[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
  THE UNITED STATES COAST GUARD AND THE FEDERAL MARITIME COMMISSION FY 
                          2007 BUDGET REQUESTS

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

                                (109-50)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 1, 2006

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure


                                   ____

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-    JAMES L. OBERSTAR, Minnesota
Chair                                NICK J. RAHALL, II, West Virginia
SHERWOOD L. BOEHLERT, New York       PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
WAYNE T. GILCHREST, Maryland         Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
PETER HOEKSTRA, Michigan             CORRINE BROWN, Florida
VERNON J. EHLERS, Michigan           BOB FILNER, California
SPENCER BACHUS, Alabama              EDDIE BERNICE JOHNSON, Texas
STEVEN C. LaTOURETTE, Ohio           GENE TAYLOR, Mississippi
SUE W. KELLY, New York               JUANITA MILLENDER-McDONALD, 
RICHARD H. BAKER, Louisiana          California
ROBERT W. NEY, Ohio                  ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey        EARL BLUMENAUER, Oregon
JERRY MORAN, Kansas                  ELLEN O. TAUSCHER, California
GARY G. MILLER, California           BILL PASCRELL, Jr., New Jersey
ROBIN HAYES, North Carolina          LEONARD L. BOSWELL, Iowa
ROB SIMMONS, Connecticut             TIM HOLDEN, Pennsylvania
HENRY E. BROWN, Jr., South Carolina  BRIAN BAIRD, Washington
TIMOTHY V. JOHNSON, Illinois         SHELLEY BERKLEY, Nevada
TODD RUSSELL PLATTS, Pennsylvania    JIM MATHESON, Utah
SAM GRAVES, Missouri                 MICHAEL M. HONDA, California
MARK R. KENNEDY, Minnesota           RICK LARSEN, Washington
BILL SHUSTER, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
JOHN BOOZMAN, Arkansas               ANTHONY D. WEINER, New York
JIM GERLACH, Pennsylvania            JULIA CARSON, Indiana
MARIO DIAZ-BALART, Florida           TIMOTHY H. BISHOP, New York
JON C. PORTER, Nevada                MICHAEL H. MICHAUD, Maine
TOM OSBORNE, Nebraska                LINCOLN DAVIS, Tennessee
KENNY MARCHANT, Texas                BEN CHANDLER, Kentucky
MICHAEL E. SODREL, Indiana           BRIAN HIGGINS, New York
CHARLES W. DENT, Pennsylvania        RUSS CARNAHAN, Missouri
TED POE, Texas                       ALLYSON Y. SCHWARTZ, Pennsylvania
DAVID G. REICHERT, Washington        JOHN T. SALAZAR, Colorado
CONNIE MACK, Florida                 JOHN BARROW, Georgia
JOHN R. `RANDY' KUHL, Jr., New York
LUIS G. FORTUNO, Puerto Rico
LYNN A. WESTMORELAND, Georgia
CHARLES W. BOUSTANY, Jr., Louisiana
JEAN SCHMIDT, Ohio

                                  (ii)

  
?

        SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

                FRANK A. LOBIONDO, New Jersey, Chairman

HOWARD COBLE, North Carolina         BOB FILNER, California, Ranking 
WAYNE T. GILCHREST, Maryland         Democrat
PETER HOEKSTRA, Michigan             CORRINE BROWN, Florida
ROB SIMMONS, Connecticut             GENE TAYLOR, Mississippi
MARIO DIAZ-BALART, Florida           JUANITA MILLENDER-McDONALD, 
DAVID G. REICHERT, Washington,Vice-  California
Chair                                MICHAEL M. HONDA, California
CONNIE MACK, Florida                 ANTHONY D. WEINER, New York
LUIS G. FORTUNO, Puerto Rico         BRIAN HIGGINS, New York
CHARLES W. BOUSTANY, Jr., Louisiana  BRIAN BAIRD, Washington
DON YOUNG, Alaska                    JAMES L. OBERSTAR, Minnesota
  (Ex Officio)                         (Ex Officio)

                                 (iii)

                                CONTENTS

                               TESTIMONY

                                                                   Page
 Blust, Hon. Steven R., Chairman, Federal Maritime Commission, 
  accompanied by Paul Anderson, Commissioner, Howard Creel, 
  Commissioner, Bruce Dombroswki, Director of Administration, 
  Austin Schmidt, Director of Operations, and Rebecca Fenneman, 
  Attorney, Office of General Counsel............................     6
 Cross, Vice Admiral Terry, Vice Commandant, United States Coast 
  Guard..........................................................     6
 Welch, Master Chief Franklin A., Master Chief Petty Officer, 
  United States Coast Guard......................................     6
 Winstead, David L., Commissioner, Public Building Service, U.S. 
  General Services Administration................................     6

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Filner, Hon. Bob, of California..................................    49
LoBiondo, Hon. Frank A., of New Jersey...........................    52

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Blust, Hon. Steven R............................................    36
 Cross, Vice Admiral Terry.......................................    42
 Welch, Master Chief Franklin A..................................    54
 Winstead, David L...............................................    60


   THE UNITED STATES COAST GUARD AND THE FEDERAL MARITIME COMMISSION 
                    FISCAL YEAR 2007 BUDGET REQUESTS

                              ----------                              


                       Wednesday, March 1, 2006,

        House of Representatives, Committee on 
            Transportation and Infrastructure, Subcommittee 
            on Coast Guard and Maritime Transportation, 
            Washington, D.C.
    The committee met, pursuant to call, at 10:00 a.m., in Room 
2167, Rayburn House Office Building, Hon. Frank LoBiondo 
[chairman of the committee] presiding.
    Mr. LoBiondo. Good morning. The Committee will come to 
order.
    The Subcommittee is meeting this morning to review the 
Administration's budget request for fiscal year 2007 for the 
Coast Guard and Federal Maritime Commission and other Federal 
programs related to the maritime transportation system.
    Let me just insert for the moment that obviously the budget 
for the Coast Guard is extremely important. We had this 
scheduled and decided to move forward with it on this topic. I 
am confident that the discussion this morning will move into 
issues surrounding Dubai. The hearing next week will be totally 
focused on that. So we will be getting into it this morning, 
although we hope to be able to talk a lot about the budget.
    The President has requested nearly $8.2 billion for the 
Coast Guard for fiscal year 2007. This amount is approximately 
1.6 percent more than the funding levels that were appropriated 
in fiscal year 2006.
    However, this request also includes more than $130 million 
for costs associated with increased fuel prices, mandatory pay 
increases, and the Coast Guard's new mission to provide aerial 
defense for the National Capital Region. I have to tell you 
that I am very concerned that when these costs are added up the 
Administration is actually requesting less money for the Coast 
Guard to carry out its traditional port security missions in 
this next fiscal year. I just do not see how that is going to 
happen.
    The budget does, however, on the good side, include 
increases for some of the Coast Guard's most critical programs, 
including the $934 million for the recapitalization of the 
Coast Guard vessels and aircraft under our program called 
Deepwater. I am interested to hear how funding at this level 
will affect the program's proposed asset mixture and completion 
time line under the revised implementation plan.
    I also hope that the witnesses' testimony will address the 
efficiencies and cost savings that could be gained by 
accelerating the completion of the program. This is something 
that we have talked about from time to time. The Subcommittee 
has supported and will continue to support an acceleration of 
Deepwater to bring these new, more capable assets online to 
bolster the Coast Guard's capabilities to carry out all of its 
critical missions.
    The President's budget also includes approximately $40 
million for Rescue 21, which will modernize and eliminate 
existing gaps in the Coast Guard's search and rescue 
communications system, but which also has homeland security 
implications. This system is currently up and running in my 
home State of New Jersey and has already improved the Coast 
Guard's ability to conduct search and rescue.
    I hope that the witnesses this morning will be able to give 
us an update on this program and tell us whether the requested 
level will be sufficient to carry out the plans to expand the 
program. Under our initial review, it doesn't look like that is 
a good news story.
    The Subcommittee remains concerned by the Administration's 
rush to relocate the Coast Guard headquarters to the campus of 
St. Elizabeth's in Anacostia without first providing Congress 
with a plan on how such a facility will be accessed by Coast 
Guard personnel and how it will meet Coast Guard requirements. 
I hope we will receive further information about this proposal 
this morning.
    We all want to recognize once again, because we admire so 
much the brave and selfless actions of the Coast Guard in 
response to Hurricanes Katrina and Rita last year. But those 
thousands of extra man hours and asset hours do have a cost. I 
am very concerned that the $69 million supplemental request 
will not cover all emergency operating expenses and provide for 
sufficient basic housing allowance to meet the service members' 
needs, or insure damaged and equipment repair. I am really 
interested to hear whether this request is fully meeting the 
Coast Guard's needs on the Gulf Coast.
    Something that has always concerned us in these 
supplementals is that the Coast Guard ends up doing such a good 
job, and in the case of the Gulf Coast, really the only bright 
light from the Federal Government side we can point to with 
pride at this stage of time, but the Coast Guard, by doing such 
a good job, always seems to manage to do more with less. Those 
days are stretching the Coast Guard very, very thin when we do 
these things.
    The President's budget for the Federal Maritime Commission 
provides for a nearly 6 percent increase over the 2006 
appropriated level. The Federal Maritime Commission regulates 
international maritime transportation, protects consumers of 
the system against fraud, and ensures an efficient flow of 
goods in and out of our ports. I look forward to hearing how 
the Commission's recent decision to allow non-vessel operating 
common carriers to enter into the confidential service 
arrangements with their customers is impacting the industry.
    And lastly, I remain deeply concerned about the 
Administration's proposal to consolidate port security grant 
funding into a multi-sector program. This is a wrong move, it 
would always be the wrong time. This is a very wrong move.
    When we are looking at such a shortfall in port security 
grant funding as we see what we have tried to accomplish since 
September 11th, and where we are heading, I am just having a 
hard time believing that this proposal is actually being made. 
This is not the time to divert funding or support from our port 
authorities' efforts to improve security at our ports. Port 
security is in the minds of all Americans.
    With the recent announcement of the acquisition of P&O 
Ports by Dubai Ports, we have all expressed serious concern 
about the matter and overall port security. This situation with 
Dubai has helped refocus a lot of America and a lot of members 
of Congress on our challenge of meeting the port security 
needs. I expect my colleagues will be addressing this situation 
today as well. And as I mentioned, we are going to be holding a 
Subcommittee hearing next week specifically on that.
    Since the enactment of the Maritime Transportation Security 
Act in 2002, the Subcommittee has held eight hearings on port 
security, including a field hearing last month on the 
significant and inexcusable delay in the launch of the 
Transportation Worker Identification Credential. It is still 
hard to believe that this time line has slipped to the degree 
that it has without any reasonable explanation of why we should 
be willing to accept this slippage in time.
    This is going to be an issue that we are going to continue 
to press on very hard. We are going to pursue aggressive 
oversight of port security and try to get this Administration 
to understand the critical need to provide sufficient funding 
to protect our ports. Rhetoric does not protect our ports. 
Funding will help protect our ports. Funding will help the 
Coast Guard. And we have to get beyond the rhetoric of saying 
we are doing everything we can, because at this point, we are 
not.
    I would like to take this opportunity to thank our 
witnesses for appearing before the Subcommittee, and in 
particular to our two Coast Guard witnesses, who will be 
retiring this summer, after long and distinguished careers. 
Both Admiral Cross and Master Chief Petty Officer Welch have 
provided the Coast Guard with tremendous leadership throughout 
your years of service to the Country. This Subcommittee wishes 
to especially thank you for all that you have done for the 
Coast Guard and for the Nation.
    At this time, I will turn to Mr. Filner.
    Mr. Filner. Thank you, Mr. Chairman.
    I have a statement for the record I would like to submit. 
And I just echo your concerns about the port security issues. 
Clearly, the firestorm that was ignited by the Dubai thing 
didn't come up just because of that particular situation, but 
because, certainly since 9/11, you and many of us in the 
Congress have been talking about the lack of security for our 
ports. This is the single most vulnerable area after we 
bolstered our airports and airline security.
    So I think the Dubai debacle follows upon other, much more 
basic security concerns that all of us have had. I happen to 
represent San Diego, California. It is not a major commercial 
port, but clearly it is a major port for our Navy and national 
defense. It is probably the biggest Navy base in the world.
    As we talked to Secretary Chertoff from our full Committee 
a week or so ago, the concerns that we had for ports were not 
really answered. Mr. Chairman, I don't know if you were here at 
that hearing, but I asked the Secretary about a briefing that 
some of his officials had had with the Congressional delegation 
from San Diego, where we wondered why San Diego was not 
considered a high threat, that would need the kind of funding 
that was being distributed in other parts of the Country. The 
homeland security briefers said, ``The military assets are 
invisible to us.'' That is, those assets are the concern of the 
military, not of homeland security.
    I think that is a very shortsighted and a very difficult 
policy to pursue. It flies in the face of common sense. We have 
three nuclear carriers sitting in the harbor, which is 
equivalent to six nuclear reactors, a half dozen nuclear subs, 
a nuclear generating plant. It seems to me that that is a 
threat, that is a risk or a threat that a terrorist might look 
at. In fact, two of the 9/11 terrorists were probably casing 
San Diego, lived fairly openly in San Diego for six months or 
more before 9/11.
    So I think we have a long way to go on this, as you 
suggested, Mr. Chairman. We are concerned about it. The Dubai 
thing just brought it out into the open. But I think you have 
scheduled a hearing on that for a week from now or so. This is 
something we have to explore. Frankly, those of us who do 
represent port areas and understand how limited the security 
has been fear that this will be the next focal point for 
attack.
    I appreciate your concern with this and your emphasis on 
studying this further. I will have my full statement on the 
budget for the record, sir.
    Mr. LoBiondo. Thank you, Mr. Filner. I was there for your 
part of the hearing last week, and it really is incredible, if 
you stop and think, with the nuclear capability that Homeland 
Security can't connect those dots. It is one of the reasons 
why, the more we focus on this, the more questions we have and 
the more aggressive we are going to be. I think we are going to 
take a whole new stance on a lot of these issues from this 
point on.
    Mr. Coble, do you wish to lead off with anything?
    Mr. Coble. Thank you, Mr. Chairman, I will be very brief. I 
have another hearing, and I may not be here at the conclusion 
of this hearing.
    I just want to reiterate what you said regarding Master 
Chief Welch and Admiral Cross, 30 and 36 years respectively, of 
distinguished service to this County and to America's oldest 
continuous seagoing service, of which I am a very proud 
supporter, as you know. Both these gentlemen, Mr. Chairman, 
look too robust to be retiring, although they have the same 
sort of hairline that I have. They are still awfully young to 
be stepping aside. I am sure we will see them subsequently.
    Admiral, I want to extend best wishes to you and the Master 
Chief, and thank you for your years of service. And I thank 
you, Mr. Chairman.
    Mr. LoBiondo. Thank you, Mr. Coble.
    Mr. Reichert, do you have anything, any opening statement? 
Any opening statement, Mr. Mack?
    Mr. Mack. Yes, thank you, Mr. Chairman, and thank you for 
holding this important hearing today.
    In light of what has happened recently, I think it once 
again shines a light on the importance and the need for us to 
secure our ports and do everything we can to make sure that our 
ports are secure. Being from Florida and having a relatively 
intimate knowledge of Port Everglades and the port in Miami, 
Tampa, Jacksonville, the State of Florida is particularly 
concerned when it comes to port security because of all the 
potential threats that exist. I want to say that the Coast 
Guard has done an exceptional job thus far in protecting our 
ports and doing it on limited resources in a lot of cases. So I 
commend you for what you do, and look forward to working with 
you on ways that we can continue to make our ports even more 
safe and more secure.
    Again, coming from Florida, it seems to me that this is a 
vulnerable place for us. Mr. Chairman, I would love to work 
with you. Last year when we had this hearing, I talked about 
Port Everglades being a unique location with an airport and a 
seaport and a downtown of a city so close together. I look 
forward to working with you and the Committee on ways to make 
our ports more secure and helping the Coast Guard do their job. 
Thank you.
    Mr. LoBiondo. Thank you, Congressman Mack.
    Mr. Boustany.
    Mr. Boustany. Thank you, Mr. Chairman. I appreciate your 
holding this hearing as well.
    Vice Admiral Cross and Chief Welch, I just want to say on 
behalf of Louisiana, my home State, thank you very much for the 
performance, the tremendous performance of the Coast Guard in 
the aftermath of Hurricanes Rita and Katrina. We have learned 
much about response to these types of disasters from the way 
you operated during the course of this. So again, I thank you.
    I also want to express my concerns about what is going to 
happen with port security and the potential for consolidating 
funding for port security with some of these other types of 
measures. This is something we need to very carefully think 
about as we move forward. I would favor maintaining port 
security as a separate funding stream and working with you as 
we go forward.
    Also I would be interested in looking at how we can, in 
addition to learning from the response of the Coast Guard in 
the aftermath of these hurricanes, look at ways that we might 
expand the role of the Coast Guard in this type of response 
effort.
    So again, I look forward to your testimony, and thank you 
very much.
    Mr. LoBiondo. Thank you, Mr. Boustany.
    We are going to move to our witnesses for today, and then 
we will get into questions afterwards. We are very pleased to 
welcome Vice Admiral Terry Cross, who is the Vice Commandant of 
the United States Coast Guard; Master Chief Welch, who is the 
Master Chief Petty Officer for the United States Coast Guard; 
the Honorable Steven R. Blust, who is the Chairman of the 
Federal Maritime Commission; and Mr. David L. Winstead, who is 
the Commissioner of Public Building Service for the United 
States General Services Administration.
    Gentlemen, thank you for being here. Admiral Cross, please 
proceed.

