homeland security project offices for 
operational and pilot deployments, technology test beds, and limited-
scale systems acquisition.
    HSARPA and SED are structuring these programs to engage the 
broadest base possible from the private sector to provide the Nation 
with efficient, effective, and innovative solutions to challenging 
homeland security problems now and in the future. They are engaging 
industry, the academic community, and private research institutes 
through contracts, cooperative agreements and grants.
    At present, the nine DOE DOE National Laboratories receiving this 
memo are not eligible to participate in extramural programs that 
involve open, competitive solicitations to the private sector through 
HSARPA and SED, because they have received internal government planning 
information that could provide an unfair competitive advantage. 
Effective January 1st, the DOE National Laboratories with capabilities 
aligned with the mission responsibilities of HSARPA and SED will be 
eligible to participate in the openly competed extramural programs, 
with expected adherence to federal regulations governing such 
competitions.

Intramural Programs
    The intramural programs draw upon the expertise of federal 
laboratories (whether government or contractor operated); these 
programs are managed by ORD. The ORD's intramural RDT&E programs, 
designed to provide the Nation with an enduring homeland security 
capability, are executed at the DOE DOE National Laboratories, DHS 
laboratories, the National Biodefense Analysis and Countermeasures 
Center, and through partnerships with other federal agencies.
    The intramural programs will be focused on mission requirements 
involving:

          specialized/unique federally-owned facilities, assets 
        or materials;

          classified research;

          analytic and technical support to other DHS 
        directorates and federal agencies for threat characterization 
        and vulnerability assessments on new and emerging threats;

          coordination with national security programs by other 
        government agencies;

          a cadre of dedicated scientists and engineers that 
        can provide independent technical assessments and advice to the 
        Federal Government;

          unique or specialized capabilities and technologies 
        that the private sector does not have business incentives to 
        pursue; and/or

          technical support to develop federal regulations, 
        standards, and certifications.

    In addition, the ORD will establish an Office to provide 
Operational Test & Evaluation (OT&E) support to DHS/S&T. The selection 
of laboratories/sites to lead the ORD/OT&E activities is still under 
review, pending further development of plans and requirements.
    Because staff at the intramural laboratories may have access to 
internal government information as part of the nature of the intramural 
programs, the laboratories that play a significant role in the 
intramural programs will be ineligible to participate in DHS/S&T 
extramural programs that involve competitive solicitations open to the 
private sector.

FY04 Funding for Extramural and Intramural Programs
    ORD, HSARPA and SED execute RDT&E programs in accordance with the 
mission requirements defined by the DHS/S&T Office of Programs, Plans 
and Budgets (S&T/PPB). An illustration of DHS/S&T's functional 
organization is attached. In accordance with annual DHS/S&T program 
guidance, while some portfolios will be managed entirely by HSARPA or 
SED, the major portfolios will have both intramural and extramural 
programs that will execute specific missions requirements within an 
agreed upon scope and budget. DHS/S&T portfolio descriptions are also 
attached. The division of intramural and extramural mission 
requirements for ORD, HSARPA and SED is determined by DHS/S&T senior 
leadership.
    In FY04, the majority of the ORD intramural programs are in 
Biological Countermeasures, Radiological/Nuclear Countermeasures, 
Threat & Vulnerability Testing & Assessment, and Standards. The ORD 
will have limited (less than $10M) or no program management 
responsibility for the remaining portfolios.
    The majority of the DHS/S&T programs will be extramural and will be 
executed through open, competitive solicitations to the private sector. 
The most significant HSARPA programs are in Rapid Prototyping, 
Radiological and Nuclear Countermeasures, Chemical Countermeasures, 
Biological Countermeasures, Threat & Vulnerability Testing & 
Assessment, and Cyber Security.
    In addition, HSARPA will have primary responsibility in DHS/S&T for 
executing RDT&E programs for the conventional mission portfolios (BTS, 
USCG, and USSS) and for enhancing the engagement of the private sector 
across all portfolios.
    The SED will have the responsibility for systems integration, 
demonstration test & development, and acquisition for all programs 
within DHS/S&T including, Counter MANPADs, BioWatch, NYNJ Port 
Authority Test Bed, and SAFECOM.
    Special provisions will be made to ensure that ongoing activities 
in the Critical Infrastructure Protection program can continue under 
the existing management structure.

Conclusion
    In closing, I offer my sincere gratitude to you and your staff for 
all your efforts in identifying capabilities, developing technical 
proposals, and defining roles and responsibilities of the DOE National 
Laboratories to support homeland security programs in the Department's 
Science DHS/S&T. The homeland security capabilities at all the 
Department of Energy DOE National Laboratories, technology centers, and 
sites are important and vital resources to the S&T Directorate. It is 
essential that the Nation's best and brightest scientific and 
technological expertise be engaged in the homeland security mission. 
The S&T Directorate is committed to utilizing the extensive 
capabilities of the all of the DOE DOE National Laboratories to protect 
the homeland.
    Dr. Caroline Purdy, Deputy Director, Office of DOE National 
Laboratories, will be contacting the Homeland Security Directors at 
your laboratories to arrange a meeting or conference call within the 
next weeks to discuss issues pertaining to this memo. Dr. Purdy may be 
reached (202) 772-9979 or by e-mail at [email protected].
Attachments:
    DHS S&T Organization by Function
    Abstract Descriptions of DHS S&T Portfolios
    cc:   Donald Joyce, Argonne National Laboratory
         Richard Tighe, Bechtel Nevada Remote Sensing Laboratory
         Paul Moskowitz, Brookhaven National Laboratory
         John Noon, Idaho National Engineering and Environmental 
Laboratory
         Don Prosnitz, Lawrence Livermore National Laboratory
         Wiley Davidson, Los Alamos National Laboratory
         Gordon Michaels, Oak Ridge National Laboratory
         Ned Wogman, Pacific Northwest National Laboratory
         Richard Stullen, Sandia National Laboratory

MEMO:      (Date of transmittal: 3/26/04)

    To:       Laboratory Directors and Homeland Security Coordinators

    From:    Maureen McCarthy

    Subject:   Additional Guidance to the DOE National Laboratories to 
Assist their Decision-Making on Participation in Department of Homeland 
Security Science & Technology (DHS/S&T) Programs

    The Department of Homeland Security, through Section 309 of the 
Homeland Security Act of 2002, is provided access to the DOE National 
Laboratories and sites managed by the Department of Energy to carry out 
the missions of DHS. The DHS Science and Technology Directorate (S&T) 
wishes to make the best use of each of these laboratories and sites in 
consonance with statute, regulation, and policy, and thus it is asking 
laboratories and sites to make a decision regarding their desired mode 
of interaction with the Directorate. That decision carries with it 
several implications, which this memorandum should clarify. S&T is 
requesting that you respond by COB 31 March in writing to U/S McQueary 
with your decision on how you wish to participate in S&T programs. U/S 
McQueary will be scheduling a meeting with you in early April to 
discuss S&T plans and programs involving the DOE National Laboratories. 
Please contact me directly if you need more information or have any 
requests.
Clarification of the Issue for Decision:

          A national laboratory may choose to participate in 
        S&T's internal strategic planning and program development 
        processes or, if otherwise permissible under applicable law, 
        regulation, contract, and DOE policy, to respond to certain 
        types of S&T solicitations open to the private sector.

          The general prohibition against Federal Funded 
        Research & Development Centers (FFRDCs) competing with the 
        private sector contained in the Federal Acquisition Regulation 
        (FAR) 35.017(a)(2) continues to apply. Accordingly, DOE 
        National Laboratories are not permitted to directly respond or 
        participate as a team member in a response to a Request for 
        Proposals (RFP).

          However, the FAR allows FFRDCs to respond to certain 
        kinds of research and development solicitations such as Broad 
        Agency Announcements (BAA) available to the private sector. 
        Accordingly, DOE National Laboratories that are FFRDCs may 
        respond to BAAs and other similar research and development 
        solicitations in accordance with the FAR and Section 4(a and b) 
        of Department of Energy Order 481.1B of September 28, 2001. S&T 
        utilizes such solicitations to execute its programs through the 
        Homeland Security Advanced Research Projects Agency (HSARPA), 
        the Office of Systems Engineering & Development (SED), and the 
        Office of Research & Development's University Programs (ORD/
        University Programs).

          Additionally, consistent with current DOE policy, DOE 
        National Laboratories are not precluded from providing 
        potential RFP respondents with lab capability statements in 
        order to make available, post award, laboratory capabilities 
        and expertise. If it is determined that a critical expertise or 
        capability exists at a laboratory, the S&T may, prior to 
        issuance of a RFP, enter into a directly funded agreement with 
        DOE to make those services available to all respondents as 
        government furnished services. DHS/S&T-procured laboratory 
        expertise or capability will be made available on an equal and 
        non-discriminatory basis to all respondents to the RFP.

          Notwithstanding the above, a national laboratory will 
        be barred from participating in BAAs if it opts to participate 
        in support of S&T's strategic planning and program development 
        processes. This is because as a result of such participation, 
        S&T will give it access to internal DHS strategic planning 
        information. DHS policy is that if any non-DHS entity, 
        including a national laboratory, receives that kind of 
        information, DHS considers that entity to have an 
        ``organizational conflict of interest'' that makes the entity 
        ineligible to participate in any solicitations open to the 
        private sector issued by S&T. This level of exposure to 
        sensitive information would give such an entity a competitive 
        advantage that would make it inappropriate for the entity to 
        participate in any future solicitation open to the private 
        sector for a prescribed period of time.

          A laboratory will remain ineligible to participate in 
        such S&T solicitations for three years after it ceases 
        engagement in the S&T strategic planning and program 
        development process.

Opportunities Open to All Laboratories

          All laboratories are eligible to execute DHS mission-
        directed projects through ORD in accordance with S&T mission 
        requirements and program execution plans. A laboratory's 
        ability to receive direct DHS funding for mission-directed 
        projects is independent of whether or not it participates in 
        S&T strategic planning.

          All laboratories are eligible to execute DHS mission-
        directed projects through SED in accordance with S&T mission 
        requirements and program execution plans. A laboratory's 
        ability to receive DHS direct funding for mission-directed 
        project is independent of whether or not it participates in S&T 
        strategic planning.

          All laboratories are eligible to serve as a technical 
        resource to S&T to provide Government Furnished Information 
        (GFI) and Government Furnished Equipment (GFE) through HSARPA 
        and SED.

          Technical experts from any laboratory may serve as 
        Subject Matter Experts (SMEs) and provide scientific reach-back 
        for DHS for emergency and incident operations, and regional 
        support.

Execution of Work at the DOE National Laboratories:

          Execution of all S&T programs at the DOE National 
        Laboratories will be conducted in accordance with the 
        Memorandum of Agreement Between Department of Energy and 
        Department of Homeland Security (dated 28 Feb 2003) and DOE 
        Notice 481.1A, Reimbursable Work for the Department of Homeland 
        Security (dated 21 April 2003).

Issues to Consider:

        1.  S&T must maintain a homeland security complex that will 
        provide the Nation with an enduring capability to meet homeland 
        security mission requirements now and in the future. The 
        homeland security complex consists of:

                  An interdisciplinary cadre of dedicated 
                experts working on homeland security missions, with 
                appropriate supporting infrastructure

                  Programs scoped and resourced to ensure the 
                Federal Government has the core competencies to counter 
                new and emerging threats

        2.  S&T may make strategic and focused investments at certain 
        government laboratories and sites in order to establish and 
        maintain mission-critical core competencies. Limited resources 
        are currently available to support these efforts. A 
        laboratory's decision to participate in the S&T strategic 
        planning process is independent of S&T's decision to make 
        future strategic investments in that institution.

        3.  The majority of S&T programs that are targeted at 
        developing, testing and transitioning homeland security 
        technologies and capabilities to operational end-users are 
        managed by HSARPA and SED. These include, e.g., the development 
        of technologies for prevention & detection and response & 
        recovery.

        4.  The programs that are potentially the subject of direct 
        funding to the DOE National Laboratories will be primarily 
        focused on: 1) scientific-based threat and vulnerability 
        assessments, and 2) systems architecture design & analysis. At 
        present, S&T is committed to making strategic investments to 
        establish and maintain core competencies in the following 
        program areas: Biological Countermeausures, Radiological/
        Nuclear Countermeasures, Threat & Vulnerability Testing & 
        Assessment, Chemical and High-Explosive Countermeasures. S&T 
        will also support direct funding of projects in these and other 
        portfolio areas.

        5.  S&T will primarily conduct mission-directed applied 
        research. S&T will leverage the basic research investments made 
        by other government agencies. In order to strengthen this link, 
        S&T and DOE Office of Science (DOE/SC) have recently formed a 
        working group to coordinate program activities and to advise 
        DOE/SC on how it can support homeland security by enhancing 
        long-term fundamental science efforts in mission-critical 
        areas.
Q4b.  Would you please describe the types of intramural research 
programs Dr. McCarthy intends to establish at the Department?

A4b. The DHS Science and Technology intramural programs are research, 
development, test & evaluation programs that are managed by the Office 
of Research and Development (ORD) and executed at government 
laboratories (either government or contractor operated) in accordance 
with S&T mission requirements.
    There are five major program areas for intramural programs that are 
expected to be executed through the ORD through FY 2004-2009.

          Biological Countermeasures: provides the science and 
        technology needed to reduce the probability and potential 
        consequences of a biological attack on this nation's civilian 
        population, its infrastructure, or its agricultural system. The 
        DOE National Laboratories will assist in developing and 
        implementing an integrated systems approach with a wide range 
        of activities, including vulnerability and risk analyses to 
        identify the need for vaccines, therapeutics, and diagnostics; 
        development and implementation of early detection and warning 
        systems to characterize an attack and permit early prophylaxis 
        and decontamination activities; and development of a national 
        bioforensics analysis capability.

          Radiological/Nuclear Countermeasures: provides the 
        science and technology needed to reduce both the probability 
        and the potential consequences of a radiological or nuclear 
        attack on the Nation's civilian population or nuclear power 
        facilities. The DOE National Laboratories assist in providing 
        the end-user community with the most appropriate and effective 
        detection and interdiction technologies available to prohibit 
        the importation or transportation and subsequent detonation of 
        a radiological or nuclear device within U.S. borders.