TESTIMONY OF VICE ADMIRAL TERRY CROSS, VICE COMMANDANT, UNITED 
  STATES COAST GUARD; MASTER CHIEF FRANKLIN A. WELCH, MASTER 
 CHIEF PETTY OFFICER, UNITED STATES COAST GUARD; THE HONORABLE 
    STEVEN R. BLUST, CHAIRMAN, FEDERAL MARITIME COMMISSION; 
  ACCOMPANIED BY: PAUL ANDERSON, COMMISSIONER, HOWARD CREEL, 
  COMMISSIONER, BRUCE DOMBROSWKI, DIRECTOR OF ADMINISTRATION, 
 AUSTIN SCHMIDT, DIRECTOR OF OPERATIONS, AND REBECCA FENNEMAN, 
    ATTORNEY, OFFICE OF GENERAL COUNSEL; DAVID L. WINSTEAD, 
 COMMISSIONER, PUBLIC BUILDING SERVICE, UNITED STATES GENERAL 
                    SERVICES ADMINISTRATION

    Admiral Cross. Mr. Chairman, Congressman Filner, 
distinguished guests, good morning. It is a pleasure for me to 
be here this morning in front of the Subcommittee.
    First of all, I would like to acknowledge your thanks to 
Master Chief Welch and myself for our service and just note 
that it has been a pleasure for us to serve. One of the really 
terrific things about being in the Coast Guard is the 
opportunity not to just work with people that you like, but to 
work with people you admire and can be proud of, and the 
opportunity to go to bed every night feeling good about 
yourself and the work that you do. So it has been our pleasure, 
sir.
    I know that we have submitted a written statement to your 
staff, and with your permission, sir,I would like to have that 
included in the record, and then I would like to offer a short 
oral statement if I might.
    Mr. LoBiondo. Please proceed.
    Since 1915, when the United States Coast Guard was 
established by law as an armed service, it has been a military, 
multi-mission maritime service, possessing a unique blend of 
humanitarian, law enforcement, regulatory, diplomatic and 
military capabilities. During this past year, Coast Guard men 
and women have used these capabilities and authorities to 
accomplish superior operational results.
    Sir, I am not entirely objective about this. But from my 
perspective, America receives a terrific return on its 
investment from the United States Coast Guard. During Hurricane 
Katrina, for example, Coast Guard men and women rescued more 
than 33,000 people in a two week period; responded to 134 minor 
oil spills and 10 significant oil spills totaling more than 8 
million gallons of petroleum products. And to put that into 
context, the Exxon Valdez oil spill was about 11 million 
gallons.
    We also restored operational capability to more than 80 
percent of the aids to navigation that were either lost or 
destroyed by the storm. Beyond Katrina, the Coast Guard was 
hard at work securing our maritime borders. In 2005, the Coast 
Guard, for the second year running, seized a record amount of 
illegal drugs, including almost 300,000 pounds of cocaine. We 
stopped illegal migration of almost 10,000 people by sea. We 
improved the security of our ports and those vessels visiting 
our ports by continuing to implement the Maritime 
Transportation Security Act and the ISPS code.
    Time and again, the Coast Guard delivered what the American 
people expect and deserve from their Coast Guard. The 
President's 2007 budget positions the Coast Guard to continue 
this record of operational excellence. The 2007 budget requests 
investments that strengthen maritime preparedness, improves 
awareness of the maritime domain and enhances capabilities to 
deal with current and emerging threats. Each investment is 
critical to equipping the Coast Guard, so that we can remain 
ready, aware, and capable of being America's first responders 
at seas.
    For example, the 2007 request includes nearly $100 million 
in operating expense funding to support the operation and 
maintenance of new assets, as well as addressing critical 
funding increases needed to close energy and maintenance 
shortfalls. In addition, $37.8 million are requested to 
complete final sustainment projects for medium endurance 
cutters. Each of these components of the request is critical to 
preserving Coast Guard readiness and preparedness.
    The 2007 budget request also includes $89 million to 
support maritime domain awareness. Key initiatives among them 
are critical: C4ISR upgrades for our cutter fleet, development 
of a nationwide AIS infrastructure, and funding to support 
continued efforts to leverage technologies and partnerships at 
the port level to improve our awareness of the people, vessels 
and cargo using our ports and waterways.
    Finally, the 2007 budget request once again makes the 
necessary investment in enhancing Coast Guard capabilities and 
thereby our ability to respond. Significant line items include: 
$418 million for the national security cutter, equipped with 
the right post 9/11 capabilities; funding for one maritime 
patrol aircraft and the missionization of previously purchased 
aircraft; support for the modernization and conversion of our 
helicopter fleet and funding to advance 10 years ahead of the 
original schedule the fast response cutter.
    The 2007 budget provides strong support for the Coast 
Guard. The budget will strengthen maritime preparedness, 
significantly improve awareness and security of the maritime 
border, advance critical modernization and recapitalization of 
our key systems, and ensure the Coast is able to respond with 
the right capabilities.
    Sir, the Commandant is looking forward to working with 
Congress to ensure successful budget and operational outcomes 
for the Coast Guard. I stand ready to respond to any questions 
you might have.
    Mr. LoBiondo. Thank you, Admiral Cross.
    Master Chief Welch.
    Master Chief Welch. Good morning, Mr. Chairman and 
distinguished members of the Subcommittee. I am very grateful 
for the opportunity to appear before you for the final time to 
share my views in support of the Coast Guard's work force that 
I have been so honored to represent.
    Tangible mission results, positive publicity and an 
intensive internal focus on our work force has culminated in 
another year of impressive work force statistics, not the least 
of which was a record high year for the interdiction of 
maritime drugs and migrants and our unprecedented search and 
rescue efforts in the aftermath of Hurricane Katrina.
    In addition to these unequaled operational results, we have 
also benefitted from another remarkable year of recruiting and 
retention efforts. We slightly exceeded our 2005 active duty 
recruiting mission and among the total of enlisted accessions, 
with the second highest percentage of minorities and the third 
highest percentage of women in the history of the Coast Guard. 
High quality accessions, our Commandant's commitment to our 
people, and your work to improve military compensation have all 
continued to positively influence our retention rates. Current 
retention rates for our officer enlisted work forces are an 
unprecedented 93 percent and 88.2 percent respectively. And 
even at the first term enlisted level, we are retaining nearly 
7 of every 10 accessions.
    I am exceptionally proud of the progress that we have 
collectively made during our watch across a broad spectrum of 
important issues. However, I would be remiss if I did not also 
share with you the key challenges that our work force continues 
to face. Our legacy fleet of cutters continues to be the most 
problematic resource issue that adversely affects our people 
and our readiness posture. During fiscal year 2005, our legacy 
cutters operated less than half the time without major 
equipment casualties, that in spite of a 100 percent increase 
in per day operational investments made during the last six 
years.
    Last year alone, our legacy fleet lost the equivalent of 
over four fleet years worth of planned activities such as 
operational missions, training and crew leave and liberty due 
to unscheduled maintenance and repairs. All of which--
    Mr. LoBiondo. Excuse me, would you just repeat that last 
one again, for anybody who may not have been paying attention, 
what was lost last year, four fleet years?
    Master Chief Welch. Yes, sir. Last year alone, Mr. 
Chairman, our legacy fleet lost the equivalent of four fleet 
years, four ship years, in one year, sir, all of which 
negatively impacts crew morale and performance. The importance 
of our integrated Deepwater systems recapitalization project 
cannot be overstated. Our fleet is old, the third oldest of 42 
similar fleets throughout the world. And with age comes 
unreliability, crew safety concerns, outdated technology and a 
general lack of interoperability that can no longer be 
tolerated, considering the wide array of maritime threats that 
potentially face us today.
    As with our fleet, our owned housing units are also old and 
outdated. Averaging 40 years of age and facing multi-year 
maintenance deferrals and a $211 million backlog of proposed 
housing maintenance and construction projects, this situation 
will continue to worsen without intervention.
    In short, we simply don't have the fiscal resources to 
adequately maintain or recapitalize our deteriorating shore 
infrastructure. Continued inattention to our family and our 
unaccompanied personnel housing units will soon lead to health 
and safety concerns that are unacceptable to our work force and 
their families.
    Health care is an issue that extends far beyond the 
organizational parameters of the Coast Guard. We continue to 
have difficulty securing participating Tricare providers and we 
will work closely with DOD to manage those difficulties.
    My chief concern is that providers are opting out of 
Tricare due to low reimbursement rates and cumbersome referral 
and administrative processes. The reduction of Medicare 
reimbursement rates stands to further exacerbate this problem, 
while at the same time, DOD intends to raise Tricare rates for 
retirees under age 65. The Coast Guard is particularly 
challenged with health care issues due to inaccessibility by 
reasons of distance to military treatment facilities.
    Child care costs and accessibility is also becoming a major 
issue facing our families and our single or unaccompanied 
parents. Being far removed from DOD facilities, Coast Guard 
families are again forced to rely upon very limited and costly 
community resources available to them. Less than 3 percent of 
Coast Guard children are cared for by Coast Guard child care 
providers.
    Recognizing the challenges of child care, we are pursuing 
partnerships with the General Services Administration and the 
National Association of Child Care Referral Agencies to reduce 
the burden that is being placed upon our working military 
families.
    In closing, I want to express my sincere appreciation for 
the time and the terrific support that this Subcommittee has 
afforded me and my service during my assignment as the Master 
Chief of the Coast Guard. Your efforts have directly 
contributed to the operational performance and the morale and 
the general well-being of our service members and their 
families. For that, I will remain forever grateful.
    Thank you, and I look forward to answering any questions 
that you may have, sir.
    Mr. LoBiondo. Thank you very much for your insightful and 
powerful statement.
    Chairman Blust.
    Mr. Blust. Good morning, Mr. Chairman, distinguished 
members of the Subcommittee. It is my pleasure to appear here 
before you to present the President's fiscal year budget for 
2007 for the Federal Maritime Commission.
    With me today are two of our Commissioners, Commissioner 
Paul Anderson and Commissioner Hal Creel, as well as a number 
of members of our staff, including Bruce Dombroswki, Director 
of Administration; Austin Schmidt, Director of Operations; and 
Rebecca Fenneman, Attorney in our General Counsel's office.
    The President's budget for the Commission provides for a 
$21,474,000 budget for fiscal year 2007. As you mentioned, Mr. 
Chairman, this represents an increase of 5.8 percent, a little 
over a million dollars over fiscal year 2006, and is in line 
with this Subcommittee's authorization numbers of $21.5 million 
for fiscal year 2007.
    I would like to take a moment and highlight for you some of 
the Commission's significant activities and recent 
accomplishments. Mr. Chairman, one of the items you asked me to 
comment on was NSAs, the non-vessel operating common carrier 
service arrangements that were put into place in January of 
2005 to allow non-vessel operators the ability to do 
confidential service contracts with their shipper customers, to 
make them in a more competitive arena with the vessel operating 
common carriers who have been able to do service contracts for 
a number of years.
    In January last year, when we made the NSAs available to 
the industry, it covered a portion of the business and excluded 
a part because of pending litigation that was moving through 
the courts. We did not initially allow NVOs to operate as 
shippers with other NVOs or shipper associations that had NVO 
members to participate with another NVO under the NSAs. We had 
concerns about the outcome of the court case, and when that was 
resolved, we were able to move along.
    And in October of 2005, we expanded the ability for NVOs to 
operate as shippers in relation to other NVOs and service and 
shippers associations which had NVOs as members to participate 
as shippers with other NVOs in the NSA arena. So the only piece 
that is still outstanding, as we have moved along and 
embellished the program, is one small piece that is joint 