          Threat and Vulnerability, Testing & Assessment: 
        provides the science and technology needed to develop methods 
        and tools to test and assess threats and vulnerabilities to 
        protect critical infrastructure and enhance information 
        exchange.

           Activities are designed to help evaluate extensive amounts 
        of diverse threat information; detect and document terrorist 
        intent; couple threat information with knowledge of complex, 
        interdependent critical infrastructure vulnerabilities; and 
        enable analysts to draw timely insights and distribute warnings 
        from the information.

           The DOE National Laboratories will contribute to the 
        development and operation of a large Threat and Vulnerability 
        Information System (TVIS) that will draw on advances in the 
        information and computer sciences as well as innovative 
        analytic techniques, help produce high-quality net assessments 
        and assessments of weapons of mass destruction, development of 
        advanced computing algorithms in support of improved aerosol 
        dispersion models, blast effects calculations, neutron 
        interrogation models, bioinformatics, and scalable information 
        extraction; and the development of biometrics for precise 
        identification of individuals and instrumentation to aid 
        authorized officials in detecting individuals with potentially 
        hostile intent.

          Chemical and High-Explosive Countermeasures: provides 
        the science and technology needed for reducing the Nation's 
        vulnerability to chemical attacks on its civilian population 
        and infrastructure, and addresses the threat that terrorists 
        will use explosives in attacks on buildings, critical 
        infrastructure, and the civilian population in the United 
        States. The DOE National Laboratories will contribute to 
        efforts to protect facilities from chemical attacks and to 
        control the industrial chemicals that may be used for such 
        attacks; will assist in development and fielding of equipment, 
        technologies and procedures to interdict suicide bombers and 
        car and truck bombs before they can reach their intended 
        targets.

          Standards: as envisioned in the Homeland Security 
        Act, the Standards portfolio seeks to improve the 
        effectiveness, efficiency and inter-operability of the systems 
        and technologies developed by the S&T Directorate. The DOE 
        National Laboratories will contribute to development of 
        technical standards and test and evaluation protocols for 
        decontamination technologies and analysis across the range of 
        weapons of mass destruction.

Q4c.  For FY 2004, the intramural programs receive $120 million and the 
extramural programs are allocated $213 million. Which programs in the 
directorate are contributing funds to these programs?

A4c. The funding division indicated in the question has since been 
refined, based on execution plans recently approved for research, 
development, testing and evaluation programs and their implementation 
through the Homeland Security Advanced Research Projects Agency 
(HSARPA), Office of Research and Development (ORD), and Office of 
Systems Engineering and Development (SED).
    The table presented on the next page provides the funding division 
currently expected for intramural and extramural performance of 
research, development, testing and evaluation. These values may change 
based on execution year program adjustments to optimize meeting S&T 
requirements. The intramural allocation reflects participation of DHS 
and other federal agency laboratory participation in program execution, 
in addition to Department of Energy DOE National Laboratories and 
sites.




Q4d.  What are the requested funds for each program in the FY 2005 
budget?

A4d. The President's budget request for FY 2005 for the DHS Science and 
Technology Directorate's portfolios is given below; numbers are in 
millions of dollars:




    The Science and Technology Directorate has initiated a threat-based 
strategic planning process which will inform allocations of the 
Directorate's FY 2005 funding, taking into account a range of budget 
scenarios in response to passage of the Department's annual 
appropriation.

Q4e.  How will the competition for extramural research programs be 
managed by the Directorate?

A4e. In accordance with the Homeland Security Act, the Homeland 
Security Advanced Research Projects Agency (HSARPA) is responsible for 
administering competitive, merit-reviewed grants, cooperative 
agreements, contracts or other transactions for research or prototypes 
to public or private entities, including businesses, federally funded 
research and development centers (FFRDCs), and universities. HSARPA 
structures and manages its competitions to ensure that DHS requirements 
are met through the active engagement of the private sector, and awards 
contracts for extramural programs and projects based on technical merit 
and feasibility reviews.
    The solicitations released through HSARPA (as well as S&T's Office 
of Systems Engineering and Development) seek to the maximum extent 
possible to capture the best ideas and solutions. To achieve this end, 
Broad Agency Announcements (BAAs) or Research Announcements (RAs) are 
the preferred mechanisms. Under a BAA or RA, teams are not in direct 
competition; each team is judged on the basis of the unique ideas 
proposed to solve the broadly defined technology challenge evaluated 
against the published criteria.
    HSARPA has also instituted a competitive process to award Small 
Business Innovation Research (SBIR) grants.

Q4f.  What is the relationship between these research programs and the 
University Centers of Excellence being established by the Department?

A4f. The Science and Technology Directorate has a coordinated approach 
to generating requirements, which are met through extramural and 
intramural execution of research, development, testing and evaluation 
programs, and also through grants awarded to the university-based 
Homeland Security Centers of Excellence (HS Centers).
    The Centers of Excellence complement other programs within the 
Department and Federal Government that fund project-focused research to 
develop and deploy specific homeland security technologies and 
capabilities. The S&T Directorate strongly encourages HS Centers to 
partner with other colleges and universities, National and DHS 
laboratories, industry, and/or State and local governments. The HS 
Centers will be expected to coordinate efforts with relevant federal, 
State and local agencies and private institutions, to minimize 
duplication in R&D, enhance communications among programs, and leverage 
financial support.
    Moreover, the Centers of Excellence, DHS laboratories, DOE National 
Laboratories, and other federally funded research and development 
centers (FFRDCs) together comprise the homeland security complex. 
Through information-sharing, infrastructure support, and exchange of 
personnel across these institutions, we can achieve and effectively 
steward an integrated network of people, places and programs dedicated 
to homeland security, to build an enduring capability for the Nation.

Q5.  Data vs. Knowledge--Significant efforts are being made to apply 
information technologies to the detection and identification of 
terrorists. There are, however, many examples where the ability to 
collect data overwhelms the ability to extract useful knowledge from 
that data.

Q5a.  What guidelines do we use to determine when technology is an aid, 
and not a hindrance, to security?

A5a. The Science and Technology Directorate believes strongly that our 
research, development, testing and evaluation program must be sensibly 
prioritized. The S&T Directorate uses Integrated Product Teams (IPTs) 
to prioritize its programs. These IPTs, made up of membership from each 
of the four Offices in the Directorate, are integral to the S&T 
planning process. Each IPT covers a focused portfolio or program area 
and works as a team to determine mission space, strategic goals for the 
next five years, and a list of prioritized deliverables. In this 
process, each IPT considers the directives, recommendations and 
suggestions from many sources, including legislation, National 
priorities and operational end-user needs and requirements as well as 
considering the costs of operation and maintenance of a given 
technology.
    In all our technology development areas, including information 
technologies, the S&T Directorate engages operational end-users both in 
the identification of needed capabilities and as a critical source for 
feedback on developed and field tested applications. This input is 
essential to ensure we are developing capabilities and technologies 
that have a positive impact on protecting the Nation's citizens, 
emergency responders and critical infrastructure.

Q5b.  To what extent is the Directorate evaluating proposals for 
technical systems to determine whether they offer real reductions in 
cost and/or risk?

A5b. The Science and Technology Directorate does evaluate proposals for 
technical systems to determine if they offer real reductions in cost 
and/or risk.
    A specific example of this is our work in Critical Infrastructure 
Protection. Decisions affecting our Nation's critical infrastructures 
are too important to be made without performing analyses beforehand 
that carefully weigh the benefits of reducing risks with the cost of 
protective actions. The most effective way to examine these tradeoffs 
is to utilize a decision support system that incorporates the results 
of threat assessments, vulnerability assessments, and analyses that are 
based on comprehensive, advanced modeling and simulation. Such a 
decision support system could be used by government (Federal, State, 
local) and industry decision makers to prioritize protection, 
mitigation, response, and recovery strategies as well as to support 
red-team exercises and provide real-time support during crises and 
emergencies.
    The Critical Infrastructure Protection Decision Support System 
(CIP/DSS) project aims to develop such a decision support system. The 
value of the CIP/DSS is that it will incorporate a wide variety of 
disparate information into a well conceived modeling framework 
supporting decision-making related to critical infrastructure 
protection. Los Alamos, Sandia and Argonne DOE National Laboratories 
are teaming to provide an ``iterative development'' approach where the 
focus in the first year has been on a set of analytical tools that 
provide decision-makers with an initial capability to set priorities 
for reducing infrastructure vulnerabilities. It includes all major 
critical infrastructures (and key assets) and their primary 
interdependencies. The initial proof-of-concept work began in August 
2003 and delivered a prototype model and case studies in February 2004. 
This prototype model included representation of all fourteen critical 
infrastructures and their primary interdependencies.
    Activities in this and subsequent fiscal years will improve the 
integration, resolution, and fidelity of the individual infrastructure 
models, and will greatly improve the interdependencies models. It will 
also incorporate vulnerability and threat data in order to ultimately 
provide a ``risk-based'' prioritization decision support system.

Q5c.  To what extent did the Directorate contribute to the design, 
development and implementation of the ``Total Information Awareness''--
or ``Terrorism Information Awareness''--proposal by the Department of 
Defense, and the second-generation ``Computer Assisted Passenger 
Prescreening System'' by the Transportation Security Administration?

A5c. The Science and Technology Directorate did not contribute to 
either the Total Information Awareness or Computer Assisted Passenger 
Prescreening System program.

Q5d.  The budget briefing for ``Threat and Vulnerability Testing and 
Assessment'' indicates that the Directorate is working to ``develop 
instrumentation to aid in detecting individuals with particularly 
hostile intent.'' Would you explain the type of instrumentation being 
considered and how you anticipate it will be used?

A5d. Efforts in the Determination of Intent program have so far been 
limited to proof-of-concept demonstrations by university research 
groups. Three types of system are being considered or evaluated, 
namely, human kinetics (body movements) or speech characteristics 
suggestive of stress or deception and remote, covert sensing (using 
near-infrared imaging) of brain activity associated with deception. The 
Threat and Vulnerability, Testing and Assessment Portfolio (TVTA) 
portfolio is also intending to fund a series of National Academies of 
Sciences studies on social and behavioral indicators of terrorist 
intent. Finally, funds have been allocated in FY 2004 to the Homeland 
Security Advanced Research Projects Agency (HSARPA) for a comprehensive 
Broad Agency Announcement (BAA) on Scene Understanding, which will 
enable a broad range of research to be funded on human kinetics.

Q6.  HSARPA--The Department was given an entity--HSARPA--that was to do 
for Homeland Security research what DARPA has done for Defense 
research. DARPA is widely seen to be a model of applied research 
innovation--they rotate in top people from industry and academe, they 
pick the most promising approaches to solving a problem and nurture 
them until a wise choice can be made, and they accelerate the movement 
from development to deployment through their funding efforts.

     What progress have you made in setting up HSARPA, and in what ways 
will it conduct business as DARPA does and in what ways do you believe 
it will (should) differ?

A6. The Homeland Security Advanced Research Projects Agency (HSARPA) 
came into existence on March 1, 2003, with other parts of the 
Department of Homeland Security (DHS). Its first employee, the Deputy 
Director, was detailed to HSARPA from the Office of Naval Research on 
May 5, 2003. HSARPA is active and growing.
    Like DARPA, HSARPA has a philosophy of bringing in senior technical 
managers and, after their project's lifespan, rotating them back out to 
the broader technical community. To date, HSARPA has recruited twelve 
technical experts in their respective disciplines, most with extensive 
government program management experience. HSARPA has made good use of 
the tools given by the Congress to hire and retain just such people. It 
has used all five methods of hiring available to it under the law, 
i.e., DHS employee, Inter-governmental Personnel Act, Section 1101 
Experimental Personnel Hiring Authority, other government detailees, 
and contractor. The Intergovernmental Personnel Act authority and the 
Experimental Personnel Management Program (EPMP) in particular are 
excellent recruitment tools.
    Aside from an emphasis on hiring practices, however, the analogy 
between DARPA and HSARPA is at best a weak one. DARPA exists within the 
Department of Defense as a means for performing undirected research and 
development--that is, research and development that is not initiated 
and directed in pursuit of an explicit customer need. Most of the 
research and development activities within the Department of Defense 
but outside of DARPA are in fact directed, and are performed within the 
acquisition chains of the respective military Service, or at places 
like the Missile Defense Agency or the Defense Threat Reduction Agency, 
in pursuit of specific needs.
    In contrast, within the Department of Homeland Security there are 
no ``Service'' research and development entities that span the space of 
activities required by the President's National Strategy for Homeland 
Security or the responsibilities associated with the Homeland Security 
Act. Thus, HSARPA is the primary means for procuring research and 
development from the private sector, including activities that are 
driven by customer requirements. Those needs and requirements are 
generated within portfolios in the Plans, Programs, and Budget (PPB) 
Office of the Directorate, which reports to the Under Secretary.
    The PPB Office manages and executes the Planning, Programming, and 
Budgeting System (PPBS) cycle for the Directorate, and hence represents 
the primary management tool utilized by the Under Secretary in 
developing a strategic plan, establishing priorities, budgeting, and 
monitoring execution as required by Section 302 of the Homeland 
Security Act. The Under Secretary, through the Office of PPB, sets 
short-, mid-, and long-range goals aimed at achieving the needs set out 
by the Administration. These goals include, for example, countering the 
threat of weapons of mass destruction and addressing the needs of 
customers in the operational Directorates in the Department and of 
state and local entities.
    Membership from all of our executing Offices--Office of Research 
and Development (ORD), Homeland Security Advanced Research Projects 
Agency (HSARPA) and the Office of Systems Engineering and Development 
(SED)--participates actively in the PPB process through integrated 
product teams (IPTs). These IPTs are integral to the planning process. 
The IPTs for each portfolio work as a team to determine their mission 
space, their strategic goals for the next five years, and a list of 
prioritized deliverables. The executing Offices then respond to the 
prioritization process with programs that are subsequently executed. 
HSARPA is responsible for the execution of its programs and determines, 
within the overall funding constraints dictated by the Under Secretary, 
the Department, and the Congress, the resources needed to meet the 
milestones and objectives of a particular program as laid out by the 
PPBS.
    HSARPA performs its execution functions by awarding research 
contracts, grants, cooperative agreements, or Other Transactions for 
Research or Prototypes to private entities, businesses, federally 
funded research and development centers, and universities. All 
solicitations to date have been open competitions with winners selected 
on technical merit, contribution to the Department's missions, and best 
value to the government.
    Additionally, unlike DARPA, we have a mixed set of needs that vary 
by region. The military services have a strong understanding of 
equipment inter-operability and its configuration control. In contrast, 
DHS must cope with large differences in scale (from large metropolitan 
cities to rural areas) and a broad variety of communications, 
firefighting, law enforcement, and protective equipment. Our research, 
development, and systems must account for--and match--regional needs. 
Our technology developments must be tailored to existing 
vulnerabilities, local government requirements, methods of operations 
and especially to existing legacy systems.
    It was recognized early that, despite the need for HSARPA to 
execute requirements-driven programs, a true ``DARPA-like'' function 
also needed to be performed. Thus, there is an Emerging Threats budget 
line that is primarily for the use of the Director of HSARPA to develop 
and execute programs that are explicitly not requirements-driven. The 
role of PPB in that area is simply to set overarching policy, to review 
the efforts for technical soundness and relevance to the needs of 
homeland security periodically, and to oversee budget execution. If 
HSARPA were to become truly ``DARPA-like'' in character, then another 
organization would need to be created to execute within the private 
sector the needs-driven R&D of the Department. This function is where 
the large majority of private sector funding would reside (as with 
DoD), and the remaining (non-requirements driven) HSARPA would be quite 
small. The economies of scale associated with combining both directed 
and undirected research and development procurements with the private 
sector are obvious.
    Not all private sector R&D is, however, procured through HSARPA. 
For example, there are programs where the key issue is not technical-
the need to invent some new capability-but rather the need to impose a 
disciplined systems engineering process in order to deliver the 
capability in a timely and efficient manner. Those efforts (e.g., 
counter-MANPADS) reside within the Systems Engineering and Development 
office. In addition, capital investments, such as the planned National 
Biodefense Analysis and Countermeasures Center (NBACC) facility, are 
not executed through HSARPA. Finally, private sector investments made 
through another government agency (e.g. standards work through the 
National Institute of Standards and Technology) may be, but are not 
always, executed most efficiently through HSARPA.