offering of service between two NVOs offering common rates, 
because of our concern of anti-trust issues.
    There is a court case that is going on right now that may 
help clarify it. In the meantime, we have asked the industry 
for comments about what they are looking for for joint service. 
We have received those in December and our staff is currently 
evaluating the comments that came in. We should be able to have 
a position on that very shortly.
    So it is moving along quite nicely. There are 207 NSAs that 
have been filed with us, and more than 10 percent of all NVOs 
have registered to provide NSA service in the future. We are 
approaching contracting year for this next year, and I expect 
we will see an increase in the numbers as we go along. It is a 
new tool and another opportunity for them to provide 
competitive service to the shippers.
    Another area that we have been actively involved in is our 
oversight of OTIs. Just recently, we were able to obtain an 
injunction against nine, well, we did a formal investigation of 
nine household goods moving companies and received an 
injunction against four companies and three individuals who 
were providing service to the shipping community, primarily 
individuals, who were moving personal effects and household 
goods overseas, to prevent them from operating outside the 
lawful arena, outside the statues of the Federal Maritime 
Commission. We received over 250 complaints, which prompted us 
to seek the injunction and proceed with the formal 
investigation. Since that time, we have received more, probably 
exceeding 300 complaints on these individual companies.
    Our concern is that individuals, especially with the baby 
boomers who are now moving on into retirement and moving 
overseas, either on a partial or full time basis, become 
victims to unscrupulous operators out there in the arena. So we 
are very concerned about it. Through our collaborative efforts 
within the organization and working with law enforcement 
agencies, with local and with Federal Government, finding ways 
to stifle the activities of the unlawful operators and either 
bring them into compliance or get them out of business. Because 
it is affecting a number of individuals, and it is an area of 
concern and focus for us.
    Another area that I mentioned last year, sir, was the 
outreach initiatives that we have been taking at the FMC. We 
have reached out, providing seminars to the industry, and we 
have invited the industry to come in and meet with us to brief 
us on the important issues. This last year, we had seven 
organizations visit the FMC and brief the entire staff on key 
issues that are confronting them. We included vessel operators, 
non-vessel operator OTIs, shippers, ports, cruise lines, marine 
terminal operators.
    And we should have another briefing later this month on the 
equipment operators. There is a group called OSEMA that 
operates equipment, and they are establishing chassis pools to 
allow freer flow of business and ease of movement. They are 
going to provide a briefing to us as to their activities. We 
expect that program to continue on. It has been well received 
on both sides.
    Finally, I would just like to briefly mention security from 
the FMC's perspective. While we do not have a direct, front 
line role in security, we continue our efforts in providing 
support to the Department of Homeland Security, primarily the 
Coast Guard and Customs and Border Protection, in providing 
expertise and advice and support to them, and through our 
licensing and bonding capabilities, make sure that those 
individuals who have responsibilities under our oversight, that 
they operate in a proper manner.
    With that, Mr. Chairman, I will be happy to answer any 
questions that you may have. Thank you.
    Mr. LoBiondo. Thank you, Mr. Blust.
    Mr. Winstead, please proceed.
    Mr. Winstead. Mr. Chairman, members of the Subcommittee, I 
am David Winstead, Commissioner of the Public Building Service 
of GSA. I assumed this position in October of last year, and I 
am pleased to be given this opportunity to appear before you to 
discuss GSA's development of a new headquarters for the U.S. 
Coast Guard, our client, at the St. Elizabeth's west campus.
    My full statement is submitted to the Subcommittee, which I 
ask to be made a part of the hearing record. With your 
permission, I would now like to make a brief statement.
    Mr. LoBiondo. Without objection.
    Mr. Winstead. Mr. Chairman, we are very pleased to work 
with the Coast Guard as our client in meeting both their 
current and future space needs, and doing so at a best value to 
them as well as the American taxpayer. The St. Elizabeth's west 
campus is a national historic landmark, located in southeast 
Washington. It is a 176 acre site with 61 buildings containing 
1.1 million square feet of current space, and it features 
landmark open space and campus, a historic Civil War cemetery 
and stunning views of the surrounding National Capital region.
    GSA acquired this campus in December of 2004 as a transfer 
of the U.S. Department of Health and Human Services at no cost 
to meet the significant future needs for secured Federal office 
space over the next decade. I would like to address two issues 
pertaining to this site that you addressed in some opening 
remarks, and that is occupancy and transportation.
    GSA is excited in developing this new headquarters complex 
for the U.S. Coast Guard. We feel that we can work and are 
working very closely with them to prepare a master plan and as 
we begin to do design work on this facility. I also will 
address other issues and needs, such as the child care, which 
was mentioned earlier. This new secured campus will combine new 
construction with the re-use of some historic buildings that 
will consist of 1.3 million gross square feet of space, 
excluding parking and occupancy. Planning for occupancy is to 
begin in 2010.
    Given the size of the campus, we are working with DHS in 
indicating and identifying other DHS elements that could locate 
on the site, thus increasing the total amount of occupied space 
to over about 4.5 million square feet, again exclusive of 
parking.
    Also, I know the Committee has asked questions of the Coast 
Guard, and we have been addressing those, in terms of 
transportation. The Committee should be assured that we are 
developing a detailed plan to manage all transportation issues 
and to provide road access to the site well before the Coast 
Guard begins occupancy of the campus.
    Presently, the west campus is only accessible from Martin 
Luther King Avenue. While Interstate 295 and Suitland and South 
Capitol Street are nearby, none of these provide direct access 
to the site. However, two Green Line Metro stations serve the 
campus, Anacostia, which is a quarter mile away, and Congress 
Heights, which is a half mile away. Currently, we are working 
with the Coast Guard to prepare a transportation management 
plan. We have gathered data from Coast Guard employees and will 
continue that process as we continue to design the site 
planning.
    We will also be gathering data from employees of other DHS 
elements as they are identified and we are already aware of 
significant interests amongst Coast Guard employees to find 
alternatives to driving to work. GSA is actively engaged in 
meetings with local transportation and transit agencies in the 
National Capital region. We hope to provide a multi-faceted 
program to improve transportation access and service to the 
neighborhood, as well as to the to the St. Elizabeth campus. 
This plan will be finalized as a part of our campus master plan 
and is a part of our environmental impact statement, both 
projected for completion by August of 2010.
    There are several transportation improvements underway and 
planned that are covered in my testimony, but we intend to 
acquire land and construct access roads at the northwest and 
southwest corners of the campus. Depending on funding, the D.C. 
Department of Transportation has scheduled roadway improvements 
along South Capitol Street and Suitland Parkway to include new 
interchanges and intersection improvements.
    We also hope that D.C. DOT has secured and received funding 
to replace the 11th Street Bridge and the Frederick Douglass 
Bridge. Express bus service and park and ride lots from 
suburban areas will access the campus from the transportation 
facilities at the Metro stations. We are also working with the 
Bolling Air Force Base and Anacostia Naval Air station in 
developing comprehensive transportation solutions for that 
area.
    Mr. Chairman, and members of the Committee, I am very 
pleased to be here as part of this panel. I know there are many 
important issues before you today. But we are committed, as 
GSA, to continue to develop this campus plan and to create a 
first class, secured headquarters campus for the U.S. Coast 
Guard. Part of that commitment is to ensure that their 
employees have safe, convenient and efficient access to and 
from their jobs. We will continue to explore these options and 
to share with this Committee our plans in that regard.
    Thank you.
    Mr. LoBiondo. Thank you very much, Mr. Winstead.
    We are now going to move into some questions. I am going to 
start off, Admiral Cross, with you. On the topic that has just 
dominated the media for the last two weeks or so, on Dubai and 
port security, we have so many questions that seem to remain 
unanswered. But I know I speak for the Committee and many of my 
colleagues in the serious concerns that we have.
    I would like you to discuss with us the Coast Guard's role 
in the original review of this proposal, and if possible, can 
you give us any time line of when you were first asked to look 
into this and any information surrounding that?
    Admiral Cross. Yes, sir, I think I can provide some 
information on that.
    The Coast Guard's role, first of all, the Coast Guard is 
not part of the Committee on Foreign Investment in the United 
States. The Department of Homeland Security is in fact the 
member of the committee, and then we work to provide 
information and input into the Department. Those efforts 
started in early May of 2005 at the staff level within the 
Coast Guard. Then the meetings continued for some time, both 
within the Department, and Coast Guard members were also 
present at certain interagency meetings as well.
    Mr. LoBiondo. So DHS requested the Coast Guard to provide 
security analysis of the proposal, is that the way it took 
place?
    Admiral Cross. They were just looking for our input into 
the proposal, yes, sir.
    Mr. LoBiondo. So you were really not asked specific 
questions? You were just asked to give your overall opinion?
    Admiral Cross. I'm sure that in the meetings, and I wasn't 
in the meetings, but I'm certain that in the meetings that 
those staff officers representing the Coast Guard were asked 
questions. I don't think any notes were taken at the meetings. 
So I can't be more specific.
    Mr. LoBiondo. I would hope that at our hearing next week we 
could be more specific with these particular issues.
    The Administration has sort of belatedly implemented the 
additional, more stringent 45 day review of this proposal, 
which remains somewhat questionable about what this review 
means, since the financial end of it looks like it is moving 
forward this week. I am not sure whether this is a pat on the 
head to try to get Congress to back off, or whether it is a 
real postponement for review.
    But will the Coast Guard be involved in any more 
comprehensive second review in this process, to your knowledge?
    Admiral Cross. I don't think the process for the second 
review has been announced. So I really can't speculate as to 
what our role might be. My presumption would be, is that we 
would participate in much the same way that we did before. But 
I will speculate that perhaps the representatives will be at a 
more senior level.
    Mr. LoBiondo. Again, possibly by next week we can have 
someone be asking DHS what involvement they would expect of the 
Coast Guard in this second review.
    Additionally, does the Coast Guard require foreign port 
terminal operators to implement security measures beyond those 
that are required by current law?
    Admiral Cross. Do you mean the overseas ports, sir?
    Mr. LoBiondo. Yes. When they are operating the ports in the 
U.S.
    Admiral Cross. Oh, you mean the foreign operators of 
terminals in the U.S.
    Mr. LoBiondo. Yes.
    Admiral Cross. No, sir, they are required, as are all the 
port and terminal operators, they are governed by the 
requirements of the Maritime Transportation Security Act of 
2002.
    Mr. LoBiondo. Let me move for a minute to the port security 
grant issue. I think that the, and I know that the Coast Guard, 
the budget is not directly responsible for this. But with the 
Coast Guard's responsibility for port security, you are very 
intimately involved. I am just astonished at the Administration 
proposal in terms of the numbers and in the proposal to 
consolidate these port security grants with the multi-sector 
transportation infrastructure program.
    Let me just remind everyone, I believe it was the Coast 
Guard's assessment in a previous hearing, that in order to come 
close to implementing our port security needs, we would be 
talking in terms of $7 billion. I think I am pretty close on 
that number, correct me if I am wrong.
    The current proposal, which could be diluted if the 
Administration gets its way, accounts for about $125 million 
this year. Now, math wasn't my strong suit, but I think that 
takes us 60 or 70 years out, not accounting for any additional 
increases. I don't think we can find anybody in or out of 
Government that has any degree of expertise that will make any 
kind of a statement saying that we are anywhere close to where 
we need to be with these port security grants or our overall 
effort with port security.
    Now, the Coast Guard probably has maximized and stretched 
our dollars that we have spent just because of your expertise 
and your excellent service. But can you tell me, does the Coast 
Guard support this proposal to eliminate dedicated funding to 
secure our ports and move it into a new area?
    Admiral Cross. Yes, sir. I think this is an effort on the 
part of the Secretary to address what are seen as the highest 
risks first. Maybe another comment would also be appropriate. I 
think that $7 billion figure, that didn't necessarily just 
apply to Federal funding. I think that was what we estimated 
was the total cost.
    For example, industry has borne much of the cost to 
implement MTSA in terms of the development of facility plans, 
the hiring of people to be security officers at facilities, and 
the same for ships, by the way. Then also the upgrades, 
security upgrades that were required on ships and port 
facilities in order to comply with the Act.
    Mr. LoBiondo. Well, I appreciate that. My $7 billion number 
was at the low end, because I think actually the estimate was 
between $7 billion and $11 billion. So I am accommodating the 
industry component of that for the other $4 billion, which 
still leaves us tremendously short.
    I don't want to dominate initially here too much, so I am 
going to move over to Mr. Filner, and then I will be back with 
some more questions.
    Mr. Filner. Thank you, Mr. Chairman.
    Admiral, I didn't understand, when you answered the 
Chairman's first question, you said you were asked in May of 
2005? I mean, this stuff didn't start until November.
    Admiral Cross. No, sir, it was November that we were asked, 
November 7th. If I said May, I misspoke.
    Mr. Filner. I don't know if you saw, if you get the clips 
on this stuff, in yesterday's San Diego Union Tribune, which is 
our daily paper in San Diego, the headline said on the paper, 
on the first page, it said Coast Guard Raise Concerns on Port 
Deal, sub-headline, Homeland Security Unaware of Warning. The 
article says, ``The Coast Guard warned within the past three 
months of the proposed takeover of some U.S. port operations by 
a state owned company raised intelligence gaps and made it 
difficult to assess the deal's possible threat to national 
security. The cautions did not trigger a 45 day investigation, 
which would have been required if a cabinet level agency had 
raised such a concern.''
    Later on the article says, ``It is unclear when the Coast 
Guard issued its warning, but Stewart Baker, the DHS Assistant 
Secretary of Policy, told Senators he never saw the Coast 
Guard's admonition, because it never circulated outside the 
Coast Guard.'' Is that true, to your knowledge, that you just 
wrote something for your own great reading pleasure and nobody 
else bothered to read it?
    Admiral Cross. Sir, perhaps if I could add some 
clarification to this entire issue, it might be useful. From 
2000 to 2002, I was the Assistant Commandant for Operations. As 
part of that assignment, I had oversight for the entire Coast 
Guard intelligence program, so I have seen a lot of 
intelligence reports.
    We try to follow what I used to call the Colin Powell 
process for developing intelligence reports.
    Mr. Filner. Did we start in November 2005, or--
    Admiral Cross. No, sir. I will get there. But it is, tell 
me what you know, tell me what you don't know, and then tell me 
what you think. So much of that report involved what we know, 
and that part remains classified. The gaps that were talked 
about specifically highlighted those things that we didn't know 
and weren't able to find out within the time frame.
    And then the conclusion of the report, which I will quote, 
``DP World's acquisition of P&O, in and of itself, does not 
pose a significant threat to U.S. assets in continental United 
States ports.'' That's what we think.
    Mr. Filner. I asked you, did this circulate outside the 
Coast Guard, to your knowledge?
    Admiral Cross. There is a process for intelligence reports. 
I do know that it was put on a SIPERNET site where other 
intelligence agencies had access to the report. I think that 
was in December that we did that.
    Mr. Filner. So Mr. Baker, when he told the Senators, this 
report never circulated outside the Coast Guard, is untrue?
    Admiral Cross. People outside the Coast Guard had access to 
the report.
    Mr. Filner. But apparently your cabinet level whatever 
didn't--do you see reports like this that say people never read 
your report? I mean, what is your reaction to that? They say 
they never saw it. These are your superiors up there.
    Admiral Cross. I don't know if Mr. Baker saw the report or 
not. My understanding is they were relying on the Coast Guard 
representatives in the meetings to communicate any concerns we 
might have.
    I should also add that action was taken on those concerns. 
The assurances that were written into the agreement to allow 
DPW to take over the P&O operations addressed two of the 
concerns that we had, and the last concern was subsequently 
addressed. So we actually have no concerns at this time.
    Mr. Filner. So all those vital concerns were resolved, as 
far as you are concerned?
    Admiral Cross. Let me be specific. Two of the concerns 
involved information that we did not have regarding certain 
backgrounds of certain personnel and employees of DPW, and 
another about certain elements of their operation that we 
didn't have information on. In the assurances that were written 
into the agreement, they have agreed to provide that 
information. We don't yet have it. But they have agreed to 
provide it.
    Mr. Filner. And the third? The foreign influence?
    Admiral Cross. Yes, sir, the third issue had to do with 
foreign influence. And in subsequent discussions with other 
intelligence organizations in town, within the Government, we 
have received additional information. We are no longer 
concerned about that.
    Mr. Filner. I am really confused now. You said that the 
agreement assured the United States we would have that 
information, although we don't have it yet, is what you just 
said. So you might say, you assure us we are getting a budget 
today, but we haven't seen your numbers, but we are going to 
get them, so I don't have to worry about anything. Is that what 
you are saying?
    Admiral Cross. No, what I was saying is, when the agreement 
is concluded, they have agreed to provide us the information. 
If they don't provide us the information--
    Mr. Filner. But the problem is, we have problems with the 
security based on that information. I mean, what you are saying 
is, as long as they provide the information, no matter what it 
says, we are happy. That is what you seem to be saying.
    Admiral Cross. Well, once they provide us the information, 
we would have an opportunity to vett the information. But we--
    Mr. Filner. But the agreement has already been passed. So 
what if you get the information, of course, it won't be 
circulated outside the Coast Guard anyway, so what is the 
difference?
    I just don't understand--there were two offers to buy those 
ports, one by this Dubai Ports World and the other by PSA, 
owned by the government of Singapore. Did you evaluate that 
one, too?
    Admiral Cross. I don't know if the offer from anyone other 
than DPW was evaluated by the Coast Guard.
    Mr. Filner. Of course, back in November, when you said you 
started, both corporations made offers, and you only did one of 
them?
    Admiral Cross. My presumption is that the offers would have 
been made to the current owners, P&O, not to the U.S. 
Government. Then P&O would have decided which offer best served 
their corporate interests.
    Mr. Filner. Right.
    Admiral Cross. Then after they decided that, the issue 
would have been passed to SIFIUS.
    Mr. Filner. Pardon me, Mr. Chairman, I know I'm beyond 
time. But you said you were asked in November. At that time, 
two offers were on the table. And it was only a few weeks ago 
really that the offer was increased sufficiently that P&O 
decided to accept the DPW bid.
    I don't understand the process. Number one, what were you 
asked to do, for which corporations, why nobody outside your 
agency knew anything about them and why you are so, why these 
issues were resolved so quickly for you? If you can comment on 
any of those four things, I would be happy to hear it.
    Admiral Cross. I am not aware that we did any analysis on 
PSA. If that is in fact the case, we will certainly provide 
that information to the Committee.
    Mr. Filner. Did you ever ask Mr. Baker why he didn't read 
your report?
    Admiral Cross. I am not sure that Mr. Baker hasn't read it, 
but no, I haven't talked with him about the report.
    Mr. Filner. He told the Senate he didn't know about it. I 
think you should worry whether the people upstairs are reading 
all this work that you are doing. I may come back to that.
    Thank you, Mr. Chairman.
    Mr. LoBiondo. Mr. Coble.
    Mr. Coble. Thank you, Mr. Chairman.
    Admiral, when we heard the words search and rescue, we 
synonymously think Coast Guard. When we hear the words port 
security, we synonymously think Coast Guard. And after 9/11, I 
made the statement, along with hundreds of others, I am sure, 
that when these murderers come back calling again, they likely 
will come calling by water, port or harbor.
    Having said that, Admiral, how do you feel about our port 
security, security now as opposed to pre-9/11?
    Admiral Cross. Congressman, I do not think there is any 
question that our ports are far more secure now than they were 
prior to 9/11. If you will permit me, I have a list of some of 
the activities and actions that we have taken over the course 
of the last few years. First of all, we implemented or 
increased the time for an advance notice of arrival from 24 
hours to 96 hours for all crew information, passenger 
information, cargo and vessel history. This gives us a chance 
to vett that information across a series of data bases.
    We fielded 12 Maritime Safety and Security teams consisting 
of more than 80 boats and the crews that go with those boats. 
Those teams also have explosive detection dogs. They have an 
underwater detection capability and divers to help manage that 
underwater detection capability.
    With the Congress' help, we have purchased and fielded 14 
new coastal patrol boats and acquired for use 5 Navy 179 foot 
patrol boats. We stood up two maritime intelligence infusion 
centers, one on each coast. We have placed field intelligence 
support teams in most of our major ports.
    Mr. Coble. Let me reclaim my time, because I want to beat 
that red light.
    Admiral Cross. Okay, I am sorry, sir.
    Mr. Coble. But the point is, you feel fairly confident, I 
take it?
    Admiral Cross. I am confident that we have done a great 
deal and we are far safer than we were. I think much work 
remains to be done.
    Mr. Coble. I concur on both counts.
    Admiral, the President requested $417 million to bring the 
first three national security cutters to full operational 
capability and to construct a fourth one. Why did the Coast 
Guard choose to acquire the national security class prior to 
other Deepwater cutter classes?
    Admiral Cross. Sir, if you take a look at the age of our 
fleet, the larger ships that we have are the oldest. You can 
make the case that they are also, well, they are clearly the 
most capable. So when we get those new national security 
cutters online, we are not only going to have new cutters, we 
are going to have far more capable cutters, especially in the 
C4ISR realm, which we think is absolutely the key to improving 
port security.
    At the end of the day, preventing terrorist attacks is 
about having the ability to collect, analyze, synthesize and 
act on information.
    Mr. Coble. And I think cost savings and operational 
benefits also likely will accrue, will they not?
    Admiral Cross. What we do know we are going to do is avoid 
substantial maintenance costs on our current 378 fleet, the 
high endurance cutters, which are going up every year. And also 
the operational days that we are losing, that is what Master 
Chief Welch was talking about, 731 days, I believe was the 
number last year of scheduled deployment days that were lost to 
unscheduled maintenance.
    Mr. Coble. Finally, Admiral, let me put a three part 
question to you. The Administration's budget proposal 
reclassifies drug interdiction as a non-homeland security 
mission. My three questions are these, Admiral. Will this 
designation affect resources and funding that is dedicated to 
the Coast Guard drug interdictions? B, do you know why the 
Administration proposed this reclassification? And finally, how 
did the diversion of personnel and air assets due to the 
hurricane response efforts affect the Coast Guard's drug 
interdiction capabilities in calendar year 2005?