Q7.  Building Decontamination--Please respond to Mr. Lampson's question 
during the hearing concerning EPA's $8.2 million reduction in homeland 
security building decontamination research.

     The following is an excerpt from the hearing transcript [Added by 
DHS Office of Legislative Affairs]:

                 ``Dr. McQueary, in the Environmental Protection Agency 
                budget documents, we find an $8.2 million reduction 
                that represents complete elimination of homeland 
                security building decontamination research. We have a 
                little bit of an interest in that around here because 
                of the anthrax and the ricin that caused building 
                shutdowns recently.

                 Would you explain the logic behind the decision to 
                eliminate this research? And would you agree that the 
                value of a network to detect the presence of hazardous 
                agents is diminished if we haven't determined the most 
                effective ways to recover from the attacks detected by 
                that network?''

A7. There has been much concern in Congress about the Administration's 
proposed complete elimination of homeland security building 
decontamination research at the U.S. Environmental Protection Agency 
(EPA). I want to state very clearly that the Department of Homeland 
Security believes that decontamination research is critically 
important. Without full recovery from any potential terrorist attacks, 
we have not met our full mission, which ranges from Awareness to 
Recovery. We must have active research and development (R&D) to ensure 
full decontamination and full recovery. With respect to the particular 
question of EPA's decontamination R&D budget, I understand that the FY 
2005 budget does not include a request in the area of building 
contamination research because unexpended existing funds from previous 
years will carry over and ensure that this important research is fully 
funded. In fact, the Budget continues to fund decontamination research, 
the program's technical staff will remain intact, and the EPA will 
still be able to achieve its core homeland security responsibilities.
    However, specific requests regarding the EPA's FY 2005 budget 
request and their R&D programs should be referred to EPA. I assure you 
we will work with the EPA to address the critical research needed for 
decontamination.

Questions submitted by Representative Judy Biggert

Q1.  In your letter of March 4, 2004, you stated that the DHS would 
convene an external panel to ``review and offer suggestions'' on the 
policy of dividing the DOE laboratories into intramural and extramural 
groups.

Q1a.  Will the external panel be charged with developing an alternative 
to the previous intramural/extramural designations, or might the panel 
endorse the previous designations made by the DHS?

A1a. The Department of Homeland Security, through Section 309 of the 
Homeland Security Act of 2002, is provided access to the DOE National 
Laboratories and sites managed by the Department of Energy (DOE) to 
carry out the missions of DHS.
    The DHS Science and Technology Directorate, wishing to make the 
best use of each of these laboratories and sites in consonance with 
statute, regulation, and policy, asked laboratories and sites to make a 
decision regarding their desired mode of interaction with the 
Directorate--to participate in S&T's internal strategic planning and 
program development processes or, if otherwise permissible under 
applicable law, regulation, contract, and DOE policy, to respond to 
certain types of S&T solicitations open to the private sector.
    On March 31, 2004, the following DOE National Laboratories and 
sites communicated their decision to Under Secretary McQueary to 
participate in S&T's internal strategic planning and program 
development processes: Argonne National Laboratory, Bechtel Nevada, 
Brookhaven National Laboratory, Idaho National Engineering and 
Environmental Laboratory, Lawrence Livermore National Laboratory, Los 
Alamos National Laboratory, Oak Ridge National Laboratory, Pacific 
Northwest National Laboratory, and the Sandia DOE National 
Laboratories.
    An external review will be conducted to assess the baseline 
capabilities of the DOE National Laboratories and sites to provide the 
Department with an enduring capability to meet long-term mission 
requirements. The results of this review will be utilized by the 
Homeland Security Science and Technology Advisory Committee (HSSTAC) to 
advise the Department on options for establishing a long-term strategic 
relationship with the DOE National Laboratories and sites.

Q1b.  If the external panel recommends an alternative to the 
intramural/extramural designations previously made by the DHS, will the 
DHS adopt the panel's recommendations?

A1b. As previously discussed, the following DOE National Laboratories 
and sites communicated their decision to Under Secretary McQueary to 
participate in S&T's internal strategic planning and program 
development processes: Argonne National Laboratory, Bechtel Nevada, 
Brookhaven National Laboratory, Idaho National Engineering and 
Environmental Laboratory, Lawrence Livermore National Laboratory, Los 
Alamos National Laboratory, Oak Ridge National Laboratory, Pacific 
Northwest National Laboratory, and the Sandia National Laboratories. 
The designation of intramural/extramural is therefore no longer 
necessary for the nine laboratories and sites under consideration.
    DHS will consider all recommendations and advice provided by 
external reviews. The results of the review will also be utilized by 
the Homeland Security Science and Technology Advisory Committee to 
advise the Department on options for establishing a long-term strategic 
relationship with the DOE National Laboratories.

Q1c.  If the external panel is not charged with developing an 
alternative to the previous intramural/extramural designations, and/or 
its recommendations are not binding on DHS, please explain the value in 
convening an external review panel.

A1c. As mentioned above, the designation of intramural/extramural is 
therefore no longer necessary for the nine laboratories and sites under 
consideration. The Department of Homeland Security will consider all 
recommendations and advice provided by external reviews. The results of 
the review will also be utilized by the Homeland Security Science and 
Technology Advisory Committee to advise the Department on options for 
establishing a long-term strategic relationship with the DOE National 
Laboratories.

Q2.  If the external review panel endorses the previous designations of 
the DOE laboratories into intramural and extramural groups, is DHS 
still committed to allowing each laboratory to determine which group it 
is in?

A2. The DHS Science and Technology Directorate, wishing to make the 
best use of DOE National Laboratories and sites in consonance with 
statute, regulation, and policy, asked laboratories and sites to make a 
decision regarding their desired mode of interaction with the 
Directorate--to participate in S&T's internal strategic planning and 
program development processes or, if otherwise permissible under 
applicable law, regulation, contract, and DOE policy, to respond to 
certain types of S&T solicitations open to the private sector.
    On March 31, 2004, the following DOE National Laboratories and 
sites communicated their decision to Under Secretary McQueary to 
participate in S&T's internal strategic planning and program 
development processes: Argonne National Laboratory, Bechtel Nevada, 
Brookhaven National Laboratory, Idaho National Engineering and 
Environmental Laboratory, Lawrence Livermore National Laboratory, Los 
Alamos National Laboratory, Oak Ridge National Laboratory, Pacific 
Northwest National Laboratory, and the Sandia DOE National 
Laboratories. The designation of intramural/extramural is therefore no 
longer necessary for the nine laboratories and sites under 
consideration.

Q3.  What particular steps will the DHS take to ensure that the 
appropriate Members and committees of Congress are informed of the 
activities and progress of the external review panel?

A3. The Science and Technology Directorate will remain available to 
brief appropriate Members and committees of Congress on the results of 
the external review and the findings of the Homeland Security Science 
and Technology Advisory Committee, which will be charged with advising 
the Department on options for establishing a long-term strategic 
relationship with the DOE National Laboratories and sites.

Q4.  You testified before the Science Committee on February 11, 2004, 
that you ``would be happy to share with [the Committee] what the 
criteria had been'' in designating the DOE National Laboratories as 
intramural or extramural. But during a meeting with staff on February 
24, 2004, Assistant Secretary Parney Albright said that DHS did not 
apply written criteria and did not assign numerical scores to the 
laboratories in its designations of the laboratories as intramural or 
extramural. Please explain the contradiction and provide the promised 
criteria.

A4. During the Fall of 2003, the S&T Directorate further defined its 
programs, stood up the Homeland Security Advanced Research Projects 
Agency (HSARPA) and Systems Engineering and Development (SED), 
established the roles and responsibilities for all of the offices 
within the S&T Directorate, and further refined what program areas were 
the unique (or majority) responsibility of the Federal Government to 
execute. Accordingly, the S&T Directorate developed the following 
criteria to further determine which laboratories are best suited to 
participate in activities involving strategic planning, program 
development, and stewardship planning:

        1.  Institutional culture and infrastructure dedicated to 
        national security, which includes the ability to conduct 
        classified programs and manage field intelligence elements;

        2.  Systems engineering capability and culture for 
        transitioning research and development programs into fielded 
        operational capability through partnerships with end-users;

        3.  Significant technical breadth and depth in the assigned 
        mission area(s), including unique expertise, capabilities and 
        assets; and

        4.  Ability to leverage other multidisciplinary programs to 
        address mission requirements.

    On March 31, 2004, the following DOE National Laboratories and 
sites communicated their decision to Under Secretary McQueary to 
participate in S&T's internal strategic planning and program 
development processes: Argonne National Laboratory, Bechtel Nevada, 
Brookhaven National Laboratory, Idaho National Engineering and 
Environmental Laboratory, Lawrence Livermore National Laboratory, Los 
Alamos National Laboratory, Oak Ridge National Laboratory, Pacific 
Northwest National Laboratory, and the Sandia DOE National 
Laboratories. The designation of intramural/extramural is therefore no 
longer necessary for these entities.

Questions submitted by Representative Lynn Woolsey

Q1.  Much of our attention is captured by the type of attacks we have 
seen in the Capitol complex in the last three years where there is a 
targeted release of a deadly substance (anthrax and ricin). These 
attacks are horrific and those exposed may become ill or even die, but 
this type of agent will not produce widespread effects to others in the 
community. I am worried about a different kind of attack wherein a 
virus or bacteria is modified and released into major population 
centers with the intent of seeing the disease spread to thousands or 
even millions of people.

     What work is the DHS doing to develop the tools necessary to 
detect such an attack, diagnose the agent, and to react swiftly with 
effective and appropriate treatment?

A1. The Department of Homeland Security, through its National 
Biological Defense and Analysis Center (NBACC), has a major effort on 
providing the scientific data to understand and prioritize biological 
threats--both current and emerging. One key element of this, done in 
collaboration with the National Institutes of Health (NIH), is to 
identify what are known as virulence pathways--the mechanisms that an 
organism uses to invade and attack its host. Even if an organism has 
been engineered, it must retain these virulence pathways to efficiently 
infect its host. Thus, an improved understanding of these pathways will 
lead to the development of medical countermeasures targeted against 
them and to a more robust defense.
    A second key element, being executed as part of a coordinated 
interagency BioSurveillance Initiative, is to conduct continuous 
monitoring of the health of our Nation's population, livestock and 
plants and to combine this with environmental monitoring data on our 
cities, food, and water supplies. This continuous situational awareness 
is geared at giving the Nation the earliest possible indicator of a 
biological event--whether from traditional agents or from a new, and as 
yet unknown, agent.
    A third element is the development of advanced detection systems 
and the associated bioassays. Bioassays allow the detector to 
``recognize'' an organism as a threat. Current bioassays are largely 
targeted at unique features (genetic or protein) that distinguish the 
threat organism from look alike organisms and from normal 
``environmental'' backgrounds. Several paths are being pursued to 
increase the capability of bioassays against engineered threats, 
including:

          Searching for ``markers'' of bio-engineering;

          Linking the unique signatures to known genetic and 
        protein features that are critical to virulence; and

          By broad classification techniques, be able to 
        determine that a new organism has features similar to already-
        characterized organisms.

Q2.  The budget submission from DHS specifically mentions the effort to 
increase sampling coverage and frequency in urban areas--this is part 
of the $407 million for biological countermeasures. What is the range 
of biological threats this effort will try to detect? What technical 
hurdles stand between the Department and its goals? Again, in light of 
the kind of threat I mention above of a viral or bacterial agent, is 
the Department looking at establishing a sampling and testing system 
for public healthcare workers or other emergency responders who would 
be among the first to see the effects of a widespread biological 
attack?

A2. The Science and Technology Directorate remains committed to 
increasing sampling coverage and frequency in urban areas. The FY 2005 
budget request includes $65 million for these activities and for 
developing next generation technologies.
    More than half of these funds, $34 million, will be used to 
increase the number of collectors in the Nation's highest-threat 
cities. Another $17 million will be used to accelerate the research and 
development of the next generation of detection technology. The new 
detectors will be fully autonomous and capable of conducting both the 
sampling and collection in the field. This will significantly reduce 
the cost of the current system, which is dominated (?70%) by the labor 
costs associated with retrieving and analyzing samples. Furthermore, 
this technology will allow simultaneous detection of more than 20 
threat agents, including some markers of genetic engineering.
    The biggest technical hurdles are:

          Achieving a low false alarm rate of less than one in 
        100 million;

          Realizing autonomous operation capable of running 24/
        7/365 with only periodic routine maintenance;

          Incorporating biological assays that are robust 
        against engineered organisms; and

          Ensuring low acquisition and sustainment costs on the 
        order of $25,000 per copy to acquire and $10,000 per year to 
        operate.