    Admiral Cross. Let me see if I can answer those in order. 
Will it affect the resources? I think over time it could 
potentially result in smaller budget allocations for the Coast 
Guard.
    The second question is, do I know why. I think that was a 
standard that was applied across all the agencies in 
Government, with an effort to increase those parts of the 
budget that were dedicated to national security.
    And the third part of your question had to do with, did the 
diversion of people and air assets to Katrina affect counter-
narcotics. I think in some way that it did. Primarily that way 
would have been, I think you may know that at one point we have 
somewhere between 35 and 40 percent of all the aircraft that we 
own were in New Orleans or Mobile, Alabama. So little question 
in my mind that we probably did not deploy, some of the ships 
that deployed for counter-narcotics that would have had 
helicopters on board probably did not. But otherwise, I think 
for the most part, that would have been the impact.
    Mr. Coble. I thank you, Admiral. Good to have all of you 
with us. Thank you, Mr. Chairman.
    Mr. LoBiondo. Thank you, Mr. Coble.
    Congresswoman Brown?
    Ms. Brown. Thank you. Later, in a different forum, would 
you please give me an update on the status of the dormitories 
in Connecticut? I visited there, I was very impressed with the 
men and women there, but it needed substantial work. I need to 
know what is the status of that.
    Let us get down to what everybody is concerned with, and 
that is port security. I want to commend you all because you 
have taken what is a lemon and made lemonade, you have done the 
best with what you have had and you have stretched the dollar. 
Thank you very much. And of course, I fought very hard that you 
all kept some independence under the Homeland Security.
    But as always, the Bush Administration is misleading the 
public. Everybody gets a comfort level when we think that the 
Coast Guard is responsible for port security. And they think 
you are doing a lot more than what you are doing. You list a 
lot of things that you are doing.
    But I come from Florida. I have 14 ports and I know exactly 
what you are doing as far as port security is concerned. Now, 
you said earlier when the Chairman asked you a question about 
combining the grants program after 9/11, if it wasn't for this 
Committee, the ports would have gotten not a dime from this 
Administration. We spent $4.4 billion in aviation security, but 
only $36 million in all surface transportation.
    So now, it is misleading the public to say that the Coast 
Guard is responsible for port security. You play a very 
important part. I have nothing wrong with you playing an 
additional part. But you cannot do it when your operational 
budget has been cut.
    Now, I need to know, what role do you all play in port 
security? And I know you can't tell us what kind of funds you 
actually need. But it is misleading the public to say that the 
Coast Guard is responsible for port security when of course the 
operators that operate the port are responsible. And in 
Jacksonville, we hire the sheriff's department that is there 
protecting the port.
    Now, you do waterside, some protection based on the amount 
of dollars that you have.
    Admiral Cross. Yes, ma'am. Maybe I should start by saying, 
Florida is near and dear to my heart as well. I was born in 
Broward County General Hospital in Fort Lauderdale.
    Ms. Brown. I live there.
    Admiral Cross. And maybe I should correct one thing. Since 
2001, the Coast Guard has grown by about 5,000 people. And we 
have seen our operating budget increase by a little over 65 
percent, and our capital acquisition budget is--
    Ms. Brown. Sir, I agree. But also, your duties and 
responsibilities have increased. Okay?
    Admiral Cross. Yes, ma'am.
    Ms. Brown. You get a free ride on that one.
    Admiral Cross. No, I do not want a free ride. I wanted to 
clarify the record.
    I do not think we have ever suggested that only the Coast 
Guard is responsible for port security.
    Ms. Brown. No, sir you have not. But in the television and 
in the news, it is out there, the Coast Guard is responsible 
for the port. This is the first I have heard it from you. But I 
knew it was misleading, lying, however you want to call it.
    Admiral Cross. Well, I think we are the leaders for port 
security.
    Ms. Brown. Oh, you are.
    Admiral Cross. The captains of the ports head the local 
port security.
    Ms. Brown. Do you verify the operation? Tell us, please 
tell us what exactly does the Coast Guard do?
    Admiral Cross. Let me offer some examples. We have 
implemented the Maritime Transportation Security Act passed by 
this Committee. So we have now validated the fact and looked at 
and approved 6,200 ship security plans and 3,200 facility 
security plans. We also--
    Ms. Brown. Excuse me, that is wonderful. Now, you have 
okayed what is written on a piece of paper. What kind of 
oversight? What kind of verification? Where is the budget for 
that? I can say anything on a piece of paper. But if there is 
not oversight, if you can't go in there and verify, there is a 
problem.
    Admiral Cross. Ma'am, we can go in and verify. And to date, 
since July of 2004, we have detected over 700 violations of 
which 44 of those were deemed to be major violations. When we 
say major violation, that oftentimes results in a stoppage of 
cargo operations or in some cases, we actually closed down 
facilities until they met the requirements of the Act.
    This is not just in U.S. ports. As well, we also inspect 
ports overseas for compliance with the International Ship and 
Port Facility Code. So far, we have inspected 44 ports 
overseas, 37 passed, 7 did not. So those 37 that passed 
represent about 80 percent of all the goods that are shipped 
into the United States. The seven that failed are in the 
process of being notified that ships arriving in U.S. ports 
from those ports will be subject to additional scrutiny.
    Ms. Brown. Oh. I have a minute left.
    Mr. LoBiondo. You are over by a minute.
    Ms. Brown. Are we going to have a second round, sir?
    Mr. LoBiondo. Yes, we certainly will.
    Ms. Brown. I am ready for it.
    [Laughter.]
    Mr. LoBiondo. Mr. Simmons.
    Mr. Simmons. Thank you, Mr. Chairman. I want to thank 
Representative Brown on two counts, one for mentioning Chase 
Hall and the renovations at Chase Hall. We have some very fine 
young men and women up in the dormitory at the Coast Guard 
Academy. But that hall needs renovation, just for safety's 
sake. And I thank her, because she visited the facility a 
couple of years ago, and saw with her own eyes what we need to 
do, and I thank her for that.
    I also wish to mention, under Coast Guard R&D, on page 6 of 
our handout, that the R&D facility is very important to Coast 
Guard. When Coast Guard was passed to Homeland Security, the 
idea was it would be passed intact. I think that's what the 
language of the law said. And yet, in each cycle, since we 
created the Department of Homeland Security, an effort has been 
made to take the funding for R&D out of Coast Guard and give it 
to Homeland Security.
    I oppose that, I think other members of the Subcommittee 
oppose that. I will continue to oppose that.
    But the point I want to make now is that the Coast Guard 
R&D has been in World War II buildings at Avery Point for a 
long time. They deserve a better spot. Boston GSA has done a 
wonderful job trying to assist in locating a site at the Fort 
Trumble property in New London. We have a site available. It is 
not encumbered by eminent domain in any fashion. It gives line 
of sight to the water.
    I would just hope that, I know GSA is here today to testify 
on the St. Elizabeth's site, but I would hope that you would 
give highest priority to providing a suitable building on the 
Fort Trumble property adjacent to the Coast Guard station, 
adjacent to Fort Trumble, which is the original Coast Guard 
facility ashore, adjacent to what we know will be the National 
Historical Coast Guard Museum. This will become a center of 
excellence for Coast Guard, and I think this is a very 
important project. I hope GSA Washington will help GSA Boston 
with this project.
    That being said, I would like to switch to again the 
subject that was raised by my colleague, Representative Brown 
of Florida, which is port security. My understanding is under 
the provisions of the Maritime Transportation Security Act of 
2002, requirements were set for the checking of cargo, both 
looking in cargo containers in facilities and checking the 
container seals. People that I know that are working the piers 
and working the docks and working the ports are telling me that 
only a very small percentage of these checks are being done.
    I guess my question is, if the budgets are adequate for 
this purpose, why are we not checking a higher percentage of 
containers and seals? There has been a big hoo-ha over DOHA and 
who should be managing our ports. That is an interesting issue. 
It is a related issue.
    But the bottom line to me is right now, and I have not as 
many as Ms. Brown, but I have a port in my district, why are we 
only checking 4, 5, 6 or 7 percent of the containers, if the 
money is adequate? And what does this Subcommittee and our full 
Transportation Committee and the Congress need to do to address 
this important homeland security issue?
    Admiral Cross. Yes, sir. The inspection of containers is, 
it is not a Coast Guard responsibility. That is primarily 
managed by Customs and Border Protection. I think it would be 
wrong for me to try to answer that question. I would prefer 
that we provide that question for them.
    If I could, can I just make a comment on your two other 
issues?
    Mr. Simmons. Please.
    Admiral Cross. Two years ago, not only was I Assistant 
Commandant for Operations, but by virtue of being in that 
position, I was also on the Coast Guard Academy Board of 
Trustees. I had an opportunity to visit the barracks on a 
number of occasions, barracks that I lived in for four years as 
a cadet. Quite frankly, I was appalled at the condition of the 
barracks. So we would seek this Committee's support for helping 
us to continue to fund the renovation of Chase Hall. It is a 
very high priority for us. We are started, but we really need 
full funding of those funds that we have asked for to continue.
    With regard to the R&D Center and the location, we agree 
with you. I think it was actually the Coast Guard that asked 
GSA to help us take another look at the facility over at Fort 
Trumble. What we were hoping is that, we walked away from that 
initially because the price was going to be exorbitant. We 
think that might have been because the developer we were 
talking to, they really develop hotels. We think maybe the 
technical requirements for an R&D center might have caused them 
to factor a great deal of risk into the price and maybe if we 
talk to the right people we can get the building modified for a 
reasonable cost.
    Mr. Simmons. I appreciate those comments, Mr. Chairman. And 
again, the building being renovated, Building 2, I agree with 
you, adopting that to your purpose is probably going to be more 
expensive than necessary. But there is land available within 
that complex unencumbered by eminent domain issues, with line 
of sight where a new building could be constructed, designed 
specifically to the Coast Guard's needs, probably cheaper than 
converting the existing building to that purpose. I would urge 
that GSA work with the Coast Guard on that. Because again, this 
becomes a center of excellence for the Coast Guard at that 
location.
    Thank you, Mr. Chairman.
    Admiral Cross. I know the Commandant is looking for an 
opportunity to meet with you to discuss kind of a broad range 
of issues in New London.
    Mr. LoBiondo. Thank you, Mr. Simmons.
    Mr. Reichert.
    Mr. Reichert. Thank you, Mr. Chairman.
    Thank you for your service. Most of us on this Committee do 
not have Coast Guard backgrounds, but there is one gentleman, 
who just left, who does. Most of us, I come from a law 
enforcement background and I spoke to the Navy League last week 
in my district is near Seattle and also to a group of Coast 
Guard members at a luncheon a couple of weeks ago. I asked them 
to forgive me, because I am a member of the Air Force in my 
younger years.
    I do not understand everything the Coast Guard does. But I 
have a good understanding of what you do. I would just for the 
record ask you to, if you could, describe your mission as it 
relates to our port security.
    Admiral Cross. Yes, sir. First of all, we love the Air 
Force.
    [Laughter.]
    Admiral Cross. We certainly wouldn't hold that against you, 
although it would be our pleasure to escort you on a visit to a 
Coast Guard facility some time, so you can get a better idea 
about what we do. We have extensive facilities down in the 
Hampton Roads area where you could do just about everything the 
Coast Guard does in a fairly short period of time.
    Port security, just like everything the Coast Guard does, 
is multi-faceted. It is not just about maritime safety and 
security teams or boat crews driving boats in order to collect 
information or just provide a deterrent capability. It is also 
about inspections, it is about implementation of the Maritime 
Transportation Security Act, and the International Ship and 
Port Facility Code, which we have worked very diligently with 
the International Maritime Organization part of the United 
Nations to get passed.
    It is about collecting information. A lot of the money, and 
in some cases, elements of different line items in our budget 
are requested to help us improve our maritime domain awareness. 
Once again, that is not just a Coast Guard effort. That is an 
effort that we are working very, very diligently with Customs 
and Border Protection, other Federal agencies, importantly with 
the Department of Defense and NorthCom, so that we will be able 
to jointly--that's a word you should recognize--
    Mr. Reichert. Yes.
    Admiral Cross. Jointly collect this information, synthesize 
it and use it and employ the most appropriate asset to go 
interdict any threats to not just our ports, but to our Country 
in general, but of course primarily we are worried about ports.
    Mr. Reichert. And you are the lead agency in that effort as 
far as--
    Admiral Cross. We have been designated the lead agency for 
maritime homeland security, as opposed to homeland defense, in 
which case we are supporting role for the Department of 
Defense. In that role, I think it is appropriate to point out 
that captains of the port are all Coast Guard officers. They 
have unique authorities in that regard. For example, they can 
refuse to allow ships to come into port. They can retain ships 
in port. They can cause ships to be moved around when they are 
in port. Coast Guard people have the authority to board and 
inspect any vessel in a U.S. port, actually U.S. vessels 
anywhere in the world, and foreign vessels within 12 miles of 
our shore.
    Mr. Reichert. And I am sure that they work in close concert 
with the locals, port authorities, as my colleague mentioned, 
the sheriff's office in Florida at one port. I happen to have 
been the sheriff of Seattle, did not have that responsibility 
but worked closely with the port authority. So your captain of 
the port certainly would be a close partner of any port 
authority and also any company that might have some authority 
there for security. Is that not correct?
    Admiral Cross. Yes, sir. The level of cooperation between 
Federal agencies, State and local agencies and industry is 
higher than it has ever been. For example, the captain of the 
port, I think I mentioned earlier, is chairman of the port 
security committee. But all those entities that you talked 
about would be represented on that committee.
    Oftentimes we do joint boardings. Increasingly we do joint 
boardings with Customs and Border Protection. I think you are 
going to see that evolve as standard procedure in the not too 
distant future.
    But also in selected ports, where they have the forces and 
are interested, we also have local authorities as part of the 
team. So it is very much a team effort.
    Mr. Reichert. Thank you. I have one quick question, I know 
I have just a few seconds left. The Healy, as you know, is 
based in Seattle. We are happy to have her stay. The funds to 
support the Coast Guard polar icebreakers have been transferred 
to NSF. Recently, NSF has spent some of their money to contract 
with a Russian flagship.
    Can you comment on that contract? Is that a benefit to the 
Coast Guard to have that sort of contract in place? I know that 
the Russian ship had some mechanical problems and failed to 
complete its mission. I think the Polar Star had to come to its 
rescue. Thank you.
    Admiral Cross. Yes, sir, I can tell you how that operation 
went this year. You are correct. I think in an effort to reduce 
costs, the National Science Foundation did contract with the 
Russian icebreaker. They had a problem with one of their props, 
and as a result of that, they requested that we get the Polar 
Star underway. I think it was more as an insurance than 
anything else. Because as it turned out, the Russian icebreaker 
was able to complete most of the mission, although the Polar 
Star arrived on scene and did for about four or five days 
actually groom the channel, as much to help prepare the ice for 
next year as anything else.
    With regard to how the entire transaction has affected us, 
we have received the funds from the National Science Foundation 
to do the required maintenance on the Polar Sea, so they will 
be able to deploy next year. So what has essentially happened 
in the short term is that the program has remained in limbo. I 
think we are waiting for a final report from the National 
Academy of Sciences on just how and who should operate the 
Nation's icebreakers.
    They did issue a preliminary report in which they noted 
that at the very minimum, the Nation should have one polar 
icebreaker, one Antarctic icebreaker and one for the Arctic. 
And that especially the one for the Arctic should address not 
just scientific concerns but also national security and 
economic concerns.
    So we are anxiously awaiting the final report and working 
with the Congress to determine a way ahead.
    If I might, I am just going to make one more comment. The 
whole reason for transferring these funds in the first place, 
and it happened because the Coast Guard actually proposed 
decommissioning the two polar icebreakers in one of our 
budgets, and it is because we simply weren't getting the 
funding we needed to properly maintain the icebreakers. We were 
year after year having to take funds that were meant to support 
other ships in order to maintain the icebreakers. So that was 
the basis for the study and the transaction that took place.
    Mr. Reichert. Thank you. Thank you, Mr. Chairman.
    Mr. LoBiondo. Thank you, Mr. Reichert.
    Master Chief, you went through a list of challenges that 
the Coast Guard has, some of them related to operational assets 
involving Deepwater, which unfortunately we have talked about a 
lot. But you also listed outside of the Deepwater operational 
concerns a number of other issues that are challenges in health 
care and personnel issues with the Coast Guard. It is a 
difficult question for today.
    But if you can, I would like for you to follow up with a 
written response on what you think the dollar requirements to 
meet that list that you outlined would be. And if it is not too 
much trouble, minimally and optimally. There probably is a bare 
minimum we need to do that would require X number of dollars 
beyond where we are, because I think you have highlighted an 
important aspect of what we are talking about as far as the 
budget is concerned, where my concerns are raised not only with 
Operation Deepwater and a lot of the Coast Guard operational 
responsibilities, but with some of these other issues that if 
morale is not good, we have bigger problems down the road.
    So I would appreciate that. I am assuming you want to get 
back to me on that.
    Master Chief Welch. Yes, sir. Just to give you a number, 
Mr. Chairman, so you know the magnitude of what we are talking 
about, our shore infrastructure that I spoke about, as you 
know, extends far beyond the world of housing. I was just 
focusing on housing and the $211 million backlog associated 
with that.
    When you look at our total shore infrastructure, the 
backlog is significant, in the billions and billions of 
dollars. But I would be happy to quantify the issues and the 
amounts that I believe would be required to make incremental 
progress, sir.
    Mr. LoBiondo. Thank you.
    Mr. Boustany, you are up.
    Mr. Boustany. Thank you, Mr. Chairman.
    Hurricanes Rita and Katrina left a lot of debris in the 
Gulf of Mexico. Admiral, I would like it if you could provide a 
status report on the cleanup of that debris. Do you have 
sufficient funds to deal with it, and do you anticipate more 
needs possibly with the upcoming supplemental? I know that is 
probably not a question that can be answered right now, but if 
you could provide a written response, I would greatly 
appreciate it.
    A question about fuel costs. The President's request has 
$30 million in additional fuel costs. Is this adequate? Is this 
going to meet your needs?
    Admiral Cross. Sir, that is our best estimate right now. As 
anybody who buys gasoline for their car knows, fuel prices have 
been all over the map lately. But we think within the context 
of the budget that that is a reasonable estimate for now.
    Mr. Boustany. Okay. With regard to the Oil Spill Liability 
Trust Fund, clearly the hurricanes had an impact on this. Are 
Stafford Act funds still available and are they still being 
used? Do you anticipate the need for further funds here? And 
one last question with regard to that, if payments temporarily 
go beyond the fund balance, can you borrow?
    Admiral Cross. That is a very interesting question, and a 
good question. My understanding is that to date, all of our 
costs have been met through the Stafford Act and we have been 
reimbursed. What we are concerned about is the potential for 
claims. We have not received any yet. But we estimate that the 
potential for claims could run as high as $800 million. If that 
occurred, then we would have to, it would likely bankrupt the 
fund and we would have to come back to the Congress. There are 
provisions for us coming back to the Congress for additional 
funds.
    Now, we do not know that is going to happen. It may not. We 
are trying to watch it very, very closely.
    Mr. Boustany. Okay. And one last question, sort of along 
the lines that the Chairman just asked. I know that there is 
$53 million for increased personnel costs. Are you looking at 
any increase in personnel or is that purely health care and 
housing and the miscellaneous things that you mentioned 
earlier?
    Admiral Cross. Yes, I think the majority of that just has 
to do with cost of living increases and pay raises. This budget 
does call for a slight increase in the work force, and I 
apologize, I do not have that number off the top of my head. I 
should have it.
    Mr. Boustany. And I too express the concern that even with 
this budget request, there is a potential for a decline, or the 
ability to maintain current services at this 2006 level. It 
sounds to me as if personnel costs and some of these other 
things are really going to kind of hit you pretty hard, to the 
point where you are at current operational levels or possibly 
even below.
    Admiral Cross. I think we will be at least at current 
levels of operation. In fact, there are some other up sides. 
Part of the request for HC130J funding for example, would buy 
us an extra 2,000 flight hours. So that would be helpful. One 
of our larger shortfalls is in maritime patrol aircraft, and of 
course, that is why we are trying to bring the COSIS on as 
quickly as we can. That 2,000 hours would be very important to 
us.
    Mr. Boustany. Thank you very much.
    Mr. LoBiondo. Mr. Filner.
    Mr. Filner. Thank you, Mr. Chairman.
    I am still a little puzzled by your testimony, Admiral. 
Again, let me just quote from the memo, I don't know who wrote 
it, but the Coast Guard assessment of the DPW purchase. It says 
``There are many intelligence gaps concerning the potential for 
DPW or P&O assets to support terrorist operations that preclude 
an overall threat assessment of the potential DPW and P&O ports 
merger.'' You didn't have enough information. ``The breadth of 
the intelligence gaps also infer potential unknown threats 
against a large number of potential vulnerabilities. And these 
gaps include, but are not limited to, operations, personnel and 
foreign influence.''
    You said in your testimony, as I understood it, correct me 
if I am wrong, you said, these questions need to be answered. 
And DPW has agreed to answer them. But you don't have the 
answers to those, right? We as a Nation don't have the answers 
to those. There is something about the information will be 
provided.
    Admiral Cross. That is correct, yes, sir.
    Mr. Filner. But the deal will already be closed by then. 
What if we had information that ten of their personnel had been 
trained in Al Qaeda camps or something? Are you satisfied that 
whatever information they give us is going to answer these 
questions?
    Admiral Cross. I think the sequencing is important here, 
sir. Those assurances are part of the agreement. Therefore, the 
agreement could not be finalized until they provided the 
information that they promised us.
    Mr. Filner. But the information--we do not know what that 
information is, which you so appropriately point out there. 
There is no way to evaluate the threat unless we have that 
information. And they still have not provided it. They have 
assured us that they will provide it. But the deal will already 
be closed, I think.
    So these are important questions. I don't see any answers 
to them, frankly. In your testimony, you distinguish between 
the first two and the third concern. Can you just explain what 
was the difference?
    Admiral Cross. Yes, sir. The first two issues--
    Mr. Filner. You got assurances.
    Admiral Cross. Yes, sir, there were assurances. And the 
third issue, we have vetted with other organizations, 
intelligence organizations with the Federal Government who have 
access to that information that we did not have. We are very 
comfortable with where we are on that now.
    Mr. Filner. So, you asked a very important question. Is 
there foreign influence on DPW or P&O operations that affect 
security and other major decisions; if so, what countries and 