    In deploying systems like BioWatch, the Science and Technology 
Directorate works closely with the Centers for Disease Control and 
Prevention (CDC) and with the local public health and emergency 
management offices where BioWatch is deployed. The local public health 
authorities establish the sampling and testing protocols for their 
healthcare workers.

Q3.  Currently, I have been told that it takes an average of three 
years to develop a vaccine. Is anyone at DHS working on speeding up the 
time to develop a vaccine to something like, say three months or even 
three weeks? If you are not working on that, who in the government is 
working on the problem?

A3. The Department of Health and Human Services (DHHS) has the 
responsibility to develop medical countermeasures for the human 
population; however, the Department of Homeland Security advises on the 
development of medical countermeasures based on its threat information.

                   Answers to Post-Hearing Questions
Responses by Phillip J. Bond, Under Secretary of Commerce for 
        Technology, Department of Commerce

Questions submitted by Representative Bart Gordon

Q1.  TA--Your testimony did not address any activities of the 
Technology Administration. Provide the Committee with five outcome-
oriented accomplishments of the Technology Administration during the 
past year.

A1. The Technology Administration (TA) was established to carry out the 
mission mandated by the Stevenson-Wydler Technology Innovation Act of 
1980. That Act calls for conducting technology policy analysis to 
improve U.S. productivity, technology, and innovation. The Act lists 
areas for that analysis, including: the relationship between technology 
development and U.S. economic performance; the influence of economic 
and labor conditions, industrial structure and management, and 
government policies on U.S. industry; technological needs, problems, 
and opportunities that, if addressed, could make a significant 
contribution to the U.S. economy. It also calls for supporting policy 
experiments, encouraging collaborative research, stimulating interest 
in high technology careers, encouraging technology skills in the United 
States, and considering government measures with the potential to 
improve U.S. technological innovation. In addition, the NIST 
Authorization Act of 1988 (Public Law 100-519) mandated that the 
National Institute of Standards and Technology, the Office of 
Technology Policy, and the National Technical Information Service all 
be a part of what comprises the Technology Administration. The 
following are some of the recent activities that contribute to TA's 
mission.

Advanced Technologies for Education and Training
    More than 40 representatives of industry, academia, teachers, and 
public interest groups formally urged TA to lead an effort to foster 
next generation learning technologies. These technologies would enable: 
visualization, modeling, and simulation; virtual worlds; intelligent 
tutors and assessment tools; large scale digital libraries and on-line 
museums; distributed learning and collaboration; and new learning 
management tools. Studies suggest that these technologies, coupled with 
new cognitive science, could enable dramatic improvements in learning 
performance, speed to mastery, and higher levels of achievement, at 
lower cost. This could have profound effects on U.S. competitiveness 
and economic growth, and provide an important new advantage for U.S. 
workers in their competition for jobs against knowledge workers in 
other countries who are willing to work for less.
    TA's leadership role was sought because many of the challenges 
related to developing and deploying these technologies are innovation 
challenges. TA has primary responsibility in this area due to its 
mission and expertise in technological innovation, as established by 
the Stevenson-Wydler Act.
    In response to these calls for leadership, TA developed and 
established the White House National Science and Technology Council 
Working Group on Advanced Technologies for Education and Training, co-
chaired by the Under Secretary for Technology. The Working Group has 17 
federal departments and agencies as members, and has developed a two-
pronged agenda. First, the working group will inventory and examine 
federal investments focused on the development of advanced technologies 
for learning. Second, under TA leadership, the working group developed 
an action-oriented innovation agenda focusing on: private sector 
investment and market development; organizational and systems change in 
education and training institutions; preparing people for new roles; 
building bridges for market responsiveness and technology transfer; and 
other factors that affect learning technology innovation. Since 
establishing the working group in October 2003, Under Secretary Bond 
has convened four townhall meetings with the education community and 
technology providers to gain a better understanding of the challenges 
and to solicit advice.
    Establishment of the working group was praised in press releases 
from: the Software and Information Industry Association, Federation of 
American Scientists, National Association of State Universities and 
Land Grant Colleges in partnership with the Business-Higher Education 
Forum, Microsoft, and the Alliance for Science and Technology Research 
in America.

Biotechnology
    US/OTP developed, fielded, and analyzed the first federal survey of 
the use of biotechnology in U.S. industry. This was a ground-breaking 
collaborative, interagency effort because, prior to development of this 
survey, no comprehensive official United States Government (USG) 
statistics existed about the use and development biotechnology and its 
contributions to the U.S. economy.
    The goals of the collaborative survey project were to:

          Develop estimates of the economic and industrial 
        impact of biotechnology on U.S. industries and the national 
        economy, as well as information about firms' economic 
        performance, growth, trade, and markets; research and 
        development; employment; interactions with the Federal 
        Government; defense orientation; and perceived barriers to 
        innovation and competitiveness.

          Test survey definitions, questions and process in 
        order to provide information to federal statistical agencies 
        (NSF and Census) as they develop collection methods for 
        statistical measures for biotechnology products and processes.

          Demonstrate the United States Government's 
        responsiveness to industry needs.

    Surveys were mailed to 3,189 U.S. companies and responses were 
obtained from 70 percent of firms; 1,031 firms confirmed that they were 
performing biotechnology activities relevant to the assessment and 
provided sufficient data for analysis.
    US/OTP's statistical analysis of the data (published in November 
2003) has been used to inform policy-makers interested in 
capitalization of U.S. biotech firms (such as questions related to SBA 
guidelines for SBIR grants) and for workforce and biodefense-related 
issues. US/OTP currently is engaged in discussions with federal 
statistical agencies to encourage a second (revised) survey in order to 
begin to develop a USG longitudinal data series on this important new 
technology area.

Science and Engineering Workforce Trends
    To support policy development directed at ensuring the Nation has 
an adequate supply of scientists and engineers to meet current and 
future demand, TA has conducted extensive quantitative and qualitative 
analysis of U.S. science and engineering workforce trends, including: 
recent occupational growth; salary growth; unemployment rates; 
educational preparation, including degrees earned by specialty, race, 
and gender; and projected job growth and job openings by occupation. TA 
staff has disseminated the results of this analysis through briefings 
to a wide range of groups:

          President's Council of Advisors on Science and 
        Technology staff

          NSF STEM Pathways Conference

          Computing Research Association's Computing Leadership 
        Summit and Board of Directors

          American Society for Engineer Education's Engineering 
        Dean's Council

          Council of Scientific Society Presidents

          Staff of the U.S. Senate Committee on Commerce, 
        Science and Transportation

Education and Training for Information Technology Workers
    After extensive research and outreach to employers, labor, and the 
education and training community (involving outreach to more than 450 
participants), TA published the ground-breaking Report to Congress on 
Education and Training for the Information Technology Workforce. This 
report includes extensive findings on the education, training, skills, 
and experience employers seek in IT workers. In addition, for the first 
time, the report lays out the complex education and training landscape 
that IT workers must navigate to acquire education and skills. As the 
IT labor market becomes more competitive and off-shoring of IT work 
increases, this report helps U.S. IT workers better understand the 
kinds of skills they need to be competitive in this labor market, and 
the types of education and training programs that offer such skills. 
This report also helps education and training providers better 
understand the IT knowledge and skills they need to provide to their 
students. TA analysts have also sought to disseminate the findings of 
this study by speaking at a variety of industry, academic and 
government fora. In particular, TA staff delivered presentations to 
three bidder's conferences held by the Department of Labor's Employment 
and Training Administration in support of its H-1B Technical Skills 
Training Grants program, as well as at its national grantees 
conference.

Nanotechnology/Converging Technologies
    TA has taken a leadership role in the National Nanotechnology 
Initiative (NNI) to ensure that the insights and breakthroughs emerging 
from our substantial federal investments in nanoscience and 
nanotechnology research move into the commercial marketplace to provide 
economic growth, high-wage job creation, and social benefits. Through 
TA's development of and participation in outreach events such as 
conferences and workshops, I have personally highlighted the need to 
proactively address societal and ethical concerns in order to lower 
possible impediments to development and commercialization of new 
products; the importance of moving research into the marketplace 
expeditiously; and encouraged increased participation by scientists and 
engineers in public education and discussion.
    TA's efforts to support these messages and engage policy-makers in 
these issues include:

          Initiating a dialogue between industry and NNI 
        leaders for senior officials of the Bureau of Industry and 
        Security (BIS) on how nanotechnology may affect, and be 
        affected by, export controls. This work led to a proposal by 
        Secretary Evans to the President's Export Council for 
        consideration of the formation of a nanotechnology subcommittee 
        which would provide a structural mechanism to enable policy-
        makers to receive counsel from the private sector.

          Fostering greater dialogue and engagement between 
        stakeholder groups-scientists, engineers, business leaders, 
        venture capitalists, educators, ethicists, philosophers, other 
        federal agencies--on issues affecting the development and 
        commercialization of nanotechnology.

             Outreach efforts include working with federal, State and 
        local economic development officials to spur awareness and 
        adoption of nanotechnology as a tool for technology-led 
        economic developments around the country. For example, in 
        partnership with the National Nanotechnology Coordination 
        Office, TA developed and led the first Regional-State-Local 
        Nanotechnology Workshop for state economic development and 
        technology leaders. More than 125 technology and economic 
        development officials from 25 states and the District of 
        Columbia participated in the conference.

             TA also is working to increase public understanding of 
        federal efforts to ensure the responsible development of 
        nanotechnology, including its impact on human health and the 
        environment. For example, TA supported the development of the 
        Converging Technologies Bar Association (CTBA), a non-profit 
        organization focused on proactively identifying and addressing 
        legal implications of converging technologies (nanotech, 
        biotech, and IT).

          Increasing understanding among federal agencies of 
        the status and implications of nanotechnology research and 
        development, and the relationship of this new technology to 
        their agencies' missions. For example, TA is working with 
        workforce development officials at the U.S. Department of Labor 
        to ensure the department's training programs include support 
        for nanotechnology-based occupations.

Digital Freedom Initiative (DFI)
    TA led the development of the Digital Freedom Initiative (DFI), a 
White House initiative announced in March 2003 by Secretary Evans. TA 
continues to lead the DFI, which has brought several federal agencies 
together with over 40 IT firms and organizations to promote technology 
partnerships and entrepreneurship as catalysts for economic expansion 
within developing economies. The goal of the Digital Freedom Initiative 
is to open new markets and create demand for U.S. high-technology 
products and services by promoting economic growth in developing 
countries--specifically by teaching the benefits of information and 
communication technology (ICT) to entrepreneurs and small businesses in 
developing countries. The DFI leverages USG leadership with the 
creativity and resources of over 90 U.S. businesses and non-profit 
organizations, together with the vision and energy of local 
entrepreneurs in host countries. U.S. business volunteers such as 
Hewlett-Packard, CISCO and other smaller firms are currently 
implementing programs in Senegal aimed at increasing IT capacities of 
small business in that country while at the same time creating new 
market demand for U.S. products and services. On October 16, 2003, 
President Bush announced that Peru and Indonesia have agreed to follow 
Senegal's lead and join the DFI partnership; Jordan is being considered 
as the next DFI partner.

U.S.-Israel Science and Technology Commission (USISTC)
    The USISTC binational initiative advances collaborative and 
technological development, helps reduce impediments in the conduct of 
business, and promotes government and industry cooperation between the 
U.S. and Israel. The Commission's secretariat, the Technology 
Administration, worked throughout 2003-04 with a host of interagency 
S&T directorates, industry sectors, and Commission constituents to 
expand binational collaboration through a fast-paced agenda with a 
strong technology focus. Key outcomes and accomplishments include the 
issuance of a biotechnology and life sciences RFP and subsequent $1 
million grant award to a consortium of private sector biotechnology 
entities designed to foster bilateral development between the U.S.-
Israeli biotech sectors; development of a U.S.-Israel cooperative 
program for civil infrastructure security (CIS) leveraging expertise 
and resources for R&D, technology assessment and demonstrations of 
innovative utility sector technologies; implementation of a 
demonstration project in partnership with Israel's Ministry of 
Environment and the White House Office of the Federal Environmental 
Executive (OFEE) that will advance integration of environmental and 
security management systems to enhance security preparedness in the 
public and private sectors; and, organization of a Nanotechnology 
Roundtable of U.S.-Israeli experts to help analyze potential high 
technology collaborations.

Memorandum of Understanding (MOU) with the Russian Ministry of 
        Education and Science
    In response to an agreement reached at Camp David in October 2003 
by President Bush and President Putin to cooperate on high technology 
matters, OTP and the Russian Ministry of Education and Science (MES) 
worked to negotiate an MOU to promote S&T Cooperation in Technology and 
Innovation. The MOU was signed on April 19th by U.S. Secretary of 
Commerce, Don Evans and Minister Andrey Fursenko/MES. OTP's next 
activities will follow up recent discussions between Minister Fursenko 
and Under Secretary for Technology Phillip Bond on appropriate Terms of 
Reference (TOR) for an Innovation Council on High Technologies. The 
Council will serve as the mechanism to achieve goals defined in the MOU 
and will focus on identifying and addressing technological, legal and 
financial issues that impact the ability of U.S. and Russian private 
and public entities to form partnerships and establish commercially 
oriented programs to serve the international market place.

Technology Transfer
    OTP's activities were guided by statutory requirements and requests 
for resident expertise. Recent activities include:

          Preparation of the statutory annual report (under the 
        Technology Transfer Commercialization Act, P.L. 106-404) on the 
        technology transfer activities of Department of Commerce 
        federal laboratories (NIST, NOAA, NTIA) in FY 2003.

          Collaboration with OMB (summer 2003 and March 2004) 
        to develop detailed guideline materials for federal agency 
        preparation of statutory (see above) annual reports on federal 
        lab technology transfer. TA/OTP language incorporated in OMB's 
        Circular A-11 of July 2003; revisions for the new fiscal year 
        to be incorporated in the forthcoming July 2004 edition of 
        Circular A-11.

          Provided preliminary statistics to the Congress 
        (April 2004) on technology transfer activities through FY 2003 
        of the federal labs across ten federal departments. This 
        information is assembled and analyzed by TA/OTP (consistent 
        with OMB's Circular A-11 guidelines--see above) as part of the 
        preparation of the next edition of the Secretary of Commerce's 
        Summary Report on Federal Laboratory Technology Transfer (also 
        statutory under the Technology Transfer and Commercialization 
        Act).

          Worked with the federal agencies (through the 
        Interagency Working Group on Technology Transfer--chaired by 
        TA/OTP) and others in the technology transfer community to 
        provide information and comment on drafts of the recent 
        evaluation report by the President's Council of Advisors on 
        Science and Technology (PCAST) on ``Technology Transfer of 
        Federally Funded R&D.'' PCAST's report was transmitted to the 
        President in May 2003. TA/OTP's coordinated activities 
        significantly enriched the findings and proposed actions 
        discussed by the report.

          Organized subcommittee of the Interagency Working 
        Group on Technology Transfer (chaired and coordinated by TA/
        OTP) to work with the Department of Commerce's Office of 
        General Counsel to prepare revised regulations for federal 
        invention licensing (37 CFR Sec. 404). Revised version of 
        licensing regulations to be published in Federal Register 
        summer 2004 (estimated).

State S&T Indicators Issued
    TA released The Dynamics of Technology based Economic Development: 
State Science & Technology Indicators, 4th edition, which tracks 
changes in values of metrics for up to ten years. The State Science and 
Technology Institute (SSTI), representing a nationwide network of state 
practitioners and policy-makers, has confirmed that the report is used 
extensively by those in the public and private sectors concerned with 
regional innovation and competitiveness. Findings include: for the 
2001-2002 time period for the number of U.S. patents issued per 10,000 
business establishments, Idaho was ranked first, followed by 
California, and Vermont; for number of engineers employed per 10,000 
civilian workers, Washington state was first, followed by 
Massachusetts, and Kansas; and for the average annual number of Small 
Business Innovation Research awards per 10,000 business establishments, 
Massachusetts was first, followed by New Mexico, and Maryland.
Facilitating Federal Laboratory Participation in Economic Development
    A Technology Administration report, which was highlighted by the 
Economic Development Administration, identified the best practices of 
seven federal laboratory partnerships and two intermediary programs in 
working with entrepreneurs, local business groups, and higher education 
to support technology-led economic development. The report, Partners on 
a Mission: Federal Laboratory Practices Contributing to Economic 
Development, provided national exposure to a set of innovative lab 
practices that can be used by communities to support innovation, 
technology transfer, to create new jobs, products and services. Key 
findings of the report were: technical and entrepreneurial assistance, 
now a peripheral activity for most government labs, can be very 
beneficial to the labs technology transfer mission; mentor protege 
programs encourage small business partnering and help strengthen 
suppliers; entrepreneurial leave programs can be valuable mechanisms 
for promoting commercial use of laboratory technology; some federal 
laboratories are effectively sponsoring entrepreneurial, seed and 
venture capital and business networking events, and; research parks and 
incubators set up by federal labs were more effective in attracting 
research companies and suppliers when the public-private linkages were 
facilitated by economic development organizations.

Collaboration with National Association of Seed and Venture Funds 
        (NASVF)
    (Ongoing) TA is working with NASVF to support local efforts to 
create angel investor networks through one-day workshops, designed by 
nationally known business and economic development professionals, on 
how communities have used team-based approaches for supporting local 
entrepreneurship and networking sources of capital. Rationale for TA's 
approach is that most states are involved in supplying or catalyzing 
the formation of a variety of risk capital to support local technology 
business growth. Outcomes include: Communities involved have reported 
an energized local seed investing market, more effective networking of 
local investors interested in technology-based companies, and greater 
resources for the local knowledge-based economy.

Telehealth
    The Technology Administration began an initiative to analyze 
innovation, demand and investment in telehealth resulting in the 
following accomplishments: a partnership between the American 
Telemedicine Association and NIST to develop initial standards for 
diabetic retinopathy; identification of homeland security applications 
for telehealth networks; increased telehealth technology and services 
exports through trade missions to Colombia, Ireland and the U.K.

Assistive Technologies (AT)
    In support of the President's New Freedom's Initiative, TA is 
leading an eight-point Department of Commerce initiative to support the 
development of assistive technologies and to promote the U.S. assistive 
technology industry. The Secretary of Commerce began the initiative 
through the Technology Administration to identify, understand and 
support innovation, growth and investment in assistive technologies. 
This initiative has resulted in the following to date: established 
positive working relationship with AT industry, including establishment 
of relationship with NIST for manufacturing and standards services; 
convened policy roundtable for the broad range of AT stakeholders; 
facilitated dialog between AT industry and federal AT research centers; 
collected and compiled international market data for 10 countries and 
reviewed foreign trade policies for unfair practices; included AT 
industry in export promotion events.

Q2.  SBIR--OMB has labeled 13 federal programs as failures, including 
the Small Business Innovation Research (SBIR) program at the Department 
of Commerce (Washington Post, 11 February 2004). A review of the 
Program Assessment Rating Tool (PART) finds fault with the Department 
of Commerce management of the program and implies criticism of the 
legislation establishing the SBIR program. NOAA and NIST manage 
Commerce's SBIR program. What steps will these two agencies be taking 
in response to the PART analysis? What are the shortcomings that the 
Administration finds with the SBIR legislation?

NIST Answer. OMB applied the Program Assessment Rating Tool (PART)--a 
programmatic evaluation tool--to the individual offices charged with 
administering the program within DOC. As a result, OMB found the 
overall management of the individual SBIR programs effective but had 
concerns in the areas of program rationale, program planning, and 
results. NIST has a strategic plan in place for its SBIR program that 
focuses on improving efficiency and effectiveness and developing 
performance measures to gather customer satisfaction data from the 
small businesses participating in the SBIR program. While NIST is 
working to adopt these improvements, progress may be limited due to 
resource constraints. Funds allocated to the SBIR program are for the 
exclusive purpose of funding SBIR awards and cannot be used for the 
administration of the program or the implementation of evaluation 
methods.
    The major issues involve program purpose and design. OMB states 
that the SBIR program is redundant of other federal programs. In 
addition, OMB finds that the design of the SBIR program (a mandatory 
``tax'' on R&D programs) reduces agencies' flexibility by restricting 
their investment decisions. These program requirements are mandated by 
the law.

NOAA Answer. The NOAA Office of Research and Technology Applications 
(ORTA) manages the NOAA component of the DOC program under the auspices 
of the Small Business Administration. NOAA's goal, which is consistent 
with Small Business Innovation Research (SBIR) legislation, is to 
enhance small business research and development and to stimulate 
economic growth. It is the function of the NOAA SBIR Workgroup, which 
is comprised of one representative from each Line Office, to develop 
and submit to ORTA research topics that advance and are consistent with 
NOAA's mission and strategic plan.
    The only aspect of the PART scoring of the NOAA SBIR Program under 
ORTA's control is the management portion, of which NOAA received a high 
score.

Q3.  MEP--The Administration's request for the Manufacturing Extension 
Program is only one-third of what is required to maintain the existing 
network of MEP centers. What will be the impact of the Administration's 
funding request on the level and amount of services provided to small 
manufacturers? For example in FY03, MEP served more than 18,000 
clients. With only $39 million, how many small manufacturers will be 
served and what will be the economic impact?

A3. Since its inception as a pilot program in 1988, the Manufacturing 
Extension Partnership (MEP) has provided many small U.S. manufacturers 
with useful business services to become more competitive and 
productive. MEP's nationwide network serves to promote lean 
manufacturing techniques such as zero-defect quality programs. The 
program makes it possible for even the smallest firms to tap into 
specialists from across the country with manufacturing and business 
expertise in plant operations and on manufacturing floors. MEP clients 
have experienced more growth in labor productivity over a five-year 
period than similar non-client firms. MEP was originally intended to be 
comprised of 12 federally supported centers, with federal funding 
ending after six years. In its 15 years of operation, the program has 
expanded away from this original design to include 400 locations, and 
Congress has removed the sunset provision. Funding for the MEP centers 
is a cost-sharing arrangement consisting of support from the Federal 
Government, State and local government, and the recovery of fees for 
services. Given advances in manufacturing and technology, it is 
appropriate to evaluate MEP operations and take steps for continuous 
improvement.
    While the President's request is a reduction from historical 
levels, it maintains the level of funding appropriated in FY04. To 
improve the effectiveness of the program at these reduced levels, the 
Administration proposes to coordinate MEP fully with other Commerce 
Department programs that are helping manufacturers to be more 
competitive and expand markets. Through this coordination, the Commerce 
Department can more closely link the technical and business staff 
employed by the MEP centers located around the country with trade 
promotion specialists in the Commerce Department's International Trade 
Administration. In addition, the ITA has experts with in-depth 
knowledge of various sectors of industry. MEP field agents and these 
sector experts, the program can be a more effective national resource 
to help small manufacturers compete and succeed in the global 
marketplace. Additionally, MEP will hold a re-competition, with a focus 
on effectiveness and cost-efficiency.

Q4.  MEP--The President's manufacturing initiative states that there 
will be a re-competition of all MEP centers that will focus on 
improving effectiveness and efficiency. What steps has the 
Administration taken to improve the effectiveness and efficiency of MEP 
centers during the past three years? Or is this re-competition just a 
way to cut the number of centers to fit within the Administration's 
budget request? What are the new selection criteria for the re-
competition? If you can't answer this question now, when will you be 
able to? What should Centers and States do in the interim while the 
Administration develops its re-competition criteria and what does this 
mean for federal funding to existing Centers?

A4. During the last year, the Department took a comprehensive look at 
the issues influencing the long-term competitiveness of U.S. 
manufacturing to identify the challenges our manufacturers face and 
outline a strategy for ensuring that the government is doing all it can 
to create the conditions that will allow U.S. manufacturers to increase 
their competitiveness and spur economic growth. That review ultimately 
lead to the recently-released U.S. DoC Manufacturing Report. As a 
result of these efforts, and reduced funding levels enacted in FY04, 
NIST plans to implement the following MEP operating plan:

1.  Redefine all existing cooperative agreements with current MEP 
centers through Fiscal Year 2004.

          Continue FY 2003 levels of funding support for 
        centers--with month-to-month commitments--through September 30, 
        2004. By carefully managing FY 2004 funds, this approach can 
        sustain the existing center system through the fiscal year with 
        the current appropriation because of the staggered basis upon 
        which centers have been funded to date (most centers will be 
        operating on FY 2003 funds through June 30, 2004).

          Centers are not obligated to accept the month-to-
        month funding and can choose to discontinue efforts at any 
        time.

2.  Conduct a full and open competition to establish a program that 
maximizes service impact at the reduced program level in Fiscal Year 
2005.

          Hold a re-competition for MEP centers in the fall of 
        2004. This timing will allow the Department to solicit and 
        receive input from state co-investors in the MEP centers. 
        Because MEP is a cost shared program relying upon the 
        contributions from its State partners (1/3 of the total center 
        funding), it is critical to get their input in defining the 
        format and structure of the re-competition. This is essential 
        to assure state support for the re-competition and to encourage 
        states to support proposals for well-qualified, well-financed 
        centers.

          MEP will conduct a series of regional discussions to 
        get state and other investor inputs in the July/August 2004 
        timeframe. NIST will release a Federal Register notice 
        requesting proposals on or about September 1, 2004, with 
        proposals due October 31, 2004 (60 days later). Awards are 
        expected to be effective January 1, 2005.

          The center competition will use the criteria and 
        protocols as established in the MEP rule (15 CFR 290).

          Aggregation of service entities will be encouraged to 
        maximize leverage of limited funding, including regional 
        centers.

          The concepts identified in the recent Department of 
        Commerce Manufacturing Report will be implemented.

          MEP will implement, as appropriate, any proposed 
        program reforms in the upcoming National Academy of Public 
        Administration (NAPA) analysis of the MEP program.

          Centers will be expected to use the limited federal 
        resources to support the delivery of services to small 
        manufacturers and limit their expenditures on administrative 
        functions.

          MEP will provide software and other standard 
        approaches to support center operations.

          Per their request, centers and state economic 
        development offices will be given opportunities to provide 
        input on the re-competition.

3.  Discontinue any center support and stewardship activities that are 
no longer relevant.

          Center annual reviews and panel reviews will be 
        discontinued as appropriate.

          Contracts and procurements associated with center 
        support that is no longer needed will be terminated for 
        convenience.

4.  Begin internal staffing analysis and reductions.

          MEP and NIST have received Voluntary Early Retirement 
        Authority (VERA) and buyout authority.

          MEP and NIST will begin Reduction-In Force (RIF) 
        processes as needed after VERA and buyouts are applied.

          MEP will implement the reduced level of program 
        support and NIST will implement the reduced level of 
        administrative overhead once the RIF is completed.

    The evaluation criteria that must be used for the re-competition 
are specified by the MEP governing regulation, 15 CFR 290. These 
criteria are equally weighted and are as follows:

          Identification of Target Firms in Proposed Region. 
        Does the proposal define an appropriate service region with a 
        large enough population of target firms of small- and medium-
        sized manufacturers that the applicant understands and can 
        serve, and which is not presently served by an existing center?

           Market Analysis. Demonstrated understanding of the service 
        region's manufacturing base, including business size, industry 
        types, product mix, and technology requirements.

           Geographical Location. Physical size, concentration of 
        industry, and economic significance of the service region's 
        manufacturing base. Geographical diversity of the centers will 
        be a factor in evaluation of proposals.

          Technology Resources. Does the proposal assure 
        strength in technical personnel and programmatic resources, 
        full-time staff, facilities, equipment, and linkages to 
        external sources of technology?

          Technology Delivery Mechanisms. Does the proposal 
        clearly and sharply define an effective methodology for 
        delivering advanced manufacturing technology to small- and 
        medium-sized manufacturers?

           Linkages. Development of effective partnerships or linkages 
        to third parties such as industry, universities, nonprofit 
        economic organizations, and State governments who will amplify 
        the center's technology delivery to reach a large number of 
        clients in its service region.

           Program Leverage. Provision of an effective strategy to 
        amplify the center's technology delivery approaches to achieve 
        the proposed objectives as described in 15 CFR 290.3(e).