to what degree? Important questions, which is what the Congress 
is asking. That information is not available to us, as far as I 
know, or to the American people. So those are really important 
questions, I am glad you raised them. I wish they would be more 
public and we would know what the answers are.
    As Ms. Brown pointed out, the Administration says, have no 
worries, American people, because the operations control has 
nothing to do with security. I, just as Ms. Brown, I cannot buy 
that at all. For example, in the Maritime Security Act that you 
referred to, it says that there shall be background checks on 
individuals who have access to the secure areas of the marine 
terminals. That is part of security. But it is also what 
operations is involved with.
    We have not started that process, have we, of checking, of 
background checks of those who have access to terminals?
    Admiral Cross. No, sir. That is affiliated with the 
Transportation Worker Identification Card project, which has 
come very, very near the top of the priority list for the--
    Mr. Filner. But it is several years and we still haven't 
done it, right?
    Admiral Cross. What we have done is conduct two prototypes, 
one in Florida and one in Delaware.
    Mr. Filner. You are testing the kind of cards, but you are 
not actually doing any background checks.
    Admiral Cross. I do not believe, no, sir, the checks have 
not--
    Mr. Filner. You see, that is where operations and security 
merge to assure us that there is security done. And as you 
pointed out several times, you didn't point out, I inferred, I 
was not for this conglomeration that is under DHS. But the 
argument was, we are going to have all this coordination.
    So in one answer today, you said, well, we are not 
responsible for the containers, it is Customs, which doesn't 
exist any more, and Immigration, which doesn't exist any more. 
So even within the Department, like we had before hand, you are 
pointing at each other. And now you are saying this is TSA's 
job and they have not done it.
    So I am not convinced that there is any kind of cross 
checking here. When your own, when the Department's own 
spokesman says, hey, I never read what the Coast Guard wrote, I 
mean, there are problems here that this issue is raising. As 
the Chairman said in his opening statement, every time we have 
a question, more questions arise. We don't know what the answer 
to your very important questions are. We are getting evidence 
that the various elements of DHS are not even talking to one 
another, and everybody is pointing to everybody else for doing 
it.
    Frankly, as someone who represents a port which I think has 
a lot of threats to it, even though your Department sees us as 
a little sleepy fishing village, I don't have any confidence 
that we are meeting these security concerns. Do you want to 
give me any more confidence?
    Admiral Cross. Sir, I would offer, first, the general 
statement that I did Congressman Coble. I think we are a lot 
more secure in our ports than we were prior to 9/11. I will not 
dispute the fact, in fact, I often say that we have, much work 
remains to be done.
    I would point out, though, that the fact that we have 
Customs and Border Protection responsible for containers and 
other aspects of the cargo coming into the Country and TSA has 
other responsibilities, that is not necessarily a whole lot 
different from the way the Department of Defense operates. You 
have the Army responsible for some elements of defense, the 
Navy for other elements. And the level of cooperation between 
agencies within the Department, once again, I know it is not 
where we want it to be, but it is dramatically increased and 
improved over where it used to be.
    Mr. Filner. I wish I could take your word for it. But I 
don't see any amount of evidence for it. And in answer to Ms. 
Brown and others, what we seem to be getting is, you are able 
to verify, paper verification of things, we are looking at 
systems, we are looking at things, but we are not actually 
doing the security, we are not doing the background checks. We 
have assurances that there is a security plan, but there is not 
a lot of checking. It is 1 or 2 percent of containers are 
checked. And the technology for doing that is not very 
sophisticated, as far as I could tell, by looking at San Diego.
    So you leave me a lot of insecurity about our security.
    Mr. LoBiondo. Admiral Cross, help me understand how the 
facility security officer at a port interacts with the port 
terminal operator in working with the Coast Guard for that 
individual port security issue, issues that may arise.
    Admiral Cross. In the implementing regulations for MTSA, 
various standards were set for the level of security in ports. 
As I think you know, when we implemented those regulations, our 
effort was not to be descriptive in terms of how the security 
had to be made. So many of the ports arrive at an acceptable 
level of security in different ways.
    But the facility security officer is required to be 
trained, and he is responsible for ensuring that the agreed-
upon security standards in any given port or facility are in 
fact being met. And he is the person that the captain of the 
port representatives would meet with and tour the facility with 
when we go back to check and make sure that the facility is in 
fact doing what they said they would do.
    Mr. LoBiondo. Who does the facility security officer answer 
to?
    Admiral Cross. Ultimately, he would answer to whoever is 
running the port. In most instances that is a port authority. 
And in some cases, there are private entities.
    Mr. LoBiondo. So the facility security officer is hired by 
the port operator, is paid by the port operator. So ultimately, 
if there is a concern that the Coast Guard raises or the port 
authority raises, the facility security officer, in order to 
accommodate whatever is required, would have to go to his or 
her boss, which is the port operator. And what guarantees or 
assurances do we have that under this Dubai deal or any other 
deal that those recommendations, those orders or whatever it 
is, will be carried out the way we want them carried out, 
according to the best interest of our homeland security?
    Admiral Cross. We actually check to make sure that the 
facilities are secured in accordance with the requirements. And 
if they are not, depending on how serious the violation is, if 
it is a minor violation, we may say something like, okay, you 
have two weeks to fix this. Then we will come back and ensure 
that the additional security elements are in place.
    If it is a serious violation, and there have been 44 of 
those since July of 2004, we have gone as far in some cases to 
actually close down the facility until the fixes were put in 
place.
    Mr. LoBiondo. I think there is reason to believe that in a 
rapidly unfolding situation at a particular port, with 
intelligence leads or some other agencies coming together to 
say, there is something very specific that is really worrisome, 
that is a big threat here, that this facility security officer 
would have access to sort of the highest level intelligence on 
that particular incident at that port, is that correct?
    Admiral Cross. Yes.
    Mr. LoBiondo. So it would be safe to assume that that 
facility security officer would be sharing that information 
with his or her boss?
    Admiral Cross. Potentially. I mentioned earlier in response 
to a question from Congressman Filner that we were not doing 
background checks as yet, or TSA is not doing background checks 
as yet. When I said that, I was referring to just typical 
employees at the port. We are in the process, in fact, of doing 
background checks on people with security responsibilities. Not 
all of those have been completed, but we are in the process of 
doing that.
    Mr. LoBiondo. But in this particular situation, with a very 
rapidly unfolding security threat for a terrorism incident at 
one of our ports, which is not that far out of the realm of 
reality, the facility security officer, interacting with the 
Coast Guard or other Federal agencies that could be involved 
with DHS on this particular issue, probably would be sharing 
with the port operator whatever that information is, however 
sensitive it may be.
    The point I am getting to that raises particular concern 
for me is that in the most recent incident we are concerned 
about is that in essence we would be sharing potentially some 
very sensitive intelligence information with United Arab 
Emirates, because they actually own the corporation. 
Unfortunately, that is what I thought.
    I have another round of questions, but I am going to move 
to Ms. Brown again.
    Ms. Brown. Thank you, Mr. Chairman.
    Let me just say that you all are the only bright spot in 
the Administration. Basically, after 9/11, you had a program, 
you were out protecting our bridges within five minutes after 
9/11. So thank you.
    When Katrina took place, FEMA was a disaster. Everybody in 
this Country knows it was a disaster. The only bright spot was 
the Coast Guard, the only bright spot. It was like our 
Government was not present. They get an F.
    So my question to you is, given your expanded role and your 
initial roles that you have as far as drugs and all of this, 
most people feel that, coming from Florida, with 14 ports, I 
have visited all my ports in Florida, but I have visited ports 
around the world on my Transportation Committee. And you say 
you have inspected 44 foreign ports, 7 didn't meet the 
standards.
    But when you say inspection, tell me, what are you talking 
about? Because I have talked to some of these operators. And I 
am not convinced that the kind of security we think is taking 
place is taking place. Let me just give you my quick questions 
and then you can answer all of them. Most people feel, when I 
talk to my port operators, the only funds available is this 
port security money. I had to go back in there and make sure 
that there was special provision given for these ports that 
have military bases there and military equipment going to our 
men and women.
    So now, if we do not have this grants program and it is 
balled into one and ports is as the bottom and all other 
security, we put $4.4 billion for aviation and just $36 million 
for all of security, not just talking about ports, we are 
talking about ports, rail, transit.
    So I want to know when is this Administration going to 
stand up for the American people. When? When are we going to 
stand up? When is this Congress going to stand up?
    We talk a great talk. But we do not put the funds where 
they need to be. What improvement do you feel is necessary to 
protect the U.S. ports? I live in Jacksonville. We have a 
football stadium right there on the water. The terrorists don't 
have to be there. We have all the cargo, all these cars coming 
through there. Put something in one of those cars. Blow it up 
and I'm halfway around the world.
    What are you all doing to make sure that does not happen? 
We are not doing our duties as members of Congress to have some 
illusion out there that the U.S. Coast Guard is taking care of 
us. You are doing the best you can based on what meager funds 
you get. And you are the only bright spot in this 
Administration. FEMA is a disaster. The only bright spot during 
Katrina, you rescued how many people, while the rest of the 
Government was missing in action.
    I know you cannot tell us the truth. We need somebody else 
here, but it is not you all. You are doing the best you can. We 
have a lot of frustration here. We have an Administration that 
does not, does not respect the Congress. Does not respect the 
Congress. One hundred twenty-nine years, I am the first African 
American. I care about all the people of Florida. And it is a 
disgrace that we talk about terrorism and protecting other 
people and we are not doing it here.
    One thing this port discussion has done is to shine the 
light on the fact that we are not adequately funding the 
infrastructure security in the United States of America. So 
maybe you can answer some of my questions in writing or say 
something, whatever they told you you could say.
    Admiral Cross. I am glad you clarified early on when you 
were talking about the bright spots, Congresswoman.
    Ms. Brown. You are.
    Admiral Cross. I thought you might be talking about Chief 
Welch's and my haircuts here.
    [Laughter.]
    Admiral Cross. Let me just offer a couple of comments if I 
could. Early on you asked about what we were doing in the 
overseas ports. I think it might be useful to clarify that we 
actually have teams of Coast Guard people who travel overseas 
and visit these ports. Typically, it is more than one visit, 
especially a lot of ports that are not major ports. Because 
early on, we found a fairly large number of discrepancies. Then 
we work with the ports, explaining to them what they have to 
do, then we go back and recheck. That is to the point now of 
the 44 that we have checked.
    Ms. Brown. When you say rechecked, you don't actually check 
the cargo, you are checking the papers.
    Admiral Cross. No, ma'am, this is not about cargo at all. 
This is about port security, facilities within the port.
    Ms. Brown. Who checks the cargo?
    Admiral Cross. Customs and Border Protection would be 
checking cargo. And in some cases, they are doing a great deal 