          Management and Financial Plan. Does the proposal 
        define a management structure and assure management personnel 
        to carry out development and operation of an effective center?

           Organizational Structure. Completeness and appropriateness 
        of the organizational structure, and its focus on the mission 
        of the center.

           Program Management. Effectiveness of the planned methodology 
        of program management.

           Internal Evaluation. Effectiveness of the planned continuous 
        internal evaluation of program activities.

           Plans for Financial Matching. Demonstrated stability and 
        duration of the applicants funding commitments as well as the 
        percentage of operating and capital costs guaranteed by the 
        applicant. Identification of matching fund sources and the 
        general terms of the funding commitments.

           Budget. Suitability and focus of the applicant's detailed 
        one-year budget and budget outline for years 2-5 and beyond.

Q5.  MEP--It has been suggested that the Administration wants to 
develop a network of regional MEP Centers. How would movement to a 
network of a few regional centers affect the current cost-share (1/3 
federal, 1/3 State and 1/3 service charges)? For example, if there were 
a Midwest regional center, how would State funding be apportioned? Have 
you discussed any of these scenarios with the States, which are equal 
partners with the Federal Government in the program? In general, what 
discussions have you had with States regarding the Administration's 
vision for the MEP? If you have not had any discussions, when do you 
intend to consult with the States?

A5. Because MEP is a cost shared program relying upon the contributions 
from its State partners (1/3 of the total center funding), many of 
which have been active for most of the past decade and some since the 
late 1980s, it is critical to get their input in defining the format 
and structure of the MEP and re-competition. This is essential to 
assure state support for the re-competition and to encourage states to 
support proposals for well-qualified, well-financed centers. NIST/MEP 
is planning to conduct a series of regional discussions to get State 
and other investor inputs in the July/August 2004 timeframe.

Q6.  Voting Systems--During the past year there have been numerous 
reports of problems with electronic voting systems. The Department of 
Defense recently scrapped its plans for Internet voting. There have 
also been widespread calls for better standards for electronic voting 
equipment. Under the Help America Vote Act, this committee ensured that 
NIST would have a role in the development of voting system standards. 
NIST has been working with state officials this past year in a very 
limited way on this issue. Why didn't the Administration consider this 
a priority for NIST and request funding for NIST voting standards 
efforts?

A6. Tight budget constraints and the Administration's priority on the 
war on terrorism prevented an appropriation request for activities 
under the Help America Vote Act in NIST's Fiscal Year 2005 Budget 
request. NIST is devoting $375,000 on voting standards and technology-
related funding in FY 2004. The Administration is, however, exploring 
the possibility of NIST's providing services to the TGDC via a 
Memorandum of Understanding with the EAC. That could provide a source 
of funds for NIST in FY 2005.

Q7.  Mr. Gordon's Questions--Please respond to Mr. Gordon's questions 
at the hearing:

Q7a.  If the Administration's proposal to eliminate ATP funding in FY 
2005 were enacted, what would the contractual and transition costs in 
FY 2005 be and would these costs be absorbed by the NIST budget?

A7a. If Congress enacts the FY 2005 President's Budget proposal to 
terminate funding for the Advanced Technology Program (ATP), the 
Department of Commerce and NIST will pursue all available means to 
address the termination cost requirements, consistent with legal 
obligations and sound management practices. To the greatest extent 
possible, NIST will seek opportunities to place ATP staff elsewhere in 
NIST or at other agencies, both within and outside the Department. NIST 
already has received VERA and buy-out authority to reduce the number of 
its employees in light of the lower appropriation level for other 
programs in FY 2004. The use of funding that may become available 
through prior year deobligations in ATP is also a possibility to offset 
ATP shutdown costs. Prior year deobligations have averaged $13 million 
over the last three years, although a lower level is projected for FY 
2005. Finally, the Department may be able to use special transfer 
authority to cover ATP termination costs if the FY 2005 appropriations 
bill contains the requested provision comparable to Section 205 of the 
General Provisions applicable to the Department in the Consolidated 
Appropriations Act, 2004.

Q7b.  If the FY 2005 MEP budget were enacted, what impact would it have 
on the States?

A7b. As a result of the findings in the U.S. DoC Manufacturing Report, 
and the reduced funding level provided in FY 2004, the the 
Administration has just recently finalized the implementation plan 
outlined above. Until the individual Centers give us specific 
information or the planned re-competition of Centers can be held, it is 
hard to determine which states will continue to provide a third of the 
funding support to the MEP system.

Q7c.  Which agencies, companies, or foundations are volunteering to 
invest in the MEP program?

A7c. Negotiations are underway with a variety of federal programs which 
could capitalize on MEP's unique access to the small manufacturing 
marketplace. These opportunities include the following:

    Department of Defense: utilize MEP to assist in overcoming critical 
defense production needs, identification and transfer of technologies 
with defense application, streamline defense supplier networks, etc.

    Department of Homeland Security: assist in outreach to 
manufacturers and supplier networks which are part of the Nation's 
critical infrastructure, assessment of vulnerabilities and 
contingencies to address disruption in the Nation's supply system.

    Department of Labor: assist in training and development of the 21st 
century workforce particularly in emerging manufacturing and technology 
sectors.

    Department of Commerce: provide assistance and outreach in 
conjunction with the proposed Manufacturing & Services directorate 
within the International Trade Administration as a critical linkage to 
the Nation's smaller manufacturers for the purpose of policy 
development. In addition, TA and EDA recently signed a Memorandum of 
Understanding by which EDA will make available a limited amount of FY 
2004 economic adjustment assistance funding in support of existing 
NIST-funded MEP centers. Subject to EDA's eligibility and program 
requirements, MEP centers will be able to apply for an estimated 
aggregate of $5 million of such funding.

    MEP has also considered foundation-type funding which is typically 
raised as principal to be kept intact, while the earnings from the 
principal are used to capitalize activities. For MEP to develop a 
steady stream of funding of any significance to substitute for some of 
the federal funding, the foundation would need to be capitalized at 
$400 to $500 million to prevent rapid depletion.
                   Answers to Post-Hearing Questions
Responses by Raymond L. Orbach, Director, Office of Science, Department 
        of Energy

Questions submitted by Chairman Sherwood Boehlert

International Thermonuclear Experimental Reactor

Q1.  At the hearing, in response to a question about the total life-
cycle cost of the International Thermonuclear Experimental Reactor 
(ITER), you stated, ``I can assure that, not only will our contribution 
be capped at the current level, but I can also tell you that the 
baseline level of performance objectives will be maintained so that the 
baseline will follow current projections.'' When you spoke of the U.S. 
contribution being capped at the current level, were you referring to 
the percentage of costs that would be covered by the U.S. or a specific 
dollar amount in current dollars? If the latter, at what dollar level 
is the U.S. contribution capped? Can you be more specific about what 
you meant when you referred to the level of performance objectives? Has 
there been any discussion of adjusting the level of performance? Do we 
have any indications that the overall cost of ITER (not just the U.S. 
portion) has increased or will increase?

A1. The total U.S. contribution to the construction, operation and 
decommissioning of the ITER project is capped at a specific dollar 
amount. This amount is an essential element of our negotiating mandate 
and, as such, should not be discussed in public. The amount is 
consistent with a share of approximately 10 percent of the costs, the 
same as the other non-host participating Parties. Regarding the level 
of ITER performance objectives, there are no plans to change the 
objectives contained in the ITER Final Design Report of 2001. Since 
then, minor design changes have been considered by the transition 
design team; however, there is no indication of any net cost increase.
Science Laboratories Infrastructure

Q2.  The budget request would cut funding for science laboratories 
infrastructure nearly in half and you have told us that you hope to 
address the most urgent infrastructure needs through third party 
financing.

Q2a.  Under this approach, what specific measures do you plan to put in 
place to ensure that governmental goals drive the construction of new 
infrastructure, rather than the needs and desires of third parties to 
generate business?

Q2b.  Third party and lease-back arrangements, although initially less 
costly, often result in higher costs to the government over the life of 
the facility. What kind of bargaining leverage does the government have 
to ensure that these facilities have a lower cost to the taxpayer?

A2a,b. All new capital asset projects with a total project cost of $5 
million and above, including those that might be third-party-financed 
projects, are subject to DOE Order 413.3, Program and Project 
Management for the Acquisition of Capital Assets. This Order and the 
accompanying Manual--which embody the capital asset principles and 
budget scoring guidelines set out in OMB Circular A-11--delineate a 
staged approval process that includes an assessment of mission need 
followed by an alternative analysis before selecting a strategy for 
addressing that mission need. This is the method that the Department 
will use to ensure that governmental goals drive such projects. Also, 
the Department's Office of Engineering and Construction Management is 
currently in the process of developing additional guidelines (as an 
addendum to Order 413.3) to address issues unique to alternative 
financing mechanisms.
    Alternative financing is intended to be the exception rather than 
the rule, and projects must make good business sense for the government 
while being attractive to the private sector. The Department supports 
the Administration's position, as set out in OMB Circular A-11, that 
public-private partnerships should be used only when they are the least 
expensive method, in present value terms, to finance construction or 
repair. DOE Order 413.3 requires that several options for the 
acquisition of a proposed project be compared based on the total life-
cycle-cost of each option. In the event that third party financing with 
a lease-back to the government is selected as the lowest life-cycle-
cost acquisition strategy, then the resulting lease-back will include a 
one-year cancellation clause to ensure that the government will have 
the flexibility to address changing needs.
New Facility Starts in a Flat Budget

Q3.  The Administration's budget projections indicate that it is 
unlikely that your Office's budget will receive significant increases 
in the near future, yet the budget proposes that work on three new 
projects begin in fiscal 2005. What impact will those projects have on 
the budgets of ongoing programs in your Office in the coming years? In 
the past, you have said that using existing laboratory facilities more 
fully is a higher priority than new starts. Doesn't the proposed budget 
run counter to that statement? Given the tight budgets, at what point 
will you have to reassess the facilities plan you recently issued?

A3. Both scientific opportunity and mission need demand that new 
activities be started even in difficult budget times. The Department 
has made various levels of commitment to three important new facilities 
in FY 2005: a new construction start for the Center for Functional 
Nanomaterials (CFN) at Brookhaven National Laboratory; long-lead 
procurement activities for the Linac Coherent Light Source (LCLS) at 
the Stanford Linear Accelerator Center; and, project engineering design 
on the Production and Characterization of Proteins and Molecular Tags 
facility. The LCLS activities are construction related, but the 
Proteins and Molecular Tags facility activities are only design related 
and do not commit the Department to moving forward with construction of 
the project. The budget places a high priority on existing facility 
operations, and increases both overall funding and operating time--as a 
percentage of optimum capacity--for the Office of Science's facilities.
    As described in our budget submission, each of these proposed new 
facilities will enable outstanding, transformational science; will be a 
major resource for the science communities that we serve; and will 
advance the missions of the Department of Energy. Continuous renewal 
and reinvention are necessary if we are to maintain our world 
leadership position in science and in the technology that is enabled by 
it. The choices that we have put forward in our FY 2005 budget 
submission strike a balance between the stewardship of our existing 
facilities and the renewal and reinvention that will ensure a bright 
future.

Questions submitted by Representative Bart Gordon

Q1.  Hydrogen--Last week, the National Academy of Science concluded 
that many of the Department's goals for a hydrogen economy were 
``unrealistically aggressive.'' Specifically, the report concludes that 
effects of hydrogen cars on oil imports and greenhouse gas emissions 
over the next 25 years ``are likely to be minor.''

Q1a.  Doesn't this suggest that the Administration's strategy for 
automotive emissions should be reconsidered?

A1a. The National Academies' report does not characterize the goals of 
the Hydrogen Fuel Initiative itself as ``unrealistically aggressive.'' 
Instead, the report used that description in referring to particular 
near-term Departmental milestones, including fuel cell durability, 
component costs and on-board storage. These milestones are indeed 
aggressive but are not unrealistic in our opinion. In fact, given the 
technical challenges ahead, these interim milestones must be aggressive 
to stimulate innovative R&D approaches. To ensure milestones are 
realistic, they are continuously evaluated in close consultation with 
our automotive and energy industry partners and can be adjusted as 
necessary or appropriate. Reconsideration is a regular part of the 
Initiative's ongoing adjustment processes. The Department agrees that 
the effects of hydrogen cars on oil imports and greenhouse gas 
emissions over the next 25 years may indeed be minor. Goals of the 
President's Hydrogen Initiative include a commercialization decision by 
2015, followed by vehicles available for purchase by 2020. Because 
growth in market share is typically gradual, and because it will take 
approximately 20 years to replace the vehicle population, full 
realization of the benefits of hydrogen vehicles is not anticipated 
until 2040.
    However, this timeline illustrates why it is so critical to work on 
hydrogen-related technologies now to achieve resulting energy security 
benefits. The timeline for market introduction and transition included 
in the National Academies' report closely matches that of the 
Initiative. We believe that the overwhelmingly positive overall nature 
of the report, combined with a vision for market introduction similar 
to the vision of the Initiative, constitutes an endorsement of the 
Initiative's strategy.

Q1b.  Does this suggest that the Bush Administration's shift in R&D 
funding from hybrid vehicles (which will reduce emissions significantly 
in the next 25 years) to hydrogen vehicles was a bad idea?

A1b. The Department invests in a balanced portfolio of R&D, including 
R&D on short- and mid-term transportation technologies as we transition 
to a hydrogen economy. The Department is actually proposing a $6.8 
million increase in its FY 2005 request over FY 2004 appropriation 
levels in the area of advanced hybrid and electric drive technologies. 
These technologies can be applied in the near-term to gasoline-electric 
and diesel-electric hybrid vehicles as well as fuel cell vehicles as we 
transition to a hydrogen economy in the long-term.
Facilities Plan

Q2.  The President's budget request for the Office of Science 
effectively leaves your budget flat in real dollars for the fifth year 
in a row. In November the Department issued a report entitled 
Facilities for the Future of Science, A Twenty-year Outlook, ranking 
the major science facilities that need to be built over the next twenty 
years. No estimated costs were included in this report but one 
illustration shows that funding would have to ramp up and stay ramped 
up over virtually the entire period. With a flat budget, how can the 
Department successfully carry out this 20-year plan?