of that overseas as well.
    Ms. Brown. How do they check it? When you say they check 
it, what do you mean?
    Admiral Cross. I do not want to speak for them, so let me 
just speak generally. First of all, they have partnerships with 
various shippers. And they get manifests in advance. And if 
they see, then they run the manifest through a risk based 
model, very sophisticated computer model.
    Ms. Brown. It sounds good.
    Admiral Cross. They use that to decide which ones they open 
and inspect. Others are scanned using sophisticated sensor 
devices. I don't think I want to go beyond that. I think that 
is a question that is best answered by Customs and Border 
Protection.
    Ms. Brown. But I mean, I know as a lay person that the 
system is flawed. I am sure that the terrorists know it, too. 
What can we do to help you with your additional roles? And 
answer the question, if we don't have the port grant program, 
what will they do? What will they do?
    Admiral Cross. I think maybe that is a question we should 
try to help answer. Because I think a lot of the funding we 
were talking about was supposed to go through other entities 
than the port grant program. For example, part of this would be 
increases to the Coast Guard's budget and CBP's budget. And 
then of course, as I mentioned earlier, those costs borne by 
industry.
    I am not trying to tell you that that is going to get 
anywhere near the $7 billion to $9 billion that the Chairman 
talked about. I am not sure we are measuring apples and apples 
here.
    Ms. Brown. So we are talking about reducing, really, 
security to our ports. That is what we are talking about. That 
is what this Administration is talking about. That is what they 
are telling this Congress to do, based on the budget that they 
sent over.
    Admiral Cross. Well, I guess I would disagree with that. I 
think we have made steady progress toward improving the 
security in the ports.
    Ms. Brown. And I think you have, on paper.
    Admiral Cross. I know you visited, as you mentioned, a 
number of ports.
    Ms. Brown. And talked with the operators of the ports, 
talked to the foreign government and just in some instances 
felt like they didn't feel they had a clue as to security of 
the ports, making sure that the fences were properly taken care 
of, that the cargo is inspected. In some areas, we have a large 
shipment, we know who is ordering it, if we are talking about 
Wal-Mart or whatever.
    But in other instances, it is dangerous. As I said, when we 
have those cars coming in at a football game, and someone can 
blow up 100,000 people just like that at one of those ports.
    Admiral Cross. You may have already done this, but if you 
have not, I would offer a visit to you to the port of your 
choice. I think we could arrange to have a joint team of Coast 
Guard people and Customs and Border Protection people and 
perhaps some of the port industry people to give you a complete 
tour of a facility. You pick the facility. I think that would 
give you a better idea of what is being done and perhaps of 
what is not being done. That might be useful.
    Ms. Brown. Sir, you can rest assured that I have done that, 
and I will do it again. I think every member on this Committee 
has done that. And we talk to the teams. And the talk is 
wonderful. But I need to know, where is the beef?
    I think the system, even though on paper it looks good, but 
the cargo is what I am concerned with, I am really concerned 
with. The fact is the amount of tonnage and cargo that is 
coming into this Country that we are not inspecting. And even 
some of this going out, that comes into the port. Everybody on 
this Committee, they have visited the ports, they know what is 
going on.
    What concerns me more than anything else is the Bush 
Administration misleading the public that the Coast Guard, 
which you are doing the best you can with the dollars that you 
get, is out there protecting the ports. And you do not have 
complete responsibility, because you just explained to us, it 
is a team effort, and I do know that there are some problems 
with part of your team.
    What about your communications system? Have we beefed that 
up? Can you all talk to each other?
    Admiral Cross. Yes, ma'am, we can. And as elements of our 
Deepwater program and Rescue 21 program, we are going to be 
much improving our ability to talk to each other.
    Ms. Brown. Can you talk to the other agencies? We saw what 
happened on 9/11, and we saw what happened with Katrina. One of 
the major problems was communication. Is the system online?
    Admiral Cross. The new Rescue 21 project that is ongoing is 
going to give us the ability to do that much better than we can 
do it now. In fact, a really bright spot in that particular 
project was the fact that we deployed a number of mobile 
communication sites into Louisiana and Mississippi and other 
locations. We were very, very pleased at how well those mobile 
sites worked for us.
    Ms. Brown. Thank you, Mr. Chairman. I want to say again 
that you are the only bright spot in this Administration.
    Mr. LoBiondo. I want to get back on the Transportation 
Worker Identification Card for a moment. We recently had a 
Subcommittee hearing focusing in on this. I still can't 
understand the reason for the delays. Admiral Cross, you stated 
that you believe this is one of the highest priorities, did I 
understand you right?
    I don't know if you can give any insight. I know that you 
are not directly responsible for this in the Coast Guard. But 
once this is implemented, you would be the enforcing agency, if 
there is a violation at a port?
    Admiral Cross. I don't know that, sir. I will be happy to 
answer that for the record.
    Mr. LoBiondo. You, you meaning the Coast Guard, how 
involved are you or were you with the implementation of the 
pilot projects in setting up this TWIC card?
    Admiral Cross. Sir, I don't know how involved we were. I am 
not sure we were or not.
    Mr. LoBiondo. So you are not aware of the reasons for the 
major delays in the implementation of this?
    Admiral Cross. No, sir, I am not.
    Mr. LoBiondo. If there is anything you can get back to us 
on from a Coast Guard perspective with Coast Guard input to TSA 
over this whole issue, because I respectfully disagree with you 
that is their highest priority. If it were their highest 
priority, we would not have been delayed up to this point. If 
it were their highest priority, they would have funded it in 
the budget and not just asked for funding for writing of the 
rules and regulations. There is no funding in place.
    This is a fundamental, I think, pretty simple and 
fundamental requirement for port security that right now, if I 
understand you correctly, while you have been doing some 
background checks, folks who are coming into our ports, what 
identification are they showing? Does Coast Guard have any 
responsibility in checking anything in that respect?
    Admiral Cross. The identification in most ports is simply a 
picture i.d. from a State or Federal agency. I think that is 
what we are using in most ports.
    Mr. LoBiondo. That is not very comforting.
    Chairman Blust, in light of the discussions we have had 
concerning homeland security and how you all fit into this, did 
the Federal Maritime Commission participate in any way or 
comment on the highly publicized sale of these port operations 
that we are discussing, to your knowledge?
    Mr. Blust. Mr. Chairman, as far as the SIFIUS side of it, 
no, we did not. That was handled by the lead administrative 
groups. I do not recall that any requests were made to us for 
additional information. We, in our normal monitoring of the 
industry, watched the bidding process and the conclusion of the 
agreement to purchase. I can tell you that P&O ports, the 
existing company in the U.S., has been most cooperative in 
working with us and information that we have asked, they have 
been willing to provide.
    Mr. LoBiondo. Mr. Filner, do you have anything additional 
at this point?
    Mr. Filner. No, thank you, Mr. Chairman.
    Mr. LoBiondo. Commissioner Winstead, your testimony stated 
that the GSA is planning for the Coast Guard to occupy the new 
facility at St. Elizabeth's by 2010. And yet also states, at 
the same time, GSA plans to acquire land to construct access to 
the facility only in 2010 to get through 2015.
    Have the agencies, you talked about the planning, but I am 
still unclear, have the agencies developed plans to provide 
reliable and efficient transportation access to the new 
facility? That is of great concern to this Committee.
    Mr. Winstead. Sure, Mr. Chairman. Let me just mention, 
being a part of this hearing and obviously hearing the critical 
role the Coast Guard has, knowing of it, we are here obviously 
to provide and move forward on this planned new headquarters in 
a very cost effective manner, to do so to provide both a new 
facility and to do so with as little burden as we can to the 
Coast Guard budget.
    In regard to the site itself, we do, as you mentioned, we 
have had approved both fiscal year 2006 funding for two 
activities, about $24 million to begin design for the 1.3 
million square foot headquarters and also about $13 million to 
begin repairing and upgrading infrastructure on the site. In my 
testimony, I mentioned the substantial effort being put to 
coordinate with D.C. DOT, WMATA Metro, Maryland as well and 
other road authorities, to look at and actual improvements 
going into place to meet those new access.
    There are basically four that I would mention, some of 
which are funded, fully funded, some of which we are getting 
funding for. One is the 11th Street Bridge and replacement. 
That is fully funded at a quarter of a million dollars, 
completion by the year 1011. South Capitol Bridge replacement 
and roadway improvement, which is partially funded, there is 
$148 million that has been appropriated, and a total cost of 
about $365 million. Those projects, the draft EISs are expected 
this summer, summer of 2006, and completing those projects by 
2015.
    Also access to Martin Luther King, negotiating currently 
with the National Park Service, and access to the Firth 
Sterling, which we anticipate we will be requesting $5 million 
for land acquisition and road construction for that portion. So 
we are going to be requesting that in fiscal year 2008, to meet 
those improvements, to have them in place before we would open 
the campus.
    Mr. LoBiondo. Thank you.
    Master Chief, can you tell us a little bit about what you 
believe the Coast Guard's personnel priorities are at this 
point?
    Master Chief Welch. Yes, sir, I can, Mr. Chairman. Our 
primary responsibility to our work force is to ensure that they 
are of the right size and that they are properly equipped to 
perform their mission safely and efficiently and repetitively. 
We have made great progress on those two fronts with the 
support of this Subcommittee.
    Aside from the right size of the work force and the right 
equipping of our work force, we have several quality of life 
initiatives that are very important for us to pursue. I 
mentioned the major ones in my verbal statement. Housing is a 
very large issue. Our housing authorities are going to expire 
next year. Without those authorities, or authorities 
commensurate to what DOD has, we are not going to be able to 
make progress in our pursuit to privatize our housing, for 
example.
    Child care is problematic. That is not just a Coast Guard 
issue, that is a nationwide issue that is going to require some 
tough decisions within the base if we are ever going to have 
any hopes of providing some relief to our people with children. 
And we will do that.
    But those are clearly the top of the top, Mr. Chairman.
    Mr. LoBiondo. Thank you.
    I guess we are coming to a conclusion with this. In 
closing, let me say that we have a great deal of frustration, 
not so much with the Coast Guard, but with the overall 
implementation of our port security measures, because it is a 
conglomeration of agencies that are involved.
    The emphasis that has been put on aviation security, maybe 
rightfully so, but if we total everything up, we are probably 
at the $20 billion, $25 billion range altogether. We are less 
than $1 billion with port security grants. I am very 
disappointed that the Administration has not forced TSA to 
fully fund the TWIC implementation, that we are not recognizing 
the port security grant needs and those things that are 
necessary for the Coast Guard to fully implement the challenges 
that we have laid out for you.
    I want to reiterate that you have done a magnificent job 
with the resources you have been given. But some of these 
issues where we just can't seem to get answers, I am hopeful 
that this renewed focus on port security and maritime anti-
terrorism in light of the proposed sale to Dubai will help 
focus other members of Congress on the overall needs of the 
Coast Guard and our need to demand some answers and some action 
on some very important issues.
    Admiral Cross and Master Chief, I am sure you will miss 
sessions like this after you are gone. We will certainly miss 
you. But we will, the Subcommittee will pick up next week on 
further questioning on the Dubai situation and the Committee 
stands adjourned.
    [Whereupon, at 12:12 p.m., the subcommittee was adjourned.]

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