A2. The 20-year facility plan, which is not a budget document, reflects 
an optimistic view of the future of the Office of Science. 
Affordability of these facilities will depend upon many factors in the 
future. In the FY 2005 request, funding is provided for the top five 
facility priorities in the plan as follows: ITER $7,000,000; Ultrascale 
Scientific Computing Capability $38,212,000; Joint Dark Energy mission 
$7,580,000; Linac Coherent Light Source $54,075,000; and Protein 
Production and Tags $5,000,000. If the multilateral negotiations are 
successful, ITER construction is expected to begin in FY 2006. The 
Ultrascale Scientific Computing Capability is not a traditional 
facility, and some research and development was already started in FY 
2003. Formal construction start decisions for the Linac Coherent Light 
Source and the Protein Production and Tags facility will be considered 
as a part of the normal process for preparing the President's future 
budget requests. We consider the above facilities to be near-term 
priorities for the next decade.
DOE Earmarks

Q3.  The Department has complained about the level of congressionally 
directed funding, or earmarks, in the FY04 budget and has produced 
statistics showing substantial increases in earmarks over the last 
several years, especially in certain programs.

Q3a.  What is your definition of an earmark?

Q3b.  The Administration complains a lot about earmarks. What is being 
done to diminish the effect of earmarking (for example, competing the 
contract)? Are you working with the earmarked institution to enable 
work consistent with DOE'S missions, or do you simply write a check?

A3a,b. An earmark is an activity called out by Congress for funding 
that was not requested in the President's budget by the Department 
(DOE).
    To help reduce earmarks, all of our research with the university 
community is competitively awarded. Our laboratories widely advertise 
unique capabilities available to the private sector and compete 
opportunities to partner with the university community.
    DOE is constrained by the conference agreement report language 
directing funds for the specified earmarked activity which may or may 
not directly contribute to DOE missions. Wherever possible and 
appropriate, DOE staff work diligently with the earmarked institutions 
to verify that the funding to support the proposed activity is within 
the scope of the Congressional direction. The award is made based on 
the determination for noncompetitive financial assistance following DOE 
guidelines.
Lab Infrastructure

Q4.  A persistent concern at the National Labs has been aging 
infrastructure. Some buildings and facilities date back to World War 
II, and some still in use were constructed as temporary buildings.

Q4a.  How much money does the President request for renovation, 
rehabilitation and demolition of these facilities that have continued 
in service well beyond their useful life?

Q4b.  Are there facilities still in service that pose a danger to lives 
and adjacent property and if so, what is being done to eliminate these 
threats?

A4a,b. The President's request includes $22,927,000 under the Office of 
Science (SC) Science Laboratories Infrastructure (SLI) program for 
renovation, rehabilitation, replacement and demolition of aging 
facilities at SC's laboratories. The applicable construction and 
demolition activities in the FY 2005 SLI budget are shown in a table I 
would like to insert for the record. The information follows:




    Note that the Brookhaven National Laboratory (BNL) Research Support 
Building Phase I and Thomas Jefferson National Accelerator Facility 
(TJNAF) Continuous Electron Beam Accelerator Facility Center Addition 
are new buildings that replace 38,400 square feet of existing space 
that can no longer be economically maintained.
    Regarding the concern that there may be facilities still in service 
whose condition may pose a danger to lives and adjacent property, we 
are confident that our systems and processes have identified any such 
facilities and they have been removed from service pending 
rehabilitation, renovation, or removal. The primary management process 
is the clear assignment of landlord responsibility within each 
laboratory for all facilities at the laboratory. Landlord divisions or 
departments have facilities managers who are fully knowledgeable in 
daily use and operation and have access to laboratory wide facilities 
management and environmental, safety, and health staff to support 
review and analysis of any issues of concern.
    A secondary check is the condition assessment survey required on 
all facilities at least once every five years. These surveys are 
generally conducted by outside contractors or an independent facilities 
group at the laboratory. Survey results establish the condition of each 
facility and this information is entered into the Facility Information 
Management System (FIMS), the DOE corporate facilities management 
system.
    Thirdly, using FIMS and periodic walk-throughs, the Site Office 
monitors those facilities that fall in the ``poor'' or ``fail'' 
category and reviews the corrective actions planned.
Strategic Plan for Science

Q5.  You stated in your prepared testimony that the Department's 
updated Office of Science Strategic Plan will be fully integrated with 
the twenty-year facilities plan. What budget increases, over and above 
the requirements to carry out the facilities plan, do you do you expect 
to be requesting to fully implement the Strategic Plan?

A5. Our strategic plan does not contain funding projections but it does 
outline an ambitious agenda for scientific discovery and leadership.
FutureGen

Q6.  FutureGen--The Department is making a major commitment towards the 
funding of the FutureGen, a project that holds the promise of an 
essentially emission-free coal-burning electric power plant within the 
next 20 years. What progress do you expect to make during this Fiscal 
Year towards making a decision on where the project will be located?

A6. There are several steps that we will follow in making a decision on 
a site for the FutureGen project. The Department is currently 
completing internal management review requirements for FutureGen and 
continuing to coordinate with the applicable committees concerning the 
program plan called for in the Conference Committee Report (H.R. 108-
330). Once we have that process complete and once the FY 2004 funding 
for FutureGen is made available, the Department can begin negotiations 
with an industry partner. We forecast awarding the cooperative 
agreement in the late 2004 time frame. After release of funds in FY 
2004, the Department will immediately begin its NEPA process for 
FutureGen. Once the negotiations are complete, the first priority is to 
develop a set of technical siting criteria that will be used in an 
open, fair, and transparent process.
    Proposed sites will be qualified for consideration based on the 
technical criteria as well as on NEPA. Qualified sites will be further 
evaluated on the technical criteria in parallel with the NEPA process 
for the project. Upon completion of the NEPA process, formal site 
selection will be made based on NEPA and site evaluation criteria. This 
will take about two years from the time a cooperative agreement is 
awarded.

Fusion Funding

Q7.  Funding for the International Thermonuclear Experimental Reactor 
(ITER) has increased substantially in this request--by $30 million--
while the Fusion Science program has only increased slightly. One of 
the ongoing concerns of the fusion community has been that ITER should 
not cannibalize the base program. What cuts do you expect to make in 
the base program to fully fund the U.S. commitment to the ITER project 
in this fiscal year? Do you expect to restore funding to the base 
program or is the Department now embarking on a course of subsuming the 
base program as funding requirements for ITER grows?

A7. The FY 2005 funding provides $7,000,000 for specific ITER-related 
activities such as assigning engineers to the International Team and 
qualifying equipment vendors. The rest of the $38,000,000 involves 
redirecting the focus of our fusion research program toward support of 
ITER. For example, our tokamak experiments, although operating for 
fewer weeks in FY 2005, will focus their program on science issues 
needed by ITER. This refocusing is slight, since the major world 
tokamaks were already doing science of relevance to ITER, but 
significant, in that research will now be coordinated world-wide 
through the International Tokamak Physics Activity, with a focus on 
specific, detailed, ITER needs.
    Similarly, our long range component development program will be 
closed out in an orderly fashion in FY 2004 and the resources will be 
redirected to support research on those components needed for our 
contributions to ITER, as well as for our ongoing experiments. Fusion 
advanced computing funding of $3,000,000 is also being redirected to 
fund ITER-relevant simulation efforts.
    Given these shifts, there will be some dislocations and staff 
reductions in the program. Some of these reductions may be mitigated as 
we conduct competitions for various parts of the program in FY 2004. 
However, as the National Research Council report on Burning Plasma 
Physics concluded, we no longer have a domestic program and an ITER 
program. We have a single integrated fusion program that includes ITER.
Oil and Gas R&D

Q8.  The budget requests for the oil and gas R&D program continue to 
decline year-after-year while oil and gas production in this country 
continues to decline at a rapid rate. The U.S. is dependent on oil and 
gas for well over half of its energy needs and imports are rising 
rapidly. To its credit the department indicates it plans to establish a 
new industry-led consortia-based program to develop a continued supply 
of natural gas beyond 2015. How can the department begin to consider 
such an ambitious undertaking with such a minimal request? Why does the 
department effectively ignore research to address our natural gas 
supply needs that are acute now?

A8. Unfortunately, the Department will not be able to initiate this 
consortia-based program in natural gas since comprehensive energy 
legislation has not yet been passed. However, the Department recognizes 
the importance of natural gas production and is requesting funding to 
provide sound science for policy decision-making, and to enhance 
environmentally safe access to resources on federal lands, primarily in 
the gas-rich Rocky Mountain region. In addition, we recognize the 
importance of increasing supplies of liquefied natural gas (LNG) and 
are requesting funding to help provide answers to safety, 
environmental, and technology issues associated with the siting of LNG 
terminals.

Q9.  Energy Efficiency--Deployment programs are considered to be some 
of the most successful in EERE. Long-standing programs such as 
Industries for the Future, Rebuild America and the Federal Energy 
Management Program provide real metrics for results from DOE research 
and development efforts. Yet, these programs have seen massive cuts to 
their budget.

Q9a.  Given the amount of energy resources that can be saved from even 
the smallest changes in industrial processes, how do you account for 
slashing the program budget by over one-third, especially in light of 
the President's recent commitment to domestic manufacturing?

A9a. We are asking these industries to bear a greater share of the 
effort in achieving energy savings which, after all, benefit the 
efficiency of their operations and enhance their own profitability. 
Over the past several years, the Congress has given us more funding 
than we have requested for the Industrial Technologies Program (ITP), 
and less than we have asked for to fund the low-income weatherization 
program. Low-income weatherization reduces energy use among low income 
Americans who spend a disproportionately high percentage of their 
income on energy. The ITP helps to reduce energy use among large 
industries that know how to save energy and have financial incentive 
and capital to do so. We have shifted resources to reflect the relative 
priority of these programs.

Q9b.  Is the decrease in funds a sign that these programs may have 
reached the end of their useful life?

A9b. Industries of the Future, Rebuild America, and the Federal Energy 
Management Program (FEMP) are robust contributors to EERE's energy 
efficiency portfolio.

          Industries of the Future: As stated above, we are 
        asking these industries to bear a greater share of the effort 
        in achieving energy savings which, after all, benefit the 
        efficiency of their operations and enhance their own 
        profitability. Over the past several years, the Congress has 
        given us more funding than we have requested for the Industrial 
        Technologies Program (ITP), and less than we have asked for to 
        fund the low-income weatherization program. Low-income 
        weatherization reduces energy use among low income Americans 
        who spend a disproportionately high percentage of their income 
        on energy. The ITP helps to reduce energy use among large 
        industries that know how to save energy and have financial 
        incentive and capital to do so. We have shifted resources to 
        reflect the relative priority of these programs.

          Rebuild America: Outreach and education efforts for 
        Rebuild America will be consolidated in FY 2005 into a single 
        outreach and communications office, increasing efficiency and 
        lowering costs. In addition, the program has determined that 
        less technical assistance is needed for certain mature and 
        successful sectors.

          FEMP: As FEMP's core activities have matured, the 
        efficiencies in those activities have increased, enabling the 
        program to reduce its funding request in FY 2005. In FY 2005, 
        FEMP will continue to streamline program activities. For 
        example, FEMP has determined that it is no longer necessary, 
        because of activity maturation, to create any new Technology 
        Specific Energy Savings Performance Contracts (ESPCs). We have 
        found that we can achieve the same benefits through a fuller 
        utilization of our baseline ESPCs in a way that is less 
        complicated for our agency customers. Through more efficient 
        use of its resources, FEMP will continue to conduct its other 
        activities, such as partnership meetings, annual awards, 
        outreach publications and technical assistance projects.

Q9c.  Is this indicative of the Department's approach towards 
deployment programs as a whole?

A9c. In total, we believe that our funding request for deployment 
activities is in alignment with previous requests, based on our 
estimates of allocation of program funding. Deployment activities 
comprise a critical part of the EERE portfolio because they help 
facilitate the market adoption of new technologies and energy sources. 
Without deployment activities, market barriers would delay or prevent 
the successful commercial adoption of certain EERE technologies that 
offer substantial energy security, environmental, and other benefits to 
the Nation.

Q9d.  What are the metrics used to determine investment in deployment 
of such technologies?

A9d. EERE evaluates its investments based on the potential economic, 
environmental, and energy security benefits resulting from making 
energy-efficient products and renewable energy resources available to 
consumers.
    Deployment activities can play a key role in facilitating the 
adoption of new technologies and energy sources. EERE focuses its 
deployment efforts on the removal of market barriers that make it 
difficult or impossible for certain technologies to penetrate markets. 
For example, the Rebuild America activity in the Building Technologies 
Program develops local markets for energy-efficient building retrofit 
services and markets.
    Not all technologies or products face such barriers. EERE evaluates 
the benefits of technology development by considering how quickly they 
are likely to be adopted on their own (i.e., without federal 
assistance). In the cases where barriers make early or rapid market 
adoption unlikely, deployment options are assessed based on their 
potential to accelerate market adoption.

Global Warming

Q10.  In your testimony, you described a number of programs that could 
lead to reductions in emissions of carbon dioxide. Witnesses have 
frequently told us that the Administration's policy is to stabilize 
carbon dioxide emissions. What is the Administration's position on when 
it wants to stabilize carbon dioxide and at what levels?

A10. As a signatory to the United Nations Framework Convention on 
Climate Change (UNFCCC), the United States shares with many countries 
its ultimate objective: stabilization of greenhouse gas concentrations 
in the atmosphere at a level that prevents dangerous interference with 
the climate system. There are a number of unknowns regarding both 
climate science and technology, however, which pose significant 
challenges to meeting this long-term objective.
    Among these is the uncertainty surrounding the timing and magnitude 
of the greenhouse gas reductions needed to meet the UNFCCC goal. 
Climate science has not advanced to the point where a ``safe'' level of 
atmospheric greenhouse gas concentrations can be elucidated with any 
confidence. This uncertainty was emphasized by the National Research 
Council in its 2001 report to the President on key questions in climate 
change science. It underscores the importance of the President's 
heightened emphasis on science and technology as the basis for future 
policy decisions on climate change.
    To reduce uncertainty and predict future climate change with 
greater confidence requires major advances in understanding and 
modeling the factors that influence atmospheric concentrations of 
greenhouse gases and aerosols, as well as the feedbacks that determine 
climate sensitivity to a prescribed increase in greenhouse gases. The 
Climate Change Science Program (CCSP) strategic plan, released in July 
2003, represents an unprecedented effort to advance our knowledge of 
the climate system. An extensive review of the CCSP plan by NRC 
concludes that the plan ``articulates a guiding vision, is 
appropriately ambitious, and is broad in scope'' and that ``advancing 
science on all fronts identified by the program will be of vital 
importance to the Nation.'' In FY 2005, more than $2 billion is 
requested for climate change science.
    The scientific information developed under the CCSP will help 
inform policy and define with greater precision the pace and scale of 
the technology challenge to address climate change. The Bush 
Administration's Climate Change Technology Program is working to 
develop technologies--such as carbon sequestration, hydrogen, bio-
energy, nuclear fission, and fusion--that could fundamentally transform 
the way we produce and consume energy. Success in these activities will 
allow the development and commercial use of technologies that can, over 
time, decouple energy use from greenhouse gas emissions. Without these 
advanced technologies, it is difficult to see how the UNFCCC goal can 
be realized. Given the historical rate of technology adoption, the 
inertia of existing energy systems, and the uncertainties inherent in 
advanced technology development, a gradual transformation toward low or 
near net-zero emission technologies is most likely. Should technologies 
advance more rapidly than expected, early adoption and accelerated 
modernization of capital stock could be possible. In FY 2005, more than 
$2 billion is requested for climate change related technology research, 
development and demonstration.
    The Bush Administration also recognizes that while climate change 
is a long-term challenge, we must begin to address it now. Two years 
ago, President Bush set an ambitious national goal to reduce the 
greenhouse gas intensity of the U.S. economy 18 percent from 2002 
levels by 2012. This new approach focuses on reducing the growth of GHG 
emissions, while sustaining the economic growth needed to finance 
investment in new, clean energy technologies. It sets America on a path 
to slow the growth of greenhouse gas emissions, and--as the science 
justifies--to stop and then reverse that growth. The Administration 
proposes more than $4 billion in tax incentives over the next five 
years to spur the use of clean, renewable energy and energy-efficient 
technologies. The Department of Energy's Climate VISION program and 
EPA's Climate Leaders and SmartWay Transport Partnership programs work 
with industry to accelerate use of cost-effective technologies and 
practices that improve efficiency and reduce emissions. 
Internationally, the United States has 13 bilateral agreements with key 
industrial and developing countries-representing about 70 percent of 
global greenhouse gas emissions-on advanced energy technologies, 
climate monitoring and modeling, climate research, Earth observation 
systems, and more. Further, we are supporting the U.N.'s Global 
Environmental Facility to transfer advanced energy and carbon 
sequestration technologies to developing countries.

Fusion Siting

Q11.  Fusion Siting--Although the U.S. is now participating in the ITER 
fusion program, the international participants seem to be having 
trouble deciding whether to site the facility in France or Japan. Press 
accounts indicate that political divisions over the Iraq war are behind 
this fight over fusion. Allegedly the U.S. is supporting the site of 
our ``ally'' in Iraq (Japan), while those generally opposed to the 
invasion (Russia, China) are supporting France.

Q11a.  Is that true?

Q11b.  Whether it is or not, when do you expect a decision to be made 
on the ITER site?

A11a,b. The allegation is false. The U.S. decision to support the 
Japanese candidate host site of Rokkasho was based solely on technical 
considerations, including site characteristics, costs to the US and 
host commitment to the project.
    At the December 20, 2003, Ministerial Meeting on ITER, the six ITER 
Parties agreed that the two candidate sites at Rokkasho, Japan and 
Cadarache, France/European Union are excellent sites. Neither Japan nor 
the European Union has lost interest in becoming the host site for the 
ITER project, and neither has budged from their position of being the 
best site. Such a situation is not uncommon in the first round of site 
negotiations among the highest level negotiators.
    On March 12-13, 2004, the six ITER parties met in Vienna, Austria 
to discuss the outstanding technical issues surrounding the site 
selection decision. It is now the responsibility of the two host 
candidate sites to seek a resolution on the siting of ITER. The 
Japanese and European Union delegations are expected to meet in March 
2004 to discuss next steps regarding their site proposals and how to 
proceed.

                              Appendix 2:

                              ----------                              


                   Additional Material for the Record




                              Statement of
        Dr. Charles Casey, President, American Chemical Society
      Dr. David Eisenbud, President, American Mathematical Society
 Dr. Catherine A. Pilachowski, President, American Astronomical Society
         Dr. Helen Quinn, President, American Physical Society
     Dr. John Steadman, President, Institute of the Electrical and 
                       Electronics Engineers--USA

    Mr. Chairman, Mr. Gordon and Members of the Science Committee, we 
thank you for the opportunity to submit this testimony. We also wish to 
express our appreciation for the strong support this committee has 
shown for science and technology over the course of several decades. 
The legislative actions this committee has taken during the last few 
years have raised the visibility of science and engineering 
substantially within Congress, we believe, to the great benefit of 
American society.
    Sadly, we cannot provide such praiseworthy comments about the 
President's FY 2005 budget request for the physical sciences, 
mathematics and engineering. After a decade during which federal 
investments in these disciplinary research programs stagnated, with a 
consequential loss in purchasing power of 20 percent or more, the 
Administration's FY 2005 budget request does little to address the 
problem. Should Congress endorse the President's overall set of 
budgetary priorities and adopt the President's proposed funding levels 
for science, math and engineering, the decade-long decline will 
accelerate. It will place in even greater jeopardy America's science 
and technology leadership, already under increasing challenge by 
nations in Europe and Asia.
    Discovery and innovation have been key to America's economic growth 
for more than half a century, accounting for more than half the 
increase in the GDP since World War II, according to economists. The 
impact of science and technology on our standard of living has become 
even more pronounced in recent years. As the Chairman of this committee 
noted last week, ``We need to remember that the decade of unprecedented 
economic growth that began in 1992 and that lasted into this new 
century was a result of previous investments we had made in science and 
technology, particularly in areas such as information technology and 
the health sciences. If the current recovery is to be sustained, we 
need to invest now in R&D. A healthy investment in R&D is the only way 
to ensure that our economy will continue to create jobs over the long-
term.''
    We would add to this several other observations. First, we can no 
longer take for granted the supremacy of American science and 
technology on the world stage that has served our nation so well for 
more than half a century. For a number of years, Europe and Asia have 
been investing heavily in their scientific infrastructure and their 
science education programs, and they are now challenging our nation's 
S&T leadership. Second, for several decades, we have relied heavily on 
a pipeline of foreign talent to bolster our scientific and engineering 
workforce. Heightened security policies in the aftermath of 9/11 
combined with growing R&D opportunities elsewhere in the world are now 
causing many foreign scientists and engineers to rethink their choice 
of the United States for pursuing their education and career goals.
    We believe that the President's budget request for the physical 
sciences, mathematics and engineering place the future of our nation at 
great risk, economically and militarily. The constriction in these 
federal accounts come at time when our nation faces significant R&D 
challenges. Sustaining real economic growth, as we have noted, requires 
continued investments in science that lead to discovery and innovation, 
according to many economists, among them Michael Boskin, Alan Greenspan 
and Robert Solow. In a risk averse, competitive global environment, 
where corporate time horizons are measured in months, rather than 
years, the Federal Government must be the dominant investor in long-
term research.
    The Federal Government also has the responsibility for keeping our 
nation secure. Science and technology are key to maintaining our 
military capabilities and keeping our homeland safe. The Defense 
Department increasingly looks toward civilian research programs for 
discoveries and innovations that can be translated into military 
hardware. The Department of Homeland Security also relies on the 
federal investments in long-term civilian research for advances that 
will lead to technologies needed in the war against terrorism on 
American soil.
    The R&D enterprise also faces the challenge of making America 
energy self-sufficient. That challenge was captured in the Hydrogen 
Initiative proposed by the President last year. The elusive goal of 
weaning our nation off foreign sources of oil will be achieved only 
through scientific discovery and innovation. Such investments must be 
made across the energy arena in the physical sciences and engineering, 
since it is impossible to predict where breakthroughs will occur.
    Providing our nation with a high-tech workforce of world-class 
quality represents still another challenge for our nation's R&D 
enterprise. It is an essential component for keeping America 
competitive globally. As we already suggested, our nation is failing in 
that challenge. For more than a decade, we have witnessed a decline in 
the number of Americans seeking advanced degrees in the physical 
sciences, mathematics and engineering. To meet the shortfall, we have 
become reliant on a pool of foreign talent. We have reaped great 
benefits from the flow of scientists, mathematicians and engineers from 
other countries, but in the process, we have exposed our nation to the 
adverse consequences when the flow slows or stops.
    Data on foreign applications to our institutions of higher learning 
suggest that the flow is indeed slowing. Entry into the United States 
has become more difficult, and nations, such as China and India, have 
invested in their scientific infrastructure, making it possible for 
many students to receive their training at home. Today, China and India 
also offer substantial career opportunities for scientists, 
mathematicians and engineers, opportunities that did not exist even 
half a decade ago. As Great Britain and Australia have increased their 
science and engineering recruitment efforts, they, too, have become 
significant destinations for young researchers from around the world. 
America's dominance of the science and engineering playing field is 
being seriously challenged.
    High-tech American industry, which is global in character, has 
already recognized the opportunities that exist elsewhere and has begun 
to outsource some of its activities offshore. At the recent World 
Economic Forum held in Davos, Switzerland, John Chambers, Cisco Systems 
chief executive, made this point: ``The jobs over time will go to the 
best educated places with the best infrastructure and the most 
supportive governments. How you create an environment where the jobs 
stay is going to be the key element.'' We believe that strong federal 
investments in basic research and the science and engineering 
infrastructure are prerequisite to a secure future for a high-tech 
American workforce.
    Since the end of World War II, federal science and technology 
policy-makers have endorsed the concept of a multiplicity of agency 
support for long-term research. Today, the Department of Energy, NASA 
and the National Science Foundation dominate the federal civilian 
research portfolio in the physical sciences, mathematics and 
engineering. Collectively, these agencies have seen their budgets flat 
lined for more than a decade, during a time when the GDP has increased 
substantially and our nation's dependence on technology has grown 
commensurately. This investment approach contrasts sharply with the 
doubling of the budget of the National Institutes of Health that took 
place during the five years ending in FY 2003.
    Congress recognized the policy imperative for addressing the 
portfolio imbalance and the shortfall in funding for the physical 
sciences, mathematics and engineering when it passed the NSF 
Authorization Act of 2002, which President Bush signed into law that 
December. The act authorizes the doubling of the NSF budget over five 
years. Both houses of Congress also agreed to authorize an effective 
doubling of the budget for DOE's Office of Science and included such 
language in H.R. 6. And on October 16, 2002, the President's Council of 
Advisors on Science and Technology (PCAST) strongly urged the White 
House to address the funding needs for the physical sciences.
    Yet, the FY 2004 presidential budget request, which the President 
submitted last year, did not reflect any commitment to such an 
initiative. The FY 2005 request similarly ignores the policy 
recommendations and authorizations for the physical sciences, 
mathematics and engineering. The President's budget would cut funding 
for the DOE's Office of Science by 2.0 percent, and, once the Math and 
Science Partnership transfer is taken into account, it would only 
increase funding for the NSF's Research and Related Activities account 
by 2.8 percent. Collectively, the NSF's programs that cover the 
physical sciences, mathematics, computer science and engineering would 
increase by 2.2 percent, not enough to cover inflation. In the case of 
the DOE, the Presidential request provides no headroom for any 
congressional earmarks, which last year totaled almost $150 million, 
suggesting that overall spending on the Office of Science's research 
activities could fall even further, unless Congress alters the 
President's request.
    Even at a time when the Federal Government faces large deficits, we 
believe that we must make the investments that safeguard the future of 
our nation. The President's proposed budget for the physical sciences, 
mathematics and engineering falls short of the mark in almost all 
cases. The NASA budget offers one exception, but even there the news is 
not uniformly good.
    While the Office of Space Science is slated to receive an increase 
of just over four percent--which we applaud--we note that some of the 
programs not directly tied to the President's new ``Exploration'' 
initiative will be delayed or reduced significantly. The new ``Beyond 
Einstein'' initiative, for example, will have two of its key missions, 
Constellation-X (an X-ray spectroscopy telescope mission) and LISA (a 
laser interferometer mission) deferred under the President's plan, and 
other missions designed to study the high-energy universe will 
experience budget cuts or be eliminated. Likewise, severe reductions in 
some solar research programs could have long-term adverse effects on 
Earth-based installations and orbiting satellites, as our ability to 
predict solar storms ceases to improve.
    On the positive side, we note that the new budget line entitled 
Lunar Exploration will allow further study of the lunar environment and 
enable the development of a sample return mission from the lunar south 
pole, where we now suspect water ice exists. We also commend the 
Administration for its budgetary commitment to improving in-space 
propulsion through the use of nuclear technology that will be needed if 
we are to explore the furthest reaches of the solar system.
    Mr. Chairman, we conclude with a few comments about the context of 
the President's budget request for the physical sciences, mathematics 
and engineering. The White House press releases and the budget 
briefings have made it clear that for FY 2005, the Administration 
considered only a few activities to be of such national importance that 
they merited increases above the 0.5 percent baseline. These are 
defense, homeland security, education and space. (We have already 
commented on the NASA budget and will not dwell on that any further.)
    We now consider proposed research budgets in the context of the 
other three priority areas. The history of the past half-century bears 
ample testimony to the importance of the physical sciences, mathematics 
and engineering for our military capabilities and for our extraordinary 
successes in defending freedom throughout the world. We have no doubt 
that our future defense capabilities will also be so reliant, as will 
our ability to defend our homeland against terrorism. In the case of 
education, we strongly believe that our 21st century workforce will 
become increasingly oriented toward science and technology. Recent 
analysis shows an extraordinary correlation between federal support for 
research and the number of American students willing to pursue careers 
in the sciences, mathematics and engineering.
    In light of these obvious connections, we find it very disturbing 
that the President's budget request continues to under-fund research in 
the physical sciences, mathematics and engineering. We hope that the 
Science Committee concurs, and we urge you, Mr. Chairman, and Members 
of this committee to communicate our testimony to other Members of 
Congress. We hope that as the House of Representatives develops its 
budget plans for FY 2005 it will make the critical investments in 
physical science, mathematics and engineering research needed to foster 
our nation's continued leadership in economic and technological growth.
